Interesting how connected the global economy was back then too:
In the early 1860s, the American Civil War caused cotton supplies, which had traditionally supported the western cotton trade, to be cut off. In England, this resulted in a depression known as the Lancashire Cotton Famine, however, in India it led to a period of great prosperity and wealth as cotton supplies in the East and Orient were suddenly in great demand.
The situation in India was exacerbated by a famine in 1866, which led to many cotton farmers turning to growing foodgrains. Overnight, many companies that had sprung up in Bombay faced extreme financial distress and their shares tanked. Many of them went into liquidation leaving their lenders including banks, holding dud paper.
Speculation on Indian cotton, followed by failed harvests left Bombay’s banks in crisis and customers struggling to access funds.
I was curious about this bank failure and looked it up. Some backstory here
https://www.qdl.qa/en/bombay-banking-crisis https://www.cnbctv18.com/finance/backstory-the-collapse-of-p...
Interesting how connected the global economy was back then too:
In the early 1860s, the American Civil War caused cotton supplies, which had traditionally supported the western cotton trade, to be cut off. In England, this resulted in a depression known as the Lancashire Cotton Famine, however, in India it led to a period of great prosperity and wealth as cotton supplies in the East and Orient were suddenly in great demand. The situation in India was exacerbated by a famine in 1866, which led to many cotton farmers turning to growing foodgrains. Overnight, many companies that had sprung up in Bombay faced extreme financial distress and their shares tanked. Many of them went into liquidation leaving their lenders including banks, holding dud paper. Speculation on Indian cotton, followed by failed harvests left Bombay’s banks in crisis and customers struggling to access funds.