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Darien Scheme

A scheme promoted by William Paterson, the Scottish founder of the Bank of England, to establish a trading colony on the Isthmus of Darien in Panama, which would provide an ideal trading base between the Pacific and Atlantic Oceans. It had its genesis in an act of parliament of 1693 which authorized the establishment of a trading company for Scotland with any country against whom the king was not at war. A company was formed in 1695 with an equal number of Scottish and English directors to subscribe the necessary £600,000 required to finance the scheme, but pressure from the House of Commons (many of whose members were jealous of any attempt to break the monopoly of the East India Company) and the active hostility of William of Orange forced the withdrawal of
the English directors. Undeterred, Paterson and his fellow Scots raised £400,000 in Scotland, a sum that was supposed to represent half of the nation's capital, and in July 1698 the first Scottish fleet left Leith bound for Darien. A base called New Edinburgh was established in October but disaster followed hard on its foundation. A combination of dissent amongst the settlers, fever, and lack of English support to drive off Spanish attacks on the colony put the scheme in immediate jeopardy. More ships and men were despatched in 1699 and although some minor gains were made, by 1700 the expedition came to an ignominious end and the Scots were forced to surrender to superior Spanish forces. Scotland lost half of the venture capital, 2000 men and women died, and relations between Scotland and England were badly damaged. Scottish pride had been hurt too: one consequence of the failure of the Darien Scheme was the realization that Scotland could act as a trading nation only in concert with England, a feeling that hastened the Act Of Union of 1707.

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