Sponsor Area

Peasants, Zamindars And The State

Question
CBSEENHS12028164

Explain the impact of American Civil War of 1861 on Indian peasants.

Solution

The impact of American Civil War of 1861 on Indian peasants:

(i) When the American Civil War broke out in 1861, a wave of panic spread through cotton circles in Britain.

(ii) As cotton prices soared, export merchants in Bombay were keen to secure as much cotton as possible to meet the British demand. So they gave advances to urban sahukars who in turn extended credit to those rural moneylenders who promised to secure the produce. When there is a boom in the market, credit flows easily for those who give out loans feel secure about recovering their money.

(iii) The ryots in the Deccan villages suddenly found access to seemingly limitless credit.

(iv) They were being given Rs 100 as advance for every acre they planted with cotton. Sahukars were more than willing to extend long-term loans.

(v) While the American crisis continued, cotton production in the Bombay Deccan expanded. Some rich peasants did gain, but for the large majority, cotton expansion meant heavier debt.