Darien scheme The colonization project that became known as the Darien Scheme or Darien Disaster was an unsuccessful attempt by the Kingdom of Scotland to become a world trading nation by establishing a colony called " Caledonia " on the Isthmus of Panama on the Gulf of Darién in the late 1690s . From the outset , the undertaking was beset by poor planning and provision , weak leadership , lack of demand for trade goods , devastating epidemics of disease and increasing shortage of food ; it was finally abandoned after a siege by Spanish forces in April 1700 . As the Darien company was backed by about a quarter of the money circulating in Scotland , its failure left the nobles and landowners — who had suffered a run of bad harvests — almost completely ruined and was an important factor in weakening their resistance to the Act of Union ( finally consummated in 1707 ) . Although the scheme failed , it has been seen as marking the beginning of the country ' s transformation into a modern nation oriented toward business . Origins . The late 1600s was a difficult period for Scotland . The country ' s economy was relatively small , its range of exports very limited and it was in a weak position in relation to England , its powerful neighbour ( with which it was in personal union , but not yet in political union ) . In an era of economic rivalry in Europe , Scotland was incapable of protecting itself from the effects of English competition and legislation . The kingdom had no reciprocal export trade and its once thriving industries such as shipbuilding were in deep decline . Goods which were in demand had to be bought from England for sterling , the Navigation Acts further increased economic dependence on England by limiting Scots shipping , and the navy was tiny . Several ruinous civil wars in the late 1600s had squandered the country ' s human and other resources ; the 1690s also saw several years of wide - scale crop failure , which brought famine . This period was referred to as the " ill years " . The deteriorating economic position of Scotland led to calls for a favorable political union , or at least a customs union , with England . However , the stronger feeling among Scots was that the country should become a great mercantile and colonial power like England . In response , a number of remedies were enacted by the Parliament of Scotland : in 1695 the Bank of Scotland was established ; the Act for the Settling of Schools established a parish - based system of public education throughout Scotland ; and the Company of Scotland was chartered with capital to be raised by public subscription to trade with " Africa and the Indies " . In the face of opposition by English commercial interests , the Company of Scotland raised subscriptions in Amsterdam , Hamburg and London for the scheme . For his part , King William III had given only lukewarm support to the whole Scottish colonial endeavour . England was at war with France and hence did not want to offend Spain which claimed the territory as part of New Granada . It was also under pressure from the English East India Company , who were keen to maintain their monopoly over English foreign trade . It therefore forced the English and Dutch investors to withdraw . Next , the East India Company threatened legal action on the grounds that the Scots had no authority from the king to raise funds outside the English realm , and obliged the promoters to refund subscriptions to the Hamburg investors . This left no source of finance but Scotland itself . Returning to Edinburgh , the Company of Scotland for Trading to Africa raised £400 , 000 sterling in a few weeks ( equivalent to roughly £ today ) , with investments from every level of society , and totalling about a fifth of the wealth of Scotland . It was , for Scotland , a massive amount of capital . Scottish - born trader and financier William Paterson had long been promoting a plan for a colony on the Isthmus of Panama to be used as a gateway between the Atlantic and Pacific — the same principle which , much later , would lead to the construction of the Panama Canal . Paterson , who had a huge capacity for hard work , was instrumental in getting the company off the ground in London . He had failed to interest several European countries in his project but in the aftermath of the English reaction to the company he was able to get a respectful hearing for his ideas . The Scot ' s original aim of emulating the East India Company by breaking into the lucrative trading areas of the Indies and Africa was forgotten and the highly ambitious Darien scheme was adopted by the company . Paterson fell from grace when a subordinate embezzled from the Company . The company took back Paterson ' s stock and expelled him from the Court of Directors ; he was to have little real influence on events after this point . First expedition . There were a large number of former officers and soldiers who joined the Darien project eagerly as they had little hope of any other employment . Many were acquainted from serving in the army and several — Thomas Drummond , for example — were notorious for involvement in the Massacre of Glencoe . In some eyes they appeared to be a clique and this was to cause much suspicion among other members of the expedition . The first expedition of five ships ( " Saint Andrew " , " Caledonia " , " Unicorn " , " Dolphin " , and " Endeavour " ) set sail from the east coast port of Leith to avoid observation by English warships in July 1698 , with around 1200 people on board . The journey round