That was a tenable
position
for a private corporation; it was not a
tenable position for the government of Great Britain.
tenable position for the government of Great Britain.
Cambridge History of India - v5 - British India
India Office Home Miscellaneous, no.
198.
2 Munry's reports, ap. Bengal Select Committee, 24 September, 1761.
8 Bengal Select Committee, 14 and 28 February, and 16 March, 1765.
## p. 175 (#203) ############################################
STRUGGLES IN ENGLAND
175
the council were, in this case their action from the point of view of
policy was irreproachable. It would have been very unwise to have
left the matter of the succession hanging over until Clive's arrival,
and still more so to have invested the new nawab with powers which
it afterwards would have been found expedient to diminish. Unfor-
tunately the council marred their conduct by making this settlement
the occasion of taking large presents in defiance of the orders of the
Company which had already been received.
Clive's victories in Bengal had transformed not only the position
of the English in India but also the proceedings of the Company in
England. Violent political discussions succeeded to the dull and
decorous statements of the course of the trade in the East. Control
of the Company and of its policy became a thing worth paying for.
Clive on the one side and Laurence Sulivan on the other, entered
into a series of campaigns to secure a dominant interest, buying up
stock, and subdividing it so as to create if possible a majority of
secure votes. The right to Clive's jagir had been the great bone of
contention, and the preservation of that valuable property had cost
Clive great sums of money. Sulivan, the great friend of Warren
Hastings, was a man without an idea in advance of the low level of
his time. He almost ruined himself in his struggle with Clive, while
his friend Vansittart did so completely; and he then took advantage
of his position and following at the East India House to seek to retrieve
his position by procuring lucrative posts for his son and relatives in
the East. In 1764 Clive succeeded for the time being in obtaining
the control of the Company; and the fact was marked by his accept-
ance for a second time of the office of governor of Fort William. He
went out in order to set right the errors that had evidently been
committed by his successors. The revolution of 1760 had been bitterly
attacked in England, and so had the war which followed with the
new nawab. It was generally felt that unless the Company set its
house in order, it would be impossible to prevent he ministry from
interfering in Indian affairs, and perhaps abolishing the Company
itself.
Clive reached Calcutta in May, 1765, and found two problems
awaiting his solution-one political, the future relations of the
English with the emperor, the nawab of Oudh, and the nawab of
Bengal; and the other administrative, the reform of the swollen profits
from illicit or quasi-illicit sources, and the re-establishment of order
and subordination, which had disappeared in the revolt of the council
against Vansittart. On his arrival the new governor found that Van-
sittart had promised Oudh to the emperor. It seemed to Clive a
a
foolish step. There was no ground for thinking that Shah 'Alam
would be able to maintain himself there without English help, so that
1 Palk MSS, pp. 91, 126 and 188; Sulivan to Hastings, 6 June, 1781 (Brit.
Mus. Add. MSS. 29149, f. 244).
## p. 176 (#204) ############################################
176
BENGAL, 1760-72
1
1
the setlement contained within itself all the elements of future com-
plications. Clive therefore sent up Carnac to reopen negotiations
until he himself should be able to visit Oudh in person. Carnac soon
found himself in communication with the fugitive Shuja-ud-daula,
with whom Clive decided to come to terms, restoring to him his old
dominions with the exception of Allahabad, on condition of a payment
of fifty lakhs of rupees. Allahabad with the surrounding districts
was bestowed on the emperor. The settlement has been attacked on
both sides—as a breach of faith with the emperor in taking away
from him what had been promised, and as bestowing territory on one
who would not be able to protect it. As regards the first no formal
treaty had as yet been arranged, so that Clive's hands were still free;
as regards the second, some sort of provision had to be made for the
emperor, and the one which Clive adopted cost the Company nothing,
and committed it to nothing. Indeed the grant of Allahabad marks
the end of those foolish dreams which had been cherished by almost
everyone in Bengal, of restoring the empire to its legitimate holder.
Any such attempt would have strained the Company's resources
beyond their power. It would have united the princes of India against
the English. At the same time the restoration of the nawab of Oudh
placed on the frontiers an ally who at the moment was too grateful
to attack them, and who afterwards was much too severely threatened
by other powers to think of doing so. Clive's settlement was a middle
course, which afforded more advantage and threatened fewer dangers
than any other that could have been adopted at the time. In Bengal
itself Clive decided on a long step forward towards the assumption
of ostensible power. He demanded from the emperor as the price of
Allahabad and its districts a farman granting the diwanni of Bengal
to the Company. That involved the complete control of the finances
of the province, and carried to its completion that process of the
extrusion of the nawab's power which had been almost secured by
the arrangement of February, 1765. The disadvantages of this plan
are obvious enough; but they were such as counted for less in those
days than they would now. Power was separated from responsibility.
But no one at the moment thought of undertaking the administration
of large tracts of India, and the fact of bad and corrupt administration
appeared one of those natural and inevitable evils which are beyond
possibility of reform. As against this the plan offered certain imme-
diate advantages. It secured that control over the nawab which was
regarded as the most pressing need of the time; it also promised some
protection against the complaints of foreign powers and the demands
of the home goverrment. Clive still remembered how the too-osten-
sible assumption of power contributed to produce the unyielding
opposition of the English to the schemes of Dupleix; and farmans of
the emperor or parwanas of the nawab, though valueless without the
support of English power, could not be fully discounted at Paris or
the Hague without a serious breach of diplomatic etiquette. It was
## p. 177 (#205) ############################################
CLIVE'S REFORMS
177
thought too that something short of the assumption of full dominion
would be less likely to excite, legal difficulties in England or provoke
the interference of parliament. In short the grant of the diwanni was
designed to secure the full control of Bengal affairs so far as the
Company's interests went without incurring the inconvenience of
formal and avowed dominion.
The administrative questions that demanded settlement were much
more difficult than these political questions. First there were the
Company's covenanted servants. They had been demoralised by the
conditions under which they had been working and the facility with
which wealth could be acquired through the English privileges in
the internal trade of Bengal; while a tradition had arisen that each
change of nawab should be the occasion of large presents, open or
concealed. The accession of Najm-ud-daula had been a particularly
bad case, because the succession was normal, and because the pre-
cedent of presents from the nawab had been extended to the minister
as well. Further, this extension of a bad practice had been made in
the face of specific orders from the Company prohibiting the accept-
ance of presents and requiring its servants to sign covenants agreeing
not to accept such in future. Instead of announcing their orders the
councillors had quietly left them over for Clive to deal with on his
arrival. Indeed they seem to have thought that his previous practice
and present influence would have led him to procure the abrogation
of the orders before he came out again as governor. But they were
mistaken in their man. Clive feared nothing, not even his own past;
and he was as fully bent on enforcing the orders of the Company as
if he himself had never made a rupee by the revolution of 1757 or
were not still in enjoyment of a jagir of £30,000 a year. One of his
earliest acts on his arrival at Calcutta was to require the covenants
to be signed by civil and military servants alike. That was done, but
Champion, and probably many others as well, did so with the idea
that this reforming zeal could not last and that their signature was
a mere matter of form. 1
Clive, however, saw as clearly as did Cornwallis twenty years
later that if illicit gains were to be abolished, considerable regular
advantages had to be provided. On his arrival he found that there
was a great lack of senior servants. Since everyone had been held
entitled to passes for the internal trade, it had been possible for even
junior servants to make fortunes by selling their passes to the Indian
merchants of Calcutta. The result was that Clive found the secretary's
department in charge of a writer of three years' standing, the ac-
countant was a writer yet younger than the secretary, while the
paymaster of the army, with balances of twenty lakhs in his hands
for months together, had also been a writer. 2 Clive resolved therefore
1 Champion's Journal, 6 August, 1765.
2 Bengal Select Committee to the Company, 24. March, 1766.
12
## p. 178 (#206) ############################################
178
BENGAL, 1760-72
to reorganise the internal trade, to place it on a wholly new basis,
and to employ the profits so as to secure handsome salaries for the
senior servants of the Company; and meanwhile to call up from
Madras a small number of covenanted servants to fill the immediate
vacancies in council. This last measure produced the sort of uproar
that was to be expected. An association was 'formed; Clive's enter-
tainments were boycotted; memorials were framed. But when the
malcontents found that they were promptly deprived of every lucra-
tive office, refused passes, and sent hither and thither very much
against their liking, they concluded at last that they had better put
up with Clive's tyranny, and the opposition died down. Meanwhile
Clive went on with his salt scheme. That had always been a govern-
ment monopoly, and as such Clive decided to administer it and employ
the profits arising out of it in the payment of allowances to the
principal civil and military servants. He did so under the form of a
trading company, under the close control of the council, and the
allowances took the form of shares in the company. This was contrary
to the orders of the Company; but Clive considered that those orders
had been issued before he had taken over the revenue administration
of the provinces, that his new plan could not possibly rouse difficulties
with the nawab, and that consequently the main objections of the
Company did not apply to his present proposals. In this respect he
was guilty of a miscalculation. When the news of what he had
done reached England, the Company at once ordered the internal
trade to be entirely abandoned; these orders were again suspended,
and Clive hoped to procure their reversal on his return to England;
but the directors insisted on their views being carried out; and so at
last the trading company was wound up. In this matter Clive has
been unduly blamed. His proposals amounted in reality to the
continuation of the monopoly which had been customary and the
assignment of the revenues so raised to the payment of establishment.
