Latest / The Rise of Colonialism: How Europe Divided the World — Fexingo History / The Regulating Act 1773: Britain's First Attempt to Control the East India Company
Transcript
- Lucas: So we've spent a lot of time on the ground in Bengal — the battles, the treaties, the dual government, the famine. But today I want to step back and look at what was happening in London while all that was unfolding, because by the early 1770s, the British Parliament was starting to realise it had a monster on its hands. Luna: The East India Company, you mean. Lucas: Exactly. The Company was a private trading corporation that now ruled millions of people, collected taxes, waged wars — and it was deeply in debt. It had asked Parliament for a loan in 1772 to avoid bankruptcy. And at the same time, news of the Bengal Famine of 1770 was reaching London, along with reports of corruption and mismanagement. Lucas: Parliament launched an investigation. And what they found was pretty damning. Company officials had been enriching themselves through private trade, taking bribes, and using their positions to squeeze the local population. The Company's own directors in London had lost control. Luna: So Parliament decided to step in. Lucas: Right. And the result was the Regulating Act of 1773 — the first major attempt by the British government to assert some control over the Company's affairs in India. It's a landmark piece of legislation, even if it didn't really work the way they intended. Luna: What did it actually do? Lucas: A few key things. First, it restructured the Company's government in India. The head of the Bengal presidency — that was the most powerful post — was now to be called the Governor-General, and he would have some authority over the presidencies of Madras and Bombay. Warren Hastings, who was already the governor of Bengal, became the first Governor-General. Lucas: Second, it created a Supreme Court in Calcutta, staffed by English judges, to administer British law. And third, it required the Company's directors to submit all correspondence about revenue and political matters to the British government — specifically to a newly created body called the Board of Control, though that name came later. Luna: So they were trying to create a chain of command from London to Calcutta. Lucas: Exactly. But the Act had serious flaws. For one thing, it didn't clearly define the relationship between the Governor-General and his council — a council of four that was meant to advise him. Hastings often found himself outvoted on his own council. And the Supreme Court's jurisdiction was vague: it claimed authority over all British subjects in Bengal, but who counted as a British subject? Indian employees of the Company? Local merchants? It led to endless conflicts. Luna: I remember reading about clashes between Hastings and the chief justice, Sir Elijah Impey. Lucas: That's right. Impey was a friend of Hastings — they'd been at school together — but their relationship soured over the court's reach. In one famous case, the court tried to assert authority over the Nawab of Bengal's own officials, which Hastings saw as a direct challenge to the Company's diplomatic power. It got so bad that Hastings eventually recalled Impey to London. Lucas: And then there was the political infighting. One of Hastings's fiercest critics on his council was Philip Francis — a man who would later help engineer Hastings's impeachment. Francis and Hastings disagreed on almost everything, especially on how to deal with the Indian states and the collection of revenue. Luna: So the Act actually made things worse in some ways. Lucas: In the short term, yes. It created a divided government in Calcutta, and the Supreme Court's overreach caused chaos. But it did establish a precedent — the idea that the British Parliament could and should regulate the Company's activities in India. That precedent led directly to Pitt's India Act of 1784, which created a more effective dual control system with a Board of Control in London. Luna: And Pitt's Act was the one that really set up the structure of the British Raj. Lucas: Exactly. The Regulating Act was the first step. It acknowledged that the Company couldn't be left to its own devices. And it's fascinating because at the same time, back in Bengal, the Nawabs were being systematically stripped of their remaining authority. The dual government we talked about in earlier episodes — where the Company took the revenues but left the Nawab to handle day-to-day administration — that was already a farce. The Regulating Act essentially confirmed that real power now lay with the Governor-General and the Company's servants, not with any Indian ruler. Luna: So the Nawab of Bengal by this point was basically a pensioner. Lucas: Pretty much. After the diwani grant in 1765, the Nawab was given a fixed allowance — first najm ud daula, then mubarak ud daula. They lived in the palace at Murshidabad, but they had no real authority. The Company collected the taxes, paid the troops, and made all the decisions. The Nawab's court