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Commercial Relations of England and Scotland 1603 - 1707
The Company of Scotland Tradings to Africa and the Indies


Scotland's illicit trade with the Plantations did not compensate for the drawbacks to her European trade caused by William's wars, and to her English trade by high duties on her imports. Her industries had developed, and their production was increasing, so she felt more and more keenly the want of markets for her goods. The Scots regretted and bemoaned their poverty, and began to realise that "this Nation, of all those who possess good Ports, and lie conveniently for Trade and Fishing, has bin the only part of Europe which did not apply itself to Commerce." Therefore, according to Fletcher, of Saltoun, "by an unforeseen and unexpected change of the genius of this nation all their thoughts and inclinations...seem to be turned upon Trade." It was obvious that a colonial market of their own was what the Scots really needed. The promoters of the New Jersey colony had pointed out that their settlement would prove of great advantage to the country, as increasing the consumption of Scottish manufactures. A few years later (1691) the Commissioners for the burgh of Glasgow declared "that it is the great concern of the royall borrows to have ane interest in forraigne plantations," and suggested that settlements might be made in Carolina and the West Indian Islands. The Convention considered the matter, but at that time nothing came of it. In 1693 the question of foreign plantations was brought before the Committee of Trade, and in the same year was passed the "Act for Encouraging of Forraigne Trade." This Act offered to all companies which should be formed for carrying on foreign trade, all the privileges and immunities which were granted to manufacturing companies. These were to be confirmed by Letters Patent from the King, and further, if attacks were made on the property of such companies, restitution was to be enforced "by publick means and at publick expense." -These privileges were more comprehensive than those enjoyed by any English company, and they were also to receive confirmation from Parliament.

The English commercial community was at this time, and had been for some years, much agitated by a controversy which raged round the East India trade. After the Restoration, when the charter granted by Cromwell in 1657 was renewed, this trade had flourished greatly, and those concerned in it became extremely wealthy. But the profits were confined to comparatively few, and the management of the company was entirely in their hands. It was, in fact, a very close monopoly. The possibility of such great gain induced private traders to fit out and send ships to the East, and gradually these interlopers, as they were called, became quite a numerous body. They were engaged in a continual struggle with the company, who were determined to maintain their monopoly. Sir Josiah Child, a "commercial grandee, who in wealth and the influence that attends wealth, vied with the greatest nobles of his time," governor of the company, was the leader in the contest with the interlopers. By costly presents and judicious bribes he made a place for himself high in Court favour, and secured from James II a charter maintaining the monopoly. Just after this, a quarrel between the Mogul government and the company agents led to war in India. While this was going on, the Revolution deprived Sir Josiah of Court support, and made an opportunity for his opponents, of which they were not slow to avail themselves. They were for the most part anxious rather for the formation of a company which should be governed neither by a despot nor by an oligarchy, than for an entirely unregulated trade. These persons formed themselves into a society known as the New Company, which now carried on the struggle against the Old, Child's, Company. Both were most anxious to obtain parliamentary powers, but though the latter secured a renewal of its privileges by charter in 1693, authority from Parliament was still denied.

After the charter was obtained, the company dealt very harshly with the interlopers, and the question was in consequence referred to the consideration of the House of Commons. The result was that, in 1694, the Commons passed a resolution declaring "that it was the right of all Englishmen to trade to the East Indies or any part of the world, unless prohibited by Act of Parliament." Trade, though nominally free, was still largely controlled by the Old Company, who had factories and offices in India. The New Company, in spite of their efforts, were not able to procure a charter. The position of affairs in 1695, therefore, was that in England there were many merchants most anxious to obtain parliamentary privileges for their trade, and that in Scotland extensive parliamentary privileges were offered, and there were few merchants who had sufficient capital or knowledge to take advantage of them. The idea of combining the two, with great advantage to Scotland, was conceived by a certain William Paterson. He was a man of considerable commercial and financial genius. He had drawn up a scheme for a national bank, which was accepted by the English Parliament in 1694, and for a short time he was a director of the thus formed Bank of England. He had travelled a good deal, especially in the West Indies, and from his knowledge of those regions sprang his scheme for an international entrepot on the Panama Isthmus. He is said to have tried to push this scheme in some continental trading centres, without success. Then he came to London, but there seems to have contented himself with suggestions for carrying on the East India trade, under cover of an Act to be secured from the Scottish Parliament. Doubtless he intended, when the company was formed, to bring forward his plan of trading to the East Indies via the Isthmus and the Pacific, but this was kept in the background for the present. Some English merchants took up the scheme warmly. Then the projectors went to Scotland, where, as has been pointed out, the nation was anxious to establish some new trade connections. The instructions given to Tweeddale, Lord High Commissioner, for the current session of Parliament, included directions to pass an Act "for the encouragement of such as shall acquire and establish a plantation in Africa or America or in any other part of the world where plantations may be lawfully acquired," with "such rights and privileges as we grant in like case to the subjects of our other dominions the one not interfering with the other." These instructions were given in April.