Although in form his plan seemed to continue the vices of the Van-
sittart régime, in essence it was wholly different and amounted to
just that measure of reform for which Cornwallis has received such
high praise. The mistake which Clive made was apparently one of
tactics. He thought the Company would be less likely to oppose the
scheme so long as the payment of the extra allowances did not appear
to come out of its own revenues. He forgot that the apparent simila- .
rity between his plan and the abuses of the past might lead to its
condemnation.
With the military officers Clive had even more trouble than with
the civilians. This was natural, because in the latter. case he had had
only to deal with illicit gains whereas in the former he was required
to cut down regular and acknowledged allowances. For some years
the Company had been endeavouring to cut down the batta or field-
allowances of the Bengal officers. These allowances were designed to
make good the extra cost of living in the field as compared with
## p. 179 (#207) ############################################
THE BATTA QUESTION
179
living in garrison. They originated in the Carnatic, where both
Chanda Sahib and Muhammad 'Ali had paid batta to the French
and English officers respectively in their service; and difficulties had
arisen when Muhammad 'Ali had transferred lands to the English
Company in lieu of this batta, and the question of its regulation had
arisen between the officers and the Company. Affairs had followed
the same course in Bengal, where batta had at first been paid by the
nawab and then became a charge upon the Company, who desired
to reduce it to the more moderate level paid at Madras. Orders to
this effect had reached Bengal when the war with Mir Kasim had
been on the point of breaking out; their immediate execution had
thus been impossible. But when they were repeated, in 1764, they
met with the same fate as those other unpleasant orders prohibiting
presents, and obedience was deferred until Clive's arrival. He ac-
cordingly prepared regulations on the subject. Officers in canton-
ments at Mongir or Patna were to draw half batta, as did officers at
Trichinopoly; when they took the field they would draw batta while
within the limits of Bengal and Bihar, but if they crossed into Oudh
they would then become entitled to double batta. For a captain
these rates amounted to three, six, and twelve rupees a day. These
orders led to a combination among the officers, just as the appoint-
ment of covenanted servants from Madras had led to a combination
among the civilians. It was agreed that they should simultaneously
resign their commissions. In this step they seem to have been
encouraged by the commander of one of the brigades, Sir Rober
Fletcher, who was not only the friend of Clive's opponents in England,
but also thought himself injured by decisions of Clive regarding
pecuniary claims which he had put forward. The agitation coincidec
in time with the trouble with the civilians, and there was talk of a
subscription for the benefit of those who should suffer through Clive's
conduct. In this matter as in the other Clive overbore all opposition
with a bold front. Every resignation was to be accepted; supplies of
officers were requested from Madras; everyone displaying the least
inclination to mutiny was to be sent down at once to Calcutta. Clive
visited the headquarters of the three brigades in person, to assure
himself that the men were under control; and the officers gradually
fell out among themselves. Those who had already made their for-
tunes were careless of what might come out of the affair, but those
who still had their fortunes to make were more timid, and, when it
came to the point, were reluctant to forgo their prospects. In these
circumstances the mutiny broke down. Those who were considered the
least guilty were allowed to return to duty on condition of signing
a three years' agreement, which under the East India Mutiny Act
would bring within the penalty of death any who so conducted them-
selves in future. Of the rest Fletcher and six more were cashiered.
1 Dodwell, Dupleix and Clive, p. 266.
1
## p. 180 (#208) ############################################
180
BENGAL, 1760-72
At the same time Clive resolved to apply to the use of the Com-
pany's officers a sum of five lakhs which Mir Ja'far was alleged to
have desired on his deathbed to be delivered to him. One of the great
lacks of the service was some provision for those who were compelled
to retire from the service by wounds or ill-health while their circum-
stances were still embarrassed. Being a legacy the sum was deemed
not to come within the Company's prohibition; it was therefore
accepted, vested in trustees, and under the name of Lord Clive's Fund
did much to bridge over the interval until the Company adopted the
practice of pensioning its servants.
Clive quitted India for the last time in February, 1767. It is not
necessary to dilate upon the greatness of his character or the results
of his work. He had a supreme faculty for seeing into the heart of a
situation, undistracted by side-issues, for compelling the obedience of
others, and for finding an immediate expedient for the needs of the
moment. His principal defect was a certain bluntness of moral
feeling which enabled him to perform and defend actions which
did not coñmend themselves even to his own age. But there was
nothing small or petty about him. Though he made an enormous
fortune, he was not mercenary; though he tricked Omichand, he was
trusted implicitly by Indians of every class. His unfaltering will and
uncompromising vigour took the fullest advantage of a peculiarly
happy concourse of events firmly to establish the Company's power
in the wealthiest province of India.
Between him and Warren Hastings come two governors who were
hardly more than stop-gaps. Verelst succeeded Clive, and at the end
of 1769 Cartier succeeded Verelst. But their combined five years of
rule were little more than an introduction to the period of Hastings.
The stage was being set for new performers. The Marathas, recovering
from their overthrow at Panipat, were beginning once more to inter-
fere in Northern India; the emperor quitted Allahabad, where Clive
had settled him, and went off to Delhi under their protection; mis-
understandings arose with Shuja-ud-daula, but they did not break
the alliance which Clive had established; the English in Bengal began
to take a share in the administration which they had so long regarded
with suspicion; attempts were made to enter into communication
with the Himalayan states and to come to terms with our Maratha
neighbours on the south. But in all these ways the time was prepa-
ratory only for the time of growth and formation which Hastings
was to inaugurate.
## p. 181 (#209) ############################################
CHAPTER X
THE EAST INDIA COMPANY AND THE STATE.
1772-86
THE period 1772-86 is the formative epoch of British Indian
History. During these years three important questions had to be
dealt with : firstly, the relation of the East India Company to the
state; secondly, the relation of the home to the Indian administration
of the Company; and thirdly, the relation of the supreme government
in Bengal to the subordinate presidencies. In this chapter we are
concerned with the first of these questions, and it may be pointed out
that the fourteen years of our period witnessed all the great statutes
which definitely subjected the Company to the control of the crown
and parliament, and converted it into a quasi-state department.
Between 1786 and 1858 we feel that the constitutional changes are
not really fundamental. Even the taking over of the Company's
powers by the crown in 1858 was less a revolution than a formal and
explicit recognition of facts already existing. Again, this was the
period which saw the Company subjected to minute and severe
inspection at the hands of parliamentary commissions, the Select and
Secret Committees of 1772, and the Select and Secret Committees of
1781. Each occasion was followed by a great statute and an attack
upon a great individual. In 1772 we have the attack upon Clive,
followed by the Regulating Act of 1773. After 1781 we have Pitt's
Act of 1784, followed by the impeachment of Warren Hastings.
Lastly, as a result of these inspections a reformation of the civil
service was carried through, partly by Hastings himself, and in fuller
measure by Lord Cornwallis.
At no time was the question of British dominion in India so
closely interwoven with political and party history at home. In Cob-
bett's Parliamentary History a very large space from 1767 to the end
of the century is devoted to Indian debates. "The affairs of the East
India Company", wrote the editor in 1768, "were now become as much
an object of annual consideration, as the raising of the supplies. ” ?
The Indian question was entangled with a serious constitutional crisis
and with the personal rivalry and political ambitions of the two
greatest statesmen of the time. It caused the fall of the notorious
Coalition Government of Fox and North, gave George III the oppor-
tunity to effect a daring coup d'état, doomed Fox to almost a lifetime
of opposition and put Pitt in power practically for the rest of his
life. From 1772 to 1795 Indian affairs were constantly before
parliament in both its legislative and its judicial aspect.
1 Parliamentary History of England, XVI, 402.
## p. 182 (#210) ############################################
182
THE COMPANY AND THE STATE, 1772-86
»
Now all this was inevitable and, when everything is taken into
consideration, not to be regretted. It is easy to paint the interference
of parliament as mischievous and misinformed, and to complain that
India was made a pawn in the party game; but there was—as some
of the most clear-sighted of contemporary statesmen saw-a serious
risk of a great empire being created and ruled by Englishmen outside
the sphere and control of the British cabinet. “The East India
Company”, as Burke said, "did not seem to be merely a Company
formed for the extension of the British commerce, but in reality a
delegation of the whole power and sovereignty of this kingdom sent
into the East. ” 1 No national government could be expected, 0%
indeed ought, to tolerate such a dangerous shifting of the centre of
political gravity. Some action on the part of the state was necessary;
the question had to be tackled even at the cost of strife, dislocation,
and possibly some injustice to individuals. "In delegating great
power to the India Company", wrote Burke, "this kingdom has not
released its sovereignty. On the contrary, its responsibility is increa-
sed by the greatness and sacredness of the power given. " 2
This bringing into relation of the Company and the state was
from the nature of the case a very difficult problem. It had to be
worked out experimentally, for there were no precedents. We can-
not be surprised that many mistakes were made.
“The British legislature", says Malcolm, “has hitherto but slowly followed
the progress of the power of the Company, in India. It had legislated for
factories on a foreign shore, when that Company was in the possession of pro-
vinces; and when the laws were completed to govern these, it had obtained
kingdoms. "
This was entirely true, but it was inevitable. The rapid developments
in the East out-distanced the efforts of parliament to comprehend
and to deal with them. According as men visualised the position
from the eastern or the western point of view, authority in the East
seemed dangerously circumscribed or perilously unhampered. Hastings
describes the sphere of his administration as "a dominion held by
a delegated and fettered power over a region exceeding the dimen-
sions of the parent state, and removed from it a distance equal in
its cricuit to two-thirds of the earth's circumference”. 4 Its remoteness
postulated the necessity of semi-independence, “distant as it is from
the reach of more than general instruction from the source of its autho-
rity, and liable to daily contingencies, which require both instant
decision, and a consistency of system”. 5 Burke, on the other hand,
from the home aspect, declares, “It is difficult for the most wise and
" 3
1
Speeches. . . in the trial of Warren Hastings (Ed. Bond), I, 15.
