Scotland’s Darien Scheme

In 1698 an ambitious new Scottish trading company established an outpost on the narrow isthmus between North and South America. A colony there, it was thought, would unlock trade between Europe, Africa, the Americas and even Asia, thanks to the short trek to the Pacific shore. The tropical forests would yield valuable timber and its hills would contain gold. Yet, within two years, the colony and its vast aspirations had collapsed. 

Known as the Darien Scheme, today the enterprise is seen as a colossal mistake. The territory was claimed by Spain and the Scots could never have challenged the military might of that declining but still formidable empire. The land was occupied by the Tule people, so the colony’s dreams of wealth relied on the exploitation of indigenous lands. Darien was advertised with a 1697 promotional poem imagining ‘Black Slaves’ working like ‘busie Bees’ to grow sugar and provisions, showing that the colonists also planned to exploit the Atlantic slave trade. 

History books usually assert that the financial losses and humiliation of the Darien Scheme led Scotland to embrace a full union with England in 1707, forming the kingdom and parliament of Great Britain. But is the story this simple? Scotland and England had shared the same monarch since 1603, while retaining separate parliaments and economies. By 1700 it was almost universally agreed that this regal union was not working, but the Scots disagreed fiercely on whether they should pursue a closer or looser union. The Union of 1707 was by no means the automatic outcome of the Darien Scheme’s failure. 

The Company of Scotland

In 1695 the Company of Scotland Trading to Africa and the Indies was created by an act of the Scottish parliament with the endorsement of a royal officer acting on behalf of William III and II. English trading companies soon realised that this new venture could pose a serious threat. The 1695 act granted valuable monopolies and tax breaks and gave the Company sweeping powers to make treaties and establish settlements. It intended to recruit investors from beyond Scotland to fund a multinational endeavour and its first capital appeal in November 1695 attracted £300,000 in less than ten days from eager London investors. 

Questions raised by English companies and colonial merchants led the House of Lords to complain to William about the competitive advantages given to the new Scottish Company. In response, the king stated that he had been ‘ill served’ by his ministers in Scotland. English investment in the Company was quashed, while similar Dutch concerns blocked investment in Amsterdam and Rotterdam. In 1697 the English ambassador discouraged foreign investment from Hamburg, Lübeck and Bremen. 

Outrage at English obstruction fuelled what has been termed a ‘financial mania’ in Scotland, akin to England’s subsequent South Sea Bubble. If English competitors were so keen to discourage investment, then surely this was a prime opportunity? As one Scottish pamphleteer stated, ‘the English anger proves its Excellence’.

Aided by the promotional work of William Paterson, a seasoned fundraiser, many Scots rushed to invest in the Company. Though weather, war and piracy made overseas trading risky, patriotic fervour drove these Scots to invest not just their money, but their pride in the venture. Promotional tracts helped to stir up enthusiasm in an era when literacy had spread to Scotland’s middle classes. One poet called on Scotland to turn from Mars, the god of war, to Neptune as the new patron of a Scottish seagoing empire.

In March 1696 Scottish investors pledged over £300,000 in just a few weeks. One subscription book was opened on the High Street in Edinburgh, while a second was taken to Glasgow and then Ayr to access western capital. Early and large subscriptions by Anne, Duchess of Hamilton and other people of influence (including prosperous merchants and the principal of the University of Glasgow) encouraged others to follow suit. London’s Post Boy newspaper reported in April that demand had led the Company to ‘open their Books for further Subscription’ to an increased target of £400,000. In contemporary Scottish pounds, the target was around £4.8 million. 

Moreover, the directors aimed to make their fund ‘the most diffusive and National joynt-stock in the world’. To this end, the Company announced that £50,000 in shares would be retained until ‘the Remotest Places of this Kingdom may have due Notice’. The final tally showed pledges from every Scottish county except Caithness, though a swathe of the Lowlands from Ayrshire to Fife provided the bulk of the funding. 

An unusual degree of social as well as geographical breadth was achieved as town councils and trade guilds subscribed with institutional funds and modestly prosperous men and women pledged their children’s inheritances and daughters’ dowries. By contrast, the near-simultaneous founding of the Bank of Scotland attracted subscriptions from a far narrower cohort of propertied men.

