The Regulating Act of 1773 was an Act of the Parliament of Great Britain planned to regulate the management of the East India Company's rule in India
Reason: By 1773, the East India Company was in terrible financial straits. The Company was important to Britain because it was a monopoly trading company in India and in the east and many influential people were shareholders. The Company paid 400,000 Pound annually to the government to maintain the monopoly but had been unable to meet its commitments since 1768 because of the loss of tea sales to America.
Lord North decided to regulate the management of the East India Company with the Regulating Act. This was the first step to the eventual government control of India. The Act set up a system whereby it supervised the work of the East India Company.
The Company had taken over large areas of India for trading purposes and had an army to protect its interests. Company men were not trained to govern so North's government began moves towards government control since India was of national importance.
- The Act limited Company dividends to 6% until it repaid a GB£1.5M loan
- It prohibited the servants of company from engaging in any private trade or accepting presents or bribes from the natives.
- The Act elevated Governor of Bengal, Warren Hastings to Governor-General of Bengal and subsumed the presidencies of Madras and Bombay under Bengal's control and created a four member Executive council to assist Governor-General of Bengal.
- A supreme court was established at Fort William at Calcutta. British judges were to be sent to India to administer the British legal system that was used there.
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