Early in May, according to Paterson, a London merchant informed him that there was "great Encouragement given for an East Indian Company in Scotland; upon which he" (i.e. Paterson) "gave Mr Chiesly a Scheme for creating the same; but that was not entirely followed." Perhaps Paterson's original plan laid some stress on his Panama scheme. Two merchants then proceeded to Scotland, and in June 1693, the "Act for a Company Tradeing to Affrica and the Indies" was passed. Twenty-one persons, some of whom were English, were constituted a corporation, receiving certain great privileges. They were empowered to trade with Asia, Africa, and America; to plant colonies in places not already possessed by any European power; to defend their trade and colonies "by force of Arms"; to make reprisals for any damage done them; to conclude treaties with foreign powers; and to have all rights of government and admiralty in their colonies. All their ships and goods were to be free from customs and duties for twenty-one years. The Scots Navigation Act of 1661 was suspended in their favour, and they were granted a monopoly of trade to Africa, America, and the Indies, "excepting and without any prejudice to any of the Subjects of this Kingdom to trade and navigat...to any part of America where the Collonies plantations or possessions of the said Company shall not be setled," that is, of course, reserving the Scots trade to the English Plantations. Lastly, His Majesty promised to interpose his authority to have restitution made for any harm done to the company. This Act was clearly the work of an independent Scots Parliament. In pre-Revolution days, when Court influence was supreme, through the Lords of the Articles, such an Act could not have been passed. The official who now represented the Court, Tweeddale, Lord High Commissioner, obviously went beyond his instructions. Burnet says that the King " drew an instruction impowering the commissioner to pass a bill promising letters patent for encouraging of trade, yet limited, so that it should not interfere with the trade of England: when they went down to Scotland, the king's commissioner either did not consider this, or had no regard to it; for he gave the royal assent to an act, that gave the undertakers either of the East India or West India trade, all possible privileges." The King's answer to the English Parliament's address on the subject: "I have been ill Served in Scotland," is well known. Tweeddale was dismissed from office for this piece of work.

The Act required that half the capital should be raised in Scotland, and amongst the promoters there were ten Scotsmen. The English merchants, however, were really the moving influence of the concern, and accordingly the first attempts to float the company were made in London. The probability of jealousy and interference on the part of the English Parliament and merchants was recognised from the first. Paterson wrote on 9 July from London (the Act was passed on 26 June): "the Gentlemen here...thinke also that we ought to keep private and close for some months that no occasion may be given for the Parliament of England directly or indirectly to take notice of it in the ensueing Session, which might be of ill consequence and especially since a great many considerable persons are already allarum'd at it." Paterson seems to have realised distinctly at this time that Scotland could not hope to carry out the scheme alone: "We must engage some of the best heads and purses for Trade in Europe therein, or we can never do it as it ought to be." Unfortunately, neither the "best heads" nor the "best purses" had any share in the undertaking in its final form. Paterson's prophecy, written at the same time, was unfortunately fulfilled: "we may be sure, should we only Settle some little Colony or Plantation and send some ships They would looke upon them as Interlopers and all agree to discourage and crush us to pieces."