Not all of the £400,000 was demanded up front. One quarter was due on subscription, yielding £80,000 in 1696. A further £70,000 was clawed in over the next three years, despite harvest failures and an economic slump. Investors did not lose all the pledged capital, but numerous families in Scotland faced a painful loss of wealth and disappointment of expectations should the Company fail. The widespread investment of national pride in the venture made Scotland’s emotional reaction to the venture as significant as any economic impact. 

Storms, fire and Spain

The Company launched its Darien venture with three newly built ships, costing more than £30,000, patriotically named the Caledonia, the St Andrew and the Unicorn. Though it would have been more prudent to have leased trading vessels, the Company sought to build confidence in its venture by purchasing state-of-the-art ships from the docks of Hamburg, hoping (fruitlessly) that this would encourage foreign investment in the Company.

The ships carried cargoes of textiles and consumer goods to trade in the American colonies (including Madeira wine, shoes, wigs, hats, combs and Bibles), plus tools and the necessities to build a settlement (even a printing press). The ships also carried provisions, though poor harvests meant that these supplies cost twice as much as usual. Eager volunteers swelled the numbers of seamen and colonists to 1,200. To encourage further growth, the colony’s constitution invited inward migration from other nations and waived local taxes on trade until 1702. 

The fleet departed on 14 July 1698 with two church ministers and the prayers of the nation, prompting consternation in England’s Atlantic colonies. Influenced by the optimistic talk of Scots in his colony, the governor of New Jersey warned his superiors in London that the Darien colony could become ‘the emporium of trade and riches of America’ and ‘may in time collect to it the riches of the Eastern and Western Indians [Indies]’. In reality, inexperience and inherent risk made the Darien Scheme a very long shot indeed. 

The Company of Scotland asserted a legal claim to its colony of New Caledonia based on a treaty made by its officers with the native Tule inhabitants on their arrival in early November 1698. But Spain saw the Scots as interlopers and voiced strong objections. Unluckily for the Scottish Company, William III and II was involved in delicate negotiations on the question of the Spanish Succession and was not going to let an ill-advised Scottish colony endanger his efforts to contain Bourbon power in Europe. From April to June 1699, Crown proclamations in England’s colonies stated that the Scottish colony had breached terms of peace with Spain and that no English colony was to trade with New Caledonia – not even to supply provisions. 

By the summer of 1699 the colonists were running low on food, having stripped the area of edibles while building huts and fortifications. Exploration of the land near the settlement had not yielded the hoped-for tropical timber or gold. Many settlers had died of disease. Unable to trade for provisions and discouraged by the king’s very public repudiation of their settlement, the colonists abandoned New Caledonia, sailing for Jamaica and then New York. By August 1699 half of the expedition had died. 

Unaware of this, the Company prepared and despatched a second fleet on 18 August 1699. Arriving in late November, the settlers included 100 wives, some children, four more church ministers and a schoolmaster. Expecting to find a thriving colony, they found the site deserted.

Struggling with illness and limited rations, they also faced determined efforts by Spain to oust them. Making a pre-emptive attack, a group of Scots and their Tule allies routed the Spanish outpost of Toubicanti in February 1700, but, soon after, a Spanish flotilla trapped the Scots in their fort of St Andrew. Lacking fresh water, the new colonists surrendered on 31 March 1700 and fled to Jamaica and North Carolina. On this second expedition, more than half of the 1,300 seamen and settlers died or were killed. In both attempts, the Company lost 11 ships to storms, fire and the Spanish. 

Yet, when survivors of the first expedition made it back to Scotland in November 1699, many expressed continuing faith in New Caledonia and blamed the English ban on provisioning for its failure. The Crown’s proclamations against the colony outraged the Company and its Scottish supporters. Many remained hopeful that the colony would be successful, if only the king could be persuaded to back it. 

Scotland’s grievances

In a fierce pamphlet war in 1699 and 1700, Company advocates defended the lawfulness of the colony, while detractors accused the directors and officers of mismanagement and predicted the colony’s demise. Walter Herries, a surgeon from Dumbarton who went on the first expedition, published an attack so excoriating that in November 1700 the Scottish parliament ordered it to be burned by the hangman in Edinburgh as ‘blasphemous, scandalous and calumnious libels’ and offered a huge £500 reward for Herries’ arrest. 

From November 1699, thousands of signatures were gathered on a mass petition to William calling for a meeting of the Scottish parliament to hear the nation’s grievances about Darien. This was organised by the ‘Country party’ opposition in the Scottish parliament, led by James, Duke of Hamilton, whose brother Basil was a Company director. William stoked outrage in Scotland by trying to suppress the petition and made no concessions when he grudgingly accepted it on 25 March 1700. 

