In 1695, the Company of Scotland was set up to make Scotland a global trading nation.
Then in 1698, a merchant, William Paterson, persuaded the Scottish government and the Company of Scotland to finance the Darien Scheme – a plan to develop a Scottish colony in Panama, a hub for trade with the Americas and East Asia.
Many nobles, merchants and ordinary Scottish folk put their life savings into the Company of Scotland, investing around a quarter of Scotland’s total wealth within 6 months.
Poor planning, disease and the harsh tropical climate, combined with interference from King William III and attacks from the Spanish made the Darien Scheme a disaster.
The Company of Scotland suffered huge losses.
Many investors went bankrupt, and trust in Scotland’s overseas trade collapsed.
The impact on the Scottish economy was catastrophic.
The failed Darien Scheme became a major reason for the 1707 Act of Union which included the Equivalent, a sum of £398,000 to pay off Scotland’s debts and allowed Scottish businesses to enter the English trading system
Description
Scotland’s bold attempt at an overseas colony ended in disaster for the nation. The colony established in Panama’s Darien Gap faced harsh conditions and opposition from Spain and England.
