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Charter Act of 1813 CHANAKYA NATIONAL LAW UNIVERSITY PATNA HISTORY-II PROJECT ON CHARTER ACT OF 1813 Submitted To: Dr. Priya Darshini Assistant Professor (History) Submitted By: Saurabh Kumar Roll no: - 607 st 1 Year ACKNOWLEDGEMENT The research work on the CHARTER ACT OF 1813 has been able to get its final shape with the support and help of people from various quarters. My sincere thanks go to all the people without whom the study could not have come to its present state. I am proud to acknowledge gratitude to the individuals during my study and without whom the study may not be completed. I have taken this opportunity to thank those who genuinely helped me. With immense pleasure, I express my deepest sense of gratitude to Dr.Priya Darshini, Assistant Professor (History), Chanakya National Law University for helping me in my research. I would also like to thank my parents without whose blessings the completion of this project was not possible. I have made every effort to acknowledge credits, but I apologies in advance for any omission that may have inadvertently taken place. Last but not least I would like to thank Almighty whose blessing helped me to complete the project. Saurabh Kumar TABLE OF CONTENTS INTRODUCTION ..................................................................................... 1 EAST INDIA COMPANY ........................................................................ 3 CHARTER ACT OF 1813 ..................... Error! Bookmark not defined. EFFECT OF CHARTER ON ECONOMY .............................................. 8 REFORMS IN EDUCATION ................................................................... 9 REFORMS IN RELIGION ..................................................................... 12 CONCLUSION ....................................................................................... 14 BIBILOGRAPHY ................................................................................... 15 INTRODUCTION The East India Company Act 1813, also known as the Charter Act of 1813, was an Act of the Parliament of the United Kingdom which renewed the charter issued to the British East India Company, and continued the Company's rule in India. However, the Company's commercial monopoly was ended, except for the tea trade and the trade with China, reflecting the growth of British power in India, The Company's charter had previously been renewed by the Charter Act of 1793, and was next renewed by the Government of India Act 1833. Napoleon Bonaparte had put in place the Berlin decree of 1806 & Milan Decree of 1807 forbade the import of British goods into European countries allied with or dependent upon France, and installed the Continental System in Europe. These circumstances posed hardships to British traders, and they demanded entry to the ports of Asia and dissolve the monopoly of the East India Company. But the East India Company clamored that its political authority and commercial privileges cannot be separated. The controversy was later resolved by allowing all the British merchants to trade with India under a strict license system. Thus the Charter Act of 1813 ended the monopoly of the East India Company in India, however:- The company's monopoly in trade with china and trade in tea was remained intact. The Charter Act of 1813, for the first time explicitly defined the constitutional position of the British territories in India. This act also made provisions to grant permission to the persons who wished to go to India for Promoting moral and religious improvements. (Christian Missionaries) This act regulated the company‟s territorial revenues and commercial profits. The company debt was to be reduced and dividend was fixed @10.5% per annum. There was also a provision that Company should invest Rs. 1 Lakh every year on the education of Indians. This act also empowered the local governments to impose taxes on the persons subject to the jurisdiction of the Supreme Court. 1 Aim and objectives – Through the research work the researcher aims to study the Charter Act of 1813 with the objective of finding its effect on various fields in the Indian context Research methodology- The researcher has implied the use of doctrinal method to conduct the research Mode of bibliography- The researcher has used a uniform mode of bibliography for the research. 