2 Idem, p. 13.
3 Malcolm, The Political History of India, I, 8.
+ Selcctions from the State Papers of the Governors-General of Indiu.
Warren Hastings. Ed. by (Sir) G. W. Forrest, 11, 92.
- Idem, p. 93.
## p. 183 (#211) ############################################
POSITION OF THE COMPANY
183
2
upright government to correct the abuses of remote, delegated power,
productive of unmeasured wealth, and protected by the boldness and
strength of the same ill-got riches”;1 and he puts his finger on the
crux of the whole matter, though no doubt he here inculcates a
counsel of perfection, when he says, "I think I can trace all the cala-
mities of this country to the single source of our not having had
steadily before our eyes a general, comprehensive, well-connected and
well-proportioned view of the whole of our dominions, and a just
sense of their true bearings and relations". The question then hefore
the statesmen of the eighteenth century was : How was the Company's
quasi-sovereignty in the East to be reconciled with the necessary
subordination to the imperial parliament? There were three possi-
bilities. The first was that the Company's privileges and powers
should remain untouched, with the hope that some practical modus
vivendi would in time be worked out. But this was felt by the majority
of the nation and even by the more far-sighted of the Company's
own servants to be no longer feasible. Both Clive and Warren Hastings
suggested tentatively to the prime ministers of their time that it
might be advisable for the state to take over the Company's powers.
There seemed a danger not only that misgovernment in India might
tarnish the name of Great Britain as an imperial state, but that the
Indian interest in England, supported by huge revenues and corrupt
parliamentary influence, might gain a preponderating and improper
power in home affairs.
The second possibility was that the state should take over in full
sovereignty the territorial possessions in India and convert the
Company's servants into a civil service of the crown. But this was
felt to be too great and drastic a change. “It was opposed to all
eighteenth-century notions of the sacredness of property, and the
problem was complicated by all kinds of delicate legal and political
questions. It might even be plausibly contended that the Company
had no considerable territorial possessions at all. It administered
Bengal, Bihar and Orissa merely as the diwan of the Moghul emperor.
That was a tenable position for a private corporation; it was not a
tenable position for the government of Great Britain. If the "territo-
rial” possessions were annexed by the crown, the act might be
represented as sheer usurpation against the Moghul Empire, and
Great Britain might be embroiled with the representatives of other
European nations in the East.
It remained that the state should take the Company into partner-
ship, assuming the position of controlling and predominant partner
in all matters relating to the higher branches of government, but
leaving to the Company the monopoly of the trade, the disposal of
its valuable patronage under crown sanction, and the details of the
1 Works of Edmund Burke, m, 193-4.
2 Idem, p. 125.
## p. 184 (#212) ############################################
184
THE COMPANY AND THE STATE, 1772-86
administration. What we see going on during the period 1772-86 is
the gradual realisation of this conception. It must be remembered
that some attempts in this direction had already been made before
1772. . A little band of members of parliament, prominent among
whom were Beckford, Barré and General Burgoyne, had long been
urging that conquests in India should pass to the crown. Their
persistent efforts met with some success in 1767 when five separate
acts were passed. These measures amongst other things interfered
in the regulations for voting in the General Courts of the Company,
regulated the amount of dividends to be paid and the manner of
paying them, and, most important, obliged the Company to pay the
exchequer an annual sum of £400,000 for two years from February,
1767, for the privilege of retaining their territorial acquisitions (the
payment was afterwards extended to 1772). "Thus”, says Sir
.
Courtenay Ilbert, "the state claimed its share of the Indian spoil,
and asserted its rights to control the sovereignty of Indian territories. ”i
These changes were only carried in the teeth of a strong opposition. .
The protests of the dissentients in the House of Lords showed how
strong as yet were the barriers of the rights of property, and the
sanctity of contract.
A legislative interposition controlling the dividend of a trading Company,
legally voted and declared by those to whom the power of doing it is entrusted
is altogether without example.
The solution, it may be admitted, was not particularly logical. It
was on the face of it absurd that a British chartered company should
pay the crown of England an annual sum of money for permission
to hold certain lands and revenues of an eastern potentate, and the
friends of the Company did not hesitate to describe the payment as
mere political blackmail.
But for five years at any rate the attack against the Company was
stayed. Then again in 1772 troubles gathered round it, arising from
the following circumstances. In March, 1772, a dividend at the rate
of 1242 per cent. was declared. In the same month the Company,
obviously endeavouring to forestall a drastic reformation from outside,
attempted through Sulivan their deputy-chairman to introduce a bill
for the better regulation of their affairs. Lord Clive, being assailed,
defended himself by taking the offensive and roundly attacked the
Company. In the debate some interesting points were raised as to
the relations between the Company and the state. Clive had in 1759
proposed to Chatham that the crown should take over the Company's
dominions. Chatham, probably because he had no leisure to face the
practical and exceedingly thorny difficulties, contented himself with
an oracular answer that the scheme was of a very nice nature and,
1 Ilbert, The Government of India, p. 39.
? Parliamentary History, XVI, 356:
## p. 185 (#213) ############################################
DEBATES OF 1772
186
as Clive's agent reported, "spoke this matter a little darkly". 1 Clive
had resented this treatment and now with an imprudence amazing
in a man, around whom his enemies were closing, struck out in all
directions as though his one aim was not to leave himself a single
partisan. With a magnificent recklessness he included the govern-
ment, the directors, the proprietors and the servants in the East in
one comprehensive condemnation :
“I attribute the present situation of our affairs”, he said, "to four causes : a
relaxation of government in my successors; great neglect on the part of admi.
nistration; notorious misconduct on the part of the directors; and the violent
and outrageous proceedings of General Courts. ” 2
The Company had acquired an empire and a revenue of £4,000,000.
It was natural to suppose that such an object would have merited the most
serious attention of administration; that in concert with the Court of Directors
they would have considered the nature of the Company's charter, and have
adopted a plan adequate to such possessions. Did they take it into considera-
tion? No, they did not. They thought of nothing but the immediate division
of the loaves and fishes. They went so far as to influence a parcel of tem-
porary Proprietors to bully the Directors into their terms.
They ought to have forced the directors to produce a plan, or with
the aid of Parliament to have made one themselves.
If administration had done their duty, we should not now have heard a
speech from the throne, intir ing the necessity of Parliamentary interposition,
to save our possessions in India from impending ruin. 3
One of those who took part in the debate, Governor Johnstone,
maintained views of some interest. He declared that:
• • •
The British legislature should not move in the affairs of Asia, unless she
acts with dignity and effect. . . . I am clear we hold those lands by conquest.
I think the conquest was lawfully made by the Company and a small part of
the King's forces in conjunction. I deny that conquest by a subject, lawfully
made, vests the property in the state, though I maintain it conveys the
sovereignty. 4
He went on to advocate that the crown under certain conditions
should grant the lands to the East India Company as was done in
the case of New England and several other of our chartered colonies.
He did not accept the theory that we need consider the susceptibilities
of other European nations.
Does any man believe that foreign nations permit us virtually to hold these
territories under the magic word Devannee? Can it be supposed they are not
equally sensible of the imposition as ourselves, or will it be believed they would
not be much better contented to hold their different privileges under the con-
firmation of a British legislature, than of a cypher of a Nabob, directed by a
Governor and Committee who mthey can never trace? 0
1 Malcolm, The Life of Clive, u, 126.
2 Parliamentary History, XVII, 361.
4 Idem, pp. 376-7.
3 Idem, pp. 363-4.
5 Idem, p. 378.
## p. 186 (#214) ############################################
186
THE COMPANY AND THE STATE, 1772-86
In the end leave to introduce Sulivan's bill was refused, and in
April, 1772, Burgoyne carried a motion to appoint a select committee
of thirty-one to enquire into the affairs of the East India Company.
The debate testifies to the intensity of feeling against the Company.
Burgoyne declared that:
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
to rise again.
Any bill based upon the present state of the Indian Government
must be “a poor, paltry, wretched palliative”. The committee was
to enquire into
that chaos where every element and principle of government, and charters,
and firmauns, and the rights of conquests, and the rights of subjects, and the
different functions and interests of merchants, and statesmen, and lawyers,
and kings, are huddled together into one promiscuous tumult and confusion.
He ended with an impassioned peroration :
The fate of a great portion of the globe, the fate of great states in which
your own is involved, the distresses of fifteen millions of people, the rights of
humanity are involved in this question-Good God! What a call-the native of
Hindustan born a slave-his neck bent from the very cradle to the yokeby
birth, by education, by climate, by religion, a patient, submissive, willing sub-
ject to eastern despotism, first begins to feel, first shakes his chains, . . . under
the pre-eminence of British tyranny. 1
It is interesting to note that Burke, who was himself to write some of
the most condemnatory reports in the 1781 enquiry, spoke againsi
any investigation at all.
