Credit Dries Up
The section describes a critical period in the Deccan area where the cotton market dramatically shifted. Initially, during the cotton boom, Indian merchants believed they could replace American cotton in British markets, leading to heightened demand and financial optimism. However, this illusion faded post-American Civil War when cotton production resumed in the U.S., causing Indian exports to plummet.
As demand decreased, moneylenders, or sahukars, became reluctant to extend credit to ryots, significantly impacting their ability to pay their debts. Concurrently, the colonial government increased revenue demands on ryots, heightening their economic struggle. This cumulative financial distress forced ryots to seek loans despite the moneylenders holding a much harsher stance. They charged exorbitant interest rates, violated customary agreements, and often failed to provide proper receipts for transactions, intensifying the crisis. Consequently, the relationship between ryots and moneylenders soured, fueling resentment and unrest in the countryside. Ultimately, the drying up of credit played a pivotal role in driving uprisings among the peasantry, revealing the harsh realities of colonial economic policies.