2 EAST INDIA COMPANY When the British East India Company (EIC) was formed in 1600, there were already other East India Companies operating on behalf of France, the Netherlands, Spain and Portugal. Thanks to the naval route that explorer Vasco da Gama discovered, riches from the Orient were pouring into Europe. With other nations importing fortunes in goods and plunder, Queen Elizabeth decided England should get some, too. So she granted the charter for the East India Company.1 Queen Elizabeth used more than just royal decree and coffers (treasury funds) to help merchants and explorers establish trade on behalf of England in the East. The charter she issued created the first official joint-stock corporation. A joint-stock corporation is composed of investors who are granted shares in a company. In return for their initial investments, shareholders are given dividends, or percentages, of the company's profits based on the number of shares the investor holds. Shares and dividends were not new concepts in England. Twenty years prior to the EIC's charter, Queen Elizabeth was already a major stakeholder in Sir Francis Drake's ship, the Golden Hind. Although it's not certain how much she made from Drake's voyages to the New World, the captain himself made a 5,000 percent return on his initial investment. So a joint-stock corporation like the one Queen Elizabeth formed in the East India Company wasn't much of a financial leap. But it was the first of its kind, and following the establishment of the EIC, its Dutch, French and other competitors followed suit. But granting charter to the EIC wasn't the only part of the prototype for modern corporations that Queen Elizabeth devised. Under the auspices of her royal authority, Elizabeth also limited the liability of the EIC's investors -- including hers. This made the company the world's first limited liability corporation (abbreviated as LLC in the United States and Ltd. in the United Kingdom). Under an LLC, the investors in a corporation are granted protection from losing any more money than their initial investments in the venture. If the company goes under, the investors only lose the amount of money they put into the LLC. The company's outstanding debts aren't divvied up among its investors. Queen Elizabeth covered any losses or debts owed by the East India Company with the royal coffers; modern LLCs are subject to bankruptcy procedures, where creditors may be forced to take pennies on the dollar or nothing at all if a corporation goes under. 1 "The Creation of the East India Company"www. history.howstuffworks.com/15-04-2012 3 Although it took several decades for the East India Company to become truly profitable, once it did, the company rose to global domination -- both in business and in government. In a symbiotic way, as the company grew in power, so, too, did England. So it's no surprise that during its existence, the company was directly involved in major geopolitical changes: The EIC literally changed the course of history. Two nations, India and the United States, revolted against East India Company rule, which led to the establishment of their current political structures. What is Charter A charter is the grant of authority or rights, stating that the granter formally recognizes the prerogative of the recipient to exercise the rights specified. It is implicit that the granter retains superiority (or sovereignty), and that the recipient admits a limited (or inferior) status within the relationship, and it is within that sense that charters were historically granted, and that sense is retained in modern usage of the term. Also, charter can simply be a document giving royal permission to start a colony.2 The word entered the English language from the Old French charte (ultimately from the Latin word for "paper"), but the concept is universal and transcends language. It has come to be synonymous with the document that lays out the granting of rights or privileges. 2“Charter” en.wikipedia.org/ retrieved on 15-04-2012 4 CHARTER ACT OF 1813 By 1813 when renewal of the Company‟s charter was due there were elaborate discussions about the justification of the commercial privileges enjoyed by the company. The extent of the company‟s territories in India had so much expanded that it was considered to be impossible for it to continue both a commercial and political functionary. Englishmen demanded a share in the trade with India in view of the new economic theories of laissez faire and the continental system introduced by Napolean.The Englishmen demanded the termination of the commercial monopoly of the company. The Act of 1813 renewed the charter of 1793 the East India Company for 20 years. The aggressive policies of Lord Wellesley and the Marquis of Hastings led to the Company gaining control of all India, except for the Punjab, Sindh, and Nepal. The Indian Princes had become vassals of the Company. But the expense of wars leading to the total control of India strained the Company's finances. The Company was forced to petition Parliament for assistance. This was the background to the Charter Act of 1813 The Charter Act of 1793 In the year 1793 the company‟s commercial privileges were extended for another twenty years. The powers, which had been specially entrusted with Lord Cornwallis on his appointment to override his council was extended to all future Governor – generals over the presidencies of Bombay and Madras was emphasized by the act. By the charter Act, during the absence of the governor General from the province of Bengal, he was to appoint as vice President from the civilian members of his council to act in his place. Moreover the act envisaged that when he went over to Bombay or Madras he was to supersede the local governors the head of the administration.
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