The Darien Scheme — A Scottish Attempt to Colonize Panama

The Darien Scheme was an unsuccessful attempt by the Scotland to establish a colony on the Isthmus of Panama in the 1690s. William Paterson was born in Tinwald in Dumfriesshire in 1658. He made his first fortune through international trade, traveling extensively throughout the America’s and West Indies and helped to found the Bank
of England.

Returning Scotland, Paterson devised a scheme to create a new trade link between east and west which could command the trade of the two great oceans of the world, the Pacific and Atlantic. In 1693, Paterson helped to set up the Company of Scotland Trading to Africa and the Indies to establish a trading colony on the Isthmus of Darien (part of modern Panama). As the Panama Canal does today, it was hoped that overland transport of goods between two ports on the east and west coasts of the isthmus to avoid the long journey around either the Cape of Good Hope or Cape Horn. Unfortunately for the colonists, Paterson had never actually set eyes on the land in question.

In 1698 five ships gathered in the Firth of Forth off of Scotland and were loaded with tools, supplies, weapons and 1200 settlers. In November of that year they reach Darien and founded their colony of New Caledonia. They built Fort St. Andrew and began erecting huts that were to be the beginning of New Edinburgh. Their crops of yams and maize did poorly however and the local native had little interest in trading for the trinkets the colonists offered. What was worse, since they had settled in the middle of Spanish claimed lands, and King William instructed the English colonies in America not to supply the Scots’ settlement to avoid the incurring the further wrath of the Spaniards.

In August of 1699 a second expedition with another 1,300 colonists set sail. Little did they know that with the onset of the summer heat, and inadequate provisions, deaths due to disease among the first batch of settlers began to increase to the point that ten colonists per day were dying. By July, after only eight months, the 300 remaining colonists had abandoned their settlement. When the second group of ships arrived in November they found the jungle had already started to devour the site of New Edinburgh, but they decided to rebuild and some 200 refugees of the original settlement returned from English settlements where they had found safe harbor.

By then, the Spanish were determined that they would prevent any other British outposts might be built in territories they claimed, and in a preemptive strike the Scots of New Caledonia successfully attacked a nearby Spanish fort. But the success was short-lived, for after a month-long blockade of Fort St. Andrew, they had been decimated by disease, and the colony was abandoned for the last time in April 1700, and only a few hundred of the 2,500 colonists survived.

The effect on the Scottish economy was catastrophic. It is said that one quarter of Scotland’s liquid assets had been invested and lost in the scheme. Scholars have argued that the Darien Scheme so crippled the country’s economy that it contributed to the dissolution of the Scottish Parliament and helped lead to the 1707 Act of Union with
England.

I recently ran across a song “Dreams Of Darien” by Paul Mackenna