Confederate states attempted to intentionally withhold cotton from Great Britain and France in order to coerce these nations to enter the war on the side of the South, according to the Mississippi Historical Society. Cotton was the main staple of the Confederacy's economy and the United States' largest export during the time of the Civil War.
Great Britain declared its neutrality with regards to the U.S. Civil War in May 1861. In response to this declaration, Confederate President Jefferson Davis and southern leaders declared an informal cotton embargo on Britain. King Cotton diplomacy started when planters burned 2.5 million bales of cotton to create a cotton shortage. Southern plantations exported more than three million bales of cotton to Europe in 1860, so burning the bales cut more than 80 percent of those exports.
Tensions between northern and southern states escalated for years ahead of the war. English companies, however, still possessed a surplus of cotton that they had amassed during the 1850s. The price of cotton did not go up until 1863, when prices went from 10 cents per pound in 1860 to $1.89 per pound three years later. To prevent further price hikes, Britain found new suppliers of cotton after the war started.
The Confederacy still used cotton to borrow money from British and French banks. Historians believe that King Cotton diplomacy ultimately failed because the surplus cotton could have been used to finance the Confederacy instead of trying to destabilize Europe's economy.