The Parliament of Great Britain imposes a…
September 1773 CE
The Parliament of Great Britain imposes a series of administrative and economic reforms by the Regulating Act of 1773, known as the East India Company Act 1773 (13 Geo. III, c. 63), and by doing so clearly establishes its sovereignty and ultimate control over the Company.
The Act recognizes the Company's political functions and clearly establishes that the "acquisition of sovereignty by the subjects of the Crown is on behalf of the Crown and not in its own right."
Despite stiff resistance from the East India lobby in parliament, and from the Company's shareholders, the Act is passed.
It introduces substantial governmental control, and allows the land to be formally under the control of the Crown, but leased to the Company at forty thousand punds for two years.
Under this provision, the governor of Bengal, Warren Hastings, is promoted to the rank of Governor General, having administrative powers over all of British India.
It provides that his nomination, though made by a court of directors, should in future be subject to the approval of a Council of Four appointed by the Crown - namely, Lt. General John Clavering, George Monson, Richard Barwell and Philip Francis.
He is entrusted with the power of peace and war.
British judicial personnel are also to be sent to India to administer the British legal system.
The Governor General and the council are to have complete legislative powers.
Thus, Warren Hastings becomes the first Governor-General of India.
The company is allowed to maintain its virtual monopoly over trade, in exchange for the biennial sum and an obligation to export a minimum quantity of goods yearly to Britain.
The costs of administration are also to be met by the company.
These provisions, initially welcomed by the Company, are to backfire.
The Company has an annual burden on its back, and its finances will continue steadily to decline.