The meetings of those concerned in the company were held in London, beginning on 29 August 1695. At first only the English promoters were present, and the meetings were called meetings "of Gentlemen concerned in the Company of Scotland trading to Africa and the Indies." The dilatoriness of the Scottish members in coming to London, or even in writing, was at first a great source of trouble to the English undertakers. Paterson wrote repeatedly urging them to hasten, but they did not arrive until 9 November. Henceforward the meetings were styled "Meeting of the Company of Scotland trading to Affrica and the Indies." The subscription books were opened on 6 November, and the company met with so much encouragement that the capital, originally fixed at 360,000, was raised to 600,000, of which the 300,000 to be raised in England was speedily subscribed. The sum paid up was 75,000. There was much anxiety that the books should be closed before the opening of Parliament, and this was done on the same day, 22 November, that the session of Parliament began. The English East India Company had already (11 November) taken notice of the Scots company, by voting that any of its members who were concerned in the Scots company would break their oath to the English company. They also petitioned the King for assistance.

On 2 December, the Lords resolved to consider the Scots Act. Next day they ordered the merchants trading to the East and West Indies, and the Customs Commissioners to attend the House, "to give an Account wherein the Act of Parliament lately made in Scotland for a Company trading to Africa and the Indies may be prejudicial to the Trade of this Kingdom into those parts." They appeared next day, and pointed out the extent of the Scots privileges, their exemption from customs and other duties, the exclusion of interlopers, and also their power of making reprisals. On the 4th the directors of the company met, and resolved that "one or more Ship or Ships be fitted out for the East Indies from Scotland with all convenient speed." Their last meeting was on 7 December, and on the same day the subscription books of the company were ordered to be laid before the House of Lords, and some of the directors were ordered to appear before the House1. On the 13th the Lords agreed to an address on the subject of the Scots company to be presented to the King, in which the Commons concurred. In this it was pointed out that the company's freedom from all duties and customs would make Scotland the staple for Indian and colonial goods, and that thereby England's trade would be ruined. Also that his Majesty's promise to enforce restitution for any damage done to the company's possessions "does seem to engage Your Majesty to employ the Shipping and Strength at Sea of this Nation, to support this new Company to the great Detriment even of this Kingdom." In. the MSS. minutes of the House of Lords for the same day, this entry stands: "Moved that a day may be appointed to receive what may be proposed in order to have union between England and Scotland." Even in the very heat of the controversy, it was realised by some that a union was the only means by which the interests of the countries could be made identical, and the dangers from an independent Scots Parliament obviated. A few days later it was suggested that certain bills should be prepared, dealing with the different points brought up in the address. "The first was to discourage all Englishmen" under severe Penalties from engaging in the Stock and Management of the Scots East India Company; and another was to prohibit English seamen from serving the Scots company, and English shipbuilders from building for them. The Lords now dropped the matter, but in January it was taken up again by the Commons. The East India Company complained that those concerned in the Scots company were fitting out ships for the Indies, and the House ordered an inquiry to be made into all the circumstances of the founding of the company. Accordingly, on 21 January 1696, the secretary and several of the directors were examined. The books had been sent off to Scotland, and therefore could not be brought before the House. One director said he had "resolved to act no longer," when he heard that Parliament had taken up the matter. Another, a member of the English East India Company, subscribed 3000, but when he heard it was resolved to send out a ship, he refused, saying: "It was against his Oath to the English East India Company. And further That if the Ship was lost, the Scotts might refuse to bear their Parts." On the same day it was resolved to impeach all the directors. Nothing came of this resolution, but parliamentary inquiry was fatal to the interests of the company, and almost all the English subscribers withdrew.

