As someone who spent a lot of my school years outside of Scotland, I will freely admit my understanding of Scottish history is sparse at best. The subject of the Darien Scheme came up in relation to one of my other articles (Chpt 24.1: Profit Margin) and the discussion around private banking in the 17th and 18th century. I had never heard of the Darien Scheme nor its implications in Scottish history and our relationship with the now United Kingdom.
So, that being said, here we have a brief summary of how the Kingdom of Scotland once attempted to establish a colony, New Caledonia, on the Isthmus of Panama known as the Darién Gap.
From The Fermtoun to Highland Baile
The late 17th Century was tough for most of Northern Europe. The 1690’s marked the lowest point of the Little Ice Age, a period in which many tens of thousands died due to low temperatures, low crop yields, famine and death. In Scotland it was known as The Lean Years (Scottish Gaelic: seachd bliadhna gorta), or The Ill Years. Estimates for the death toll range as high as 25% of the population for some regions of Scotland, and an overall rate of 15%.
“They entered the wild country. Broken fences. Ruined castles. Stretches of bogland. Wooded headlands. Turfsmoke rose from cabins, thin and mean. On the muddy paths, they glimpsed moving rags. The rags seemed more animate than the bodies within.”
Colum McCann, TransAtlantic
This tough period in Scottish history was also exacerbated by the economic and demographic fallout from the Jacobite Uprising in 1689. The combination of which overwhelmed the Kirk (Church), it being the major element of poor relief and justice (Old Scottish Poor Law), and they were unable to cope with the general level of poverty and crisis.
At this time, Scotland’s economy was relatively small, its exports limited and in relation to England, unable to compete. It did have good trading relationships with mainland Europe for coal and iron, but due to continued debasement of the Scottish Pund, most trade was done in foreign currency. Industries such as ship building were in decline and many goods that were required to be imported had to be bought using English Sterling. This dire economic position led to calls for a political or customs union with England, although the stronger feeling among Scots was that it should itself become a great mercantile and colonial power like England.
In 1695, and in response to this crisis, the Parliament of Scotland established the Bank of Scotland (Scottish Gaelic: Banca na h-Alba) and created an overseas trading company (Company of Scotland). They granted it monopoly over Scottish trade with India, Africa and the America’s. It was also known as the Scottish Darien Company. Troubled both financially and politically in the early years, its court of directors split between Edinburgh and London, it was essentially a direct competitor (in theory) to the English East India Company.
From East To West and Back Again
Whilst competition with the East India Company was attractive it was the expedition to Panama that garnered the most support. Led by William Paterson, the company launched the expedition in 1698, hoping to establish a colony which could then be used as a trading point between Europe and the Far East. The ultimate goal being to use Panama as a land bridge between Atlantic and Pacific oceans.
The initial investment capital for the Company of Scotland was split, half coming from Scotland itself, and one quarter each from England and Holland. The East India company, however, had different ideas, and seeing potential competition they petitioned the English parliament to withdraw financial support. This prompted the Dutch investors to do the same, leaving Scotland, its elites and its people, to foot the bill. There was no shortage of takers though, thousands of Scots were willing to invest in the expedition to the tune of £400,000 (£63,738,805 inflation adjusted Dec ’23).
‘The Darien Venture was the most ambitious colonial scheme attempted in the 17th century… The Scots were the first to realise the strategic importance of the area… ”
Many officers and former soldiers, who had little chance of other employment, joined this initial expedition. Comprised of five ships (Saint Andrew, Caledonia, Unicorn, Dolphin, and Endeavour ), they set sail out of Leith in an attempt to avoid observation by English Warships and were carrying around 1,200 people. They left Scotland in July 1698, passing by Madeira and the West Indies, before arriving off the coast of Darien on the 2nd of November that year.
The settlers disembarked and set about building their new home, declaring it Caledonia – “we do here settle and in the name of God establish ourselves; and in honour and for the memory of that most ancient and renowned name of our Mother Country, we do, and will from henceforward call this country by the name of Caledonia; and ourselves, successors, and associates, by the name of Caledonians“.
The colonists built Fort St. Andrew for defense, and erected huts for the main settlement, New Edinburgh, in what is now known as Puerto Inabaginya. Before clearing land to plant yams and maize in order to support themselves. The only remnant of the colony found today is the ditch that they dug through the neck of land that separated Caledonia Bay from the ocean.
I Yam what I Yam
It was not all peaches and cream however (or perhaps coconut milk and yams). Agriculture proved difficult in the area and although the natives nearby were hostile to Spain, the colony being near Spanish silver trade routes, they were unwilling to trade for the trinkets brought by the colonists. The most serious failure of the early days was the lack of significant trade with the few ships who did stop in the bay. By the summer of the following year, malaria and fever had started to work their way through the colonists and the mortality rate was as high as ten settlers per day.
“They were plain daft to try… It was disaster. They never had a chance.”
