Charter Act of 1813

Charter Act 1813 or East India Company Act 1813 was passed by the British Parliament to renew the charter of British East India Company and continue the rule of the same in India.

Background

The earlier charter act of 1793 had given the East India Company a monopoly to trade with East for a period of 20 years. However, the rise of Napoleon Bonaparte had brought hard days to the businessmen of England. Napoleon Bonaparte had put in place the Berlin decree of 1806 & Milan Decree of 1807, which forbade the import of British goods into European countries allied with or dependent upon France, and thus installed the so called Continental System in Europe.

Due to these hardships, the British Traders demanded entry to the ports of Asia and dissolve the monopoly of the East India Company. Apart from these hardships, the theory of Free trade policy of Adam Smith had also became quite popular in those days. The supporters of this policy started giving arguments on how ending the monopoly of East India Company in trade with India could bring help the growth of British commerce and industry.

However, East India Company opposed these arguments giving logic 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.

Key Provisions

End of Monopoly of East India Company

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 with India was kept intact. Thus, trade with India for all commodities except Tea was thrown open to all British subjects. This lasted till 1833 when the next charter abolished the trade of the company.

Permission to Christian Missionaries

The act also granted permission to the persons who wished to go to India for promoting moral and religious improvements. (Christian Missionaries)

Other Provisions

• This act regulated the company’s territorial revenues and commercial profits. It was asked to keep its territorial and commercial accounts separate.
• 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.

Nothing substantial was changed in terms of governance in India except that the Charter Act 1813 for the first time explicitly defined the constitutional position of the British territories in India. The Act also empowered the Local Governments in India to impose taxes on persons and to punish those who did not pay them.