Scotland while kept below deck was so traumatic that some colonists thought it comparable to the worst parts of the whole Darien experience . Their orders were " to proceed to the Bay of Darien , and make the Isle called the Golden Island . . . some few leagues to the leeward of the mouth of the great River of Darien . . . and there make a settlement on the mainland " . After calling at Madeira and the West Indies , the fleet made landfall off the coast of Darien on 2 November . The settlers christened their new home " Caledonia " . With Drummond in charge , they cut a ditch through the neck of land that divided one side of the harbour in Caledonia Bay from the ocean , and constructed " Fort St Andrew " , equipped with 50 cannon , on the peninsula behind the canal . The fort did not have a source of fresh water . On a mountain , at the opposite side of the harbour , they built a watchhouse . Close to the fort they began to erect the huts of the main settlement , " New Edinburgh " , and to clear land for growing yams and maize . Letters sent home by the expedition created the misleading impression that everything was going according to plan . This seems to have been by agreement as certain optimistic phrases kept recurring , but it meant the Scottish public would be completely unprepared for the coming disaster . Agriculture proved difficult and the local Indian tribes , although hostile to Spain , were unwilling to buy the combs and other trinkets offered by the colonists . Most serious was the almost total failure to sell any goods to the few passing traders that put in to the bay . With the onset of summer the following year the stifling atmosphere , along with other causes , led to a large number of deaths in the colony . Eventually the mortality rate rose to ten settlers a day . Although local Indians brought gifts of fruit and plantains these were appropriated by the leaders and sailors who largely remained on board ship . The only luck the settlers had was in giant turtle hunting , but fewer and fewer men were fit enough for such strenuous work . The situation was exacerbated by the lack of food mainly due to a high rate of spoilage caused by improper stowing . At the same time King William had instructed the Dutch and English colonies in America not to supply the Scots ' settlement so as not to incur the wrath of the Spanish Empire . The only reward the council had to give was alcohol , and drunkenness became common , even though it sped the deaths of many men weakened by dysentery , fever and the rotting , worm infested food . After eight months the colony was abandoned in July 1699 , apart from six men who were too weak to move . Deaths continued on the ships , and those who managed to survive the journey and return home found themselves regarded as a disgrace to their country and even disowned by their families . Only 300 of the 1200 settlers survived and only one ship managed to return to Scotland . A desperate ship from the colony that called at the Jamaican city of Port Royal was refused assistance on the orders of the English government , which feared antagonising the Spanish . Second expedition . Word of the first expedition did not reach Scotland in time to prevent a second voyage of more than 1000 people . The second expedition arrived on 30 November 1699 and found two sloop s there ; one with Thomas Drummond from the original expedition . Some men were sent ashore to rebuild huts , which caused others to complain that they had come to join a settlement , not build one . Morale was low and little progress was made . Drummond insisted that there could be no discussion , the fort must be rebuilt as the Spanish attack would surely come soon , but he clashed with the merchant James Byres who maintained the Counsellors of the first expedition had now lost that status , and consequently had Drummond arrested . Initially bellicose , Byres began to send away all those he suspected of being offensively minded — or of being allegiant to Drummond . He outraged a kirk minister by claiming it would be unlawful to resist the Spanish by force of arms , as all war was unchristian . He then deserted the colony in a sloop . The colonists sank into apathy until the arrival of Alexander Campbell of Fonab , sent by the company to organize a defence . He provided the resolute leadership which had been lacking and took the initiative from the Spanish by driving them from their stockade at Toubacanti in January 1700 . However , Fonab was wounded in this daring frontal attack and became incapacitated with a fever . The Spanish force — who were also suffering serious losses from fever — closed in on Fort St Andrew and besieged it for a month , although disease was still the main cause of death during this time . The Spanish commander called for the Scots to surrender and avoid a final assault , warning that if they did not no quarter would be given . After negotiations the Scots were allowed to leave with their guns , and the colony was abandoned for the last time . Only a handful of those from the second expedition returned to Scotland Of the total 2500 settlers that set off , just a few hundred survived . Reactions to the disaster . The failure of the colonization project provoked tremendous discontent throughout Lowland Scotland where almost every family had been affected . Many held the English responsible while believing that they could and should assist in yet another effort at making the scheme work . The company petitioned the King to affirm their right to the colony ; however , he declined and replied that , though he was sorry that the company had incurred such huge losses , to claim Darien would mean war with Spain . The continuing futile debate on the issue served to further increase bitter feeling . Hoping to recoup some capital by a more conventional venture , the company sent two ships from the Clyde , the " Speedy Return " and the " Continent " , to the Guinea coast laden with trade goods . Sea captain Robert Drummond was the master of the " Speedy Return " ; his brother Thomas , who had played such a part in the second expedition , was supercargo on the vessel . Neither ship was seen in Scotland again . Instead of seeking to sell for gold as the company ' s directors intended , the Drummonds exchanged the goods for slaves which they sold in Madagascar . Carousing with the buccaneers for whom the island was a refuge , the Drummonds fell in with the pirate John Bowen of Bermuda who offered loot if they lent the Scots ships to him for a raid on homeward bound Indiamen . Robert Drummond was initially persuaded but backed out of the agreement , only for Bowen to appropriate the ships while he was ashore . The " Continent " was lost to fire on the Malabar coast and Bowen scuttled the " Speedy Return " after transferring to a merchant ship he had taken . The Drummonds decided against returning to Scotland to explain the loss of the ships they had been entrusted with , and no more was heard of the brothers . The company sent out another ship but it was lost at sea . Unable to afford the cost of fitting out yet another ship , the " Annandale " was hired in London with the intention of trading in the Spice Islands , but the East India Company had it seized on the grounds that the venture was a contravention of their charter . This provoked uproar in Scotland , greatly aided by the inflammatory rhetoric of the company ' s secretary , and relentless enemy of the English , Roderick MacKenzie . Fury at the country ' s impotence led to the scapegoating and hanging of three innocent English sailors . Hangings . Thomas Green , the twenty - five - year - old master of an English merchant ship , the " Worcester " , which he brought into Leith in July 1704 , had been given the command aged twenty - one . A liking for strong drink was to be his downfall . Mackenzie convinced himself that " Worcester " was an East India Company ship and should be seized in reprisal for the " Annandale " . He succeeded in getting legal authority and Green watched over the next three months as the cargo was impounded and the sails , guns and rudder were stripped . In December the crew was arrested for piracy . Although many in Scotland were delighted it soon became clear to the directors of the Darien company that Mackenzie ' s charges were not supported by any kind of valid proof and it seemed that the men would be released . However , Mackenzie suddenly claimed to have ascertained from the crew of the " Worcester " that Green had drunkenly boasted of taking the " Speedy Return " , killing the Drummonds and burning the ship . Despite a total lack of real evidence Green and two of his crew , John Madden and James Simpson , were sent for trial . The prosecution case , which was made in medieval Latin and legal Doric , was unintelligible to jury and accused alike . The defence advocates seem to have presented no evidence and fled after the trial . There was hardly anyone in Scotland who was disinterested but some jurors resisted bringing in a verdict of guilty . The men were convicted nonetheless and sentenced to death by hanging . The Queen advised her 30 privy councillors in Edinburgh that the three men should be pardoned , but the common people demanded that the sentence be executed . Nineteen of the councillors made excuses to stay away from the deliberations on a reprieve , fearing the wrath of the huge mob that had arrived in Edinburgh to demand that the sailors be put to death . Although they had affidavits from London by the crew of the " Speedy Return " , which proved Green and his crew had no knowledge or involvement in the fate of the ship , the councillors declined to pardon the men . Green , Madden and Simpson were subjected to derision and insults by the mob before they were hanged . Green had complete faith that , as an innocent man , he would be reprieved and was still looking to the Edinburgh road for a messenger as the hangman placed the hood over his head . Consequences of failure . The failure of the Darien colonization project has been cited as one of the motivations for the 1707 Acts of Union . According to this argument , the Scottish establishment realised that it could never be a major power on its own and that if it wanted to share the benefits of England ' s international trade and the growth of the English Empire , then its future would have to lie in unity with England . More so , Scotland ' s nobles were almost bankrupted by the Darien fiasco . Some Scottish nobility petitioned Westminster to wipe out the Scottish national debt and stabilise the currency . The first request was not met though the second was and a Scottish Pound was given the fixed value of a shilling . Personal Scottish financial interests were also involved . Scottish commissioners had invested heavily in the Darien project and they believed that they would receive compensation for their losses . The 1707 Acts of Union , Article 14 , granted £398 , 085 10s sterling to Scotland to offset future liability towards the English national debt . See also . Other Scottish settlements in America :