Administrative reformsCornwallis was charged by the directors of the British East India Company to overhaul and reform its administration in India. The company had historically paid its functionaries (revenue collectors, traders, and administrators) in India relatively little, but allowed them to engage in trade for themselves, including the use of company shipping for the purpose. As long as the company was profitable, this open door to corruption and graft at the company's expense was overlooked. However, the rise of manufacturing in Britain led to a collapse of prices for textiles and other goods from India, and the company's involvement in wars on the subcontinent had also been expensive. By the time Cornwallis arrived the company was losing money. Its employees, however, continued to profit personally, without caring whether or not the company made money. Cornwallis sought to change this practice, first by refusing to engage in such dealing himself, and second, by securing pay increases for the company's functionaries while denying them their personal trading privileges.
Another area of reform that Cornwallis implemented was the reduction of nepotism and political favoritism as means for advancement and positions within the company. Seeking instead to advance the company's interests, he sought out and promoted individuals on the basis of merit, even refusing requests by the Prince of Wales to assist individuals in the latter's good graces.
Prior to the earl's arrival, judicial and police powers in territories controlled by the company were a confusion of differing standards that were also either inconsistently or arbitrarily applied. Part of Cornwallis's work was the introduction of criminal and judicial regulations that to a significant degree still underpin the Indian judicial system.
Indian cities, much like British cities of the time, were poorly policed, and crime was widespread. Different penal and civil codes were applied to Hindus and Muslims, and the codification of these codes in different languages meant that it was virtually impossible for justice to be properly and consistently applied. Much of the criminal justice system in Bengal remained in the hands of the nawab, the nominal local ruler of the company's territory. Furthermore, individuals with powerful political connections in their community often were able to act with impunity, since no one suffering at their hands was likely to press charges for fear of retribution. Hastings had several times made changes to policing and the administration of justice, but none of these had had a significant impact on the problem.
William Jones, an expert on languages, translated existing Hindu and Muslim penal codes into English so that they could be evaluated and applied by English-speaking judges. Cornwallis began in 1787 by giving limited criminal judicial powers to the company's revenue collectors, who already also served as civil magistrates. He also required them to report regularly on detention times and sentences given.In 1790 the company took over the administration of justice from the nawab, and Cornwallis introduced a system of circuit courts with a superior court that met in Calcutta and had the power of review over circuit court decisions Judges were drawn from the company's European employees. These reforms also included chances to the penal codes to begin harmonizing the different codes then in use. By the time of his departure in 1793 his work on the penal code, known in India as the Cornwallis Code, was substantially complete.
One consequence of the Cornwallis Code was that it, in effect, institutionalized racism in the legal system. Cornwallis, in a manner not uncommon at the time, believed that well-bred gentlemen of European extraction were superior to others, including those that were the product of mixed relationships in India. Of the latter, he wrote "as on account of their colour & extraction they are considered in this country as inferior to Europeans, I am of opinion that those of them who possess the best abilities could not command that authority and respect which is necessary in the due discharge of the duty of an officer." In 1791 he issued an order that "No person, the son of a Native Indian, shall henceforward be appointed by this Court to Employment in the Civil, Military, or Marine Service of the Company." Cornwallis's biographers, the Wickwires, also observe that this institutionalization of the British as an elite class simply added another layer on top of the complex status hierarchy of caste and religion that existed in India at the time. Cornwallis could not have formalized these policies without the (tacit or explicit) agreement of the company's directors and employees.
Cornwallis's attituted toward the lower classes did, however, include a benevolent and somewhat paternalistic desire to improve their condition. He introduced legislation to protect native weavers who were sometimes forced into working at starvation wages by unscrupulous company employees, outlawed child slavery, and established in 1791 a Sanskrit college for Hindus that is now the Government Sanskrit College in Benares. He also established a mint in Calcutta that, in addition to benefiting the poor by providing a reliable standard currency, was a forerunner India's modern currency.
The Permanent Settlement
The Company's acquisition of the territories of Bengal in the 1760s led to its decisions to collect taxes in the area as a means of reducing investment capital directed toward India. A variety of taxation schemes were implemented in the following years, none of which produced satisfactory results, and many of which left too much power over the natives in the hands of the tax collectors, or zamindars. The company's directors gave Cornwallis the task of coming up with a taxation scheme that would meet the company's objectives without being an undue burden on the working men of its territories.
John Shore (who went on to succeed Cornwallis as Governor-General) and Charles Grant, two men he came to trust implicitly, were the most important contributors to what is now called the Permanent Settlement. The essence of the arrangement they came up with in the summer of 1789 was that the zamindars would effectively become hereditary landholders, paying the company tax based on the value of the land. Shore and Cornwallis disagreed on the term of the scheme, with Shore arguing for a ten-year time limit on the arrangement, while Cornwallis argued for a truly permanent scheme. Cornwallis prevailed, noting that many of the company's English revenue collectors, as well as others knowledgeable of company finance and taxation, supported permanency. In 1790 the proposal was sent to London, where the company directors approved the plan in 1792. Cornwallis began implementing the regulations in 1793.
Critics of the Permanent Settlement objected to its permanency, claimed that the company was forgoing revenue, and that Cornwallis and others advocating it misunderstood the historic nature of the zamindars. The Wickwires note that Cornwallis relied extensively on advice not only from John Shore, who had extensive experience in India prior to Cornwallis's arrival, but also from the revenue collectors in the various districts, who were almost uniformly in favor of a permanent settlement with the zamindars. He was also clear on the need to protect the ryots (land tenants) from the excesses of the zamindars, writing, "It is immaterial to government what individual possessed the land, provided he cultivates it, protects the ryots, and pays the public revenue."