Circumstances at the time of the enactment of the Charter Act of 1813 with Video

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Introduction

Among the historians, the Charter Act of 1813 is rated more significant than the Charter Act of 1793. There are reasons for such an inference. The Charter Act of 1793 had given the patent to the Company for twenty years. There was a lot of agitation against the renewal of the Charter when twenty years ended. But, it was finally renewed for the next twenty years by the  Charter Act of 1813. The Act ended the monopoly of the trade of the company under the laissez-faire theory of Adam Smith, provided for the education of the Indians under the principles of Utilitarianism, and asserted the complete sovereignty of the British Crown in and over the Company's territories following the policy of imperialism.

Circumstances at the time of the enactment of the Charter Act of 1813.

1. The Prevailing Political Ideologies of the time

Adams Smith published his book “An Inquiry into the Nature and Causes of the Wealth of Nations” in 1797. In the book, he propounded a principle of political economy, which became famous as the principle of the Leissez Faire. Soon, it took hold of the English merchant's mindset as well as the politicians of England. In 1813, the twenty-year period of the monopoly of trade to India granted to the East India Company in 1793 expired. The anti-monopolists attacked the East India Company vehemently and demanded to abolish its monopoly. In such a political climate, the Directors of the Company again approached the Parliament to renew its charter.

2. Economic Crises of the time

At the beginning of the nineteenth century, Europe was under Napoleon's domination. Napoleon tried to subjugate Britain, which he had termed a nation of shopkeepers. He adopted the political weapon of the Continental System, which was a strategy of economic blockade. It severely affected the trade and industry in Britain. The prices of the staple food increased. In 1811, Britain suffered an economic crisis. The harvest had failed, and it was followed by riots. Unemployment was on the increase, and wages declined. Britain sought the answer in the political economy theory of Adam Smith which came in support of free trade. The leading politicians in the House of Commons who were in contact with the directors of the Company frankly told them that they would not be able to safeguard their privilege of the monopoly of trade with India. The House of Commons had reached a conclusion that the Indian trade would be flung open to all the interested merchants.

3. Problems of Company's Creation

The East India Company had created many difficulties by its own acts and policies, and it had created a problem for it in England. The policy of war and expansion adopted by Lord Wellesley had enlarged the Indian territorial possessions. Except for a few regions like Punjab and Sind, the rest of India had passed under British paramountcy. It had become difficult for the Company to continue as a political sovereign and a commercial organisation.

4. Massive Debt of the Company and an Important Fifth Report

The debt of the company had increased tremendously before the expiry of its period before 1813. It resulted from the aggressive policy adopted by Lord Wellesley in India. In 1805, the Company was under a debt of 2.1 crore pounds, paying 28 lakhs interest annually. In 1808, the Directors of the Company applied for a substantial loan from the Government. The House of Commons appointed a Committee to enquire into the financial difficulties of the Company. The Committee submitted its report in July 1812, which is famous as the Fifth Report. The Fifth Report is considered to be the most authoritative document on the realities of the land revenue and judicial and political arrangements in India at that time.

5. Anti-monopolists Parliamentarians and their Private Trade interests lobby

No sooner did the Directors apply for the new charter than there started a heated debate in the House of Commons. A group of parliamentarians aggressively urged the view in the House of Commons that the monopoly of Indian trade given to the Company must be ended, and all British citizens must get the right to trade freely in India. The parliamentarians supporting the private trading interests gradually became stronger in the House of Commons. The Directors of the Company made every effort to neutralise the anti-monopolist move in the British parliament. The company petitioned the legislature to present its case before a council of the Parliament. The company was given the opportunity.

6. The Directors sought a Hearing in the Parliament

The Directors pleaded before the Council of the Parliament, supported by strong evidence and testimonies of the people who were directly associated with the working of the company in India. The Company presented two major arguments. Their first argument was that with the end of the monopoly on Indian trade, their trade profits would dry out, and it would not be feasible for the Company to conduct government work over the Indian territories. Their second argument was that the unlimited access to the Europeans in the Indian trade would create such political dangers that might not be manageable. The witnesses authenticated their stand in support of leading people like Warren Hastings, Lord Teignmouth, Charles Grant, and Colonel Malcom before the Parliamentarian. They strongly pleaded that trade in India could be conducted with advantage only through the agency of the Company. However, the anti-monopolist Parliamentarians gathered sufficient strength to pull down all their arguments.

7. Support in raising ban on Christian Missionaries Activities in India

The issue of the permission for the Christian Missionaries to conduct their activities proved very decisive in the framework of the Charter Act of 1813. The Company had followed the rule that banned the Christian Missionaries from conducting their religious activities on Indian territories under the government of the Company. There was a strong movement in England favouring the permission of Christian missionaries to conduct their religious activities in India. Nearly less than 850 petitions were laid on the table of the House of Commons demanding the withdrawal of the ban on Christian missionaries. The demand favouring the Christian Missionaries supported the stand of anti-monopolists against the Company.

8. The 13 Resolutions of Anti-monopolists and Pro-Christian Missionaries Parliamentarians

The anti-monopolists and pro-Christian Missionaries Parliamentarians successfully carried the majority with them. They submitted their proposals to the Parliament in 13 resolutions which framed the Charter Act of 1813 provisions.