By the Act of 1767, the British Parliament allowed the Company the privilege to retain territorial possession in India. The continuation of the Company was decided in the Regulating Act 1773, wherein it was allowed to exist for the next twenty years. Before the period expired, the Directors of the Company had applied for the renewal of the Charter. The Parliament granted it the Charter for the next twenty years. It was the first in the series of Charters by the Parliament, which the Parliament had continued to renew till 1853. The British Parliament maintained the institution of the Board of Control, which directed, superintend, and controlled the workings of the Company. On every renewal, the Parliament increased its grip over the operation of the Company and simultaneously reduced its privileges and rights. From the Charter Act 1793, a series of Charters sustained the Company till 1858.
The Circumstances Leading to Enactment of the Charter of 1793.
Act of 1786
The British Parliament was dominated by such Political personalities of Britain who were friends of Lord Cornwallis. The loss of American Colonies weighed heavily on the minds of Lord Cornwallis and his friends in the British Parliament. Lord Cornwallis was one of the generals who had surrendered to the American Revolutionaries. Therefore, on his return, his friends tried to give Lord Cornwallis a position of respectability and good pay. It was suggested that he be posted in India as Commander in Chief of Indian forces. The Commander in Chief was also a Council of the Governor-General in Council member. Lord Cornwallis was not ready to join after studying the workings of the government of India. He asked for more power and a better say in the administration. In the Act of 1786, Lord Cornwallis was appointed as the Commander in Chief. The Commander in Chief was given the power to override the Council on his responsibility. In addition to that, Lord Cornwallis was also made the Governo-General in Council. He was empowered to override the decisions of his Council. It was made possible because William Pitt the Younger was influential in the Parliament, and he favoured Lord Cornwallis.
Declaratory Act of 1788
Henry Dundas was the first President of the Board of Control. He was a friend of William Pitt the Younger. He continued as the President for a long time. However, the style of working and the attitude of Henry Dundas while dealing with the Company brought him into conflict with the Directors of the Company. Henry Dundas deputed four Royal Regiments to India and paid the expenses out of the Indian Revenue. The Court of Directors objected to the billing. The Parliament responded by passing the Declaratory Act of 1788. The 1788 Act transferred the full power and supremacy to the Board of Control. The Act also stipulated that the Directors should place the Company's annual account before the Parliament. The provisions were also added to settle the gratuity and the salaries. The Act transferred the power of the Company to the Ministry of the Crown.
The Directors of the Company applied for the renewal:
The Directors of the Company sought the renewal of the Charters before the tenure of twenty years came to a close by 1793. The power of the Company was gradually being withdrawn from it by statutes like the Declaratory Act of 1788. However, the Company was still secure in the monopoly of Indian trade. The monopoly of trade with India held enough attraction to maintain the Company.
Support of Ministers to the Company:
Many Ministers in the Crown had a direct interest in the existence of the Company. They had patronised the Company.
Favourable Circumstances:
When the Company's expiry date approached, Britain got involved in a war with France, and the country's attention was entirely diverted to that war. In the meantime, the Company's application for a licence renewal was brought before the Parliament. Some merchants petitioned the Parliament to end the monopoly of trade granted to the Company. However, many ministers patronised the Company. The Bill for a new Charter was quietly passed in the Parliament. The features of the Charter Act are given below.
Main Provisions of the Charter Act 1793:
Provision 1.
The Company's trade monopoly was extended for twenty years. The private individuals were allowed to trade to the extent of 3000 tons of shipping.
Provision 2.
The members of the Board of Control and its staff were to be paid from India's revenues.
Provision 3.
The Governor Generals and the Governors of the Presidencies were empowered to override the majority in their Councils. This power was already given to Governor-General Cornwallis in 1788 in the Declaratory Act. The number of members in each Council was restricted to three.
Provision 4.
The Governor-General in Council was given full power and authority to superintend, direct, and control the Presidency Governments. When the Governor-General visited other Presidencies, a provision empowered him to supersede the Governor there.
Provision 5.
The Governor-General was empowered to depute one of the members of his Council as the Vice-President of the Council. The Vice-President was to act for the Governor-General when the latter was on tour to other Presidencies.
