History

A complex and complete market :
Before the arrival of outsiders the trade was handled by a variety of Indian merchants and bankers. The whole process of trade basically involved three steps -
• Financing production
• Carrying or transporting goods
• Supplying goods to the exports
Supply merchants linked the port towns to the inland regions. They gave advances to weavers, procured the woven cloth from weaving villages, and carried the supply to the ports. At the port, the big shippers and export merchants had brokers who negotiated the price and bought goods from the supply merchants operating inland.
However, once the East India Company established political power, it could assert a monopoly right to trade. It proceeded to develop a system of management and control that would eliminate competition, control costs, and ensure regular supplies of cotton and silk goods. This it did through a series of steps.
(a) The Company tried to eliminate the existing traders and brokers connected with the cloth trade, and establish a more direct control over the weaver. It appointed a paid servant called the gomastha to supervise weavers, collect supplies, and examine the quality of cloth.
(b) It prevented Company weavers from dealing with other buyers. One way of doing this was through the system of advances. Once an order was placed, the weavers were given loans to purchase the raw material for their production. Those who took loans had to hand over the cloth they produced to the gomastha. They could not take it many other trader.
(ii) Effects :
(a) Soon, however, in many weaving villages there were reports of clashes between weavers and gomasthas. Earlier supply merchants had very often lived with in the weaving villages, and had a close relationship with the weavers, looking after their needs and helping them in times of crisis. The new gomasthas were outsiders, with no long-term social link with the village. They acted arrogantly, marched into villages with sepoys and peons, and punished weavers for delays in supply-often beating and flogging them. The weavers lost the space to bargain for prices and sell to different buyers; the price they received from the Company was miserably low and the loans they had accepted tied them to the Company.
(b) In many places in Carnatic and Bengal, weavers deserted villages and migrated, setting up looms in other villages where they had some family relation. Elsewhere, weavers along with the village traders revolted, opposing the Company and its officials. Over time many weavers began refusing loans, closing down their workshops and taking to agricultural labour.
(c) Many weavers had small plots of land which they had earlier cultivated along with weaving, but now they had to lease out the land and devote all their time to weaving.