Provision of the Act. The Act of 1784 introduced changes mainly in the Company's Home Government in London. It greatly extended the control of the State over the company's affairs. While the patronage of the Company was left untouched, all civil, military and revenue affairs were to be controlled by a Board popularly known as the Board of control, consisting of the Chancellor of the Exchequer, one of the Principal Secretaries of State and four members of the Privy Council appointed by the King.
A Secret Committee of three Directors was for be the channel through which important orders of the Board were to be transmitted to India. The Court of Proprietors lost the right to rescind, suspend or revoke any resolution of the Directors which was approved by the Board of Control.
In India, the chief government was placed in the hands of a Governor-General and Council of three. The Governor-General was still left liable to be overridden by the Council, but as the number of Councilors was reduced to three, he, by the use of his casting vote, could always make his will predominate if he had one supporter. Beyond this the Act of 1784 did not go.
This defect was met in the Act of 1793, whereby the Governor-General was empowered to disregard the majority in Council provided be did so in a formal may accepting the responsibility of his own action. Under the Act of 1784 the ^residencies of Madras and Bombay were subordinated to the Governor- General and Council of Bengal in all matters of diplomacy, revenue and war.
Last, but not the least, only covenanted servants were in future to be appointed members of the Council of the Governor-General. The experiment of appointing outsiders had proved calamitous.
Observations on the Act:
Pitt's Indian Act of 1784 brought about two important changes in the constitution of the Company. Firstly, it constituted a department of state in England known as the Board of Control whose special function was to control the policy of the Court of Directors, thus introducing the Dual System of government by the Company and by a Parliamentary Board which lasted till 1858. The Board of control had no independent executive power.
It had no patronage. Its power was veiled. It had access to all the Company's papers and its approval was necessary for all dispatches that were not purely commercial, and in case of emergency the Board could send its own draft to the Secret Committee of the Directors to be signed and sent out in its name.
The Act thus placed the civil and military government of the Company in due subordination to the Government in England. Secondly, the Act reduced the number of members of the Executive Council to three, of whom the Commander-in-Chief was to be one. It also modified the Councils of Madras and Bombay on the pattern of that of Bengal.
Circumstances leading to the Passing of the Act in 1781 as in 1772, both a Select and a Secret Committee were appointed to go into the affairs of the Company. The former (the Select Committee) investigated the relations between the Supreme Court and the Council in Bengal, the latter (the Secret Committee the causes of the Maratha War.
The voluminous reports they presented were freely used as arsenals for weapons against the Company by party orators in Parliament.
Parliamentary interference in the affairs of the Company was obviously once again called for, especially when the Directors of the Company were obliged openly to confess that the war had beggared them and to apply to the State for another loan of a million pounds.
After a measure drafted by Dundas, Chairman of the Secret Committee had been rejected, Fox introduced his India Bill in Parliament.
The measure was really inspired by Burke and, behind him, by Philip Francis. This bill sought to transfer all the political and military powers of the Company to a Board of Seven commissioners to be nominated in the first instance by Parliament and afterwards by the Crown, and all its commercial powers to a subordinate body of nine Assistant Directors who were ultimately to be nominated by the holder of East India stock, though they too in the first instance were to be appointed by Parliament.
The bill if it had been passed would in effect have swept aside the Company as a political power and brought all political appointments under the control of a commission which was to be appointed in the first instance by Parliament and afterwards by the Crown.
The chief advocates of this measure had ten years earlier opposed North's Act as an intolerable invasion of the right of property. The feature of the Bill upon which the Opposition seized was the surrender of the immensely valuable patronage of India to the Ministry or the Crown and Pitt thundered against it as the most desperate and alarming attempt at the exercise of tyranny that ever disgraced the annals of any country.
The bill, however, was passed in the House of Commons by large majorities only to be rejected in the House of Lords through the intervention of George III. The Bill was thrown out and the Ministry-the coalition of Fox and North- resigned. It may be observed in passing that for the First and the last time a British Ministry was wrecked on Indian issue.
Pitt came into power and in January 1784 he moved for leave to bring in his India Bill and leave was granted.
Even the second reading was taken, but the Bill was not destined to be put on the statute bock for the new Ministry had to resign. Pitt's new Parliament met in May 1784. Following the lines laid down in his Bill of January, the new Bill was finally carried in the House of Commons in July and in the House of lords in August 1784.
Fox, throughout the session, continued to refer to the superior merits of his own Bill. Pitt had taken the precaution of neutralizing the opposition of the English Company with the result that the measure was introduced in parliament fortified and recommended by the consent of the Company.
In essentials Fox's and Pitt's measures were on the same lines except that the latter did not touch the patronage of the Company. Pitt himself pointed out that while Fox's India Bill ensured a permanency of men, a permanency of system.