Which of the following statement (s) is/are correct about the decade of the 1860s in India?

Statement A) While the American crisis (American Civil War) continued, cotton production in the Bombay Deccan expanded.

Statement B) By 1862 over 90 percent of cotton imports into Britain were coming from India, bringing prosperity to all the cotton producers in India.

Only statement A is correct.

The correct answer is Option 1- Only statement A is correct.

Statement A) While the American crisis (American Civil War) continued, cotton production in the Bombay Deccan expanded.

Correction in Statement B- By 1862 over 90 per cent of cotton imports into Britain were coming from India. But these boom years DID NOT BRING prosperity to all cotton producers. Some rich peasants did gain, but for the large majority, cotton expansion meant heavier debt.

 When the American Civil War broke out in 1861, a wave of panic spread through cotton circles in Britain. Raw cotton imports from America fell to less than three per cent of the normal: from over 2,000,000 bales (of 400 lbs each) in 1861 to 55,000 bales in 1862. Frantic messages were sent to India and elsewhere to increase cotton exports to Britain. In Bombay, cotton merchants visited the cotton districts to assess supplies and encourage cultivation. As cotton prices soared (see Fig. 10.15), 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.

These developments had a profound impact on the Deccan countryside. The ryots in the Deccan villages suddenly found access to seemingly limitless credit. 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. While the American crisis continued, cotton production in the Bombay Deccan expanded. Between 1860 and 1864 cotton acreage doubled. By 1862 over 90 per cent of cotton imports into Britain were coming from India. But these boom years did not bring prosperity to all cotton producers. Some rich peasants did gain, but for the large majority, cotton expansion meant heavier debt.