Sunday, April 11, 2010

Darien Scheme

On April 11, 1700, the Scottish settlement of Darien was abandoned.  The Darien Company began as the first large-scale Scottish joint-stock company.  Its formation was encouraged by the passage of the Act, William and Mary 1693, which included a chapter (34) "for the encouraging of foreign trade".  This act effectively promised William's protection for such endeavors.  Darien was the brainchild of financier William Paterson.

Paterson attempted, and failed, to obtain funding for his proposed trading colony on the Isthmus of Darien (Panama) in England and Holland.  Eventually, he turned to his native Scotland, where the project found substantial interest.  Scotland was a poor country at this time.  According to bank historian Andrew Kerr, Scotland's total currency did not exceed L800,000.  The Darien Company, after initial success in Scotland, reached a subscribed funding of approximately L400,000, half of which was paid up.  This was clearly an enormous investment for a Scottish enterprise.

The first ships bound for Darien left on July 26, 1698; a flotilla of 5 well armed vessels.  Two further expeditions were to follow.  Far from protection, the colonists found that rival English colonies in the West Indies and Americas were forbidden to sell food to the Darien group.  Darien was attacked by a much larger Spanish force, and finally the colonists were forced to leave Panama.

Several Scottish writers have commented on this catastrophe, including Tobias Smollett: "The clamor in Scotland increased against the ministry, who had disowned their company, and in a great measure defeated their design, from which they had promised themselves such heaps of treasure.... At Madeira they took in a supply of wine, and then returned to Crab Island, in the neighborhood of. St. Thomas, lying between Santa Cruz and Porto Rico. Their design was to take possession of this little island; but when they entered the road, they saw a large tent pitched upon the strand, and the Danish colors flying. Finding themselves anticipated in this quarter, they directed their course to the coast of Darien. . . . "

Regarding Darien, Walter Scott commented that "Nothing could be heard throughout Scotland but the language of grief and of resentment. Indemnification, redress, revenge, were demanded by every mouth, and each hand seemed ready to vouch for the justice of the claim. For many years no such universal feeling had occupied the Scottish people."

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