A History of William Paterson and the Darien Company
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,-?:•;, ;fl^> '. /^^"V- ^'r':::^m'<;* *. " \, .-: A HISTORY OF WILLIAM PATERSON AND THE DARIEN COMPANY WILLIAM PATERSON, Founder of the Bank of England and Projector OF THE DARIEN COMPANY. Facsiinili: oj a Pen-and-ink Drawing in MS. in the British Museum. 1 A HISTORY OF WILLIAM PATERSON AND THE DARIEN COMPANY WITH ILLUSTRATIONS AND APPENDICES BY JAMES SAMUEL BARBOUR FORMERLY ACCOUNTANT OF THK BANK OF SCOTLAND WILLIAM BLACKWOOD AND SONS EDINBURGH AND LONDON M C M V 1 A^l l^ights rcse>~!'ed '^ UNIVERSITY ^ ^ ' OF CALIFOSNIA^ SANTA D J Q O BARBARA Inscribed WITH EVERY SENTIMENT OP RESPECT AND ESTEEM TO Sir GEORGE ANDERSON, Kt., TREASURER OF THE BANK OF SCOTLAND, BY THE AUTHOR. — ; PEEFACE. The printed documents and books concerning the Darien Company and the relations to it of its projector William Paterson, while numerous, are widely scattered, and in the following pages an endeavour has been made for the first time to focus their chief information in narrative form. The story of the flotation of the ill-starred Darien Company, its multiplied disasters, and its tragic collapse, along with that of the chequered career of its projector, forms an interesting episode in Scottish history which should not be allowed to sink into oblivion. Among the numerous authorities consulted and drawn upon, the following may be partic- ularly named : 1. ' A Defence of the Scots Abdicating Darien Inchiding an Answer to the Defence of the Scots Settlement there.' Printed in the year 1700. The writer of this tract is understood to Vlll PREFACE. have been one Walter Herries, a surgeon on board the first expedition to Darien. 2. 'The History of Darien.' By the Eev. Francis Borland, "sometime Minister of the Gospel at Glassford, and one of the Ministers who went along with the last Colony to Darien. Written mostly in the year 1700, while the Author was in the American regions." 2nd edition. Glasgow, 1779. 3. 'History of the Union.' By Daniel De Foe. London, 1786. 4. ' The Darien Papers.' Edited by Dr Hill Burton for the Bannatyne Club. Edinburgh, 1849. 5. 'The Writings of William Paterson.' By Saxe Bannister, M.A. 2nd edition. 3 vols. London, 1859. 6. ' The Early History of the Scots Darien Company.' By Hiram Bingham, Curator of South American History and Literature at the Library of Harvard University. Three papers in 'The Scottish Historical Eeview,' January, April, and July 1906. Edinburgh, April 1907. — CONTENTS. CHAP. I. WILLIAM PATERSON AND THE PASSING OP THE DARIEN company's ACT . 1 II. THE CAPITAL OP THE DARIEN COMPANY 13 III. THE DARIEN COMPANY AND ITS BANK-NOTE ISSUE 28 IV. THE company's PREPARATIONS FOR THE FIRST EX- PEDITION TO DARIEN 37 V. THE EXPEDITIONS TO DARIEN : FIRST EXPEDITION 54 VL THE EXPEDITIONS TO DARIEN : FIRST EXPEDITION continued ...... 91 VII. THE EXPEDITIONS TO DARIEN : SECOND EXPEDITION 133 VIII. RESTITUTION OF THE CAPITAL, WITH INTEREST, TO THE SUBSCRIBERS OF THE DARIEN COMPANY . 156 IX. WILLIAM PATERSON's INDEMNITY AND HIS LAST WILL ...... 186 APPENDICES. A. ACT OF THE DARIEN COMPANY—JUNE 26, 1695 . 201 B. DECLARATION BY THE COUNCIL OF CALEDONIA DECEMBER 28, 1698 .... 211 CONTENTS. C. HUI.E8 AND ORDINANCES BY THE PARLIAMENT OP CALEDONIA, FOR THE GOOD GOVERNMENT OF THE COLONY—APRIL 24, 1699 . 215 D. LETTER—J. 8. FLEMING, F.R.S.E., TO 'THE SCOTSMAN' —AUGUST 5, 1880 . .222 — E. BROCHURE ' THE HISTORY OP CALEDONIA : OR, THE SCOTS COLONY IN DARIEN IN THE WEST INDIES. BY A GENTLEMAN LATELY ARRIV'd.' LONDON, 1699 ...... 227 p. LIST OF SUBSCRIBERS TO THE DARIEN COMPANY, 1696 ...... 253 ILLUSTEATIONS. PAGE PORTRAIT OF WILLIAM PATERSON . Frontispiece DARIEN BANK-NOTES ..... 32 LEITH HARBOUR—ABOUT 1700 . .55 SKETCH-MAP OF ROUTE TAKEN BY FIRST EXPEDITION AFTER LEAVING MADEIRA . .59 PLAN OF HARBOUR AT CALEDONIA . .66 FACSIMILE OF SIGNATURE AND HANDWRITING OP WILLIAM PATERSON—FEBRUARY 6, 1700 . 154 THE DARIEN HOUSE (sO-CALLED), BRISTO PORT, EDIN- BURGH ....... 181 IRON LID OF TREASURE-CHEST OF DARIEN COMPANY, IN ANTIQUARIAN MUSEUM, EDINBURGH . 200 A HISTORY OF WILLIAM PATERSON AND THE DARIEN COMPANY. CHAPTER I. WILLIAM PATERSON AND THE PASSING OP THE DARIEN COMPANY'S ACT. The material available for a narrative of the early life of William Paterson, the founder of the Bank of England and projector of the ill- fated Darien Company, is very limited. It is only after he reaches manhood that we possess details of his career. For long the whereabouts of his birthplace remained in doubt ; and as regards the place of his burial, " no man knoweth of his sepulchre unto this day." Hill Burton, the historian, as well as Saxe Bannister, Paterson's sympathetic bio- grapher, had both to confess ignorance on A 2 WILLIAM TATERSON AND THE these points. On the authority of William Pagan (' Birthplace and Parentage of William Patcrson'), we