Union Blockade: Prize Money, British Runners and Egypt's Cotton Bankruptcy
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Union Blockade: Prize Money, British Runners and Egypt's Cotton Bankruptcy

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In April 1861 Abraham Lincoln declared a blockade of 3,500 miles of Confederate coastline when the U.S. Navy had only three ships able to enforce it, one vessel stuck on Lake Erie and another off Hawaii. Navy Secretary Gideon Welles bought ferries and merchant steamers, armed them, and built the fleet to 671 ships. The episode explains why declaring a blockade risked treating the Confederacy as a nation, and how Richard Henry Dana Jr. won the 1863 Prize Cases at the Supreme Court.

Prize money kept bored crews alert: an infantry private earned $13 a month, while one capture paid a captain $13,000 and a cabin boy $533. British investors built fast, low paddle steamers burning smokeless anthracite and ran them from Nassau, Bermuda and Havana. Five of six runs succeeded, yet Southern shipments fell from over 20,000 to about 8,000 and cotton exports dropped 95 percent. Britain turned to Egypt, whose cotton boom paid for new boulevards in Cairo and Alexandria until prices collapsed after 1865 and Egypt declared bankruptcy in 1876.

  • The capture of the Memphis brought $510,000 at auction for its captors.
  • The British-owned runner Banshee returned a 700 percent profit before its capture on its seventh run.
  • A Wilmington wholesaler asked his Bahamas agent to send cognac instead of chloroform.
  • The H.L. Hunley sank the USS Housatonic off Charleston in 1864 and went down with its crew of eight.
  • The loss of coastal shipping and imported salt fed a meat shortage, inflation and bread riots in Richmond.

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