Darien scheme

Caledonia
Colony of the Kingdom of Scotland
← 1698–1700 →
Flag of the Company of Scotland Trading to Africa and the Indies
Caledonia on a modern map
Capital		New Edinburgh Coordinates: 8°50′02.47″N 77°37′54.47″W / 8.8340194°N 77.6317972°W / 8.8340194; -77.6317972
King of Scotland
•	1689–1702	William II
Leader
•	1698–1700	Thomas Drummond
•	January – February 1700	Alexander Campbell of Fonab
Historical era		Colonial period
•	Landfall	2 November 1698
•	First colony abandoned	July 1699
•	Second colony established	November 30, 1699
•	Second colony abandoned	February 1700
Population
•	1698	1,200
•	1700	2,500
Today part of		Panama

Flag of the Company of Scotland Trading to Africa and the Indies

The Darien scheme 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. The aim was for the colony to have an overland route that connected the Pacific and Atlantic oceans. From the beginning the undertaking was beset by poor planning and provisioning, divided leadership, a lack of demand for trade goods particularly caused by an English trade blockade, devastating epidemics of disease, collusion between the English East India Company and the British monarchy and English government, as well as a failure to anticipate the Spanish Empire's military response. It was finally abandoned in March 1700 after a siege by Spanish forces, which also blockaded the harbour.

As the Scottish Darien Company was backed by 25–50% of all the money circulating in Scotland, its failure left the entire Lowlands almost completely ruined and was an important factor in weakening their resistance to the Act of Union (completed in 1707). The land where the Darien colony was built is virtually uninhabited today although recent research has suggested that the venture could have been a major economic success providing major economic competition to England and Spain.

The late 17th century 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 that were in demand had to be bought from England for sterling. Moreover, the Navigation Acts further increased economic dependence on England by limiting Scotland's shipping, and the Royal Scots Navy was tiny.

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