The Select Committee was presided over by General Burgoyne
himself, and included among its members Lord George Germain,
Barré, Lord Howe, Sir Gilbert Elliot, Pulteney, and Charles James
Fox. But the Company's troubles were not yet over. In August, 1772,
though it had recently been helped by the bank, it was obliged to
apply to government for a loan of £1,000,000. There was a storm
of opposition, for this application seemed to show that there was no
justification for the dividend declared in March. Parliament was
especially summoned. Lord North moved for a committee of secrecy
on the ground that complaints had been made of the disclosure of
confidential information by the Select Committee. North was careful
to state that he himself believed that, however closely pressed the
Company might be by present exigencies, it was nevertheless in
point of external strength and vigour in full health. Burgoyne rose
in defence of the Select Committee, and in the end, though a new
secret committee of thirteen was set up, the old Select Committee was
continued in being. The Select Committee produced twelve, and the
Secret Committee six, reports, all highly condemnatory. Tremendous
1 Parliamentary. History, XVII, 454-9.
## p. 187 (#215) ############################################
ATTACKS ON THE COMPANY
187
feeling against the Company was aroused. Horace Walpole records
the popular impression : "Such a scene of tyranny and plunder has
been opened up as makes one shudder. . . . We are Spaniards in our
lust for gold, and Dutch in our delicacy of obtaining it”. 1 Responsible
statesmen took a view hardly less grave. Lord Shelburne writes to
Chatham : “Every man of every party acknowledges a blow to be
impending in that part of the world, which must shake to its founda-
tions the revenue, manufactures, and property of this”. 2 As the
reports continued to appear, Chatham's indignation rose, and we
find him writing in 1773, “India teems with iniquities so rank, as to
smell to earth and heaven”. 3 But mere abuse of the servants in India
was of little avail. We have Warren Hastings's authority for the
statement that Shelburne was "better informed in India affairs than
almost any man in England”, 4 and the latter, in a further letter to
Chatham, distributed the blame pretty impartially.
impartially. He declared that
though the crimes and frauds of the servants in India were enormous,
yet the directors appear to be accomplices throughout, while the
proprietors seem to be the most servile instruments of both, "nor",
he continues, "has there been found as yet, to speak impartially, any-
where in the House of Commons that firm, even, judicial spirit,
capable of administering, much less originating, that justice which
the case requires”. 5
The Company now made feverish efforts to conduct its own
reformation and, following the precedent of 1769, nominated six
supervisors, who, with plenary powers and salaries of £10,000 each,
were to proceed at once to India to overhaul the whole system there.
But this was more than parliament could stand, and, on the advice
of the Committee of Secrecy, a bill was passed in December, 1772,
prohibiting the Company from sending out the supervisors. Burke,
still as yet the stalwart friend of Leadenhall Street, opposed the bill;
Clive, on the other hand, supported it. “I could wish”, he said, "the
”
Company had met this house half-way instead of petitioning and
quarrelling with the mouth that is to feed them”, then, in reference
to the supervisors and thinking of his own past history, he added,
“had they, Sir, known the East Indies as well as I do, they would
shudder at the bare idea of such a perplexing and difficult service”.
In March the Company again petitioned parliament for a loan of
£1,500,000. In May, Burgoyne developed his attack upon Clive in
the Commons, and amongst the resolutions accepted by the House
was one “That all acquisitions, made under the influence of a military
force, or by treaty with foreign princes, do of right belong to the
State". ? This was in one sense a definite declaration of sovereignty
>
1 Paget-Toynbee, Letters of Horace Walpole, vm, 149.
2 Correspondence of Chatham, IV, 210.
3 Idem, p. 276.
4 Gleig, Memoirs of Warren Hastings, II, 557.
5 Correspondence of Chatham, IV, 271.
® Malcolm, Life of Lord Clive, 1, 313. i Parliamentary History, XVII, 856.
## p. 188 (#216) ############################################
188
THE COMPANY AND THE STATE, 1772-86
over the Company's territories, but it might be asked first, what is
the exact validity of a resolution of the House of Commons, and
secondly, could the claim apply to the anomalous system created in
Bengal by the grant of the diwanni? The curious form of the ex-
pression used, “under the influence of a military force", instead nf
some similar phrase such as "by conquest", was no doubt intended
to cover the de facto position in Bengal. Burke in various speeches
still resisted all attempts to extend state control over the Company.
He disbelieved in the motives of the government : "The pretence of
rectifying abuses, of nourishing, fostering and protecting the Com-
pany was only made with a design of fleecing the Company". The
pretext for interfering was the same in 1773 as in 1767, but "Have
these evils been rectified? Have any of the criminals been summoned
before you? Has their conduct been enquired into? Not one single
suspected person has been examined”. If these evils really existed,
it could only be concluded that ministers
sanctified this bloodshed, this rapine, this villainy, this extortion . . . for the
valuable consideration of £400,000. This crime tax being agreed to, we
heard no more of malpractices. The sinners were arrayed in white-robed in-
nocence;. their misdeeds were more than atoned for by an expiatory sacrifice
of the pecuniary kind. . . .
And again :
I have studied, God knows; hard I have studied, even to the making dogs'
ears of almost every statute book in the kingdom, and I now thus publicly and
solemnly declare that all you have been doing and all you are about to do, in
behalf of the East India Company, is impolitic, is unwise, and entirely repug-
nant to the letter as well as the spirit of the laws, the liberties, and the con-
stitution of this country. 1
Two acts of parliament were now passed. The first granted the
Company a loan of £1,400,000 at 4 per cent. on certain conditions.
The second was the important Regulating Act. The latter did three
things. It remodelled the constitution of the Company in India, and it
tentatively and incompletely subjected the Company to the super-
vision of the ministry and the subordinate presidencies to the super-
vision of the supreme government in Calcutta. The bill was fiercely
opposed by the Company and its friends. The Company's own
petition declared that the bill "will destroy every privilege which the
petitioners hold under the most sacred securities that subjects can
depend upon in this country". The act "under the colour of Regula-
tion, will annihilate at once the powers of the . . . Company, and
virtually transfer them to the Crown". 2 The City of London also
petitioned against the bill on the ground that “the privileges the City
of London enjoy stand on the same security as those of the East India
Company". 3 One of the directors in the House of Commons stigma-
tised the bill as "a medley of inconsistencies, dictated by tyranny,
1 Parliamentary History, XVII, 819-21, 835.
3 Idem, p. 889.
2 Idem, pp. 889-90.
2
## p. 189 (#217) ############################################
THE REGULATING ACT
189
2
yet bearing throughout each line the mark of ignorance". 1 Burke
described the principle of the measure as "an infringement of national
right, national faith, and national justice". But the bill was passed
by 131 to 21 votes in the Commons and by 74 to 17 in the Lords.
Its main provisions were as follows: The qualification for a vote in
the Court of Proprietors was raised from £500 to £1000 and was
restricted to those who had held their stock for at least twelve months.
Measures were taken to prevent the collusive transfer of stock, and
the consequent multiplying of votes. The directors were henceforth
to be elected for four years, and one-fourth of their number must
retire every year, remaining at least one year out of office. There
was to be a Governor-General of Bengal assisted by four councillors.
The vote of the majority was to bind the whole, the governor-general
having merely a casting vote when there was an equal division of
opinion. The governor-general and council were to have power to
superintend the subordinate presidencies in making war or peace.
The directors were to lay before the treasury all correspondence from
India dealing with the revenues; and before a secretary of state
everything dealing with civil or military administration. The first
governor-general and councillors, Warren Hastings, Clavering,
Monson, Barwell and Philip Francis, were named in the act. They
were to hold office for five years, and future appointments were to
be made by the Company. The act empowered the crown to establish
by charter a Supreme Court of Justice, consisting of a chief justice
and three puisne judges. Liberal salaries were granted, £25,000 to
the governor-general, £10,000 to each councillor and £ 8000 to the
chief justice.
Something by way of detailed criticism may now be attempted on
these clauses. The alteration in the voting qualification of the General
Court was introduced with a view to prevent the Company's servants,
when they returned from the East, from gaining an excessive influ-
ence over the directors. The raising of the qualification meant that
1246 of the smaller holders of stock were disqualified. It was generally
held that the clause failed to attain its object.
“The whole of the regulations concerning the Court of Proprietors”, said the
authors of the Ninth Report of the Select Committee of 1781, "relied upon two
principles, which have often proved fallacious, namely that small numbers
were a security against faction and disorder, and that integrity of conduct
would follow the greater property. " 3
There was certainly a good deal of point in the argument of those
who held that, by abolishing the vote of the £500 stock-holders, the
act punished the small proprietors, who could not split votes, and
rewarded those who could.
The change in the constitution of the court of directors was made
with the view of giving the members of the court greater security of
1 Parliamentary History, XVII, pp. 890-1.
2 Idem, p. 902.
8 Repurts from Committees of the House of Commons, vi, 46.
## p. 190 (#218) ############################################
190
THE COMPANY AND THE STATE, 1772-86
tenure, lessening the temptation to secure votes by a corrupt dispensa-
tion of patronage, and encouraging a more continuous and consistent
policy at home and abroad. Hitherto the twenty-four directors were
elected each year, and might have been completely changed at each
election. As Clive once averred, they spent the first half of their
year of office in discharging the obligations by which they had pur-
chased their seats, and the other half in canvassing and preparing for
a new election. At the first election after the bill passed, six directors
were to be chosen for one year, six for two years, six for three years
and six for the full term of four years. In practice the six who
retired each year were always re-elected for the following year and
the effect therefore was as Kaye notes, “to constitute a body of thirty
directors, of whom six, forming a sort of non-effective list, go out
every year by rotation". 1 It was of course possible for the proprietors
at each election to have chosen six new members, but in practice
they never did so.
It was unfortunate that the governor-general was not given in
the last resort power to override his council. After 1786 this was
found to be necessary, and it has ever since remained a prerogative
of the governor-general. Hastings always felt deeply the restrictions
on his power and more than once declared that experience would
prove the governor-general must have this privilege in reserve. After
five years' experience of the working of the act, he writes in 1779 :
I would not continue. the pageant that I am for all the rewards and
honours that the king could give me. I am not Governor. All the means I
possess are those of preventing the rule from falling into worse hands than my
own.