When the parliament finally met in May 1700, more petitions arrived from shires and burghs. East Lothian was typical in asking the estates to ‘assert the Indian and African Company’s right to their colony of Caledonia, which has been and still unjustly is called into question’ and to ‘give such support to it as may encourage the adventurers to go on with an undertaking, which, if vigorously pursued, may tend so much in the future to the wealth, honour and interest of the nation’. 

This meeting of Parliament got out of control and was hastily adjourned. While members waited in Edinburgh hoping to reconvene, news of the victorious assault at Toubicanti sparked riotous celebrations. Supporters of the colony placed candles in their windows and threw stones through the unlit windows of government officials. A petition signed by 92 members of the parliament demanded that they should be allowed to reconvene ‘for Redressing the Grievances of the Nation’ and ‘Asserting its just Rights and Privileges, as well at Home and Abroad, in its Colony of Caledonia’. 

Hoping tempers would cool, the king’s officers did not recall the parliament until October. By this time, news of the colonists’ surrender to Spain had arrived. Discussion of the Company of Scotland was delayed until January, while popular measures were passed to curry support among members. The parliament expressed its dismay, unanimously asserting the rights of the Company and the sovereignty of Scotland. Still, Crown officers managed to block a bill in favour of the settlement, which would have embarrassed the king. A bill to bail out the Company was also dropped.

The Darien debacle led William to conclude that Scottish autonomy needed to be constrained. He proposed in 1700 and again in 1702 that Parliament should consider a closer union with Scotland. From the monarch’s point of view, Scotland’s independence had become a major liability. 

More union or less? 

The Scots agreed with William that the regal union was not working, though they disagreed on a remedy. Pamphleteers complained that Scotland gave more than it got from its union of allegiance. William’s Nine Years War with France (1688-97) had drained men and taxes from Scotland, while disrupting trading links with the enemy. The potential to trade with the Crown’s Atlantic colonies was constrained by laws excluding the Scots as foreigners from England’s colonial commerce. This anomalous position fuelled the effort to establish a Caribbean colony for Scotland, though some Scots managed to trade illegally with colonies such as Virginia, New York and Jamaica, using false flags and clandestine ports. 

English political leaders showed no interest in William’s plan for a closer union, but the question came into focus from March 1702 when the king died unexpectedly following a riding accident. His successor, Queen Anne, pursued William’s proposals for closer union, not for economic reasons but to protect the British monarchy from the threat of a Jacobite restoration in Scotland. 

A revolution in 1688-90 had removed the Stuart dynasty and replaced it with an extraordinarily precarious monarchical line. William and his wife Mary had no children and by 1700 all of Anne’s children had died. The French king, Louis XIV, supported the Stuarts in exile and in 1701 recognised the son of the deposed James II and VII as the rightful successor to the British thrones. In 1702 Anne was in poor health and had no direct heir. She needed England and Scotland to agree on a joint successor to prevent any return of the Stuart Jacobite line to the British Isles.

In 1701 Parliament recognised Sophia of Hanover, a Protestant grand-daughter of James VI and I, as Anne’s successor. Anne also needed Scotland to pass a succession act – or to agree a complete union of the kingdoms, with Sophia as the named successor. This would be a neat solution, resolving the problem of the succession and the clashes of Scottish and English sovereignty during the Darien debacle. Could Anne create sufficient support in both Scotland and England for closer union?

Marrying ‘a beggar’

A closer union had been proposed and rejected for a century. After James VI of Scotland inherited the English throne as James I in 1603, efforts to negotiate a closer union were strongly resisted in Scotland and England. A religious alliance was formed in 1643 between rebel regimes in Scotland and England with the Solemn League and Covenant, but this retained separate kingdoms and parliaments. Oliver Cromwell created a British Protectorate in 1653 after conquering Scotland, but this was overturned with the 1660 restoration of the Stuart monarchy. Proposals by the monarch for economic union in 1669-70 and 1686 did not attract significant Scottish support. Conversely, a request by Scottish revolutionaries for parliamentary union in 1689 found no support in England. 

By 1702 attitudes remained hesitant. In 1700 the English Tory Sir Edward Seymour stated that Scotland was ‘a beggar’ and ‘whoever married a beggar could only expect a louse for a portion [dowry]’. The Scottish parliament was willing to ratify Anne’s 1702 proposals for union negotiations, but George Mackenzie, Viscount Tarbet made little headway when he published a tract in London to encourage English and Scottish support for the queen’s union. 