Provision 6.
The Governor-General, the Governors, the Commander-in-Chief, and some other officers were not permitted to leave India while they held office. This provision continued even when the Company was abolished.
Provision 7.
The Commander-in-Chief was removed from the Council of the Governor-General's membership. He was eligible to become a member of the Court of Directors, which deputed him to the Council.
Provision 8.
The Charter reiterated the policy of non-intervention, no further conquests, and no further extension of the territories in India. It was declared the British nation's wish, honour, and policy. This policy was inaugurated by the Pitts India Act of 1784 and again reiterated in the Charter Act of 1793.
Provision 9.
The provision ruled that accepting gifts and presents by British subjects holding any office or employment under the Royal Majesty or the Company was unlawful. It was declared an act of extortion and a misdemeanour at law.
Provision 10.
The Civil Service rule adopted the principles of grading ranks and seniority in service. Promotion to a higher post was made based on length of service. Only Covenant servants of the Company were to be given positions with pay over £500 a year.
Provision 11.
The sale of liquor was made subject to the grant of a licence by the Governor-General, who was empowered to levy a sanitary tax in the Presidency towns.
Provision 12.
The Supreme Court of Calcutta's jurisdiction was extended to the high seas and given admiralty jurisdiction.
Provision 13.
The Governor-General was given the power to appoint the members of Civil Services as Justices of Peace.
Provision 14.
The Company's finances were also regulated. Under a provision of the Act, a particular amount was assumed to be the Company's annual surplus. Five lakh pounds were allocated from that assumed fund to pay the Company's debts. A part of that fund was made available to raise the dividend from 8 per cent to 10 per cent.
Criticism and Significance of the Charter Act 1793.
1. Fresh Charters after every 20 years
It was the first in a series of Charter Acts. Three more Charter Acts followed, which continued the Company's existence until it was abolished by the Good Government of India Act in 1858. The Regulating Act gave the Company a patent for twenty years. It introduced Parliament's measure to establish control over the workings of the Company under the direction and supervision of the State. Parliament passed the Charter Act of 1793 exclusively to give patents to companies.
2. Provisions of the 1784 Act reiterated
The Charter Act 1793 reiterated the principles and policies defined in Pitt's India Act 1784. The Act stipulated that the Company would not follow the policy of territorial expansion. However, it remained merely high-sounding morals on paper. The Governo-Generals like Lord Cornwallis, Lord Wellesley, Lord Hastings and others expanded the territorial limits. The Directors of the Company were also against it. However, the Governors-General benefited from the distance from London, the underdeveloped mode of communication, which was time-consuming, and the more protracted processes of decision-making on the part of the Board of Control and Court of Directors.
3. Strengthened the Control of Parliament over the Company
The Charter Act 1793 consolidated the provisions of the Regulating Act 1773 and the Pitt's India Act 1784. It provided more details about the rules already established by earlier statutes. The powers of the Governor-General were defined, and he was made more powerful.
4. Exploitation of Indian Wealth increased
The Charter Act of 1793 increased the expenditure of the Indian Government. The salaries of the Board of Control were derived from India's revenue. India suffered from regular famines. The economic condition of India was deteriorating in the territories which had come under the rule of the Governor-General. The expenditure on the Indian revenue continued for too long. It was finally curbed by the Government of India Act of 1919.
5. The Post of Governor-General in Council consolidated
No significant changes were made in the government of India. However, the Governor-General's power was increased. He was empowered to make appointments to the post of Justice of Peace, given the power to levy taxes, and authorised to issue liquor licences.
6. Parliament’s dominance over revenue and territory of British India administration
The Act brought finance and accounts under the purview of Parliament. The annual account was now placed before the Parliament. The Parliament assumed that the Company earned a surplus every year. It issued directions to the Company to make specific payments. The Company's financial independence was taken away. However, the Company was allowed a monopoly of trade.
The Charter Act of 1793 was a consolidating measure. It laid out the high-sounding principle of non-aggression. However, the governor-general did not follow that policy. The Company continued to expand its territorial limits. Before the Charter Act of 1813, it had brought under its sway a significant part of Indian territory.
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