In agitating against the Scottish company, the great English companies had a twofold object in view. No doubt they were honestly alarmed at the prospect of a company with such extensive privileges, largely financed and managed by Englishmen, making Scotland an emporium, and greatly damaging their trade. But in addition, both the East India and African companies intended to make capital out of the general alarm. The East India Company seized the opportunity of pointing out that their trade was "in Danger of being lost, by means of the great Privileges granted to Joint Stocks of neighbouring Nations," and praying for leave to bring in a bill to establish their company. The Lords suggested on 20 December, that bills should be prepared to establish the East India and Africa Companies in England, "with such Powers and Privileges as shall be proper to obviate the Inconveniences that may otherwise arise by the Scotch Act." But excitement over the Scots Act soon died down, and the Company was not successful in its attempt to obtain parliamentary authority. On the other hand, those who were anxious that the trade should be open to all, drew another moral from the Scots Act. "And if all Englishmen have the freedom of trade to India it'cannot be supposed any of them will joyn with the Scotch, but everyone will rather imploy his own money." This, the writer declared, would ruin the Scots company. "Now if all the English decline the Scots Company, they will want both Stock and Experience to carry it on, and will sink of themselves"a true prophecy.

The matter was also considered in relation to the Plantation trade. Randolph, government agent in the Colonies, wrote soon after the Act was passed, that the Scots, "under pretence of Erecting an East India Company in yer King-dome...do Engage themselves with Great Sums of money in an American Trade; a Trade which has already for Several Years been carried on by Scotchmen." He feared that they might make a settlement in some unappropriated spot near Pennsylvania, or in an island near the coast, which might become "a staple not only of all Sorts of European Manufactures, but also of the Enumerated Plantation Commodities." Like the East India Company, Randolph used the Scots project as a stalking horse for impressing on the government the necessity for those measures which he desired, the tightening up and stricter enforcement of the Navigation Acts, and the necessity of joining small proprietary colonies to the government of some province directly under His Majesty's authority. The Lords, influenced by the Customs Commissioners, also paid some attention to this aspect of the Scots Act. They ordered the Commissioners to attend the House, "to give an Account, whether as the Law now stand there be a sufficient Power, in Carolina, Maryland, Pennsilvania and other Plantations where there are Proprietors to collect the King's Duties there: and whether there be the same Security to prevent the Inconveniences that may arise to the Proprietors and Planters there, from the Act of Parliament in Scotland." These inquiries were followed by the "Act for preventing Frauds and Regulating Abuses in the Plantation Trade." Besides making the regulations more stringent, with a view to checking the existing Scottish trade, the Act took some precautions against a Scottish settlement being founded, by declaring that no land in the colonies was to be sold to any but natives of England, Ireland, or the Plantations. The agitators against the Scots Act connected with the Plantation trade were therefore more successful than the traders to the East. Parliament considered the Plantation trade of greater importance to England than the Indian trade, as in America there was a better market for England's chief product, woollen cloth; and also the returns from the colonies were esteemed of more value than the goods which were brought from the East. They were therefore anxious both to stop the Scottish trade with the West, which already went on, and also to prevent the Scots from securing any land near the colonies, where they might establish a depot for colonial goods, and from which, with the help of Dutch shipping, Europe might be supplied.

English opposition and parliamentary investigation converted the company from a possible success into a probable failure. The promoters were now dependent on Scottish support. This was most ungrudgingly given, all the more because Scottish national pride was aroused by English interference. "Scots humours seem no less warm in prosecuting this business than the Inglish are in opposing it....T'was the notice the parliament of Ingland first took of it made the wholl nation throng in to have some share and I'm of opinion the resentments people are acted by; are the greatest supplys (that) furnishes life to that affaire." The books were opened in Edinburgh on 26 February 1696. Over 50,000 was subscribed on the first day, and by the end of July the whole amount, fixed now at 400,000 instead of 300,000, was subscribed. The largest subscribers were the Duke of Hamilton, Lord Belhaven and Stewart of Grandtully, who each subscribed 3000. Landed proprietors, merchants, shipowners and masters, manufacturers, advocates, writers, doctors, craftsmen, all invested, the sums varying from 2000 to 100.

