Darien Scheme: An Attempt at a Global Trade Hub

In the late 1690’s, William Paterson, a Scottish trader and banker devised an ambitious attempt to establish a global trade hub in the Darien.  He was able to convince the Parliament of Scotland to fund an attempt to create a trade expedition and an independent Scottish Empire in what is now known as the Republic of Panama. 

The venture consisted of traveling to today’s Guna Yala region of Panama.  The plan was to create a trade hub connecting the Atlantic and Pacific oceans via an overland route, and establish a colony on the Gulf of Darien, which would be christened Caledonia by the settlers.  They proceeded to construct Ft. St. Andrew which was equipped with canons, but no there was no source of fresh water. The settlement of huts built near the Fort was called New Edinburgh and the settlers proceeded to clear land for planting.  As far as Scotland knew, everything was going to plan.  Little did they know of the fate of the settlers and the disastrous experiment due to several factors.

Agriculture was extremely difficult in the jungle terrain. The few traders that passed through the area were not interested in the goods that the settlers brought. The lack of fresh water and food, malaria and fever started claiming the lives of the settlers.  After just 8 months and the death of hundreds of settlers, the project was abandoned. Paterson’s wife and child both perished and he became seriously ill.  Only 300 survived of the 1200 that initially arrived.

Unfortunately, word of the disaster did not reach Scotland before a second expedition of 1000 people arrived.   They arrived to a settlement that was abandoned, and overgrown.  Fear of the Spanish attacking was paramount which led the Scots to attack a Spanish fort and after a month of sustained attacks, the Scots surrendered to the Spaniards. They remaining settlers were permitted to leave the settlement.

The outcome of this failed experiment was the loss of 80% of the pioneers, shame in their home of Scotland, and the loss of 20% of Scotland’s total capital.