«does money produce wealth?»

Such a Parcel of Rogues in a Nation – The Myth of Scotland‘s sold Freedom, the failed Darién project and the Act of Union with England in 1707

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Do you remember it? It was a knife-edge election when Scotland, with 55.18 %, voted to remain a part of the United Kingdom of Great Britain and Northern Ireland. The motivation of course was an economic one. Strictly speaking, this is only logical since economy was likewise central when Scotland became a part of the United Kingdom in 1707. And that is how it happened.

 

In the second half of the 17th century, world economy underwent a massive change. Until then, individual merchants used to cross the Atlantic Ocean. They were replaced by international trading companies which generated high returns. Lords, kings and burghers invested not only in the trade, but also in manufactories and mines. Roads and canals were built. Economy was booming.

All the Scots could do was casting a jealous look at places like London or Amsterdam. Scotland disposed neither of infrastructure nor of any support from the King who focused on wealthier England, which he had ruled in personal union with Scotland since 1603. Thus, he did not provide any assistance even when Scotland faced a terrible famine in the 1690s. Up to 25% of the rural population is said to have died of starvation back then.

 

Economy was down, therefore, and the Scots were in need of some kind of initiative to gather courage and participate in the prosperity of the rest of the world. The solutions the politicians came up with were not new. They did the same what others had done before them. One of their measures was the foundation of a Scottish trading company called Company of Scotland, modeled on the East India Company.

 

The first problems already arose with the fundraising. The initial plan had been to collect money on the international market. The British East India Company, however, went to court. It claimed that the Scots had no privilege from the king, which of course was true, and hence were not entitled to raise capital on the foreign market. The courts judged in favor of the East India Company which prompted a chorus of patriotism in Scotland. Everybody wanted to compete with the toffee nosed British. It took only a couple of weeks to raise 400,000 pounds. Everyone invested: nobility, bourgeoisie, craftsmen. Yet nobody became aware of the fact that those 400,000 pounds made for almost a fifth of Scotland’s available assets. The Scottish people basically staked everything on one card. And that card simply had to win the trick.

 

So a smashing, extraordinary project with great potential was called for. This is where a visionary called William Paterson comes in. He had devised a plan for a Scottish colony to become a hub for the spice trade.

 

It must be stressed from the outset that William Paterson was no anonymous weirdo. Amongst other things, he had developed the concept of the Bank of England and was a co-founder of that dignified institution. His plan centered upon the Isthmus of Panama, which was called Isthmus of Darién in his days. He had lived in that region and knew that the strait was only 55 kilometers wide at its narrowest point. If those 55 kilometers could be bridged with a trading road, this would have been the ideal connection between the Spice Islands in the one side and Europe on the other side.

 

That sounded good. The Scots were convinced and, in 1698, sent an expedition with the aim to establish a new Caledonia on the Gulf of Darién.

 

To cut a long story short: things did not turn out as imagined. The plants did not grow as expected. The indigenous people were not too keen on bartering the goods the Scottish had brought with them. And diseases like malaria and yellow fever cost hundreds of settlers their lives.

 

No help was provided – on the contrary. William III, King of England and Scotland, prohibited the near-by trading posts from supporting the Scottish rivals in any way. He did so for political reasons. The new colony was located on Spanish territory, on the route the Spanish silver fleet took. William did not want to annoy Spain with which he had just forged an alliance against Louis XIV, King of France.

 

And so the project became a disaster. From the 2,500 colonists that had embarked from Scotland, only a few hundred returned home. Though, the worst was yet to come. Virtually every family in Scotland had invested huge sums of money in the Darian scheme. That money was lost for good. The blame was cast on the British, which were indeed largely responsible for the colony’s failure. While some people cultivated their hatred for the English, others contemplated ways to participate in their wealth.

 

The nobility and the rich bourgeoisie in particular considered a union with England a good chance to compensate for their losses. Queen Anne, who ascended the throne in 1702, would have loved to form a union between Scotland and England. She had her reasons. After seventeen pregnancies she was still childless and seriously ill. Her heir, George Louis of Brunswick and Lüneburg, was the one to succeed her on the throne. Yet, there was an opportunity that the Scots would nominate their own ruler.

 

To prevent that from happening, Anne deployed English money. She bribed the most influential politicians in the Scottish parliament. The highly indebted Duke of Queensberry, for instance, who was to procure the signing of the Act of Union, received 12,325 pounds from the British treasury. In return, he advertised the union with England amongst his fellow noblemen thanks to which Scotland would finally have its share in global economy.

 

And that was not all. After the Scottish Parliament had adopted the Act of Union, by 106 votes to 69, it was granted 398,085 pounds and 10 shillings. Scotland was obliged to use 58.6 % of that sum to satisfy the most important shareholders and creditors of the Company of Scotland.

 

It is hardly surprising that the people on the street, who got no compensation whatsoever, could not suppress their hatred for England. About 100 years later, Robert Burns wrote his poem on the parcel of rogues in a nation. With those lines, he cemented the national myth that Scotland’s freedom had not been lost in battle but sold for money.