That is exactly what I thought when I first learned of it. It was another one of those things about the Civil War period that didn't seem to make sense.
If the South was producing the bulk of the money, why was nearly all of it ending up in New York?
The South was NOT producing the bulk of the money. Exports were not the same as GDP, which was about $4 billion in 1860. Agriculture in total only provided 38% of U. S. GNP and cotton was only a portion of that. Industry accounted for 28% of GNP and services provided another 34%.
In that same year 90 percent of the nation’s manufacturing output came from northern states. The North produced 17 times more cotton and woolen textiles than the South, 30 times more leather goods, and 20 times more pig iron. Even in the agricultural sector, northern farmers were out-producing their southern counterparts in several important areas. In 1860 northern states produced half of the nation’s corn, four-fifths of its wheat, and seven-eighths of its oats.
The real faction that wanted to fight to keep what they had were Southern slaveholders. In 1860, the economic value of slaves in the United States exceeded the invested value of all of the nation’s railroads, factories, and banks combined. Now, how does that square with your fallacies of bogus King Cotton?