What happened in the cotton industry in 1861?

Great question, Kaia!

1861 saw Southern cotton merchants refuse to ship out their cotton. The plan was to use the assumed irreplaceability of their cotton to establish dominance and ideally force European intervention in the budding war. This backfired on the confederacy: the demand for cotton was satisfied by other parts of the world (many of them being British colonies, such as India). The decrease in the export of cotton would mainly have negative effects on the southern economy. The Union navy would later exacerbate this by blockading major confederate ports.