British India: EICo Administration

Although power without responsibility was useful for the EIC, it was anything but for the Indians who found themselves under EIC administration. Early direct EIC rule of their provinces was characterised as a time of almost lawlessness. The revenues that EIC officials were collecting were being rapidly repatriated back to Britain – this left the Indian officials with no means to pay for their judicial system. From the British government’s point of view, this was leading to an extremely bad press. And even worse than this was the fact that it was the EIC officials who were getting rich off of this system. As individuals were making fortunes for themselves, the EIC itself was in dire straits economically. The company never got to see the vast majority of the revenues collected in India. The financial problems of the EIC came to public prominence in the 1770s, when the EIC first of all defaulted on payments for use of British armed services and then was forced to ask the British government for a one million pound loan to keep the company going. Many people in Britain were incensed that so many EIC officials were coming back to Britain as incredibly wealthy individuals, but that the British government would have to bail out the company itself. The loan was reluctantly forwarded to the company in 1773 but it had strict provisions that directly involved the British government in EIC affairs for the first time – at least on a formal basis. They established a Supreme Court in Calcutta to which Indians also had recourse and which could even make appeals to the Privy Court in London. The Crown was also to appoint members to a Supreme Council which could advise the newly created post of Governor General of Bengal. Efforts were also made to stamp out official profiteering – although these measures were less successful.
The EIC had successfully used their significant presence in Westminster to avoid direct Crown rule in India. However, EIC administration was still more concerned with revenue collection than for the betterment of civil society in the sub-continent. This made perfect sense to the EIC, but sat uneasily with many of the more liberal sentiments coming out of Britain at the time. In fact, little more than a decade later, the British parliament found that it had to scrutinise EIC activities in India to an even greater extent. The result was the creation of a ‘Board of Control’ in 1784 whose president was a member of the Cabinet and was directly answerable to parliament. This Act still left the day to day running of the provinces to EIC officials on the ground – however it was clear that the British Government was being drawn further and further into the administrative affairs of India. In fact, the first Governor General of Bengal, Warren Hastings, resigned almost immediately when he discovered that the Board of Control had power to force any Governor General to resign.
Warren’s successor, Lord Cornwallis, ushered in a period of profound reform in company rule of India. Cornwallis’ honesty and integrity saw his administration remove all officials considered to be corrupt or disreputable. He professionalised and increased the salaries of the civil service in an attempt to remove temptation for corruption. He introduced revenue reforms that were designed to simplify revenue collection – but would also create an Indian gentry of sorts. This artificially created class would later become staunch defenders of the British Empire and would be instrumental in preventing the spread of rebellion in the middle of the following century. Cornwallis also reformed the military wing of the EIC by Europeanising its officer corps. This effectively barred Indians from advancement to commissioned status. This particular rule proved to be one of the more pernicious rules and one that may explain much of the snobbery and disdain that was to follow in the nineteenth and twentieth centuries. Perhaps the most important of Cornwallis’ reforms were what became known as the 48 regulations. These basically formally accepted EIC responsibility for civil services and the judicial system. It may have been a peculiarly British legal system, but it was better than none at all – which had been the case for the previous four decades. These reforms would shape not only the remaining half century of EIC control of India, but much of the subsequent Raj as well.
In fact, one of the major aspects of EIC control in India is how it slowly and surely shifted from being a trading company to an administrative arm of the British Government. Trade became less and less important as tax collecting took increasing precedence within the company. Part of this transformation was the removal of the privileged monopoly rights that had been granted to the EIC way back in the seventeenth century. The British government passed acts in both 1813 and 1833 which effectively withdrew these privileges. However, there was an element of compensation built into these Acts and the EIC was effectively subsidised to collect taxes. The distinction between EIC rule and British rule was becoming increasingly hazy as the century wore on. It is hard to say whether this effective ‘privatised imperialism’ would have continued throughout the century or whether it would have naturally transferred itself to government rule anyway. This question would remain an academic one as the north of India would unexpectedly test the EIC to destruction and force the British Government to become directly involved in the subcontinent. These convulsions were what has become known as ‘The Indian Mutiny.’