What were the various steps taken in the regulating act 1773?



Circumstances Leading to the Act the first association of the British with the work of administration under what is called the system of Dual Government (1765 to 1772) is a discreditable and shameful page of British history, which has been summed up in a contemporary Muslim history, the Siyar-ut Mutakherin, thus: "The new rulers paid no attention to the concerns of the people and suffered them to be mercilessly oppressed and tormented by officers of their own appointing.

" Then came the famine of 1770 in Bengal which was one of the most appalling disasters in the recorded history of India the company was not responsible for the famine, but it and its agents were largely to blame for a complete collapse of government. W.E.H. Lecky describes the plight of the people in the following words: "Never before had the Indians experienced tyranny which was so skillful, so searching and so strong..."

During the twelve years preceding Warren Hasting's administration the servants of the Company thronged back to England loaded with wealth and what was strongly suspected of being the plunder of Bengal.

The incursion of these 'Nabobs' with their lavish notions and orientalised habits into the aristocratic circles of the time is one of the most striking social phenomena of 18th century England. Contemporary memories and letters reveal the mingled contempt, envy and hatred with which they were regarded. While the servants of the Company were making huge profits, the company itself was on the verge of insolvency.

It was an ill-chosen moment for the Company to go bankrupt, especially when it had so few friends being hated by all and sundry. Yet that is what it contrived to do. A blind folly had for some time past possessed the Directors and shareholders of the Company.

In 1769 when the Company was in debt to the tune of £6 millions, a dividend of 12.5 % was declared, though the Directors had to conceal facts and falsify accounts. When news reached England of the famine in Bengal and Haider Ali's successful onslaught into the Carnatic, the Company's stock showed a spectacular decline and before long rumours got abroad of the Company's true financial position.

The Directors in sheer desperation applied to the Bank of England for a loan of £1,000,000. The fat was really in the fire when the Directors of the bankrupt Company applied to the Government for relief. For in doing so, they signed the death warrant of their Company's independence.

The opportunity to turn its distress to the advantage of the State and especially of its Royal Head was too good for the resurrected Tories to miss. Lord North with secure majorities in both Houses of Parliament prudently referred the application to Parliament. A Select Committee was appointed to enquire into the Company's affairs.

This Committee was presided over by General Burgoyne who in proposing a resolution for the appointment of the Committee declared: "The most atrocious abuses that ever stained the name of civil government called for redress... if by some means sovereignty and law are not separated from trade, India and Great Britain will be sunk and overwhelmed never rise again."