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Was the Confederacy a Tool of International Finance? Part 2

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Part 2 of 3. Part 1 here

The Confederacy’s Relations with International Finance

The primary allegation in regard to “Rothschild” (sic) funding of the Confederacy is that an important loan was secured from the Erlanger bank in Paris. This financial arrangement was nothing but Shylocking and was not favorable to the Confederacy.

From a conspiratorial viewpoint, much is made of CSA emissary and Judah P. Benjamin’s former law partner John Sliddell’s daughter being engaged to Baron Erlanger—Slidell’s niece being married to August Belmont, the Rothschild representative to the Northern States.[1] Despite the family connections, the Erlangers were not about to do the Confederacy any favors.

Benjamin personally negotiated the $2.5 million loan with Baron Emile Erlanger, in Richmond, Virginia. He hoped that involvement with the banking house of Erlanger and Cie, and with the Erlanger family, who were close friends and advisers to France’s Emperor Louis Napoleon, would succeed in establishing diplomatic relations,[2] which had failed to make any headway with Britain. The original plan had been for a loan of $2.5 million to be repaid with bonds and the sale of cotton, with the Erlangers reaping a huge profit of 23% commission and 8% for handling the bonds.[3]

It should be noted that Benjamin considered the terms “usurious,” but the Confederacy had no choice. These are the typical actions of rapacious bankers out for sheer profit, not the actions of cunning strategists conspiring with a fellow Jew to destroy the USA by backing the South. Extensive face-to-face negotiations by Benjamin reduced the rate from 8% to 7%. Speculators and investors in Europe bought up the bonds, and the Erlangers made a quick profit.[4]

What can be deduced from this is that:

  1. The most significant loan obtained by the Confederacy, that of the Erlangers, was only gained through tough negotiation by Benjamin, who nonetheless regarded the terms as “usurious.”
  2. The family connections of Slidell made no difference in gaining favorable terms.
  3. The Erlangers were out for quick and exorbitant profits as a business proposition, and were obviously not involved in any plot to promote the Confederacy against the North as part of any long-term strategic plan.

The seminal study on funding and diplomacy during the American Civil War is Jay Sexton’s[5] Debtor Diplomacy.[6] Sexton does not try to obfuscate the role of international finance in politics. He states that the desire of the American states to gain European capital influenced foreign policy, and that the primary influence was that of Britain, and this influence was particularly evident during the Civil War. “Furthermore, the financial needs of the United State (and the Confederacy) imparted significant political power to an elite group of London-based financiers who became intimately involved in American foreign relations during this period,”[7] which Sexton describes as: “The unprecedented power of an elite group of international financiers.”[8]

The mid-nineteenth century witnessed the great British-based banking houses reach the pinnacle of their power and influence in American affairs. Led by Baring Brothers, the Rothschilds, and George Peabody and Company (the predecessor to the house of J. P. Morgan), banks in the City of London were the architects of nearly every facet of the Atlantic economy. In addition to negotiating loans and marketing American securities abroad, banks such as the Barings and Rothschilds underwrote transatlantic trade, provided insurance, exchanged currencies, and compiled influential market reports. During the westward flow of capital across the Atlantic, however, remained the central function of the leasing transatlantic banks. Ninety percent of the United States’ foreign indebtness in 1861 was of British origin.[9]

The financial and commercial power of these banks “extended to them significant political and diplomatic influence on both sides of the Atlantic,” adds Sexton, and he alludes to the poem “Don Juan” by Lord Byron, where it is stated that the Barings and the Rothschilds are the “true lords of Europe.” [10]

In the US these bankers also exercised considerable influence through the connections of their emissaries, in particular August Belmont, the Rothschilds’ representative based in New York, and Thomas Ward and Daniel Webster acting for Barings, in Massachusetts, whom Sexton describes as “highly influential politicians and lobbyists.”[11] “These transnational banks established a network of high finance and high politics that connected Britain and the United State and merged international finance with international relations.”[12]

Hence, Sexton has confirmed what so-called “conspiracy theorists” are often scoffed at for by academe and the media; that there was – and is – an international elite of bankers who weld political power through their use of money and trade. This is also how another eminent historian, Dr. Carroll Quigley described these same international bankers when he wrote that they are, “devoted to secrecy and the secret use of financial influence on political life.”[13] Quigley described their aim as being:

[T]o form a single financial system on an international scale which manipulated the quantity and flow of money so that they were able to influence, if not control, governments on one side and industries on the other. The men who did this aspired to establish dynasties of international bankers and were at least as successful at this as were many of the dynastic political rulers.[14]

However, there are variables that are often misinterpreted or overlooked,[15] frequently colored by a wish to see conspiracies behind anything involving a Jew such as Benjamin, around whom an intricate and spurious conspiracy theory can be woven.

