William Paterson is probably the Scottish equivalent of Barack Obama.  He was a trader in the West Indies and he later founded the Bank of England.  One would think that the man who founded the Bank of England would be someone to admire, but it might be hard to convince a Scotsman, based on the damage he did to their country.   You see, William Paterson convinced a majority of the citizens of Scotland to do something so stupid that it literally bankrupted the country.  The time was 1695, and even though Scotland was in dire economic straits at home, the citizens scraped together ₤400,000 in order to fund a colony, so that Scotland could begin building an Empire.  Since all of the good locations for a colony were long gone, Scotland was left with some rather undesirable options.  They seriously considered garden spots like Greenland and Africa before William Paterson intervened to convince them of the ideal spot:  Darien. 

Hmmm.  Having a little trouble placing Darien on the map, are we?  Well, Darien is now known as Panama.  This was the ideal spot, in the brilliant mind of Mr. Paterson, because even then people knew the value of the Isthmus of Panama.  Scotland would control the trade between the Atlantic and the Pacific.  What could possibly go wrong?  It was hard to believe that someone else hadn’t already grabbed up this gem.  Okay, technically the Spanish had grabbed it up, but they didn’t have anyone actually living there.  So, in 1698, the Scottish people rejoiced as they sent off 1,200 people in five ships to establish the Scottish Empire.  A few minor problems developed.  One problem is that the Scots are used to a climate that is cold and rainy.  Panama is certainly rainy, but not exactly cold.  Tropical jungle, or as they say in Scotland, bloody swamp,  is probably a better description.  The Scots soon learned about several tropical diseases that made them hunger after kilt wearing weather.  Then there was this little problem that Spain had a lot more ships and troops, and they were not very welcoming to this colony on their territory.  But perhaps the final straw was that King William, who had Scottish roots, ordered the English to avoid trading with Darien, for fear of offending Spain.  The Scots literally found themselves starving, waist deep in mud, tormented by mosquitos,  deathly ill from malaria and yellow fever, unable to trade anything with anyone, all the while being constantly shot at by the annoyed Spanish.  Nice!

The colony was a complete and total failure, with the few survivors surrendering to the Spanish army in an act of desperation.  Of course, the people in Scotland did not know that, so they blissfully sent another expedition with another 1,200 Scots.  If anything, these people had it even worse, and they never actually got to go ashore at Darien.  The few survivors of the disastrous sea voyage promptly surrendered to the Spanish Navy waiting for them.   Historical records show that approximately 2,400 Scots traveled to Darien.  The best estimate is that about 30 of them somehow managed to return.

But, the story does not end there.  Bankrupt Scotland agreed to sign the Act of Union.  For their part of the deal, England paid back the people who had invested in Darien everything they had lost, with 5% interest.  The Scots may have been incredibly stupid in trying to establish Darien, but they clearly learned their lesson.  This money was later used to found the Royal Bank of Scotland and the rest is history.

[copy of the announcement of the Equivalency Fund, reimbursing those had had invested in Darien]

I guess the point is that the United States is not the first country to commit economic suicide by following the leadership of someone who was absolutely clueless.   We can, at least, take comfort that others have been just as stupid as those who voted for the brilliant leadership of Pelosi, Obama and Reid.  Unfortunately, the price of stupidity in 2010 is likely to be similar to that experienced by the Scots in 1698, but we, hopefully, won’t lose as many lives.  Who knows, maybe we can find someone, say the Chinese, to fund our stupidity so that we can prosper in the future.

[Pictures and historical records from:]

GLASGOW UNIVERSITY LIBRARY
SPECIAL COLLECTIONS DEPARTMENT 

Book of the Month 

The Darien Scheme

Darien letters : from the Spencer Collection Glasgow University Library. Glasgow : 1971 Sp Coll Spencer Add. q2

Cundall, Frank.  The Darien Venture. New York : 1926 Sp Coll Spencer 63

Prebble, John.  The Darien disaster.  London : 1968 Economics P486.D6 PRE

Taylor, Benjamin. The Darien Expedition. [Paisley] : [1892] Sp Coll Spencer 71