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By chance, the British had a glut of cotton in 1861. Also the cotton workers in Lancashire were solidly anti-Confederate, unlike most prople in the Westminster Parliament.
In the first year of the war, there was a cotton surplus, so nobody was particularly dependent on American cotton.

Also the cotton workers in Lancashire were solidly against slavery, and would resist any attempt to support the Confederates.

Finally, Lincoln passed the Emancipation Proclamation, making it impossible for free nations abroad to support the South without looking pro-slavery themselves.

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