British Regulating Act

Explanation and Analysis of the Document

The British Regulating Act of 1773 marks the first instance in British history of a parliamentary act in response to the shortcomings of a Crown charter. The act is described in its title as “A Bill [With the Amendments] for Establishing certain Regulations for the better Management of the Affairs of the East India Company, as well in India as in Europe.” This description suggests important issues. First, the bill explicitly states that its purpose was to create “better management” of the East India Company, pointing to the dissatisfaction of the government with the company’s state of affairs. The phrase “in India as in Europe” is particularly important, as it makes immediately clear that the jurisdiction of the government does not exist only within Britain and that the bill intends to regulate the actions of officials in India as well. This act marks the first instance of such overt British governmental involvement in the activities on the subcontinent.

Paragraphs 1 and 2

The British government’s dissatisfaction with the management of the East India Company is revealed in the opening lines of the bill. The East India Company had previously operated in relative sovereignty under various charters granted by the Crown. These charters placed very limited regulation on the company. Thus, the bill begins by declaring that the former charters granted insufficient power to address the widespread instances of fraud and other forms of abuse and mishandling on the part of the company. It further notes that this state of affairs had led to the “Scandal” and “Dishonour” of the nation. The East India Company had become an embarrassment to the British (particularly within the increasingly competitive era of European colonial expansion) and was financially unable to meet its obligations to the nation. The document’s forceful, and even at times harsh, tone reflects the frustration and, in some corners of government, outrage at the actions of the company. The opening paragraph acknowledges that there is not sufficient governmental control in the charter agreements and that the present circumstances of the company (widespread scandal and virtual bankruptcy) required increased governmental involvement. Paragraph 2 indicates that the governmental structure of India “has not answered the good Purposes intended thereby.”

Paragraphs 3–5

While the act stipulates many specific requirements pertaining to the operation of the company, two key requirements position the Regulating Act as an important historical document. The first is the establishment of a governor-general of India based in Bengal and presidential councils for Madras, Bengal, and Bombay. The second is the establishment of a supreme court in India. These two key aspects of the documents marked the first substantial move toward British control in India. Paragraphs 3 through 5 outline the new governmental structure of India.

The governor-general was established alongside the presidential councils “for the better Management of the said United Company’s Affairs in India.” The act declares that at Fort William in Bengal, a governor-general and four councilors will be appointed. This directive effectively established the position of governor-general and positioned Bengal firmly as the seat of the British imperial presence because the new governor-general would be based there. The governor-general would have control of the “Ordering, Management, and Government, of all the Territorial Acquisitions and Revenues.” He would have the “Power of superintending and controuling the Government and Management” of regions such as Madras, Bombay, and Bencoolen. He would have military power to defend British interests and to negotiate with “Indian Princes or Powers,” a reference to the so-called Princely States that remained under the nominal control of local rulers. The act specifies that “all Transactions and Matters whatsoever, that shall come to their Knowlege, relating to the Government, Revenues, or Interest, of the said United Company” are to be communicated to the governor-general. Further, the act mandates frequent and detailed communication of all matters pertaining to India to the Crown and the ministries in England.

The intention of this part of the act was to alleviate the corruption and personal profiteering that had been taking place by creating a more clearly accountable political figure in the region and outlining the terms of office and service. This part of the act also specifies that the governor-general’s and councilors’ term of office would be five years and stipulates the process by which they could be removed. Notably, the governor-general could be fired by the East India Company, but the directors could ask the king to remove the governor or a councilor. This stipulation is important because it openly illustrates the new, more assertive role of the British government in the affairs of the East India Company.

Paragraphs 6 and 7

Following the establishment of the political and administrative offices of governor-general and the councils in India, the act addresses the other key issue at hand. The act set up a court system in India for the members of the East India Company and related individuals. While some versions of British courts had been operating in the outpost regions prior to the passage of the act, the courts were not unified, and their authority was ambiguously defined. This act’s definition of the British courts and the role of British law in the region came in response to the corruption and abuses of company officials. The act not only made East India Company officials accountable to British law but also provided sweeping authority to the court in the region.

The act establishes a “Supreme Court of Judicature” at Fort William. The court was to consist of a chief justice and three additional justices. The court would have “full Power” to “do all such other Things as shall be found necessary for the Administration of Justice.” Notably, again, the court was seated in Bengal at Fort William, further designating Bengal as the center of British power in the region. The phrase “to do all such other Things as shall be found necessary for the Administration of Justice” is particularly vague in this section of the document and led to wide interpretation of the actual limits of the court’s power. Furthermore, the majority of clerks and officers of the court were to be appointed by the judges, giving them complete control over who had access to the positions. This is an issue that was revisited with Pitt’s India Act of 1784.

The document goes on to state that the jurisdiction of the court extended not only to employees of the East India Company but also to any natives of India making complaints against anyone related to the company. While this stipulation was presented as a way to establish British governmental responsibility for the actions of East India Company officials, it also placed British subjects under the British judicial system and alleviated the threat of local justice systems that might not be sympathetic to the British presence. The establishment of the superiority of British law and order on the subcontinent is a profoundly important aspect of the document, even though full, overt British control of the region would come later.

Paragraph 8

Another significant provision of the act is contained in the eighth paragraph, which states that it will be unlawful for persons who have been dismissed from or resigned from the East India Company to carry on trade in India. It also states that it would be unlawful for “any free Merchant, free Mariner, or other Person” whose agreements with the East India Company to engage in trade have expired to “carry on, or be in any wise concerned in any Trade, Traffick, Merchandize, or Commerce” in the East Indies. This provision reconfirms the East India Company’s monopoly in the region. Anyone who had ever worked for the East India Company was forbidden to work for, or even contract for, any other trading entity in the region.

Paragraphs 9 and 10

Finally, the last major section of the act declares that the governor-general and councils could establish “Rules, Ordinances, and Regulations” as they saw fit. The supreme court had to approve and confirm these regulations as legal, and they could not run contradictory to local laws, but fines could be assessed in cases of noncompliance. This step was important in the imposition of British authority on the Indian Subcontinent as it set the foundation for British lawmaking in the region. Paragraph 9 specifies procedures for enacting and promulgating these rules, ordinances, and regulations, and for repealing them. Paragraph 10 gives the governor-general and council “full Power and Authority to act as Justices of the Peace” in the Indian settlements and “to do and transact all Matters and Things which to the Office of a Justice or Justices of the Peace do belong.”