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Legislative Proceedings from 1773 to 1780—Renewal of the Charter
Select and Secret Committees of the House of CommonsProceedings
against Indian DelinquencyMr. Dundas's East India BillMr. Fox's
East India Bills—Mr. Pitt's East India Bill.

It is now time to inquire into the proceedings to which the affairs of India had Chap. IX.
given birth in England since the last great legislative interference. From the v i7g0"~"'
year 1767 till the year 1773, the East India Company was bound to pay to the Legislative
public yearly the sum of 400,000/., "in respect of the territorial acquisitions and ^rion1to*
revenues lately obtained in the East Indies." But in the year 1773, the financial 'TMTM780.
embarrassments of the Company became so great, that they were obliged to
solicit, and received, a loan from the public of 1,400,000/. At that time it was
represented, "That, in the then circumstances of the East India Company, it
would not be in their power to provide for the repayment of such loan, and for
the establishing their affairs upon a more secure foundation for the time to come,
unless the public should agree to forego, for the present, all participation in the
profits arising from the territorial acquisitions and revenues lately obtained in the
East Indies." * It was, accordingly, at that time enacted, that it should not be
lawful to make a dividend of more than six per cent. per annum on the Com-
pany's capital stock, till that loan was repaid; and that the whole of their surplus
profits should be applied to its liquidation: that after the loan of 1,400,000/.
should be repaid, it should not be lawful to make a dividend of more than seven
per cent. per annum, upon the capital stock, until by the application of the whole
of their surplus profits, their bond debt should be reduced to the sum of
1,500,000/. In the year 1779, the loan being repaid, and the debt reduced
according to the terms of the preceding ordinance, an act was passed, to be in
force for one year, permitting a dividend of eight per cent. for that year, and
reserving the surplus profits for the future disposal of the legislature. In the
year 1780, another act was passed for one year also, containing precisely the-
same enactments as that of the preceding year.

* Such are the words of the preamble of the act 21 Geo. III. c 65.



686 HISTORY OF BRITISH INDIA.Book V. As the exclusive privileges were to expire upon three years notice after the 25th of March, 1780, it was now high time to treat about a renewal of the charter; and accordingly during the latter part of that year, and the beginning renewal 'of"the of 1781, much negotiation took place between the Treasury and the East India charter. House. In parliament, the business was of very difficult handling. The contests between the Supreme Council and Supreme Court, which were represented as actually opposing one another with an armed force, had given occasion to petitions from the British subjects in India, from the Governor-General and Council, and from the East India Company; and had made a deep impression upon the public mind: The complaints and representations of Mr. Francis, taken up warmly by a powerful party in the legislative assembly, had filled the nation with ideas of injustice and other crimes on the part of Mr. Hastings: Intelligence had been received of the irruption of Hyder Ali into Carnatic, with the strongest representations of the misconduct of those agents under whom so much calamity had arrived: And strong fears were excited, that the ruin of the English interests, in that part of the world, was at hand.

The points were two, upon which the views of the minister and the Company found it difficult to concur; The right to the territory; and the remuneration due to the public for the advantages which the East India Company were allowed to enjoy. According to the minister, the right of the crown to all territory acquired by subjects, was a matter of established law: The Company were at this time sufficiently bold to assert, that the Indian territory which they had acquired belonged of right to themselves. On the other point, the only question was, what proportion of the proceeds from the Indian territory, the East India Company should be made to give up to the nation.

Lord North was now tottering on the ministerial throne: The East India Company were, therefore, encouraged to greater boldness, in standing out for favourable terms: And they declined to bring forward a petition for a renewal of the charter, on those terms to which the minister desired to reduce them. On the 9th of April, 1781, he represented, that" though he did not then intend to state any specific proposition relative to the future management of the Company's affairs, still he held it to be his duty to state to the House some points, that would be very proper for them to consider, before they should proceed to vote: First, the propriety of making the Company account with the public for three-fourths of all the net profits above eight per cent. for dividend; Secondly, of granting a renewal ofthe charter for an exclusive trade for a short, rather than a long term; Thirdly, of giving a greater degree of power than had been hitherto enjoyed, to the Governor of Bengal, that, in future, among the members of the Council, he Chap. IX. might be something more than a mere primus inter pares, equal with the name * of chief; Fourthly, of establishing a tribunal in England, for jurisdiction in affairs relating to India, and punishing those servants of the Company who should be convicted of having abused their power; Fifthly, the propriety, as all the dispatches received from India by the Directors were by agreement shown to his Majesty's Secretary of State, of making all dispatches to India be shown to him before they were sent, lest the Directors might at some time or other precipitate this kingdom into a war without necessity with the princes of that country. Sixthly," he said, "it would be the business of the House to determine, upon what terms, and whether with or without the territorial revenues, the charter should be renewed; Seventhly, whether, if government should retain the territories, it might not compel the Company to bring home the revenue for government ; and, Eighthly, whether any, and what regulations ought to be made, with respect to the Supreme Court of Judicature." *

Of these propositions, the third, the fourth, and the fifth, are remarkable, as the archetype, from which were afterwards copied three of the principal provisions in Mr. Pitt's celebrated India bill.f

At last a compromise was effected between the minister and the Directors. A Lord North's

&ct for rcncw&l

petition for renewal of the charter was presented from the Directors, on the 26th of th* charter, of June, 1781. And an act was passed, of which the following were the principal

* See Cobbett's Parliamentary History, xxii. 111.