2 Munry's reports, ap. Bengal Select Committee, 24 September, 1761.
8 Bengal Select Committee, 14 and 28 February, and 16 March, 1765.
## p. 175 (#203) ############################################
STRUGGLES IN ENGLAND
175
the council were, in this case their action from the point of view of
policy was irreproachable. It would have been very unwise to have
left the matter of the succession hanging over until Clive's arrival,
and still more so to have invested the new nawab with powers which
it afterwards would have been found expedient to diminish. Unfor-
tunately the council marred their conduct by making this settlement
the occasion of taking large presents in defiance of the orders of the
Company which had already been received.
Clive's victories in Bengal had transformed not only the position
of the English in India but also the proceedings of the Company in
England. Violent political discussions succeeded to the dull and
decorous statements of the course of the trade in the East. Control
of the Company and of its policy became a thing worth paying for.
Clive on the one side and Laurence Sulivan on the other, entered
into a series of campaigns to secure a dominant interest, buying up
stock, and subdividing it so as to create if possible a majority of
secure votes. The right to Clive's jagir had been the great bone of
contention, and the preservation of that valuable property had cost
Clive great sums of money. Sulivan, the great friend of Warren
Hastings, was a man without an idea in advance of the low level of
his time. He almost ruined himself in his struggle with Clive, while
his friend Vansittart did so completely; and he then took advantage
of his position and following at the East India House to seek to retrieve
his position by procuring lucrative posts for his son and relatives in
the East. In 1764 Clive succeeded for the time being in obtaining
the control of the Company; and the fact was marked by his accept-
ance for a second time of the office of governor of Fort William. He
went out in order to set right the errors that had evidently been
committed by his successors. The revolution of 1760 had been bitterly
attacked in England, and so had the war which followed with the
new nawab. It was generally felt that unless the Company set its
house in order, it would be impossible to prevent he ministry from
interfering in Indian affairs, and perhaps abolishing the Company
itself.
Clive reached Calcutta in May, 1765, and found two problems
awaiting his solution-one political, the future relations of the
English with the emperor, the nawab of Oudh, and the nawab of
Bengal; and the other administrative, the reform of the swollen profits
from illicit or quasi-illicit sources, and the re-establishment of order
and subordination, which had disappeared in the revolt of the council
against Vansittart. On his arrival the new governor found that Van-
sittart had promised Oudh to the emperor. It seemed to Clive a
a
foolish step. There was no ground for thinking that Shah 'Alam
would be able to maintain himself there without English help, so that
1 Palk MSS, pp. 91, 126 and 188; Sulivan to Hastings, 6 June, 1781 (Brit.
Mus. Add. MSS. 29149, f. 244).
## p. 176 (#204) ############################################
176
BENGAL, 1760-72
1
1
the setlement contained within itself all the elements of future com-
plications. Clive therefore sent up Carnac to reopen negotiations
until he himself should be able to visit Oudh in person. Carnac soon
found himself in communication with the fugitive Shuja-ud-daula,
with whom Clive decided to come to terms, restoring to him his old
dominions with the exception of Allahabad, on condition of a payment
of fifty lakhs of rupees. Allahabad with the surrounding districts
was bestowed on the emperor. The settlement has been attacked on
both sides—as a breach of faith with the emperor in taking away
from him what had been promised, and as bestowing territory on one
who would not be able to protect it. As regards the first no formal
treaty had as yet been arranged, so that Clive's hands were still free;
as regards the second, some sort of provision had to be made for the
emperor, and the one which Clive adopted cost the Company nothing,
and committed it to nothing. Indeed the grant of Allahabad marks
the end of those foolish dreams which had been cherished by almost
everyone in Bengal, of restoring the empire to its legitimate holder.
Any such attempt would have strained the Company's resources
beyond their power. It would have united the princes of India against
the English. At the same time the restoration of the nawab of Oudh
placed on the frontiers an ally who at the moment was too grateful
to attack them, and who afterwards was much too severely threatened
by other powers to think of doing so. Clive's settlement was a middle
course, which afforded more advantage and threatened fewer dangers
than any other that could have been adopted at the time. In Bengal
itself Clive decided on a long step forward towards the assumption
of ostensible power. He demanded from the emperor as the price of
Allahabad and its districts a farman granting the diwanni of Bengal
to the Company. That involved the complete control of the finances
of the province, and carried to its completion that process of the
extrusion of the nawab's power which had been almost secured by
the arrangement of February, 1765. The disadvantages of this plan
are obvious enough; but they were such as counted for less in those
days than they would now. Power was separated from responsibility.
But no one at the moment thought of undertaking the administration
of large tracts of India, and the fact of bad and corrupt administration
appeared one of those natural and inevitable evils which are beyond
possibility of reform. As against this the plan offered certain imme-
diate advantages. It secured that control over the nawab which was
regarded as the most pressing need of the time; it also promised some
protection against the complaints of foreign powers and the demands
of the home goverrment. Clive still remembered how the too-osten-
sible assumption of power contributed to produce the unyielding
opposition of the English to the schemes of Dupleix; and farmans of
the emperor or parwanas of the nawab, though valueless without the
support of English power, could not be fully discounted at Paris or
the Hague without a serious breach of diplomatic etiquette. It was
## p. 177 (#205) ############################################
CLIVE'S REFORMS
177
thought too that something short of the assumption of full dominion
would be less likely to excite, legal difficulties in England or provoke
the interference of parliament. In short the grant of the diwanni was
designed to secure the full control of Bengal affairs so far as the
Company's interests went without incurring the inconvenience of
formal and avowed dominion.
The administrative questions that demanded settlement were much
more difficult than these political questions. First there were the
Company's covenanted servants. They had been demoralised by the
conditions under which they had been working and the facility with
which wealth could be acquired through the English privileges in
the internal trade of Bengal; while a tradition had arisen that each
change of nawab should be the occasion of large presents, open or
concealed. The accession of Najm-ud-daula had been a particularly
bad case, because the succession was normal, and because the pre-
cedent of presents from the nawab had been extended to the minister
as well. Further, this extension of a bad practice had been made in
the face of specific orders from the Company prohibiting the accept-
ance of presents and requiring its servants to sign covenants agreeing
not to accept such in future. Instead of announcing their orders the
councillors had quietly left them over for Clive to deal with on his
arrival. Indeed they seem to have thought that his previous practice
and present influence would have led him to procure the abrogation
of the orders before he came out again as governor. But they were
mistaken in their man. Clive feared nothing, not even his own past;
and he was as fully bent on enforcing the orders of the Company as
if he himself had never made a rupee by the revolution of 1757 or
were not still in enjoyment of a jagir of £30,000 a year. One of his
earliest acts on his arrival at Calcutta was to require the covenants
to be signed by civil and military servants alike. That was done, but
Champion, and probably many others as well, did so with the idea
that this reforming zeal could not last and that their signature was
a mere matter of form. 1
Clive, however, saw as clearly as did Cornwallis twenty years
later that if illicit gains were to be abolished, considerable regular
advantages had to be provided. On his arrival he found that there
was a great lack of senior servants. Since everyone had been held
entitled to passes for the internal trade, it had been possible for even
junior servants to make fortunes by selling their passes to the Indian
merchants of Calcutta. The result was that Clive found the secretary's
department in charge of a writer of three years' standing, the ac-
countant was a writer yet younger than the secretary, while the
paymaster of the army, with balances of twenty lakhs in his hands
for months together, had also been a writer. 2 Clive resolved therefore
1 Champion's Journal, 6 August, 1765.
2 Bengal Select Committee to the Company, 24. March, 1766.
12
## p. 178 (#206) ############################################
178
BENGAL, 1760-72
to reorganise the internal trade, to place it on a wholly new basis,
and to employ the profits so as to secure handsome salaries for the
senior servants of the Company; and meanwhile to call up from
Madras a small number of covenanted servants to fill the immediate
vacancies in council. This last measure produced the sort of uproar
that was to be expected. An association was 'formed; Clive's enter-
tainments were boycotted; memorials were framed. But when the
malcontents found that they were promptly deprived of every lucra-
tive office, refused passes, and sent hither and thither very much
against their liking, they concluded at last that they had better put
up with Clive's tyranny, and the opposition died down. Meanwhile
Clive went on with his salt scheme. That had always been a govern-
ment monopoly, and as such Clive decided to administer it and employ
the profits arising out of it in the payment of allowances to the
principal civil and military servants. He did so under the form of a
trading company, under the close control of the council, and the
allowances took the form of shares in the company. This was contrary
to the orders of the Company; but Clive considered that those orders
had been issued before he had taken over the revenue administration
of the provinces, that his new plan could not possibly rouse difficulties
with the nawab, and that consequently the main objections of the
Company did not apply to his present proposals. In this respect he
was guilty of a miscalculation. When the news of what he had
done reached England, the Company at once ordered the internal
trade to be entirely abandoned; these orders were again suspended,
and Clive hoped to procure their reversal on his return to England;
but the directors insisted on their views being carried out; and so at
last the trading company was wound up. In this matter Clive has
been unduly blamed. His proposals amounted in reality to the
continuation of the monopoly which had been customary and the
assignment of the revenues so raised to the payment of establishment.
Although in form his plan seemed to continue the vices of the Van-
sittart régime, in essence it was wholly different and amounted to
just that measure of reform for which Cornwallis has received such
high praise. The mistake which Clive made was apparently one of
tactics. He thought the Company would be less likely to oppose the
scheme so long as the payment of the extra allowances did not appear
to come out of its own revenues. He forgot that the apparent simila- .
rity between his plan and the abuses of the past might lead to its
condemnation.
