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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 biographer, had both to confess ignorance on these
points. On the authority of William Pagan ('Birthplace and Parentage of
William Paterson'), 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 known; but from his ready
pen, and the able manner in which he expressed himself in his numerous
writings, it may justly be inferred that the superior elementary education
provided by the parish school of his day laid the foundation of his future
intellectual attainments.
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 intercommunins: 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 afterwards, it is conjectured that he then
left England for Amsterdam, and in his visits to the coffee-houses there he
became acquainted with 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 suggestion—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 buccaneers, William Dampier and Lionel Wafer, from whom he
derived much of his information 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 considerable 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 of
Brandenburg, and to the cities of Emden and Bremen; but meeting with little
encouragement, 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,1and
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 afterwards (dated Westminster,
4th April 1709), he says—
"Your Petitioner first formed and proposed the scheme for relieving the
public credit by establishing the Bank of England; 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 establishment 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 Revolution 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 advantages. This desire for
commercial expansion was accentuated by a succession of bad harvests, which
had reduced many thousands of the population to destitution. In order to
remedy this unfortunate state of matters and give effect to the commercial
aspirations of the nation, the Scottish Parliament devoted itself to passing
several Acts fitted to stimulate home industries and foreign trade. Notably,
on 14th June 1693, it passed an important measure, entitled an Act
for Encouraging Foreign
Trade ,
wherein it was declared that Scottish companies might be formed to trade
"with any country not at war with their majesties— to the East
and West Indies, the
Straits and Mediterranean, Africa and the northern parts"; and such
companies were promised Letters Patent and the Great Seal.
The passing of this wide trading Act paved the way for the Parliamentary
incorporation of Paterson's great scheme, the Darien Company, which came
about in this wise.
The monopoly of Indian trade, enjoyed by the London East India Company, had
long been encroached upon by "interlopers," or ships sent out by private
traders, a number of which were owned by Scots merchants in London. These
gentlemen hoped to have a free trade to India, or to obtain a Charter for a
rival Company. They were disappointed in this, as the old Company not only
frustrated their efforts in that direction, but also secured a renewal of
their own Charter for other twenty-one years. This was the position of
affairs when the session of the Scottish Parliament was opened on 9th May
1695. King William expressed his regret that important engagements abroad
prevented him from meeting with them, but he sent the Marquis of Tweeddale
down to Scotland as his Commissioner, with instructions to gratify the
ancient kingdom as far as possible. In his opening address, after the king's
letter had been read, Tweeddale, among other assurances of the royal regard
for Scotland, informed the House that
"If they found it would tend to the advancement of trade that
an Act be passed for the encouragement of such as should acquire and
establish a plantation in Africa or America, or any other part of the world
where plantations might lawfully be acquired, his Majesty was willing to
declare that he would grant to his subjects in Scotland, in favour of their
plantations, such rights and privileges as he was accustomed to grant to the
subjects of his other dominions."
In the same month, May 1695, Paterson was approached by his friend Mr James
Chiesly, merchant in London, who acquainted him that there was great
encouragement given by the Scottish Legislature for establishing an East
India Company in Scotland on a legal basis,
Although the king gave his Commissioner authority to promote
any measure in the Scots Parliament for the furtherance of Scottish
commerce, it was understood that any Act that might be passed was to be
submitted to his Majesty for approval before it received royal assent. This
formality appears to have been omitted in the case of the Darien Company's
Act. At the time it was passed the king was on the Continent conducting the
war against Louis XIV. of France, and was ignorant of what was being done in
his name. This omission accounted for much of the hostility afterwards shown
by the king to the Company, and for his significant remark that " he had
been ill-served in Scotland." and
he asked his assistance in the matter. In response to Chiesly's request,
Paterson drew up and handed to him the draft constitution of a Bill for
erecting such a Company. The draft Bill, whatever Paterson's private
prepossessions may have been at the time, while giving significant
prominence to an American as well as to an African and Indian trade, did not
otherwise, on the face of it, suggest the Darien enterprise, with which it
was ultimately solely associated. Its original and ostensible design was the
establishment of an East India trade. The measure as drafted by Paterson,
having been approved by his mercantile friends in London, was carried into
Scotland by Mr Chiesly and Mr Coutts, who were favourably received by the
chief officers of State and, it may be said, by the whole of the nobility
and people of any consequence. There was therefore no fear of the passage of
the proposed Act, more especially as it had the patronage of Ministers of
the Crown such as the Marquis of Tweeddale and James Johnston, Secretary of
State, the latter of whom got the main credit of carrying it through
Parliament.
