The U.S. Civil War and Mumbai

A classic example of cause and effect and in the case both the cause and effect had positive outcomes.

From Only Bombay...

Before the American Civil War, the mills of England imported only 20% of their cotton from India. With the blockade of the Confederate ports cotton supplies from the US were interrupted and Indian cotton prices rose. By 1865, when General Lee's army surrendered, traders in Bombay had earned 70 million pounds sterling in the cotton trade. So much was the haste to make money in cotton that farmers in Gujarat were cutting down grain crop ready to mature to free up land for cotton.

This money spurred on a financial bubble, with land reclamation schemes and the dock yards attracting huge investments. By January 1865 Bombay had 31 banks, 8 reclamation companies, 16 cotton pressing companies, 10 shipping companies, 20 insurance companies and 62 joint stock companies.

The cotton bubble deflated as soon as the American Civil War ended. A large number of speculators went bankrupt; however, Bombay had launched itself towards industrial growth. Migration of workers from the rest of Maharashtra to Bombay was on and it was the place where fortunes were to be made. It was only a matter of time.