Introduction to Book Two of “Penang: The Fourth Presidency of India”

Book Two is entitled: “The Administrators”

(To read the entire introduction to Book Two, please click here)

In the previous book, the interplay between the East India Company’s administration and the British government was briefly touched upon, as was the prevailing politics at the turn of the nineteenth century. It is helpful here to offer an overview of how the East India Company administration operated both at home and in its territories. The word ‘government’ is used frequently throughout this volume and unless specifically stated to be otherwise refers to the Company administration. Although the British parliament had introduced far greater control over the Company’s operations by the time Penang was settled as a port of call, in practice the Company largely remained an autonomous body, especially out in the field.

From the time of the East India Company’s incorporation in 1600 its operations were governed by a series of charter acts passed from time to time by parliament. Until the Regulating Act of 1773 the Company was essentially left to its own devices with regard to governing India. Even at this time the British government was only concerned with the Company’s political affairs and not the commercial side of its operations which were seen as integral to the well-being of the national economy. The Company’s political involvement in India had not initially arisen from a territorial expansionist policy per se but as a consequence of the establishment of trading links which developed into more permanent settlements. The administration of these territories created a huge financial burden which by 1772 required the assistance of government loans.

As a result, the 1773 Regulating Act introduced significant modifications to the overall administration of India. First, the post of governor general was created in Calcutta, essentially as an arbitrator between the Company and Crown, supplementing a council of four. This body was termed the ‘supreme government’ and had the power to form regulations for the administration of all Company settlements in India. The presidencies of Madras and Bombay also fell under its jurisdiction but retained limited powers to form laws or regulations. The governor general could not act independently of his council but was vested with the casting vote. Initially the Crown reserved the right to make these appointments but under protest this was modified by Pitt’s India Bill in 1784 to allow the Court of Directors the power to nominate and recall the governor general and councillors with the sanction of the Board of Control. Interestingly a Company man, Warren Hastings, was appointed the first governor general of India but would later pay the heavy toll of impeachment and acquittal in the courts. Second, English law was to be introduced to India with the establishment of a Supreme Court in Calcutta, its judges appointed by the Crown. Third, and perhaps most significantly, the Act set down that the ‘acquisition of sovereignty by the subjects of the Crown is on behalf of the Crown and not in its own right’. The Company was thereby recognised as a sovereign representative of the Crown.

By the charter of 1698 the London-based Court of Directors comprised 24 men who were at first elected annually by the shareholders or proprietors, each of whom was entitled to one vote providing they held a minimum of £500 of Company shares. But after 1714 only the chairman and deputy chairman were elected, the balance being appointed by ballot. The Regulating Act of 1773 set down that six new directors were required to be elected each year with six remaining for two years; six for three years; and six for four. This meant that six directors would retire or go back out for re-election or ‘rotation’ each year. Proprietors would need to own £1,000 of stock for one vote, £3,000 for two, £6,000 for three or £10,000 for four votes. In reality a system more akin to the 1714 resolutions was practised. The Court of Directors met regularly, each meeting requiring a quorum of 13, whereas the Court of Proprietors was only obliged to meet quarterly. Meetings of each body were held in separate rooms within the Company’s East India House buildings in Leadenhall Street, London. As the Company’s prestige grew, so did these buildings, resulting in the impressive edifice that was completed in 1799…