Accordingly, on 12th June 1695, the Bill was presented to the Scottish
Parliament for preliminary consideration, and after being read was referred
to the Committee of Trade. On
Friday the 21st the Bill was brought in from the Committee for further
consideration, when it was again read, amended, and approven. Thereafter it
was again remitted to the Committee of Trade, in order that the names of the
patentees or promoters—of whom ten resided in Scotland and ten in England —
might be inserted. On the Wednesday following—a fortnight after its
introduction—the Bill was reported to the House, when it was "read, voted,
and approven." Thus the great Act erecting The
Company of Scotland trading to Africa and the Indies, so
full of important issues for Scotland, passed the Scottish Parliament on
26th June 1695. It also became law on the same day by being carried to the
Throne, where it was "touched with the Sceptre" by his Majesty's
Commissioner in the usual way.
The Company was popularly known in Scotland as "The Darien
Company," from its expeditions to the Isthmus of Darien, and this title has
been followed here. It is frequently referred to by contemporary writers as
"The African Company," but the only action on the part of the Company which
justified the use of that title was their sending out to the Gold Coast of
Africa, in September 1699, a ship called the African
Merchant,
William Bell, captain. The ship returned with a quantity of gold dust,
received in barter for its cargo. This gold dust was minted into twelve- and
six-pound pieces Scots, sometimes called pistoles and half-pistoles (Darien
pistoles). The Company's crest, "the sun rising out of the sea," appears on
the coins immediately under King William's bust, and they bear the date
1701. They are further unique in respect that they were the last gold coins
issued by the Scottish Mint.
Although Paterson was responsible for the main part of the text of the Bill,
and his name appears in it as heading the promoters resident in England, he
personally had no hand in its receiving the imprimatur of the Scottish
Parliament. When giving evidence in January 1696 before the Committee of the
House of Commons, which was appointed to examine " what methods were taken
for obtaining the Act of Parliament passed in Scotland for the establishing
of the East India Company, and who were the promoters and advisers thereof,"
Paterson stated that " he did not solicit for the Act, nor knew anything of
its passing, but he heard Mr Chiesly and Mr Blackwood say that they had
solicited for such an Act formerly. He was induced to be concerned in the
matter, because there was no encouragement for such a trade in England."
Among the large powers conferred upon the Darien Company by their Act were
the following:—
1. Monopoly in Scotland of trade with Asia, Africa, or America for 31 years.
2. Goods imported by the Company during the space of 21 years to be duty
free, except foreign sugar and tobacco.
3. The Company to be empowered for the space of 10 years to equip, fit out,
and navigate their own or hired ships in warlike or other manner, as they
shall think fit.
4. Members and servants of the Company to be privileged against impressment
and arrest; and if any of them happened to be so treated, the Company were
authorised to release them, and to demand the assistance both of the civil
and military powers for that purpose.
5. The Company and their officers and members to be free from taxes for 21
years.
6. No part of the capital stock or of the real or personal property of the
Company to be liable to any manner of confiscation or arrest; and creditors
of members of the Company to have lien over their profits only, without
having any further rights over the debtors' stock.
7. The Company authorised to take possession of uninhabited territories in
any part of Asia, Africa, or America, or in any other place, by consent of
the inhabitants, provided it was not possessed by any European sovereign;
and there to plant colonies, build towns and forts; to impose taxes and
provide such places with magazines, arms, &c.; to wage war and make
reprisals, and to conclude treaties of peace and commerce.
8. Should any foreign State injure the Company, the king to interpose, and
at the public charge obtain reparation for the damage done.
9. All persons concerned in the Company, together with those who might
settle in or inhabit any of their plantations, to be declared free citizens
of Scotland, and to have the privileges thereof.
10. Letters Patent, confirming the Company's Act, to be given by the king,
to which the Great Seal was to be affixed.
11. In token of allegiance, the Company to pay yearly to his Majesty and his
successors a hogshead of tobacco in name of blench-duty, if required.
[For full text of the Act see Appendix A.] |