now know that Paterson was of Scottish birth, his father having been John Paterson, farmer in Skipmyre, in the parish of Tinwald, Dumfriesshire. The farmhouse where he was born (presumably in 1658) was pulled down in 1864. Of Paterson's early education, also, little is able known ; but from his ready pen, and the manner in which he expressed himself in his numerous writings, it may justly be inferred that the superior elementary education pro- vided by the parish school of his day laid the foundation of his future intellectual at- tainments. Eliot Warburton, in ' Darien, or the Merchant Prince,' informs us that he saw it stated in an old pamphlet in the Bodleian Library that Paterson, when about seventeen years of age, on account of being suspected of intercom- muning with certain Covenanters who were sheltering in his neighbourhood, was forced to leave his home in Dumfriesshire and take refuge in Bristol with an aged kinswoman of his mother. This lady dying shortly after- wards, it is conjectured that he then left Eng- land for Amsterdam, and in his visits to the coffee-houses there he became acquainted with PASSING OF THE COMPANY S ACT. 6 several of the leading merchants of that town. From this Dutch port he is believed to have made his first voyage to the West Indies, where he spent some years. It has been stated that he became first a missionary, and afterwards a buccaneer, but this is unsupported by any reliable evidence. The latter sugges- tion—that he attached himself to the Brethren of the Coast—is one which is quite at variance with Paterson's high-toned life. It may have had its origin in the circumstance that, while resident in Jamaica, it is understood that he got acquainted with the two well-known buc- caneers, William Dampier and Lionel Wafer, from whom he derived much of his informa- tion respecting Central America and the Spanish Main. The probability is that, while in the West Indies, Paterson was engaged wholly in mercantile pursuits. After acquiring a moderate fortune and con- siderable business experience, he returned to Europe with a Scheme of Foreign Trade which he had matured, the result of long study of questions of commerce and finance, and which he hoped to carry into execution under the auspices of some foreign Power. With this in view, about the year 1686 he visited several Continental towns, when he took occasion to offer his Scheme to Frederick William, Elector — 4 WILLIAM PATERSON AND THE of Brandenburg, and to the cities of Emden and Bremen ; but meeting with little en- couragement, he returned to England and settled down in London as a merchant. Putting his Scheme of Trade aside for a time, Paterson, along with his friend Michael Godfrey and a few other London merchants, brought forward another important project, with which his name has ever since been honourably associated. This was his proposal for the formation of a National Bank, first submitted to the Government in 1691, and which finally led to the establishment of the Bank of England in 1694. Paterson's claims as " chief projector " of that great institution have never been seriously questioned. He was one of the original directors of the Bank,^ and he saw it fairly started ; but owing to a difference of opinion with the majority of his colleagues, when he was outvoted, he voluntarily withdrew from the Corporation in 1695 by selling out his qualification of £2000 stock. In a petition to Queen Anne some years after- wards (dated Westminster, 4th April 1709), he says " Your Petitioner first formed and pro- • Paterson's name appears as one of the first directors in the copy of the Bank Charter given in the Appendix to Lawson's ' History of Banking,' first edition, 1849, p. 455. PASSING OF THE COMPANY S ACT. 5 posed the scheme for relieving the public credit by establishing the Bank of Eng- land ; but that, notwithstanding the signal success of that institution for the public service, and his unwearied endeavours in promoting the same through all manner of opposition from 1691 to the full estab- lishment thereof in 1694, your Petitioner never had any recompense for his great pains and expense therein." Paterson's career now turned in the direction of Scotland and the Darien Company. With the Kevolution of 1688, the religious and political troubles of Scotland had begun to subside and a spirit of trade and adventure had arisen in their place. The people were envious of England's lucrative colonial trade, and longed to enjoy similar economic advan- tages. This desire for commercial expansion was accentuated by a succession of bad har- vests, which had reduced many thousands of the population to destitution. In order to remedy this unfortunate state of matters and give ejQfect to the commercial aspirations of the nation, the Scottish Parliament devoted itself to passing several Acts fitted to stimulate home industries and foreign trade.