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| WILLIAM PATERSON |
| Founder of the Bank of England
- (1658-1719) |
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In 1691, Paterson, a Scottish trader of
dubious background, but respected in London's financial circles,
devised a cunning scheme to let the cash-strapped government of
the time, impoverished by years of civil war, borrow from the country's
rich landowners at good rates of interest. The lenders, or "shareholders"
would be known as The Company of the Bank of England.
And so the beast that spawned modern capitalism,
with the power to bring down governments, was born.
In 1696, Paterson resigned from the newly
established Bank after falling out with his fellow Directors, and
he returned to his native Scotland determined to repeat the success,
under his own terms. What followed became known as "The Darien Disaster"
and dealt Scotland a crippling blow from which she would never recover.
The plan was simple, ingenious and, if successful,
would catapult Scotland into the league of world powers, dominated
by England and Spain. The wealthy of Scotland flocked to invest
in this fabulous "Get-Rich-Quick" scheme that simply couldn't fail.
By definition, that included most of Scotland's MP's.
By colonising the thin, as yet unclaimed
strip of land known as Darien, Panama, and, ultimately, building
a canal to link the Atlantic and Pacific oceans, Scotland would
control a hugely lucrative world-trade passage.
The first settlers sailed out in 1698 to
high national excitement. Most of them, including Paterson's own
wife and son would be dead within the year, the project in ruins
before even getting off the ground.
Although the disease-ridden climate might
be blamed for this disaster of national proportions, there is no
doubt that the major European powers, England included, were not
prepared to allow this upstart heathen country to muscle in on their
patch.
Consequently, supply vessels from Scotland
containing materials, medical supplies, food and so on were constantly
blockaded and turned away from their destination. Who can say if
the scheme might otherwise have worked? In the event, Paterson returned,
broken and broke in 1699 with the few remaining survivors.
Scotland was bankrupt. And boy, did England
know it.
Westminster seized the opportunity to bail
out the destitute Scots and by 1707 the grateful Scottish Parliament
had been sold, and the Scottish people sold out in the thinnest
disguised merger of "equals" in the history of takeovers, otherwise
known as the So near, and yet........
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