was a stage set. And the Regulating Act didn't change that — it just made the British structure more official. Luna: It's striking how quickly the Company went from trader to sovereign. Lucas: And it all happened within a few decades. Clive's victory at Plassey was in 1757. By 1773, the British government was already trying to rein in the Company. And one of the reasons they acted was the publicity around Clive himself. He'd returned to England a hero, but also under a cloud of accusations. In 1773, just as the Act was being debated, Clive testified before Parliament — and shortly after, he died by suicide. Luna: That must have added to the sense of crisis. Lucas: No doubt. The man who had won an empire was seen as a corrupt figure. The Company's reputation was at a low point. So the Act was also a way for Parliament to show it was doing something — to restore some legitimacy to British rule in India. Luna: And of course, the Company needed that loan. Lucas: Right. The Act also provided for a loan of £1.4 million to the Company — but with strings attached. The Company had to reform its administration, and it had to submit to greater oversight. So it was a bailout with conditions, very much like modern financial rescues. Luna: I guess in some ways, the 1773 Act is the moment the Company stopped being a private enterprise and started being an arm of the British state. Lucas: That's exactly what it was. And it's a moment that doesn't get as much attention as the battles, but it's crucial for understanding how the British Raj was eventually formalised. The Company would continue to rule until 1858, but after 1773, it was always under the shadow of Parliament. Luna: And speaking of listeners who follow these threads episode by episode — for anyone who's been coming along with us through the rise of the Company and its transformation into a colonial power, this kind of legislative history is really the backbone of how that empire was built. And if you've been finding these conversations valuable, one way to support the show is by visiting buy me a coffee dot com slash fexingo. It's a simple way to help keep the podcast ad-free and independent. Lucas: Yeah, absolutely. Every contribution goes straight to keeping the research thorough and the conversations honest. So thank you to anyone who's already supported us — it really makes a difference. Lucas: Anyway, back to the Regulating Act. One more thing I find interesting: the Act required the Company to send regular reports to the British government about its political and revenue affairs. That sounds reasonable, but in practice, the directors in London often didn't know what was happening in India until months after the fact. So the reports were always out of date, and the Governor-General in Calcutta had enormous discretion. Luna: So the Act gave Parliament oversight in theory, but in reality, Hastings could still do pretty much what he wanted. Lucas: To a large degree, yes. And Hastings was a very active Governor-General. He fought wars, expanded Company territory, and reformed the revenue system — all without waiting for approval from London. The Regulating Act didn't stop him; if anything, it gave him a title that gave his actions more weight. Luna: What about the Supreme Court? Did it actually help anyone? Lucas: It helped British merchants and Company employees who could sue each other in a familiar legal system. But for Indians, it was mostly a source of confusion and sometimes oppression. The court often sided with the Company against local landlords and peasants. There's a famous case called the Cossijurah Case in 1779-80, where the court tried to assert jurisdiction over a zamindar — a landholder — and Hastings blocked it. The case went all the way to London, and eventually the British government clarified that the court's jurisdiction was limited to the city of Calcutta. Luna: So the court was more about controlling the British in India than protecting Indians. Lucas: Exactly. And that's a theme that runs through the whole early period of British rule. The institutions created by the Regulating Act — the Governor-General, the Supreme Court — were designed to impose order on the Company's servants, not to govern India justly. Justice for Indians would come much later, and only after a lot of struggle. Lucas: So the Regulating Act of 1773 was a flawed but important step. It acknowledged that the Company's empire in India was a matter of national importance, not just a private commercial venture. And it set the stage for the more comprehensive Pitt's India Act of 1784, which finally created a stable system of dual control. Luna: And that's the system that lasted until the mutiny in 1857. Lucas: Exactly. So when we think about the rise of colonialism, we often focus on battles and treaties — Plassey, Buxar, Allahabad. But the legislative acts passed in London were just as important in shaping the colony. The Regulating Act was the first time Parliament said, 'This is our responsibility.' And from that point on, there was no going back.