| Short Title: | East India Company Act 1772 |
| Parliament: | Parliament of Great Britain |
| Long Title: | An Act for establishing certain Regulations for the better Management of the Affairs of the East India Company, as well in India as in Europe. |
| Year: | 1773 |
| Statute Book Chapter: | 13 Geo. 3. c. 63 |
| Introduced By: | Frederick North, Lord North on 18 May 1773 |
| Royal Assent: | 21 June 1773 |
| Commencement: | 10 June 1773 1:00pm |
| Related Legislation: | 13 Geo. 3. c. 64 |
| Status: | Repealed |
| Original Text: | https://books.google.com/books?id=8qRFAAAAcAAJ&pg=PA814 |
The Regulating Act 1773 (formally, the East India Company Act 1772) was an Act of the Parliament of Great Britain intended to overhaul the management of the East India Company's rule in India (Bengal).[1] The Act did not prove to be a long-term solution to concerns over the company's affairs. Pitt's India Act was therefore subsequently enacted in 1784 as a more radical reform. It marked the first step towards parliamentary control over the company and centralised administration in India.
By 1773, the East India Company (EIC) was in dire financial straits. The company was important to the British Empire because it was a monopoly trading company in India and the east, and many influential people were shareholders. The EIC paid (equivalent to £ in 2015) annually to the government to maintain its monopoly but had been unable to meet its commitments since 1768 because of the loss of tea sales to America. About 85% of all the tea in America was smuggled Dutch tea. The EIC owed money to both the Bank of England and the government. It had 15 million lbs (15disp=output number onlyNaNdisp=output number only million kg) of tea rotting in British warehouses and more en route from India. The Regulating Act 1773, complemented by the Tea Act 1773, had the principal objective of reducing the surplus of tea held by the financially troubled EIC and improve its financial standing.
Lord North overhauled the management of the India Company with the Regulating Act. The EIC 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 set up a system whereby the British government supervised the work of the EIC. Company shareholders opposed the Act, and the EIC was still a powerful lobbying group in Parliament despite its financial problems.[2]