. Advent of Europeans The arrival of the Europeans, beginning with the Portuguese, was the first major external shock to this well established and regulated system of trade. The primary interest of the Europeans was in securing spices for Europe directly. In the olden days, the spices were carried to the Persian Gulf ports and then overland to the Mediterranean.
They soon learned that a simple bilateral exchange was not workable in the Asian markets. This was mainly because there was no demand in the local economies for the products of Europe, other than gold or silver. On the other hand, because of the universal demand in south- east Asian markets for Indian textiles, clothes from India served as a substitute medium of exchange. The demand for the painted fabrics of the Coromandel coast in the Indonesian islands, in particular, made the Dutch and the English set up their establishments on the east coast to procure the cloth that could be profitably exchanged for spices.
smaller centres. If mercantile activity can be deemed to be a pyramid, this class of merchants would be at the base of the pyramid. At its top were the great merchants, who were the prime movers in overseas trade with great reserves of capital, who controlled the producers in the hinterland of the ports. They generally employed the services of a network of brokers and sub-brokers to acquire goods from the interior regions or hinterland of the port towns.
These agents could be said to form the middle tier of the merchant pyramid. Banking and Rise of Merchant Capitalists Commercial institutions were also well- developed to promote such extensive trade. Because a variety of coins were in circulation, there were money-changers or shroffs to test coins for their purity and decide their value in current terms. They also served as local bankers.
Instead of transferring money as cash from one place to another, merchants issued bills of exchange, known as hundis which would be cashed by shroffs at different destinations at a specified rate of discount. This well-developed infrastructure and organization of trade enabled the rich merchants to amass large fortunes. Such merchant princes or capitalists were found in all parts of India – the bani as and Parsi merchants of Surat, the nagarseths of Ahmedabad, the Jagat Seths of Bengal, and the merchant communities of the Coromandel. Contemporary European observers noted that these merchants appropriated all the profits from trade to themselves, while the earnings and condition of the weavers and peasants were pitifully poor.
This rendered them especially vulnerable to natural calamities like famines. In the Madras region, for instance, famine occurred at least ten times between and . Sometimes there was widespread famine which lasted for several years on end. This drove the rural poor to sell themselves into slavery.
Dutch records from the Coromandel regularly mention male and female slaves among the cargo sent to Batavia. XI History - Lesson - - The Coming of the Europeans Over these one hundred and fifty years, the English in India were gradually undergoing a metamorphosis from being traders to builders of a trading empire, eventually emerging as the virtual rulers of large parts of the country.