The locals did bring some gifts of fruit and plantains, but these were appropriated by the leaders and sailors, most of whom remained on board the ships in the bay. Some food was obtained by hunting turtles in the bay, however as more and more men died, this was less viable. Letters were sent home to Scotland by the colonists but we can observe in the letters, recurring optimistic phrases that are believed to be part of a plan to create a misleading impression of success.
Due to the perceived competition with the East India Company, and fearing reprisals from the Spanish Empire, King William instructed the Dutch and English colonies in America not to aid the Scottish settlement. Soon, most had died from dysentery, fever, rotting & worm infested food, as well as a lack of supplies. Just eight months after they arrived, the colony was abandoned, all except six men who were too weak to move. Out of the original 1,200 settlers, only 300 survived. The single ship that made it back to Scotland, with just 250 people onboard, returned as a disgrace to their country. The Caledonia and the remaining colonists headed to New York, seeking supplies and assistance.
Unbeknownst to the returning colonists, two further resupply ships had already been dispatched with another 300 settlers. These two arrived in Darien to find ruined huts and 400 overgrown graves of the previous colony. Expecting to find a busy and prosperous town they debated their next move, some headed to Jamaica and some (after the ship burned and sank) were picked up by the remaining original ships returning from New York.
Second Time’s the Charm
As word of the first expedition’s failure did not reach Scotland in time, the Company of Scotland sent a second full voyage of 1,000 people. The Rising Sun, The Duke of Hamilton, The Hope and the Hope of Bo’ness set out with the blessing of the Church of Scotland, arriving in Caledonia Bay on the 30th of November 1699. The ships that had returned from New York were already there and men were sent ashore to rebuilt huts for accommodation. Morale was low, with men complaining they had come to join a colony, not rebuild it, and progress was slow.
There was infighting for command between the leadership of the original and second expeditions. This drove division between the colonists. Disease was still rife and conditions were dire. Skirmishes with the Spanish led to further deaths and loyalties to separate leaders split the men.
Expecting more Spanish attacks they attempted to rebuild the Fort. Spanish forces did indeed attack and besiege them for over a month, before finally negotiating a surrender. The Spanish commander, Juan Pimienta, called for surrender after initially stating the Scottish men would be given no quarter. The remaining men were allowed to leave with their guns, and the colony abandoned for the last time. Only a handful of those from the second expedition returned to Scotland, with a few hundred of the original 2500 settlers surviving the ordeal.
Liquidity is a Wind Up
I don’t think it needs stated that this colonisation attempt was a failure. All told, the venture drained Scotland of an estimated quarter of its liquid assets (15-40% in some estimates). The failure provoked tremendous discontent throughout Lowland Scotland, with almost every family affected by the failure of their investment and diminished prospects for a wealth Scotland. Some held the English responsible and believed that they should attempt to petition the English King to fund another effort at colonisation. The King refused, stating that reclaiming Darien would mean war with Spain, something he desperately wanted to avoid.
This financial debacle played a key role in forcing the country into the 1707 Acts of Union (Scottish Gaelic: Achd an Aonaidh) which united the Kingdoms of Scotland and England. This, in the words of the Treaty, “United into One Kingdom by the Name of Great Britain“.
With the failure of the Darien Scheme and the loss of so much Scottish money, the now almost bankrupt Scottish nobles saw a union with England as the best chance of becoming part of a major power. Piggybacking off the English international trade and growth in overseas possessions. Prior to the Union, some of the Scottish nobility had petitioned Westminster to stabilise the currency. Subsequently the Scottish pound was devalued and pegged at £12 Scots equaling £1 sterling.
Under the Acts of Union, Scotland was granted a sum known as The Equivalent, to offset future liability against the English national debt, which at the time was £18 million (£3.67 Billion Inflation adjusted Jan 2024). As Scotland had no national debt, this sum was mostly allocated to compensate the investors in the Darien scheme, with 58.6% of it allocated to its shareholders and creditors.
“We’re bought and sold for English Gold, Such a Parcel of Rogues in a Nation.”
Robert Burns
Conclusion
This union of Scotland and England, carried by the Scottish elite, was firmly against the wishes of the great majority. Most of the printed discussions at the time spoke against incorporation. Often discussing concerns over the independence of the Kirk, fear of rising taxes and the impact on the local economy. Threats of widespread civil unrest prompted Westminster Parliament to impose martial law.
Whilst Scotland benefited from the freedom of trade with England and the colonies, as well as a great expansion of available markets, it did give up its sovereignty. Previous frustrations caused by economic and political rivalry with England led to the Darien Scheme and the failed expedition. England appears to have done everything in its power to ensure failure. According to many, the Acts of Union were a political hit job in order to satisfy English political imperatives, examples of some well-timed salary arrears to members of parliament indicating betrayal.
The majority in Scotland at the time, and to this day, considered themselves betrayed by their own elite. A sentiment that still runs through the Scottish Independence movement.
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