With the military officers Clive had even more trouble than with
the civilians. This was natural, because in the latter. case he had had
only to deal with illicit gains whereas in the former he was required
to cut down regular and acknowledged allowances. For some years
the Company had been endeavouring to cut down the batta or field-
allowances of the Bengal officers. These allowances were designed to
make good the extra cost of living in the field as compared with
## p. 179 (#207) ############################################
THE BATTA QUESTION
179
living in garrison. They originated in the Carnatic, where both
Chanda Sahib and Muhammad 'Ali had paid batta to the French
and English officers respectively in their service; and difficulties had
arisen when Muhammad 'Ali had transferred lands to the English
Company in lieu of this batta, and the question of its regulation had
arisen between the officers and the Company. Affairs had followed
the same course in Bengal, where batta had at first been paid by the
nawab and then became a charge upon the Company, who desired
to reduce it to the more moderate level paid at Madras. Orders to
this effect had reached Bengal when the war with Mir Kasim had
been on the point of breaking out; their immediate execution had
thus been impossible. But when they were repeated, in 1764, they
met with the same fate as those other unpleasant orders prohibiting
presents, and obedience was deferred until Clive's arrival. He ac-
cordingly prepared regulations on the subject. Officers in canton-
ments at Mongir or Patna were to draw half batta, as did officers at
Trichinopoly; when they took the field they would draw batta while
within the limits of Bengal and Bihar, but if they crossed into Oudh
they would then become entitled to double batta. For a captain
these rates amounted to three, six, and twelve rupees a day. These
orders led to a combination among the officers, just as the appoint-
ment of covenanted servants from Madras had led to a combination
among the civilians. It was agreed that they should simultaneously
resign their commissions. In this step they seem to have been
encouraged by the commander of one of the brigades, Sir Rober
Fletcher, who was not only the friend of Clive's opponents in England,
but also thought himself injured by decisions of Clive regarding
pecuniary claims which he had put forward. The agitation coincidec
in time with the trouble with the civilians, and there was talk of a
subscription for the benefit of those who should suffer through Clive's
conduct. In this matter as in the other Clive overbore all opposition
with a bold front. Every resignation was to be accepted; supplies of
officers were requested from Madras; everyone displaying the least
inclination to mutiny was to be sent down at once to Calcutta. Clive
visited the headquarters of the three brigades in person, to assure
himself that the men were under control; and the officers gradually
fell out among themselves. Those who had already made their for-
tunes were careless of what might come out of the affair, but those
who still had their fortunes to make were more timid, and, when it
came to the point, were reluctant to forgo their prospects. In these
circumstances the mutiny broke down. Those who were considered the
least guilty were allowed to return to duty on condition of signing
a three years' agreement, which under the East India Mutiny Act
would bring within the penalty of death any who so conducted them-
selves in future. Of the rest Fletcher and six more were cashiered.
1 Dodwell, Dupleix and Clive, p. 266.
1
## p. 180 (#208) ############################################
180
BENGAL, 1760-72
At the same time Clive resolved to apply to the use of the Com-
pany's officers a sum of five lakhs which Mir Ja'far was alleged to
have desired on his deathbed to be delivered to him. One of the great
lacks of the service was some provision for those who were compelled
to retire from the service by wounds or ill-health while their circum-
stances were still embarrassed. Being a legacy the sum was deemed
not to come within the Company's prohibition; it was therefore
accepted, vested in trustees, and under the name of Lord Clive's Fund
did much to bridge over the interval until the Company adopted the
practice of pensioning its servants.
Clive quitted India for the last time in February, 1767. It is not
necessary to dilate upon the greatness of his character or the results
of his work. He had a supreme faculty for seeing into the heart of a
situation, undistracted by side-issues, for compelling the obedience of
others, and for finding an immediate expedient for the needs of the
moment. His principal defect was a certain bluntness of moral
feeling which enabled him to perform and defend actions which
did not coñmend themselves even to his own age. But there was
nothing small or petty about him. Though he made an enormous
fortune, he was not mercenary; though he tricked Omichand, he was
trusted implicitly by Indians of every class. His unfaltering will and
uncompromising vigour took the fullest advantage of a peculiarly
happy concourse of events firmly to establish the Company's power
in the wealthiest province of India.
Between him and Warren Hastings come two governors who were
hardly more than stop-gaps. Verelst succeeded Clive, and at the end
of 1769 Cartier succeeded Verelst. But their combined five years of
rule were little more than an introduction to the period of Hastings.
The stage was being set for new performers. The Marathas, recovering
from their overthrow at Panipat, were beginning once more to inter-
fere in Northern India; the emperor quitted Allahabad, where Clive
had settled him, and went off to Delhi under their protection; mis-
understandings arose with Shuja-ud-daula, but they did not break
the alliance which Clive had established; the English in Bengal began
to take a share in the administration which they had so long regarded
with suspicion; attempts were made to enter into communication
with the Himalayan states and to come to terms with our Maratha
neighbours on the south. But in all these ways the time was prepa-
ratory only for the time of growth and formation which Hastings
was to inaugurate.
## p. 181 (#209) ############################################
CHAPTER X
THE EAST INDIA COMPANY AND THE STATE.
1772-86
THE period 1772-86 is the formative epoch of British Indian
History. During these years three important questions had to be
dealt with : firstly, the relation of the East India Company to the
state; secondly, the relation of the home to the Indian administration
of the Company; and thirdly, the relation of the supreme government
in Bengal to the subordinate presidencies. In this chapter we are
concerned with the first of these questions, and it may be pointed out
that the fourteen years of our period witnessed all the great statutes
which definitely subjected the Company to the control of the crown
and parliament, and converted it into a quasi-state department.
Between 1786 and 1858 we feel that the constitutional changes are
not really fundamental. Even the taking over of the Company's
powers by the crown in 1858 was less a revolution than a formal and
explicit recognition of facts already existing. Again, this was the
period which saw the Company subjected to minute and severe
inspection at the hands of parliamentary commissions, the Select and
Secret Committees of 1772, and the Select and Secret Committees of
1781. Each occasion was followed by a great statute and an attack
upon a great individual. In 1772 we have the attack upon Clive,
followed by the Regulating Act of 1773. After 1781 we have Pitt's
Act of 1784, followed by the impeachment of Warren Hastings.
Lastly, as a result of these inspections a reformation of the civil
service was carried through, partly by Hastings himself, and in fuller
measure by Lord Cornwallis.
At no time was the question of British dominion in India so
closely interwoven with political and party history at home. In Cob-
bett's Parliamentary History a very large space from 1767 to the end
of the century is devoted to Indian debates. "The affairs of the East
India Company", wrote the editor in 1768, "were now become as much
an object of annual consideration, as the raising of the supplies. ” ?
The Indian question was entangled with a serious constitutional crisis
and with the personal rivalry and political ambitions of the two
greatest statesmen of the time. It caused the fall of the notorious
Coalition Government of Fox and North, gave George III the oppor-
tunity to effect a daring coup d'état, doomed Fox to almost a lifetime
of opposition and put Pitt in power practically for the rest of his
life. From 1772 to 1795 Indian affairs were constantly before
parliament in both its legislative and its judicial aspect.
1 Parliamentary History of England, XVI, 402.
## p. 182 (#210) ############################################
182
THE COMPANY AND THE STATE, 1772-86
»
Now all this was inevitable and, when everything is taken into
consideration, not to be regretted. It is easy to paint the interference
of parliament as mischievous and misinformed, and to complain that
India was made a pawn in the party game; but there was—as some
of the most clear-sighted of contemporary statesmen saw-a serious
risk of a great empire being created and ruled by Englishmen outside
the sphere and control of the British cabinet. “The East India
Company”, as Burke said, "did not seem to be merely a Company
formed for the extension of the British commerce, but in reality a
delegation of the whole power and sovereignty of this kingdom sent
into the East. ” 1 No national government could be expected, 0%
indeed ought, to tolerate such a dangerous shifting of the centre of
political gravity. Some action on the part of the state was necessary;
the question had to be tackled even at the cost of strife, dislocation,
and possibly some injustice to individuals. "In delegating great
power to the India Company", wrote Burke, "this kingdom has not
released its sovereignty. On the contrary, its responsibility is increa-
sed by the greatness and sacredness of the power given. " 2
This bringing into relation of the Company and the state was
from the nature of the case a very difficult problem. It had to be
worked out experimentally, for there were no precedents. We can-
not be surprised that many mistakes were made.
“The British legislature", says Malcolm, “has hitherto but slowly followed
the progress of the power of the Company, in India. It had legislated for
factories on a foreign shore, when that Company was in the possession of pro-
vinces; and when the laws were completed to govern these, it had obtained
kingdoms. "
This was entirely true, but it was inevitable. The rapid developments
in the East out-distanced the efforts of parliament to comprehend
and to deal with them. According as men visualised the position
from the eastern or the western point of view, authority in the East
seemed dangerously circumscribed or perilously unhampered. Hastings
describes the sphere of his administration as "a dominion held by
a delegated and fettered power over a region exceeding the dimen-
sions of the parent state, and removed from it a distance equal in
its cricuit to two-thirds of the earth's circumference”. 4 Its remoteness
postulated the necessity of semi-independence, “distant as it is from
the reach of more than general instruction from the source of its autho-
rity, and liable to daily contingencies, which require both instant
decision, and a consistency of system”. 5 Burke, on the other hand,
from the home aspect, declares, “It is difficult for the most wise and
" 3
1
Speeches. . . in the trial of Warren Hastings (Ed. Bond), I, 15.