But as the capital had been originally fixed at 600,000, it was felt that efforts should be made to raise the additional 200,000. Accordingly delegates were sent by the company to Holland, and to Hamburg, where rich and adventurous merchants were likely to be found, and where the Scots had considerable trade connections. But in Amsterdam the opposition of the Dutch East India Company prevented any merchants from joining. In Hamburg the money was promised, but in April 1697, Sir Paul Bycaut, the English Resident there, presented an address to the Senate, declaring that the Scots agents had no authority from the King, and that His Majesty would consider any engagement made by the Hamburg merchants with the Scots "an affront" to his authority. The merchants opened a subscription list, but stipulated that no money should be paid until the company should procure a declaration from the King authorising their proceedings. The company, and Parliament on their behalf, presented petitions and addresses to William, begging him to order that all opposition be withdrawn. Although he promised to consider the matter, and to order that his name should not be used to hinder the projects of the company, the Hamburg agent did not withdraw his opposition. No capital was subscribed there, and the Scots were therefore forced to begin operations with their own 400,000, of which only 219,094. 85. Id. was actually paid up.

Wherever possible, English opposition thwarted the company. Considering the attitude of England towards Scottish trade since 1660, it was to be expected that a potential rival to the great English companies, with Scottish authority, and with its headquarters in Scotland, would not be allowed to be financed with English capital. Interference abroad, however, was unwarrantable, and deprived Scotland of the last hopes of making the project a success. In the later conduct of the company's affairs, England could not interfere, until the settlement was made which endangered her foreign relations. Then William's alarm was justifiable, but not so the measures which were taken against the company and its colony. Although ruin was then inevitable, the conduct of the colonial authorities, acting upon instructions from England, did something to increase the horrors of the desertion of Darien, and much to influence public opinion in Scotland against England, her government, and her people.

When the English voice in the management of affairs was removed, Paterson was able to push his own scheme for a settlement on the Isthmus of Panama, to be a depot for East and West Indian goods, and to "carry on a Commerce in two vast Continents." The advantages of the scheme to Scotland were said to be many. A settlement would be provided for her surplus population, to which they should emigrate instead of going to fight on the Continent, or to settle in the English Plantations. Then the trade which would be attracted to such a settlement would provide a market for Scottish goods, greatly enrich the country, and make her a depot from which Europe should be supplied with both East and West Indian commodities. Both silver and gold mines were supposed to exist on the Isthmus; wealth from these was to pour into the country, and Scotland, at one bound, by virtue of this scheme, was to take her position as one of the leading commercial powers of Europe. Unfortunately there were many weak points in the project. For one thing, the amount of capital was utterly inadequate for carrying out a grandiose plan of this nature. Then, too, the Scots were inexperienced in the work of colonisation; and also, but for their trade with the American colonies, they knew nothing of trade with any countries but those which were near at hand. Also the spot where they designed to settle was very near the Spanish settlements of Carthagena, Panama, and Porto Rico. Paterson, at any rate, ought to have realised that the exclusive Spanish policy was not in the least likely to tolerate an alien colony in the midst of their sphere of influence. The country itself was far from being the El Dorado of their hopes. The climate was bad, and the land unfit for a settlement, and the gold and silver mines were non-existent.

Amongst golden dreams of Scotland's future wealth, three ships set sail from Leith on 26 July 1698. Early in November they arrived at the Bay of Acla, in the Gulf of Darien, where they intended to begin their settlement. Experience on the voyage had already shewn, what a short time on shore soon confirmed, the inadequacy of the regulations made for governing the colony. The supply of provisions was insufficient; because of carelessness and dearth no more were sent out from Scotland; and the goods which had been brought out, including large supplies of blue bonnets, bibles, and periwigs, were not particularly suitable for trading with the natives. Pestilence attacked the small force, and in June 1699, these combined difficulties caused the colonists, now reduced in number from 1200 to 900, to abandon the settlement. The refugees made for New York, but before they reached that colony, proclamation had been made, by William's orders, that his subjects there were to "forbear holding any correspondence with or giving any assistance to" any persons who had been engaged in making a settlement from Scotland. They were able, however, doubtless helped by their fellow-countrymen settled in New 'York, to get enough provisions to take them back to Scotland.

Meanwhile the directors at home had sent out a second expedition, leaving Leith in May 1699. They arrived at New Caledonia, as the settlement had been named, in August, to find the colony deserted, and after a short stay they sailed for Jamaica. The third expedition, of about 1300 men, sailed from the Clyde in September of the same year. Although they had heard rumours of the desertion of the settlement, they were not prepared to find that the only remains of the colony, from which they had hoped so much, were a few empty huts and a dismantled fort.