What can be said is that CSA emissaries secured Enfield rifles from the London Armoury, which provided arms for both North and South throughout the Civil War;[16] the result of non-partisan profit motives, rather than plutocratic conspiracies to favor the South.

What can also be said is that one bank that was sympathetic to the Confederacy – on principle – was that of Fraser, Trenholm and Company, Liverpool, under the directorship of Charles Prioleau, which became the Confederacy’s “unofficial bank.” This hardly amounts to collusion between international finance and the Confederacy, let along with the Rothschilds. As Sexton observes, “the bank was far from a financial powerhouse by most estimations” but by 1860 had become a leading cotton importer.[17]

Charles Prioleau was a South Carolinian, “who had long attempted to free the South from, as he viewed it, the economic hegemony of the North.”[18] Hence the motivation of the firm, headed by a Southerner, was not merely sympathy with the Confederacy, for Prioleau specifically aimed to assist the South in opposing the plutocratic interests centered in the North. The company was responsible for arranging for the ships that ran the Northern blockade, and its own ships even flew the Confederate Flag. In 1861 CSA President Jefferson Davis authorized the use of the bank as the Confederacy’s depository.[19] However, the agency of this relatively modest bank could not compensate for the lack of credit from international finance, and already by 1862 the CSA’s account with Fraser, Trenholm had been severely overdrafted.

Despite the disruption of the cotton trade to England as the result of war, what is remarkable is the lack of support that Britain showed the Confederacy, despite turning a blind eye to the supply of ships from Britain. What the international financiers of The City of London, led by the Rothschilds, sought by 1862 was a quick diplomatic solution to the war. However, Sexton emphasizes that:

It is important to note that the Rothschilds, whose holdings of Southern states securities were minimal and were only tangentially involved in the cotton trade, did not financially nor politically support the Confederacy. Rothschild records clearly reveal the firm’s disdain for slavery. Nor, despite the myth, did the bank loan money to the Confederacy during the war.[20]

Sexton states in a footnote in regard to the “myth” of Rothschild funding of the Confederacy that there is only one instance when the bank brokered (as distinct from purchased) a sale of Confederate bonds for only $6,000 on behalf of Joseph Deynood in 1864. “This sole instance pales in comparison to the hundreds of thousands of dollars worth of Union bonds that the bank brokered in the same period.”[21]

What can be stated from the seminal work of Professor Sexton is that:

  1. There was indeed a powerful coterie of international bankers headed by the Rothschilds.
  2. These interests did not provide any significant assistance to the Confederacy.
  3. The Confederacy was starved of credit from Europe and Britain.
  4. The only bank that was sympathetic and helpful to the CSA was Liverpool’s Fraser, Trenholm and Co., whose director Charles Prioleau was a patriotic Southerner who wished to see the South free of Northern-based plutocracy.


1. Robert N. Rosen, The Jewish Confederates (South Carolina: University of South Carolina Press, 2000), 79.

2. Rosen, 79.

3. Rosen, 79.

4. Rosen, 79.

5. Oxford University Lecturer in American History.

6. Jay Sexton, Debtor Finance: Finance and American Foreign Relations in the Civil War Era 1837-1873 (New York: Oxford University Press, 2005).

7. Sexton, 1.

8. Sexton, 12.

9. Sexton, 12.

10. Sexton, 12.

11. Sexton, 12.

12. Sexton, 12.

13. Carroll Quigley, Tragedy and Hope: A History of the World in Our Time (New York: Macmillan, 1966), 52.

14. Quigley, p. 51.

15. Spurious interpretations of Quigley et al. have also led, for example, to another conspiracy theory that states that the real wire-pullers are the British Establishment, including the British Monarchy. Among the primary theorists for this are those of the LaRouche movement for example. For a refutation of this see: K. R. Bolton, “Don’t Blame the Brits: Is there an ‘Anglophile’ Conspiracy Seeking World Domination?,” Foreign Policy Journal, August 8, 2010,

Sexton himself also alludes to this “Anglophile conspiracy” interpretation even among some mainstream scholars, stating: “Finally, it should be explicitly stated that in no way does this work advance the argument that the United States, through its debts to British capitalists, was in some way incorporated into an ‘informal’ British empire” (Sexton, 18).

16. Sexton, 142.

17. Sexton, 144.

18. Sexton, 144.

19. Sexton, 144.

20.  Sexton, 151. Sexton’s references to Rothschild disdain for slavery as: N. M. Rothschild and Sons to [August] Belmont, 7 May, 9 July 1861, Rothschild Archive, London.

21. Sexton, 151; footnote 44.

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