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The Darien Adventure

A history for teachers

The context

View of Edinburgh, 1719

In the 1690s the Scots were peculiarly disposed to express fervent support for a national adventure that would bring fame and riches to Scotland. Indeed, the origins of the Darien scheme are to be found in Scotland’s political and economic discontent over many preceding decades. From 1603, after the death of Queen Elizabeth I, the King of Scotland also became King of England, although both countries kept their own parliaments. This was called the Union of the Crowns. James VII of Scotland and II of England, crowned king in 1685, was unpopular because he was Roman Catholic and also highly autocratic. In 1688 a revolution led to his flight to France and the acceptance of his Dutch son-in-law, William of Orange, as the Protestant King of both England and Scotland.

King James and his descendants still had supporters in both France and Scotland who called themselves ‘Jacobites’, because the Latin name for James is ‘Jacobus’. They became the focus for opposition to English rule in Scotland. In 1689 the Jacobites, resentful of the declaration of William as King of Scotland, fought the royal army at Killiecrankie. The rising melted away, but the Jacobite threat remained. Determined to secure obedience from the clan chiefs, King William ordered Fort William to be built and garrisoned in the Highlands and, in 1692, punished the recalcitrance of the Chief of the MacDonalds by the Massacre of Glencoe.

Not only were many Scots unhappy with the political situation, but there was also widespread resentment about economic affairs. Since the Union of the Crowns, Scotland had become poorer than ever as it was neglected by the King in London and also dragged unwillingly into England’s wars. In 1632 Scotland lost her only colony – Nova Scotia in Canada – as a result of an English war with France and later England’s Dutch wars compromised valuable trading privileges which Scottish merchants had previously enjoyed.

Scottish overseas trading activity was further frustrated by the Navigation Act which forbade goods to be imported into England or its colonies unless carried in English ships or ships of the country from which they emanated. To make matters worse two powerful English trading companies, the East India Company and Royal Africa Company, claimed a monopoly of the rich trade with the East Indies and Africa.

The plan

Company of Scotland minute book title page, 1696

In 1695 Scottish-born William Paterson thought up a simple but, in theory, brilliant scheme which would remedy Scotland’s worst ills. He was a prolific ‘projector’, a promoter of speculative money-making schemes, who had been responsible for the foundation of the Bank of England in 1694. His new plan was that the Scottish Parliament, following the passing of An Act for Incourageing Forraign Trade in 1693, should grant a monopoly of trade with Africa and the Indies to a Scottish trading company in a way which would harness the lucrative Far Eastern trade.

A key part of the plan was the establishment of a Scottish colony in Central America, at a place called Darien (now part of Panama), so that merchant ships no longer had to make the long and perilous journey around the Cape of Good Hope or Cape Horn. Instead, goods would be transported to the colony on the eastern site of Darien and carried across the narrow isthmus to a port on the western seaboard, where ships with exchange cargoes from the East Indies and Asia would lie waiting.

The fact that Paterson had never set eyes on Darien did not deter him. ‘The time and expense of navigation to China, Japan, the Spice Islands, and the far greatest part of the East Indies will be lessened more than half… ’, he proclaimed. ‘Trade will increase trade, and money will beget money… Thus this door to the seas, and the key of the universe… will of course enable its proprietors to give laws to both oceans, and to become arbitrators to the commercial world.’ Many other major European powers were embarking on similar schemes of colonisation at this time as a means to profit from expanding trade.

The preparation

Company of Scotland subscription list, 1696

On 26 June 1695 the Scottish Parliament passed an act establishing ‘The Company of Scotland Trading to Africa and the Indies’. Its capital was to be £600,000 sterling, half to be subscribed in London and half in Scotland. English investors soon raised their share, but the powerful directors of the East India Company, fearing that their monopoly would be broken and their business ruined, turned King William and the English Parliament against the venture. The King, who was endeavouring to appease Spain, was only too happy to oppose the planting of a Scottish colony on Spanish-claimed territory. The directors of the Company of Scotland were threatened with impeachment and English investors quickly withdrew their money.

The Scots, enraged by the duplicity of the King and English Parliament and carried along on a tide of national pride, determined to raise all the capital alone. By August 1696 the revised target of £400,000 sterling had been subscribed in Scotland. This was an enormous sum, amounting to about half the country’s available capital. The company’s directors began to lay plans for the colony and in the meantime effectively used the subscribed capital, of which £34,000 was held in coin, to operate as a bank by making loans and issuing notes. These initiatives were not a success and, indeed, much of the subscribed capital was embezzled and never recovered.

