Had it been shipped, sold & banked, $200 million in 1861 would have purchased hundreds of thousands of repeating rifles, with ammunition (circa $100 each), plus the latest equipment to produce more, plus dozens of state-of the art warships ($500,000 each), field artillery, plus steel for rail & engines, copper for telegraph wires, etc., etc. So right away, the Confederacy would start with a huge material / technological advantage. Speculation in commodities markets can be a risky business. A lot of factors can affect the price and it's easy to go wrong. The British were stockpiling raw cotton and unsold fabric was building up in warehouses. Just what the optimal solution would be could be difficult to figure out.
If you were the Confederacy, you'd have to choose between selling as much as you could now and possibly deflating the price, or waiting until cotton was in greater demand (which would involve greater risk for your investment). You had the Union navy to worry about, and also, as we now know, the UK would turn to other suppliers of cotton soon enough.
Also, I'm not sure you'd want to be committing your money and labor power to building railroads when war loomed. You'd need those resources for other things, and it would be surprising if the lines were actually built by the time you did go to war.
But certainly, patience (which was in short supply) could really have helped the Confederate government. Maybe their best hope was to call Lincoln's bluff. If they didn't attack federal positions, there wouldn't have been support for federal action against the rebel states. Lincoln would have been bound by his word not to strike the first blow. If he went back on it, Northerners wouldn't have supported him.
In any case, the more time passed without war, the more secession and Southern independence would become irreversible real world facts. The problem was that Davis and the other secession activists wanted a border that was substantially further north than what they had in early 1861, so they were willing to make aggressive moves that would eventually have led to war even if Fort Sumter weren't an issue.
x:
"Speculation in commodities markets can be a risky business.
A lot of factors can affect the price and it's easy to go wrong..." But it's hard to imagine anything more wrong than letting cotton sit rotting on docks while your customers find alternate supply sources.
What were they thinking?
It might help to remember that Jefferson Davis was the former US Secretary of War, and under him the Army's highest ranking general, Winfield Scott, inherited or developed what eventually became the Anaconda Plan to strangle the South, first economically, then militarily.
So Davis had to know what was coming, once war began.
So how smart did Davis have to be, to know that the best way to avoid strangulation was to, ahem, let sleeping snakes lie?
