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Great Britain was torn between taking action (or in this case inaction) in the war so that slavery would end, or so at least they wouldn't appear to be supporting it, and openly supporting the Confederacy, helping to split a potential and growing rival in two.
The US had 31 million people by 1861, 27 million of them whites, and 22 million of those in the North, so Britain had to be politically and diplomatically careful. The child had grown to dwarf the mother country in population, industry (to a lesser degree) and resources, and if GB ended up in the war against the North, it could well lose.
Add to this the position of Queen Victoria against slavery. Britain had already abolished the practice 30 years ago, and the majority of the population were appalled by its continued existence and growth in the South. English warships actively stopped Spanish slave trade ships in the Atlantic, so they were clearly an abolitionist nation, with a foreign policy to match.
Even Frederick Douglass went to England on a speaking tour, telling of the horrors he experienced under slavery, raising money to purchase his own freedom, and making it more difficult for GB to come in on the Confederate side.
No other country seriously considered intervention on either side, and the most Britain did to help out the South was build a few warships for her and buy smuggled cotton.
Part of the Confederate States of America's plan for survival was gaining the recognition of other major world powers--particularly Great Britain and France--in their fight for life against the United States. However, the British Empire and France both chose to remain neutral, and for a very good reason: Recognition of the Confederacy meant going to war with the United States.
Great Britain had already lost the Colonies and, later, their attempt to regain control of them again in the War of 1812. They had no plans to make a third attempt unless they knew the CSA would be around for a while. One of Gen. Robert E. Lee's reasons (and spurred by President Jefferson Davis) for invading the Union was the hope of a major victory on Northern soil that would prompt international recognition as well as financial aid and, inevitably, foreign troop alliance.
The U.S. threatened Great Britain at one point for apparently supplying the Confederacy with two warships; England's later supply of blockade-running ships was not considered a breach of neutrality, however. But, apparently, U.S. threats of retribution against England were just that: threats.
What those in Great Britain did not know was that there was never any real teeth to (U.S. Secretary of State William) Seward's policy as, "...Lincoln nipped the policy in the bud." However, having not known this, Seward's claims and threats of force did have an impact on the Great Britain's approach the Confederacy. (Ephraim) Adams writes, "...in England all that the public knew was this American irritation and clamour...the London press expressed itself a bit more cautiously, for the moment, merely defending the necessity of British neutrality." It can be safely stated that Seward's political positioning with Great Britain influenced its relationship with the Confederacy during the early part of the Civil War.
France, on the other hand, refused Confederate recognition primarily because of that nation's
"strong stand against slavery... and a frustrating policy of inaction by the British, as well as the troubling perceptions of some Europeans that the Confederacy was located in South America and that most Americans were a cross between Davy Crockett and Sam Slick."
No major nation ever officially recognized the CSA; their safest havens appeared to be in The Bahamas and Cuba (neither of whom were independent at the time), where most of the South's blockade-running ships resupplied. President Davis, meanwhile, had assumed from the start that the South's production of King Cotton would eventually provide his infant nation with plenty of international support--a belief that proved tragically incorrect for length of the war.
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