The Collaborative International Dictionary of English v.0.48:

Oakum \Oak"um\ ([=o]k"[u^]m), n. [AS. [=a]cumba; pref. [=a]-
   (cf. G. er-, Goth. us-, orig. meaning, out) + cemban to comb,
   camb comb. See Comb.]
   1. The material obtained by untwisting and picking into loose
      fiber old hemp ropes; -- used for calking the seams of
      ships, stopping leaks, etc.
      [1913 Webster]

   2. The coarse portion separated from flax or hemp in
      nackling. --Knight.
      [1913 Webster]

   White oakum, that made from untarred rope.
      [1913 Webster]

WordNet (r) 3.0 (2006):

oakum
    n 1: loose hemp or jute fiber obtained by unravelling old ropes;
         when impregnated with tar it was used to caulk seams and
         pack joints in wooden ships