The Intriguing Darien Scheme

Today we look at the intriguing story of the Darien Scheme, an unsuccessful attempt by Scotland to become a world trading nation by establishing a colony called “Caledonia” on the Isthmus of Panama on the Gulf of Darién.

The plan was the brainchild of William Paterson, a Scot born in Tinwald in Dumfriesshire in 1658, who made his first fortune through international trade and was well known down south as one of the founding directors of the Bank of England. His plan was to create a link between east and west, which could command the trade of the two great oceans of the world, the Pacific and Atlantic. Trade with the incredibly lucrative Pacific markets was a hugely expensive business, since all merchant ships had to make the hazardous trip round Cape Horn on the southern tip of South America. This added months to the journey, and the ships involved had a high chance of being lost at sea. If a colony could be established at Darien, goods could be ferried from the Pacific across Panama and loaded onto ships in the Atlantic from there. This would thus speed up Pacific trade making it much more reliable.

darien
The Isthmus of Darien

 

In 1693, Paterson helped to set up the Company of Scotland to make his idea a reality. The original directors of the Company of Scotland were Scottish and English in equal numbers, with the risk investment capital being shared, half from the English and Dutch, and the other half from the Scots. However, under pressure from the East India Company,  who were afraid of losing their trade monopoly, the English Parliament withdrew its support for the scheme at the last minute. This forced the English and Dutch to withdraw and left the Scots as sole investors of the scheme.

Thousands invested their money with roughly £500,000 gathered, about half of the national capital available. Thousands more volunteered to travel to Darien and a new home.The money was used to fit out five ships for the expedition, the Unicorn, St Andrew, Caledonia, Endeavour and Dolphin, despite efforts by the English authorities to block them.  In 1698 the vessels containing merchandise, military stores, provisions and 1,200 persons finally sailed from Leith to Darien to form the proposed colony.

darien chest
A example of a Darien Chest which housed the money for the scheme

 

On 2nd November 1698 the ships landed and renamed the land Caledonia with its capital New Edinburgh. However, problems were quick to arise. The crossing had not been pleasant with many men falling ill and power struggles already apparent. The situation grew worse because of lack of food. The land was not the paradise they had hoped it would be; it was unsuitable for agriculture and in the spring torrential rain brought with it disease. Soon the death toll was reaching 10 people a day. Only seven months after arriving 400 Scots were dead and many were emaciated and yellow with fever. Faced with the threat of attack from the native Spaniards the decision was made to abandon the scheme.

Unfortunately, news did not travel quickly in the 17th century. Six more ships set sail from Leith in November 1699 loaded with a further 1,300 excited pioneers, all blissfully ignorant about the fate of the earlier settlers. In all sixteen ships ended up making sail to Darien but only one would return. Scotland had paid a terrible price with more than two thousand lives lost. Together with the loss of the investment the Scottish economy was almost bankrupted and left many landowners and nobles almost completely ruined.

The Darien Scheme lost over £232,884, made up of the life savings of many of the Scottish people and the Scottish economy was in a dire situation. Seven years later Scotland agreed to the Act of Union with some claiming the disaster of Darien as a major reason for the alliance. As part of the deal, England paid off Scotland’s debts with the ‘Equivalent’, a sum of £398,000, most of which went to cover the Company of Scotland’s losses. The institution established to administer this money eventually became the Royal Bank of Scotland.

The Darien Scheme was a bold an ambitious plan that ultimately backfired for all those involved. Hopefully you’ve enjoyed hearing a little about this scheme, as always please like, share, tweet, comment and ponder what may have happened had the scheme been successful.

All the best, K & D

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s