f The purport of these three propositions he expressed more explicitly on the 25th of May. "He had an idea which he had once thrown out, of giving the Governor-General greater powers than were at present vested in him; authorizing him in some cases to act independently of his Council, only stating to them, after he had so acted, the reasons upon which he justified his conduct, and sending home those reasons, together with such as the Council should at the time have delivered, in case they differed in opinion from the Governor-General. ..... Another

matter he designed to introduce was this: At present the Company were obliged to send copies of all their dispatches from India, but not of any of the orders and instructions which they sent out: He meant, therefore, to insert in the bill a clause, obliging them to show to the Lords of the Treasury, or the Secretaries of State, all their instructions to their servants that related to their political and military conduct; and to add farther, that if his Majesty thought proper to signify, through his Secretaries of State, to the Directors, any order relative to the particular conduct of the Company's servants, in regard to the prosecution and management of war in India, or to the political direction of affairs, or to any treaties with the powers in India, that the Directors should be

obliged to obey such order, and to send it out to India immediately He thought it would be

a desirable thing to establish a Court of Judicature in this kingdom, to hear and determine, in a summary way, all charges of peculation and oppression in India." Ib. p. 326.

Book V. provisions: That, whereas the Company, since the 24th of June, 1778, when '^^~~J they nad p^d their loan to the public, and reduced their bond debt to the preappointed limits, had been in possession of all the profits arising from the Indian territory, exempt from participation with the public, they pay 400,000/. to the public, in discharge of all claims upon that account previous to the 1st of March, 1781: That all the former privileges granted to the Company be continued to them, till three years notice after the 1st of March, 1791: That the Company pay out of their clear profits, a dividend of eight per cent. per annum on the capital stock, and of the surplus, three-fourths to the public, reserving the remainder to their own use: And that the claims with respect to the territory, on the part both of the Crown and the Company, remain unaffected by the present act. Of the propositions, thrown out by the minister, for the introduction of reforms into the government of India, only one was carried into effect; namely, that regarding the powers of ministers over the political transactions of the Company. It was ordained that they should communicate to ministers all dispatches which they sent to India, with respect to their revenues, and their civil and military affairs; and that in all matters relative to war and peace, and transactions with other powers, they should be governed by the directions which ministers might prescribe.* Ap^oi^ment On the 12th of February, 1781, petitions from the Governor-General and Committee. Council, and from a number of British subjects residing in Bengal, and from the United Company of Merchants trading to the East Indies, against the pretensions and proceedings of the Supreme Court of Judicature, were read in the House of Commons; and after a debate it was agreed, that a Select Committee should be chosen to whom they were referred. This was that celebrated committee who were afterwards instructed to take into consideration the administration of justice, in the provinces of Bengal, Bahar, and Orissa; and in what manner that country might be governed with greatest advantage to the people both of Great Britain and of India. In this Committee was included Mr. Francis, who had obtained a seat in parliament upon his return to England; and the most conspicuous, as well as the most laborious of its members, was Mr. Edmund Burke. Secret Com- The Select Committee was moved for by General Smith, who belonged to mittce. what is called the opposition party in the House; and it was chiefly composed of members who acted not in concert with the minister. That a want of equal zeal for the elucidation of Indian delinquency might not be imputed to his party, the

• 21 Geo. III. cap. 65.

^minister, on the 30th of April, immediately after the arrival of news of the Chap. IX. irruption of Hyder Ali into Carnatic, moved for the formation of a Secret Com- v mittee, who should inquire into the causes of the war, then subsisting in the Carnatic, and into the state of the British possessions on that coast. This Committee was composed almost entirely of persons connected with the minister; and Mr. Henry Dundas, then Lord Advocate of Scotland, was its presiding and most active member.

The first of these Committees presented the House with twelve Reports, the other with six; and the public is deeply indebted to them for the publication of the most important documents of the Indian government, during the period to which their inquiries applied. Any considerable desire for the welfare of India, guided by any considerable degree of intelligence, would have taken a grand lesson from that example. An adequate plan for a regular, and successive, and still more perfect publication of the most material documents of the Indian administration would be one of the most efficient of all expedients for improving the government of that distant dependency.

On the 23d of May, a report from the Select Committee on the petitions Bill for reagainst the Supreme Court was read; and leave given to bring in a bill, for the Supreme better administration of justice in Bengal, for the relief of certain persons im- Cou^t• prisoned at Calcutta under a judgment of the Court, and for indemnifying the Governor-General and Council for resisting its process. The subject was debated on the 19th of June, Mr. Dunning being the most remarkable of the opponents of the bill. It was passed without delay; and exempted from the jurisdiction of the Supreme Court the Governor-General and Council, all matters of revenue, and all Zemindars, and other native farmers and collectors of the revenue.

Lord North resigned the office of minister in the month of March, 1782; and was succeeded by the Marquis of Rockingham and party, the hostility of whom to the present managers in India was sufficiently known.

On the 9th of April, 1782, Mr. Dundas moved that the reports which he had Proceedings of presented as Chairman of the Secret Committee should be referred to a Com- ^ain^t indfan mittee of the whole House; and, in a speech of nearly three hours in length, delinquency, unfolded the causes and extent of the national calamities in the East. He expatiated on the misconduct of the Indian Presidencies, and of the Court of Directors; of the former, because they plunged the nation into wars for the sake of conquest, contemned and violated the engagement of treaties, and plundered and oppressed the people of India; of the latter, because they blamed misconduct

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