Causes of the Regulating Act 1773

CAUSES OF THE REGULATING ACT 1773: • Constitutional anomaly arising due to the system of dual government
With the acquisition of the territories in Bengal the Company’s position has been altered and it is no longer remained a mere trading organization but emerged as a territorial power. It had succeeded in establishing a de facto government in Bengal, Bihar and Orissa. But the emergence of the company from a trading body to a territorial power placed it in a peculiar position from the constitutional standpoint. According to English law, no British subjects could possess territory except in the name of the Crown. It therefore followed that either the territorial acquisitions by the company in India were to be taken possessions of by the crown or the company would left to be free with its powers and privileges and powers. Both these options did not seem feasible, firstly because it involved the risk of antagonizing the other European nations and secondly, the company’s misrule in India was likely to tarnish the name of British Empire.

• Abuse of privileges by the Company’s servants–
As a result of the battles of Plassey (1757) and Buxar (1764), the Company acquired the Diwani and the Nizamat, thus establishing its military supremacy in the regions of Bengal, Bihar and Orissa. The area was gripped with anarchy and confusion, and the company’s servants were given to their obsession for wealth. Corruption was widespread among them, and they exploited the people in order to amass huge fortunes for themselves so that they could return quickly to England. When they went back to Britain they dabbled in politics, and with their ill-gotten wealth they purchased seats in the House of Commons. This vulgar display of wealth earned them the nickname of ‘Nabobs’. They also bought stock in the Company, seeking to influence its policies.


• The Company’s political ambitions–
The British politicians realized that the Company’s interests in India were no longer merely...