A chart from 1729 of the rocky bay at New Caledonia, down at the southeastern corner of the Isthmus of Darien/Panama. The Bank of Scotland and the Company of Scotland were founded to finance it in 1695, and the first settlements went up in 1698, including the garrison at Fort St Andrew, and the main settlement at New Edinburgh further into the bay. The Scots apparently assumed that all one had to do was establish a settlement and trade would appear as if by magic; but as Daniel Defoe said, even if the Spanish and the English had not done their best to strangle the venture, there was nothing to attract merchants to such a lonely and inaccessible plot. The sufferings of the thousand or so brave colonists make heartbreaking reading, and the area is now all but uninhabited.
Part 1 of 2
IN 1603, King James VI of Scotland became James I of England too, and he and his son Charles I held two crowns and summoned two Parliaments, Westminster and Edinburgh, until 1649 when Westminster had Charles summarily executed.
Two years later, the newly republican English Parliament then passed the first Navigation Act, shutting out Dutch competition in the belief that imports made the country poorer.* Scotland was frozen out of England’s single market too, required to use English ports and currency and pay English taxes to access England’s colonial markets.*
Disappointingly, the Restoration saw England’s stranglehold tighten, and when Westminster unilaterally ousted James VII and II in 1688 and handpicked his daughter Mary and her Dutch husband William instead, outraged Scottish statesmen began to whisper of nominating their own Head of State again.
But independence requires an income. So in 1695, with Edinburgh’s blessing, the Company of Scotland raised enormous sums from private donors to found Caledonia, Scotland’s own colony on the Isthmus of Darien.*
The Act was annulled in 1660 along with all other laws passed in the Interregnum, but immediately reinstated and new provisions introduced to control particular imports. All the Navigation Acts were finally repealed in 1849 in the interests of free trade, encouraged by the groundbreaking economics of Adam Smith – a Scotsman.
Eighteenth-century ‘mercantilist’ wisdom was that a nation’s wealth was its gold reserves, which were increased by absorbing new colonies, mining their gold, employing (or enslaving) their labour, taxing their trade, and taxing exports to foreign nations. Imports from foreign competitors were discouraged, as they were blamed for taking gold out the country. Crony enterprises such as the East India Company helped the Treasury to keep it all in-house.
Now the Isthmus of Panama: for the location, see Puerto Escocés at Google maps. The colony was located in a natural bay on the eastern (Atlantic) side, washed by the Caribbean Sea, at the southern end of the isthmus near what is now the border with Colombia. The chief settlement was named New Edinburgh; today it is called Puerto Escocés, Scottish Port. Not to be confused with New Caledonia in the South Pacific, an island under French administration 750 miles east of Australia first sighted by Captain Cook in 1774, who was reminded of Scotland.
Précis
In 1695, the Scottish Parliament formed a company to found Caledonia, a new colony in modern-day Panama, to circumvent England’s tight control of trade with colonies in North America. Scotland had been frozen out of international trade during Cromwell’s Interregnum, and although Edinburgh now shared one monarch with Westminster again, the two Parliaments were still treated very differently. (57 / 60 words)
Part Two
Parliament Square in Edinburgh, by Sir David Wilkie (1785–1841), as it might have looked in 1794, fifty years before the artist painted it. Even enthusiasts of the Union of 1707 such as Daniel Defoe soon admitted that membership of London’s single market had done Scotland more harm than good. But philosophers of the eighteenth-century ‘Scottish Enlightenment’ were among those who inspired the American colonies to break free in 1776, and inspired British statesman such as William Huskisson and Richard Cobden to embrace free trade in the 1820s and 1830s, arguably making the Union one of the most beneficent events in human history.
CALEDONIA was to be a strategically-located Pacific and Atlantic trade hub for Africa and the Indies, working in partnership with other European states such as Holland and Spain. London reacted coldly, desiring neither competition nor a Scotland capable of aiding England’s enemies. After all, the exiled James was living in the court of French King Louis XIV, and still commanded considerable support in Scotland.*
To the Scots’ dismay, however, the Spanish let them down, claiming Darien for themselves as New Granada. Madrid’s ruthless blockade of the colonists’ settlement at New Edinburgh in 1700 left the Darien scheme in tatters, and Scotland close to bankruptcy.
Westminster seized their opportunity. They proposed merging the two Crowns, Parliaments and economies into one Kingdom of Great Britain, and offered compensation of almost £400,000 to sweeten the deal,* over half of it for investors cleaned out by the Darien scheme. Edinburgh succumbed, and the Act of Union took effect on May 1st, 1707.*
Both France and Spain remained supportive of James II and his son James Stuart. See The Jacobite Rebellions, The Battle of Glen Shiel and The War of the Spanish Succession.
Considered as ‘economy cost’, approximately £10bn in today’s money. For this and other comparisons, see Measuring Worth.
There were two Acts, one passed in 1706 by the English Parliament, and one passed in 1707 by the Scottish Parliament.
Précis
Edinburgh intended Caledonia as a centre for east-west trade, supported by England’s colonial rivals Spain. However, Spain proved as hostile as England, and in 1700 the colony was unsympathetically extinguished by Madrid. Scotland’s losses were such that in 1707, in exchange for debt relief, her Parliament agreed to merge with Westminster to create one Parliament of Great Britain. (56 / 60 words)