The journey

Ships at the Port of Leith, near Edinburgh, 1698 © Edinburgh City Libraries 2010

Meanwhile, ships and provisions were bought, notably in Holland and Germany, including cannon, guns and swords, axes, hammers, nails, clothing and household goods. Crews were recruited and the expedition’s five ships assembled in the Firth of Forth. With the exception of the former French vessel Dolphin, their names – Caledonia, St Andrew, Unicorn and Endeavour – reflected Scots patriotism and hope. On 18 July 1698 this first expedition left the port of Leith with around 1,200 people, including William Paterson, on board. At a time when the total Scots population amounted to only about a million souls, the amount of manpower committed to the venture was as staggering as that of money.

In order to protect the company’s interests the location of the colony remained a secret to both the emigrants and the ships’ crews. Once clear of Madeira, however, sealed orders were opened which revealed the ultimate destination of the expedition for the first time. They were ‘to proceed to the Bay of Darien, and make the Isle called the Golden Island… some few leagues to the leeward of the mouth of the great River of Darien… and there make a settlement on the mainland’.

The colony

Company of Scotland’s charters and constitutions of Caledonia in America, 1698

The colonists reached Darien, which they called New Caledonia, in November 1698. There they built Fort St Andrew and began to erect the huts of New Edinburgh and to clear land for growing yams and maize. However, agriculture proved difficult and the local Indians unwilling to buy the combs and other trinkets offered by the colonists. Worse still no fleets of merchant ships appeared to initiate a rich entrepĂ´t trade with Asia and India. Meanwhile, the King had instructed the English colonies in America not to supply the Scots settlement and inadequate provisions, combined with the unfamiliar hot and humid climate, soon caused fever to spread and many settlers died. In July 1699 the colony was abandoned.

Back in Scotland some bad news had been received from Darien, but nobody knew that the colony had been deserted. A second expedition, with a further 1,300 settlers an board and the newly-built ship The Rising Sun at its head, set sail in August 1699. The second expedition arrived in November to find the huts of New Edinburgh in disrepair and the jungle growing again. Nonetheless, the colonists decided to rebuild the settlement and some survivors of the first expedition returned to Darien from English colonies, like New York, where they had sought refuge.

The Spanish, although not interested in settling on the unhealthy coast of Darien themselves, were by now determined to prevent other European colonists claiming their territory. Learning of this enmity, the exhausted and hungry Scots launched a successful pre-emptive attack on the Spanish fort at Toubacanti in January 1700. The Scots settlers subsequently held out bravely against blockade at Fort St Andrew for more than a month before surrendering. Decimated by disease, the colonists left Darien for the last time in April 1700.

The legacy

Equivalent Company dividend warrant of Adam Smith, 1736

The Darien scheme was a complete and disastrous failure. Around one-quarter of Scotland’s liquid assets were lost in the venture and some two thousand people died. Blame was directed against England which had withdrawn its financial support at the last moment and had failed to assist the Scots at Darien from its American colonies. In 1704, when the English merchant ship Worcester was driven into the Firth of Forth by inclement weather, it was seized and its captain and two of his men were later executed for sinking one of the Company of Scotland’s ships. The charges were unfounded but the Scots wanted revenge for Darien.

For King William and his successor, Queen Anne, who were keen both to avoid war with Scotland and to prevent the Scottish parliament granting conflicting privileges and interfering in England’s foreign policy, the lessons of Darien were clear. Both monarchs pressed for union of the Scottish and English Parliaments and after lengthy negotiations this was finally achieved by the Act of Union of 1707.

Stone marking the site of Fort St Andrew in Panama today © Murdo Macdonald 2010

Many Scots supported the Union because the Darien disaster, coupled with a series of bad harvests after 1695, had caused huge distress in Scotland. The Treaty of Union, which provided for free trade and navigation and payment of £398,000 (a sum known as ‘the Equivalent’) in compensation for the Darien losses and to support Scottish industries, seemed vital to the country’s economic survival. The last Scottish Parliament met on 25 March 1707 and was not to be re-established in Edinburgh until 1999, almost 300 years after the failure of Darien.

The men appointed to distribute ‘the Equivalent’ were known as Commissioners of the Equivalent. The Scottish Commissioners set up in the old office of The Company of Scotland in Milne Square, Edinburgh, and as only part of the Equivalent had been paid in cash many creditors were issued with debentures. Two societies of debenture holders were formed, both of which were wound up in 1724 when the Equivalent Company, registered in Scotland, was formed. Three years later the new company sought a royal charter to extend the provision of banking services to those beyond its own membership. The new bank, to which half of the Equivalent stock was subscribed, was established in 1727 and called The Royal Bank of Scotland.

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