When the American Civil War started in 1861, there was great anxiety in the cloth manufacturing centres of England. Following the War, the import of raw cotton was drastically reduced. Only 3% of the normal import was got at this time. British government started sending urgent messages to India asking the Indian officials to send more cotton to England. The cotton mill owners of England came to Bombay see the situation in person and to encourage cotton cultivation here. The price of cotton skyrocketed.
The exporters of Bombay used this opportunity to make maximum profit. The British tried all they could to get more cotton from India. To encourage cotton cultivation, they gave advances to the ‘sahukars’ (moneylenders) of Bombay. The Sahukars gave money to the village moneylenders who gave this money to the farmers on high interest rates. It was easy for the farmers to get loans from these money lenders. The moneylenders were confident that they would get their money back. These developments helped the cotton farmers of Deccan to expand their cultivation.
