Darien Scheme

Darien Scheme. William Paterson, the founder of the Bank of England, conceived the project of opening a new trade route between Europe and the East by way of the Isthmus of Darien or Panama. He therefore induced the Scottish parliament to pass an Act in 1695 incorporating the Darien Company with very extensive powers. It was authorised to form settlements in Asia, Africa, and America, to make treaties with foreign powers, and to provide for the defence of its settlements. Civil and religious liberty was to be a feature of the government. The directorate was to be half English and half Scottish; in fact, however, the company was intended as a Scottish rival to the English East India Company, which controlled the Cape route to India, Scottish trade having been much interfered with by the Navigation Act of 1660. The Scots took up the project with enthusiasm, and capital was also subscribed in Hamburg and Amsterdam, as well as in England. Great opposition, however, was caused in England by the grant of these privileges to a company which was so largely Scottish, and the English and Dutch subscriptions were almost wholly withdrawn. The scheme, however, continued, about £400,000 (nominal) having been subscribed in Scotland. In 1698 a small squadron sailed (it would seem with a singularly unsuitable cargo), and, taking up land by agreement with the natives on the Isthmus of Darien, proceeded to found the city of New Edinburgh. They had. however, occupied territory claimed by Spain, whose government protested at once. A second expedition sent out from Scotland arrived in 1699, but found that the first had deserted the city and left for New York. A Spanish squadron now anchored off the town, and after lengthy negotiations the colonists abandoned the scheme altogether in April, 1700. Quite half of them perished, chiefly from disease. Paterson escaped, but for a time became insane through his sufferings. His scheme, it may be noted, included a Panama Canal.