- Khandavalli Satya Deva Prasad
(Source: Chapter 12 of Operation Red Lotus: A Strategic Reassessment, by Prarag Tope, Rupa and co., 2010).
In Aug of 1857, the war in India had shaken the world. England was mobilizing tens of thousands of their soldiers in other parts of the world for deployment in India. This needed large amounts of funds.
An American businessman called George Francis Train, who later ran for the president, in his book published in 1857, asks:
“England says they are short of funds. Where are the hundreds of millions of silver that have been shipped there, disturbing the currency of the world?”(George Francis Train, Young America in Wall Street, pp.198-200, Sampson Low and Son, London, 1857).
During the summer of 1857, in the month of June and July, the English discreetly withdrew hundreds of millions of dollars of their investments from US banks and trusts, creating a massive liquidity crisis.
On 24th Aug 1857 the Ohio Life Insurance and Trust Company in the United States filed for bankruptcy. This failure was the beginning of what is known as the ‘panic of 1857’, a severe economic crisis that the US faced, and spread into Europe. India was a major supplier of cotton to Britain in this period. The disruption of cotton supply to Britain encouraged the English to look elsewhere for cotton- including the southern colonies of the United States. The panic of 1857, in combination with the dynamics related to cotton trade with Britain, led to the dramatic clash between the northern and the southern colonies of the US.
Comments: The above extract not only points to the major role played by the Indian economy in the global economy but also its life line role in the British economy. The 1857 First war of Independence waged by the Indians not only shook the British economy to the core but also contributed to far reaching crises in the United States’ such as the panic of 1857 and the Civil War. These facts are in stark contrast to what the run of the mill text books on Indian History and Economy teach. They never present the global reach and decisive importance of Indian economy even during the misrule of the British imperialists. This kind of selective blindness in our history, both general and subject specific like economic, scientific needs to be corrected in order to know our true past so that we can use it as the foundation to build our future.