By 1865 Great Britain was the most powerful nation on Earth. It was said the sun never set on the British Empire, and the global holdings back up that claim.
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The Brits had holdings in North America, The Caribbean, Africa and Asia. She had defeated Napoleon and won the Crimean War. Pax Britannica ruled the world. British commerce drove the global economy and Queen Victoria's soldiers enforced the rule of law in the various colonies. The Royal Navy protected the shipping routes and supported the troops in "Queen Victoria's little wars".
But even though the British economy suffered significantly during the American Civil War, Britain did not intercede. Britain was the world leader in textile production and the United States supplied 95% of the cotton to the British mills in 1860. By 1865, the US supplied only 5% of the cotton while lower quality cotton from India and Egypt only provided about 40% of the pre-war cotton requirements. There was significant unemployment in Brittan by 1863 due to the cotton shortages.
Some historians point to the South's position on slavery as one reason the British remained neutral. Lincoln's Emancipation Proclamation put slavery to the forefront. The South never demonstrated a clear ability to win the war. Lee's early success was overshadowed by Southern losses in the west.
Most importantly, I think, was Britain did not want to get into another war in North America. Only one Navy had demonstrated a real ability to take on Her Majesty's fleet -- The United States Navy. To even recognize the Confederacy risked war with the United States. Canada was vulnerable.
But there was one more surprising fact in play. In 1865 the United States possessed the most powerful navy in the world. It had more ships, more men, more ironclads, more steam warships than any navy in the world -- including Great Britain.
I bet you did not know that.
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