The first expedition had already come into collision with the Spaniards at Carthagena. A small vessel belonging to the company was wrecked in the bay, and the commander and crew were seized as pirates and put into irons. They were condemned to be executed, but owing to English representation the sentence was not carried out, though they were kept prisoners for a long time. Two or three months after the arrival of the third contingent, the Spanish attack on the intruders, which had been preparing for a long time, at last took place, and on 31 March 1700, the settlers finally capitulated.

The disastrous end of the first expedition had not damped the hopes of the Scots, who still looked for success to crown their endeavours. The Scots in New Jersey were said to be "growne to a very great hight... from the Success that their Countreymen meet withall in their settlement of Golden Island." In Scotland there was said to be "such an earnestness and disposition towards that matter, without any sparing, either of their persons or purses, that every observer must think it wonderful." The news of the final desertion therefore came as an unexpected and very bitter blow to the Scots. Nor had the English expected their neighbours' enterprise to fail. The English Parliament had directed their attention to the Scots Company in its initiatory stages. Then they had feared that it might be a rival to the East India Company. Four years later they were again alarmed. This time they wished to inquire "how consistent the Colony at Darien may be with the Treaties with Spain and the Trade of this Kingdom," with special reference to the Plantation trade. An address on the subject was sent to the King. In this the Lords expressed their fears that the settlement might tend " to a disturbance of that Peace and good Correspondency with the Crown of Spain, which we conceive is very advantageous to us all"; and also that it must "prove very inconvenient to the Trade and Quiet of this Kingdom4." William, in his answer, pointed out the only solution of the difficulty: "His Majesty does apprehend that Difficulties may too often arise, with respect to the different Interests of Trade between His Two Kingdoms, unless some way be found to unite them more nearly and compleatly." This proposal of union bore no fruit, but it certainly would not have been a favourable opportunity for approaching the Scots.

The whole nation was seething with indignation at the ruin of their cherished scheme, which they attributed to the malign influence of England. Parliament met in May 1700, and was overwhelmed with addresses, petitions, and remonstrances from all parts of the country, begging that the company's right to the colony of Caledonia might be maintained, and asserting England's responsibility for its downfall, and the necessity for asserting Scotland's freedom and independence. Parliament was adjourned several times, but national excitement did not abate. In January 1701, Parliament drew up an address to the King concerning Caledonia. They emphasised the "several great and grievous hardships" put upon them by the kingdom of England. These were, firstly, the interference of both Houses of Parliament in 1695, by which the company lost subscriptions to the value of 300,000; and also the address of the Lords to the King, of February 1700, "persisting in the opposition made against our Company and their Colony." Secondly, Parliament complained of the English agent's interference at Hamburg. Thirdly, the Proclamations issued in the English colonies were "injurious and prejudicial to the rights and liberties of the Company." Later, an Act was passed confirming the privileges and immunities of the African Company.

William never directly answered the address, but in his last message to the English Parliament a year later, "His Majesty is fully satisfied that nothing can more contribute to the present and future peace, security and happiness of England and Scotland, than a firm and entire union between them," he again emphasised what he felt would be the only solution of the difficulties of the two countries; In 1702 Anne answered Parliament's address in words of the same tenour: "to avoid all occasions of misunderstanding or differences...we shall think it our happiness to establish an intire Union betwixt the two Kingdomes." With the unsuccessful negotiations for Union of 1702, the history of the African Company is merged into that of the Union. From one point of view, the Darien episode was disastrous indeed; but it was also of use, in that the failure precipitated the crisis in the relations of the two countries. The conception of the scheme, its parliamentary authorisation, the actual settlement in Spanish territory, shewed England that her neighbour might, with favourable conditions, prove a formidable rival. On the other hand, its failure, through want of capital and experience, made plain to the Scots the necessity for money, if their trading interest were to flourish. They had already seen English capital invested in Scottish undertakings; but the experience of the African Company shewed them that the English Parliament would not allow such investments in any scheme which clashed with English interests, and over which it had no control.


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