2 Idem, p. 13.
3 Malcolm, The Political History of India, I, 8.
+ Selcctions from the State Papers of the Governors-General of Indiu.
Warren Hastings. Ed. by (Sir) G. W. Forrest, 11, 92.
- Idem, p. 93.
## p. 183 (#211) ############################################
POSITION OF THE COMPANY
183
2
upright government to correct the abuses of remote, delegated power,
productive of unmeasured wealth, and protected by the boldness and
strength of the same ill-got riches”;1 and he puts his finger on the
crux of the whole matter, though no doubt he here inculcates a
counsel of perfection, when he says, "I think I can trace all the cala-
mities of this country to the single source of our not having had
steadily before our eyes a general, comprehensive, well-connected and
well-proportioned view of the whole of our dominions, and a just
sense of their true bearings and relations". The question then hefore
the statesmen of the eighteenth century was : How was the Company's
quasi-sovereignty in the East to be reconciled with the necessary
subordination to the imperial parliament? There were three possi-
bilities. The first was that the Company's privileges and powers
should remain untouched, with the hope that some practical modus
vivendi would in time be worked out. But this was felt by the majority
of the nation and even by the more far-sighted of the Company's
own servants to be no longer feasible. Both Clive and Warren Hastings
suggested tentatively to the prime ministers of their time that it
might be advisable for the state to take over the Company's powers.
There seemed a danger not only that misgovernment in India might
tarnish the name of Great Britain as an imperial state, but that the
Indian interest in England, supported by huge revenues and corrupt
parliamentary influence, might gain a preponderating and improper
power in home affairs.
The second possibility was that the state should take over in full
sovereignty the territorial possessions in India and convert the
Company's servants into a civil service of the crown. But this was
felt to be too great and drastic a change. “It was opposed to all
eighteenth-century notions of the sacredness of property, and the
problem was complicated by all kinds of delicate legal and political
questions. It might even be plausibly contended that the Company
had no considerable territorial possessions at all. It administered
Bengal, Bihar and Orissa merely as the diwan of the Moghul emperor.
That was a tenable position for a private corporation; it was not a
tenable position for the government of Great Britain. If the "territo-
rial” possessions were annexed by the crown, the act might be
represented as sheer usurpation against the Moghul Empire, and
Great Britain might be embroiled with the representatives of other
European nations in the East.
It remained that the state should take the Company into partner-
ship, assuming the position of controlling and predominant partner
in all matters relating to the higher branches of government, but
leaving to the Company the monopoly of the trade, the disposal of
its valuable patronage under crown sanction, and the details of the
1 Works of Edmund Burke, m, 193-4.
2 Idem, p. 125.
## p. 184 (#212) ############################################
184
THE COMPANY AND THE STATE, 1772-86
administration. What we see going on during the period 1772-86 is
the gradual realisation of this conception. It must be remembered
that some attempts in this direction had already been made before
1772. . A little band of members of parliament, prominent among
whom were Beckford, Barré and General Burgoyne, had long been
urging that conquests in India should pass to the crown. Their
persistent efforts met with some success in 1767 when five separate
acts were passed. These measures amongst other things interfered
in the regulations for voting in the General Courts of the Company,
regulated the amount of dividends to be paid and the manner of
paying them, and, most important, obliged the Company to pay the
exchequer an annual sum of £400,000 for two years from February,
1767, for the privilege of retaining their territorial acquisitions (the
payment was afterwards extended to 1772). "Thus”, says Sir
.
Courtenay Ilbert, "the state claimed its share of the Indian spoil,
and asserted its rights to control the sovereignty of Indian territories. ”i
These changes were only carried in the teeth of a strong opposition. .
The protests of the dissentients in the House of Lords showed how
strong as yet were the barriers of the rights of property, and the
sanctity of contract.
A legislative interposition controlling the dividend of a trading Company,
legally voted and declared by those to whom the power of doing it is entrusted
is altogether without example.
The solution, it may be admitted, was not particularly logical. It
was on the face of it absurd that a British chartered company should
pay the crown of England an annual sum of money for permission
to hold certain lands and revenues of an eastern potentate, and the
friends of the Company did not hesitate to describe the payment as
mere political blackmail.
But for five years at any rate the attack against the Company was
stayed. Then again in 1772 troubles gathered round it, arising from
the following circumstances. In March, 1772, a dividend at the rate
of 1242 per cent. was declared. In the same month the Company,
obviously endeavouring to forestall a drastic reformation from outside,
attempted through Sulivan their deputy-chairman to introduce a bill
for the better regulation of their affairs. Lord Clive, being assailed,
defended himself by taking the offensive and roundly attacked the
Company. In the debate some interesting points were raised as to
the relations between the Company and the state. Clive had in 1759
proposed to Chatham that the crown should take over the Company's
dominions. Chatham, probably because he had no leisure to face the
practical and exceedingly thorny difficulties, contented himself with
an oracular answer that the scheme was of a very nice nature and,
1 Ilbert, The Government of India, p. 39.
? Parliamentary History, XVI, 356:
## p. 185 (#213) ############################################
DEBATES OF 1772
186
as Clive's agent reported, "spoke this matter a little darkly". 1 Clive
had resented this treatment and now with an imprudence amazing
in a man, around whom his enemies were closing, struck out in all
directions as though his one aim was not to leave himself a single
partisan. With a magnificent recklessness he included the govern-
ment, the directors, the proprietors and the servants in the East in
one comprehensive condemnation :
“I attribute the present situation of our affairs”, he said, "to four causes : a
relaxation of government in my successors; great neglect on the part of admi.
nistration; notorious misconduct on the part of the directors; and the violent
and outrageous proceedings of General Courts. ” 2
The Company had acquired an empire and a revenue of £4,000,000.
It was natural to suppose that such an object would have merited the most
serious attention of administration; that in concert with the Court of Directors
they would have considered the nature of the Company's charter, and have
adopted a plan adequate to such possessions. Did they take it into considera-
tion? No, they did not. They thought of nothing but the immediate division
of the loaves and fishes. They went so far as to influence a parcel of tem-
porary Proprietors to bully the Directors into their terms.
They ought to have forced the directors to produce a plan, or with
the aid of Parliament to have made one themselves.
If administration had done their duty, we should not now have heard a
speech from the throne, intir ing the necessity of Parliamentary interposition,
to save our possessions in India from impending ruin. 3
One of those who took part in the debate, Governor Johnstone,
maintained views of some interest. He declared that:
• • •
The British legislature should not move in the affairs of Asia, unless she
acts with dignity and effect. . . . I am clear we hold those lands by conquest.
I think the conquest was lawfully made by the Company and a small part of
the King's forces in conjunction. I deny that conquest by a subject, lawfully
made, vests the property in the state, though I maintain it conveys the
sovereignty. 4
He went on to advocate that the crown under certain conditions
should grant the lands to the East India Company as was done in
the case of New England and several other of our chartered colonies.
He did not accept the theory that we need consider the susceptibilities
of other European nations.
Does any man believe that foreign nations permit us virtually to hold these
territories under the magic word Devannee? Can it be supposed they are not
equally sensible of the imposition as ourselves, or will it be believed they would
not be much better contented to hold their different privileges under the con-
firmation of a British legislature, than of a cypher of a Nabob, directed by a
Governor and Committee who mthey can never trace? 0
1 Malcolm, The Life of Clive, u, 126.
2 Parliamentary History, XVII, 361.
4 Idem, pp. 376-7.
3 Idem, pp. 363-4.
5 Idem, p. 378.
## p. 186 (#214) ############################################
186
THE COMPANY AND THE STATE, 1772-86
In the end leave to introduce Sulivan's bill was refused, and in
April, 1772, Burgoyne carried a motion to appoint a select committee
of thirty-one to enquire into the affairs of the East India Company.
The debate testifies to the intensity of feeling against the Company.
Burgoyne declared that:
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
to rise again.
Any bill based upon the present state of the Indian Government
must be “a poor, paltry, wretched palliative”. The committee was
to enquire into
that chaos where every element and principle of government, and charters,
and firmauns, and the rights of conquests, and the rights of subjects, and the
different functions and interests of merchants, and statesmen, and lawyers,
and kings, are huddled together into one promiscuous tumult and confusion.
He ended with an impassioned peroration :
The fate of a great portion of the globe, the fate of great states in which
your own is involved, the distresses of fifteen millions of people, the rights of
humanity are involved in this question-Good God! What a call-the native of
Hindustan born a slave-his neck bent from the very cradle to the yokeby
birth, by education, by climate, by religion, a patient, submissive, willing sub-
ject to eastern despotism, first begins to feel, first shakes his chains, . . . under
the pre-eminence of British tyranny. 1
It is interesting to note that Burke, who was himself to write some of
the most condemnatory reports in the 1781 enquiry, spoke againsi
any investigation at all.
