On this day in 1698

A get rich (not so) quick scheme may have contributed to the end of Scotland’s political independence.

Seventeenth century trade between Europe and the Far East involved long and dangerous journeys around the southern tips of either South America or South Africa. Establishing a shorter route via Panama, which occupies the narrow strip of land linking North and South America, would dramatically cut transport times, reduce the risks merchants needed to endure, and provide a ready source of income for whoever controlled the passage. A similar principle lies behind the current Panama Canal.

The Darien Scheme

Thus, William Paterson devised the Darien Scheme to land a colony at Darien, in what is now Panama, and, under the authority of the Company of Scotland, administer an overland route between the Atlantic and the Pacific.

The scheme looked viable, and was so tempting, that almost 20% of the entire wealth of Scotland and its population was invested in the Company of Scotland. England didn’t invest in the company, in part because the land that now forms Panama was claimed by Spain, which was England’s ally in its ongoing war with France.

Caledonia established

On 18 July, five ships – the Caledonia, Dolphin, Endeavour, St Andrew, and Unicorn – set sail from Leith and, after three and a half months at sea, arrived at Darien and established the new country of Caledonia. They built a fort and, around it, the town of New Edinburgh, but life appears to have been hard from the very start. Much of the settlers’ time was taken up with manual labour to establish the settlement and farm the surrounding land, and their attempts at trading both with the locals and with ships that made use of the natural harbour were largely unsuccessful.

The settlers started to fall ill, and many died of malaria or starvation. Eventually, they abandoned the settlement, but not before supply ships had been dispatched from Scotland on a journey that, unknown to their crews and a second batch of settlers, would land them in an all but deserted New Edinburgh.

Disaster follows disaster

News of the disaster was slow to reach Scotland, and yet another batch of settlers headed off for Darien, still believing that the settlement had been a success. Despite efforts to rebuild the colony, the fort eventually fell in the face of a Spanish onslaught, and the Scottish settlers were forced to abandon it definitively.

The Scottish investors had made enormous losses with the failure of the scheme. The Company of Scotland tried to make up some of the losses through conventional trade, but this, too, was unsuccessful. Finding themselves out of pocket, the moneyed classes petitioned for a union with England in exchange for compensation.