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Historic Uses
Various Native American tribes, including the Houma and the Seminole, have used Spanish moss for a variety of purposes. When the outer coating of the plant is cleaned away, tough, black, curly inner fibers are exposed.  These strong fibers were useful in many ways.  The fibers were woven into a course cloth that was used for bedding, floor mats and horse blankets.  The fibers could be twisted into cordage that was used as rope.  The ropes were used to lash together the poles that composed the framework of housing.  The dried fibers were used to remove scum in cooking.

The process used to strip off the outer coating is still used today.  It consists of placing bundles of the green moss into a shallow pond for six weeks, long enough for the outer coat to rot away.  Dry Spanish moss was used for fire arrows.  The moss was wrapped around the base of the shaft, lit on fire and then shot from the bow.

The moss was also an ingredient in the clay that was used to plaster the insides of houses.  Fresh Spanish moss was gathered, soaked in water and stuffed into dugout canoes to keep them from drying out and splitting.  The Natchez tribe of Louisiana played a game that used fist-size balls that were stuffed with Spanish moss.  The plant was boiled to make a tea for chills and fever.

There is evidence that Spanish moss was used over 3,000 years ago to make fire-tempered pottery.  Although the moss burned away during the firing, the distinctive pattern of the fibers is still evident in the clay pottery. Spanish moss is still used today by many Native American tribes. For example, the Houma and the Koasati use Spanish moss in the construction and decoration of small dolls.

Civil War
The use of woven spanish moss blankets and saddle pads was adopted by Conferderate calvalry during the civil war. By the end of the war it was the most commonly issued blanket, which is probably not surprising considering its abundance in the south. It was durable and waterproof, did not chafe the horses, and allowed airflow and evaporation of horse's sweat.

Wildlife
Several bird species such as Yellow-throated warblers build their nests inside clumps of living Spanish moss, while  several others gather the moss for nesting material.  There is at least one species of spider that only occurs in Spanish moss and several species of bats including the Seminole bat, roost in clumps of Spanish moss.

Livestock
The plant is used as fodder for animals.

Other Uses
Spanish moss is used in flower arrangements and as decorations for handicrafts.  It is said to be excellent mulch for the garden.  Spanish moss is grown commercially for use as packing material and as a replacement for horsehair in upholstery and mattress stuffing.
Source: USDA

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