The Darien scheme was an unsuccessful attempt, backed largely by investors of the Kingdom of Scotland, to gain wealth and influence by establishing New Caledonia, a colony in the Darién Gap on the Isthmus of Panama, in the late 1690s. The plan was for the colony, located on the Gulf of Darién, to establish and manage an overland route to connect the Pacific and Atlantic Oceans. The backers knew that the first sighting of the Pacific Ocean by Balboa was after crossing the isthmus through Darién.
The attempt at settling the area did not go well; more than 80 per cent of participants died within a year, and the settlement was abandoned twice. There are many explanations for the disaster. Rival claims have been made suggesting that the undertaking was beset by poor planning and provisioning; by divided leadership; by a lack of trade with local indigenous tribes or neighbouring Dutch and English colonies; by epidemics of tropical disease; widespread opposition to the scheme from commercial interests in England; and by a failure to anticipate a military response from the Spanish Empire. It was finally abandoned in March 1700 after a siege by Spanish forces, which also blockaded the harbour.
As the Company of Scotland was backed by approximately 20 per cent of all the money circulating in Scotland, its failure left the entire Scottish Lowlands in financial ruin. This 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 located in the modern territory of Guna Yala, an autonomous indigenous territory home to the Guna people. The expedition also took sovereignty over 'Crab Isle' (modern day Vieques, Puerto Rico) in 1698, yet sovereignty was short-lived.
Origins
The late 17th century was a difficult period for Scotland, as it was for much of Europe; the years 1695-97 saw catastrophic famine in present-day Estonia, Finland, Latvia, Norway and Sweden, plus an estimated two million deaths in France and Northern Italy. The 1690s were Scotland's coldest decade in the past 750 years as documented in tree ring records.
Scotland's economy was relatively small, its range of exports was limited, and it was in a weak position in relation to England, its powerful neighbour (with which it was in personal but not yet 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 relatively small. Though the unusual cold affected much of the Northern Hemisphere, Scotland suffered disproportionately and lost 10-15% of its entire population, possibly due to its political isolation. A series of domestic conflicts, including the 1639-51 Wars of the Three Kingdoms and unrest related to religious differences between 1670-1690 exhausted the people and diminished their resources. The so-called "seven ill years" of the 1690s saw widespread crop failures and famine, while Scotland's deteriorating economic position led to calls for a political or 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, several solutions were enacted by the Parliament of Scotland: in 1695 the Bank of Scotland was established; the Act for the Settling of Schools created 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 II of Scotland and III of England 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.