The Select Committee was presided over by General Burgoyne
himself, and included among its members Lord George Germain,
Barré, Lord Howe, Sir Gilbert Elliot, Pulteney, and Charles James
Fox. But the Company's troubles were not yet over. In August, 1772,
though it had recently been helped by the bank, it was obliged to
apply to government for a loan of £1,000,000. There was a storm
of opposition, for this application seemed to show that there was no
justification for the dividend declared in March. Parliament was
especially summoned. Lord North moved for a committee of secrecy
on the ground that complaints had been made of the disclosure of
confidential information by the Select Committee. North was careful
to state that he himself believed that, however closely pressed the
Company might be by present exigencies, it was nevertheless in
point of external strength and vigour in full health. Burgoyne rose
in defence of the Select Committee, and in the end, though a new
secret committee of thirteen was set up, the old Select Committee was
continued in being. The Select Committee produced twelve, and the
Secret Committee six, reports, all highly condemnatory. Tremendous
1 Parliamentary. History, XVII, 454-9.
## p. 187 (#215) ############################################
ATTACKS ON THE COMPANY
187
feeling against the Company was aroused. Horace Walpole records
the popular impression : "Such a scene of tyranny and plunder has
been opened up as makes one shudder. . . . We are Spaniards in our
lust for gold, and Dutch in our delicacy of obtaining it”. 1 Responsible
statesmen took a view hardly less grave. Lord Shelburne writes to
Chatham : “Every man of every party acknowledges a blow to be
impending in that part of the world, which must shake to its founda-
tions the revenue, manufactures, and property of this”. 2 As the
reports continued to appear, Chatham's indignation rose, and we
find him writing in 1773, “India teems with iniquities so rank, as to
smell to earth and heaven”. 3 But mere abuse of the servants in India
was of little avail. We have Warren Hastings's authority for the
statement that Shelburne was "better informed in India affairs than
almost any man in England”, 4 and the latter, in a further letter to
Chatham, distributed the blame pretty impartially.
impartially. He declared that
though the crimes and frauds of the servants in India were enormous,
yet the directors appear to be accomplices throughout, while the
proprietors seem to be the most servile instruments of both, "nor",
he continues, "has there been found as yet, to speak impartially, any-
where in the House of Commons that firm, even, judicial spirit,
capable of administering, much less originating, that justice which
the case requires”. 5
The Company now made feverish efforts to conduct its own
reformation and, following the precedent of 1769, nominated six
supervisors, who, with plenary powers and salaries of £10,000 each,
were to proceed at once to India to overhaul the whole system there.
But this was more than parliament could stand, and, on the advice
of the Committee of Secrecy, a bill was passed in December, 1772,
prohibiting the Company from sending out the supervisors. Burke,
still as yet the stalwart friend of Leadenhall Street, opposed the bill;
Clive, on the other hand, supported it. “I could wish”, he said, "the
”
Company had met this house half-way instead of petitioning and
quarrelling with the mouth that is to feed them”, then, in reference
to the supervisors and thinking of his own past history, he added,
“had they, Sir, known the East Indies as well as I do, they would
shudder at the bare idea of such a perplexing and difficult service”.
In March the Company again petitioned parliament for a loan of
£1,500,000. In May, Burgoyne developed his attack upon Clive in
the Commons, and amongst the resolutions accepted by the House
was one “That all acquisitions, made under the influence of a military
force, or by treaty with foreign princes, do of right belong to the
State". ? This was in one sense a definite declaration of sovereignty
>
1 Paget-Toynbee, Letters of Horace Walpole, vm, 149.
2 Correspondence of Chatham, IV, 210.
3 Idem, p. 276.
4 Gleig, Memoirs of Warren Hastings, II, 557.
5 Correspondence of Chatham, IV, 271.
® Malcolm, Life of Lord Clive, 1, 313. i Parliamentary History, XVII, 856.
## p. 188 (#216) ############################################
188
THE COMPANY AND THE STATE, 1772-86
over the Company's territories, but it might be asked first, what is
the exact validity of a resolution of the House of Commons, and
secondly, could the claim apply to the anomalous system created in
Bengal by the grant of the diwanni? The curious form of the ex-
pression used, “under the influence of a military force", instead nf
some similar phrase such as "by conquest", was no doubt intended
to cover the de facto position in Bengal. Burke in various speeches
still resisted all attempts to extend state control over the Company.
He disbelieved in the motives of the government : "The pretence of
rectifying abuses, of nourishing, fostering and protecting the Com-
pany was only made with a design of fleecing the Company". The
pretext for interfering was the same in 1773 as in 1767, but "Have
these evils been rectified? Have any of the criminals been summoned
before you? Has their conduct been enquired into? Not one single
suspected person has been examined”. If these evils really existed,
it could only be concluded that ministers
sanctified this bloodshed, this rapine, this villainy, this extortion . . . for the
valuable consideration of £400,000. This crime tax being agreed to, we
heard no more of malpractices. The sinners were arrayed in white-robed in-
nocence;. their misdeeds were more than atoned for by an expiatory sacrifice
of the pecuniary kind. . . .
And again :
I have studied, God knows; hard I have studied, even to the making dogs'
ears of almost every statute book in the kingdom, and I now thus publicly and
solemnly declare that all you have been doing and all you are about to do, in
behalf of the East India Company, is impolitic, is unwise, and entirely repug-
nant to the letter as well as the spirit of the laws, the liberties, and the con-
stitution of this country. 1
Two acts of parliament were now passed. The first granted the
Company a loan of £1,400,000 at 4 per cent. on certain conditions.
The second was the important Regulating Act. The latter did three
things. It remodelled the constitution of the Company in India, and it
tentatively and incompletely subjected the Company to the super-
vision of the ministry and the subordinate presidencies to the super-
vision of the supreme government in Calcutta. The bill was fiercely
opposed by the Company and its friends. The Company's own
petition declared that the bill "will destroy every privilege which the
petitioners hold under the most sacred securities that subjects can
depend upon in this country". The act "under the colour of Regula-
tion, will annihilate at once the powers of the . . . Company, and
virtually transfer them to the Crown". 2 The City of London also
petitioned against the bill on the ground that “the privileges the City
of London enjoy stand on the same security as those of the East India
Company". 3 One of the directors in the House of Commons stigma-
tised the bill as "a medley of inconsistencies, dictated by tyranny,
1 Parliamentary History, XVII, 819-21, 835.
3 Idem, p. 889.
2 Idem, pp. 889-90.
2
## p. 189 (#217) ############################################
THE REGULATING ACT
189
2
yet bearing throughout each line the mark of ignorance". 1 Burke
described the principle of the measure as "an infringement of national
right, national faith, and national justice". But the bill was passed
by 131 to 21 votes in the Commons and by 74 to 17 in the Lords.
Its main provisions were as follows: The qualification for a vote in
the Court of Proprietors was raised from £500 to £1000 and was
restricted to those who had held their stock for at least twelve months.
Measures were taken to prevent the collusive transfer of stock, and
the consequent multiplying of votes. The directors were henceforth
to be elected for four years, and one-fourth of their number must
retire every year, remaining at least one year out of office. There
was to be a Governor-General of Bengal assisted by four councillors.
The vote of the majority was to bind the whole, the governor-general
having merely a casting vote when there was an equal division of
opinion. The governor-general and council were to have power to
superintend the subordinate presidencies in making war or peace.
The directors were to lay before the treasury all correspondence from
India dealing with the revenues; and before a secretary of state
everything dealing with civil or military administration. The first
governor-general and councillors, Warren Hastings, Clavering,
Monson, Barwell and Philip Francis, were named in the act. They
were to hold office for five years, and future appointments were to
be made by the Company. The act empowered the crown to establish
by charter a Supreme Court of Justice, consisting of a chief justice
and three puisne judges. Liberal salaries were granted, £25,000 to
the governor-general, £10,000 to each councillor and £ 8000 to the
chief justice.
Something by way of detailed criticism may now be attempted on
these clauses. The alteration in the voting qualification of the General
Court was introduced with a view to prevent the Company's servants,
when they returned from the East, from gaining an excessive influ-
ence over the directors. The raising of the qualification meant that
1246 of the smaller holders of stock were disqualified. It was generally
held that the clause failed to attain its object.
“The whole of the regulations concerning the Court of Proprietors”, said the
authors of the Ninth Report of the Select Committee of 1781, "relied upon two
principles, which have often proved fallacious, namely that small numbers
were a security against faction and disorder, and that integrity of conduct
would follow the greater property. " 3
There was certainly a good deal of point in the argument of those
who held that, by abolishing the vote of the £500 stock-holders, the
act punished the small proprietors, who could not split votes, and
rewarded those who could.
The change in the constitution of the court of directors was made
with the view of giving the members of the court greater security of
1 Parliamentary History, XVII, pp. 890-1.
2 Idem, p. 902.
8 Repurts from Committees of the House of Commons, vi, 46.
## p. 190 (#218) ############################################
190
THE COMPANY AND THE STATE, 1772-86
tenure, lessening the temptation to secure votes by a corrupt dispensa-
tion of patronage, and encouraging a more continuous and consistent
policy at home and abroad. Hitherto the twenty-four directors were
elected each year, and might have been completely changed at each
election. As Clive once averred, they spent the first half of their
year of office in discharging the obligations by which they had pur-
chased their seats, and the other half in canvassing and preparing for
a new election. At the first election after the bill passed, six directors
were to be chosen for one year, six for two years, six for three years
and six for the full term of four years. In practice the six who
retired each year were always re-elected for the following year and
the effect therefore was as Kaye notes, “to constitute a body of thirty
directors, of whom six, forming a sort of non-effective list, go out
every year by rotation". 1 It was of course possible for the proprietors
at each election to have chosen six new members, but in practice
they never did so.
It was unfortunate that the governor-general was not given in
the last resort power to override his council. After 1786 this was
found to be necessary, and it has ever since remained a prerogative
of the governor-general. Hastings always felt deeply the restrictions
on his power and more than once declared that experience would
prove the governor-general must have this privilege in reserve. After
five years' experience of the working of the act, he writes in 1779 :
I would not continue. the pageant that I am for all the rewards and
honours that the king could give me. I am not Governor. All the means I
possess are those of preventing the rule from falling into worse hands than my
own.