Anne’s talks collapsed by early 1703 over trading issues. Though agreeing to the principle of free trade, English negotiators refused to concede compensation for the statutory rights of the Company of Scotland or the costs of harmonising taxation at higher English rates. 

Scotland’s Country party responded in the 1703 and 1704 Scottish parliaments with aggressive demands for a treaty on trade with England and the devolution of royal powers to Edinburgh. Andrew Fletcher of Saltoun envisioned a selective transfer of sovereignty from the Crown to the Scottish parliament, with acts requiring parliamentary approval for declarations of war, peace treaties and ministerial appointments. Recognising that the succession gave them leverage, the Scots demanded new ‘conditions of government’ before they would accept Sophia of Hanover as their future queen.

In response, the Westminster Parliament issued an ultimatum in spring 1705. A majority in the House of Commons was keen to settle the succession. They threatened economic sanctions if the Scottish parliament did not either confirm the Hanoverian succession or authorise fresh union talks. The right of Scots to own property in England would be rescinded and the export of Scottish cattle, coal and linen to England would be blocked. 

These threats were made during a fresh episode of Anglo-Scottish conflict that rekindled anger in Scotland over the Darien disaster. When an East India Company ship, the Worcester, docked in Leith, the crew were rumoured to have pirated a Company of Scotland ship, the Speedy Return. An Admiralty court found them guilty and, despite protests from the government in London, Captain Green and two crewmen were hanged early in March in front of an enormous crowd. 

After ten years of Anglo-Scottish conflict over the Company of Scotland it may seem surprising that the Union of 1707 was agreed – but Anne was determined to settle the succession. Renewed talks early in 1706 produced agreement on economic concerns. An ‘Equivalent’ would compensate Scotland for taking on English taxes in a British free trade zone. An advance payment on the Equivalent of nearly £400,000 would buy out Company of Scotland shareholders at five per cent interest on the shares. A further £20,000 was sent secretly from London to repay Crown debts owed to selected parliamentarians. Small adjustments to the treaty on taxes and a crucial Act securing the Presbyterian Church in perpetuity also helped confirm votes in the Scottish parliament. 

The British Union 

The Company of Scotland presented an ambitious vision of multinational investment that prefigured modern globalisation. But inexperience and a failure to anticipate nationalist backlash by English, Dutch and Spanish competitors destroyed a substantial proportion of Scotland’s wealth.

This did not lead inevitably to the 1707 Union, though a more complete union did address the problems of Scottish sovereignty exposed by the Darien Scheme. For the Crown, the treaty forged a more complete British union to resist French-backed Jacobites, while removing the potential for Scotland to embarrass the monarch in international affairs. For the English, the new British trading zone confirmed the monopolies of the English East India Company and the Royal African Company and aimed to reduce Scottish black market trading in the colonies. 

For the Scots, supporters of closer union hoped that the treaty would free them from what Major James Cunningham of Aiket called a ‘hatefull dependence’ in the regal union. A survivor of the first expedition to Darien, Major Cunningham acted as a double agent to stop a Presbyterian uprising against the treaty because he expected that a full union would allow Scotland to enjoy the same privileges as England’s counties. 

Other Scots feared that closer union would not reduce the effects of English hegemony in the British union. Pamphleteers and parliamentary speakers argued for a treaty on trade and defence that would retain separate Scottish and English parliaments under a federal government. To highlight the imbalance of power between Scotland and England, Andrew Fletcher of Saltoun made a deliberately provocative proposal to convert the British realms into a monarchical federation of 12 city states. His 1703 tract, An Account of a Conversation Concerning a Right Regulation of Governments, aimed to create roughly equal regions in which ‘virtue and industry might be universally encouraged’ instead of being concentrated in London. 

These concepts, from devolution to federalism to city regions, continue to feature in contemporary discourse on the British constitution, while Brexit has reignited debate on economic nationalism and globalisation. The story of the Darien Scheme is not the simple tale of overreach, bankruptcy and union that it has sometimes been portrayed as. Instead, the pathos and politics of the Company of Scotland reveal fundamental economic and political questions still faced by the British nations. 

Karin Bowie is Senior Lecturer in Scottish History at the University of Glasgow and author of Public Opinion in Early Modern Scotland, c.1560-1707 (Cambridge University Press, 2020).