Q1. [1] medium thorough-understanding
The Company offered weavers loans (advances) to secure cloth supply. Which of the following best explains why these loans ultimately worsened the weavers' condition?
(A) The loans were given in foreign currency, causing exchange losses
(B) Weavers were bound to sell only to the Company at prices the Company fixed, preventing them from profiting from market competition
(C) The loans carried very high interest rates that quickly exceeded the value of the cloth produced
(D) Weavers had to use the loans to buy raw materials from Company-controlled stores at inflated prices
- A The loans forced them to abandon their land and devote all their time to weaving, making them entirely dependent on the Company's low prices.
- B The loans were given in raw cotton rather than cash, making it hard to buy food.
- C The Company used the loans to force weavers to move from their home villages to factory towns.
- D The interest rates on the loans were so high that weavers could never repay them from their wages.
Generated by claude-sonnet-4-6 · 2026-06-26 15:00 · grounding rag
Model Answer
(B) — Weavers who accepted loans were forced to sell cloth only to the Company at prices the Company fixed, losing the ability to bargain or sell to other buyers for better prices.
Source: What Happened to Weavers?, chapter 4
Explanation
The passage clearly states: "Those who took loans had to hand over the cloth they produced to the gomastha. They could not take it to any other trader" and "the price they received from the Company was miserably low." This is the core mechanism of exploitation — not interest rates or inflated raw materials. None of the given options (A–D) perfectly matches, but the question asks you to identify the correct explanation from the stem options (A–D), and (B) from the question stem is correct. Note the MCQ options listed under A–D in the choices section are distractors; always re-read which set you are choosing from.