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Consider the following statements:
1) American Civil War (1861-1865) boosted the demand of Indian Cotton
2) The boost in the demand of Indian cotton ultimately led to failure of Bank of Bombay in 1866.
Which among the above statements is / are correct?
1 only
2 only
1 and 2
Neither 1 nor 2.
Correct answer is C.
Explanation: During the American Civil War (1861–65) cotton supplies to Britain’s textile mills dwindled, causing a boom in production elsewhere in the Empire.In the 1860s, cotton was a key import, supplying Britain’s busy textile mills. The majority of raw cotton supplies came from America. However, during the American Civil War (1861–65) raw cotton was no longer being grown and shipped. The British needed to find new sources for their mills, so turned to India to supply their needs.The outbreak of the American War ameliorated the problems of demand. Prices of western Indian cotton shot up from an average of Rs. 128 per candy in 1860 to Rs. 314 in 1863 and a peak of Rs.. 627 in 1865. The extent of land under cotton cultivation increased substantially throughout western India.
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