Such commerce was large and scandalous. About twice as much cotton went to Northern states as was shipped through the blockade to Europe. Aside from gold, cotton was the best international exchange medium available in America. Although Civil War shipment tonnage dropped sharply, cotton prices soared over ten-fold thereby sustaining a large monetary volume.
When Northern traders purchased cotton with specie, the gold invariably found its way into markets where it bought weapons for the Confederacy. Contrary to popular belief such markets were not necessarily outside the United States. Union Major General William T. Sherman complained that Rebels purchased weapons in Cincinnati from the cotton they sold for gold to Memphis traders after Memphis was occupied by Federal soldiers.
Evidence suggests a number of notable Civil War personalities were involved in dubious – perhaps treasonous – conduct. Examples include Treasury Secretary Salmon P. Chase, Major General Benjamin Butler and Rhode Island Senator William Sprague. One cotton trader became the largest shareholder of New York’s National City Bank. His son, grandson, and great-grandson all served sequentially as the bank’s Board Chairman, the last as late as 1967. The bank is currently known as Citicorp.
Perhaps because the story provides no heroes, little has been written about wartime intersectional trade. Nonetheless, an 1865 joint Senate-House investigation led by Illinois Congressman Elihu Washburne concluded: “[The trade] is believed to have led to a prolongation of the war, and to have cost the country thousands of lives and millions upon millions of treasure.”