Why Europe Would Not Ally With the CSA: Repudiation of Bond Investment Debt

What is impossible to understand is why the five states that flat out repudiated that debt to European investors, the heart of secession and the CS, seemed to have no memory of doing this.  So, until the very bitter end, they still expected that Europe would come in on their side against the Union.  Now European nations were not, and did not, recognize the CSA as a nation for many reasons, but this debt repudiation, which directly did great damage to many banks and families in England and Europe, had not been forgotten. This is what they could expect from a want to be nation like the secessionist states. Yet,  DeBow even, with all his spewing of numbers and facts and stats never ever mentioned this huge Southern scandal of the 1840's, to which Mississippi was central.

There are many articles and books on the Mississippi Repudiation of the 1840's, but for some reason not many Civil War historians bring it up.

The primary reason Mississippi refused to repay her debt was that it would mean a tax; at the time Mississippi was the wealthiest state, but most of the white population were slave owning planters -- an enormous part of the population was made up of slaves, who did not own anything.  Mississippi was not going to tax her own.  Let the feds -- i.e. other tax payers -- pay for her debt or the hell with it.

An entertaining account is here.

In 1840, the state of Mississippi defaulted on interest payments on $2 million of Planters Bank bonds and $5 million of Mississippi Union Bank bonds. About the same time, seven other states and one territory (later granted statehood) defaulted on their debts, as did the Republic of Texas (later annexed as a state).

Most states later reconciled with their creditors; for example, they resumed interest payments and funded interest arrears. Not Mississippi.
Mississippi proceeded to repudiate both issues of bonds, and, further, to undermine the private debts owed to its state-chartered banks.

Back then, nations that defaulted on their international debts put themselves at the risk of invasion. In the sovereign debt-repayment literature, such invasions, and threats to invade, are called gunboat diplomacy.

In an 1843 debate between a probond Mississippi Democrat and an antibond Democrat, the antibond Democrat spoke of British cruisers off the state's shore. At this point, a member of the audience spoke:
Sir, in that event I join my countryman who opposes the payment of the bonds. My sword … sir, the last drop of my blood, shall be spent in resisting the demand. My state, sir, may she be always right, but, right or wrong, the state, sacred, intangible and profane, forever.

In the United States, states are sovereign. They are the final authority when it comes to their debts. So, states seemed immune to invasion for nonpayment, since the US Constitution requires the federal government to defend the states. But, again, in 1843, a Whig and former president, John Quincy Adams, offered a resolution in the US Congress that would deny Mississippi the protection of the federal government if the state was invaded by its creditors.

In the event of such a war, the State involving herself therein will cease thereby to be a State of this Union, and will have no right to aid in her defense from the United States, or any one of them.

A hundred years later some of the European creditors were attempting to collect what was owned them.