IF you have more pennies than you know what to do with, you put them into a savings bank, and, if you leave them there long enough, other pennies are added to them. These other pennies are called interest. But the man at the bank, when he takes your pennies, does not lock them up in a cash box and leave them there. If he did, you would never get interest, any more than if you put your pennies into a box at home. The interest does not grow by magic. When you put your pennies into a bank, you really lend them to the people who manage the bank. They use them to buy and sell and so make more money, and they are then able to give you interest, that is, they pay you for having lent them your money.

Of course you cannot buy much with a few pennies, but when hundreds and thousands of people all put their money into the same bank, it comes to a large sum, and with this large sum the bank managers are able to do great things. In this way money is 'circulated,' that is, instead of lying in a box locked up, doing no good to any one, it passes from one person to another, making every one richer and more comfortable.

There are many things about banks and banking that are very difficult for little people, and indeed for grown up people too, to understand, and I am not going to try to explain them. They are so difficult, that up to the time that I have been writing about, there were no proper banks in Britain, where people could put their money and be sure that it was quite safe. But at this time a clever Scotsman called William Paterson went to London. He was so clever, that he made the English people listen to his ideas about banks, and very soon the Bank of England was started. And that bank which William Paterson founded in 1694 A.D., is to-day the greatest and richest bank in the British Empire. When it was founded, people were very much afraid that their money might be stolen, so the King was asked to send some soldiers to guard the house which was used as offices. This the King did, and to this day, in London every evening, you may see soldiers march into the courtyard of the Bank of England, to keep guard all night over the people's money.

But besides being a banker, William Paterson was a merchant. He saw that the English made a great deal of money by trading with other countries and by founding colonies in far lands. He saw no reason why Scotland should not do the same, and from being a poor country, become a rich country like England.

When he was young, Paterson had travelled a great deal. He had sailed far away over the sea, and had seen many a strange land. Now he formed the plan of founding a Scottish colony on the narrow neck of land which joins North and South America.

If you look on the map, you will see that the land, at a place called Darien, is very narrow indeed. It seemed to Paterson that this was a splendid place at which to form a colony. On the one side was the Atlantic, on the other the Pacific Ocean, and the narrow neck of land between them might be made the centre of all the trade of the world. To get to India, ships had to pass round the stormy, dangerous Cape of Good Hope. But with a Scottish colony at Darien, that would no longer be necessary. Ships would then sail across the Atlantic; they would unload at Darien; in one day the cargoes could be carried across the narrow neck of land to ships on the other side. In this way time would be saved, danger avoided, all the trade of the world would pass through Darien, which would become the gate of the sea, and the key of the universe.

It was a glorious idea, and looking far into the future, Paterson seemed to see Scotland made great and splendid by her merchants.

Scotland was still sore and angry with the memory of Glencoe, and those who were at the head of affairs welcomed any plan that would take people's thoughts away from that dark deed. The Master of Stair, although he could not understand why people hated him instead of looking upon him as a hero, saw that he had made a mistake, and he did his best to help Paterson.

The King, too, would gladly have had the people forget Glencoe, so he gave them leave to form a company, which was to be called the Company of Scotland trading with Africa. This company was to be allowed to found colonies and to build cities, harbours, and forts. If their ships were taken or hurt by the ships of other lands, the government promised them help and support, besides other favours.

All Scotland was full of excitement. Every one who had saved a little money brought it to the Company, hoping that their few savings would come back to them like a golden harvest. English people too wanted to join, and sent money. Everything went well. Then suddenly some of the people in England became jealous. They got a foolish idea into their heads, that if the Scots became wealthy, and did a great deal of trade in far countries, it would hurt the English and make them poorer. They wanted to keep all the trade and wealth to themselves, and so they made up their minds to stop the Scottish Company being formed.

This was very greedy and very unjust, but so strong did the feeling become, that at last the English Parliament asked the King to stop the Company of Scotland, because it would spoil English trade. And the King, instead of standing by the Scots, who were as much his people as the English, said that he had been ill served in Scotland, and hoped that some remedy might be found for the evils which seemed likely to arise from this new Company. When the English Parliament and the King talked like this, the English people became frightened, and would give no more money to the Scottish Company.

The people of Holland, King William's other country, also wanted to join the company, but when they saw that it was likely to lead them into a quarrel with the English, they too drew back.

In spite of all this opposition, the Scots resolved to go on with the company, and the people were so enthusiastic and eager about it, that although Scotland was a poor country, all the money which was needed to start with was soon gathered.

Every one was full of hope and excitement, and every one thought that his fortune was made. It was known that gold was to be found at Darien, and they had visions of their ships coming home laden with the precious metal.

When enough money had been gathered, the company bought five ships from the Dutch, and in them, twelve hundred men and women set sail from Leith for the new colony.

It was a bright, sunny day in July when they started. All Edinburgh seemed to come to see them off. The quay was crowded with people who had come to bid their friends farewell, and to wish them good luck. There were tears and laughter, prayers and blessings, as last good-byes were said, last hand-shakes given. Then the five vessels sailed out into the waters of the Forth, and never did ships carry a burden of more happy hopeful hearts.

After many weeks upon the sea, the colonists at last safely reached Darien in the beginning of November. Darien was inhabited by Indians. They were a savage people, but they received the new settlers kindly, and, in return for some of the goods which the colonists had brought with them, they gave them land upon which to build.

The colonists at once began to build a town, which they called New Edinburgh, and a fort, which was called New St. Andrews. The country they called Caledonia, which is an old name for Scotland.

For a time things seemed to go well. Every one worked with a will. All day long the sound of axe and hammer was heard, and the little town of wooden houses grew rapidly. But while the colonists were busy building, the weeks and months slipped past. The food which they had brought with them was nearly all used up. Anxiously they turned their eyes towards the sea, watching for a ship bringing the food which had been promised from Scotland. No sail appeared. Day by day the portions served out to each man grew smaller and smaller. 'l'lie work went on slowly, for men who are always hungry cannot do much. Still they hoped, and still they watched, but no white sail glimmered on the cairn blue sea.

You know that near the Equator the world is very much hotter than in what is called the temperate zone, where the British Isles are. Darien lies near the Equator. When the colonists arrived, it had been winter time, and they found the climate very pleasant. Now summer had come. The terrible tropical sun blazed down upon these tired, hungry men. There was no coolness anywhere. Inside the little houses it was dark and close, outside, a burning torment At night, foul mists rose from the marshes round, bringing deadly sickness with them. Struck down by hunger and disease, hundreds died. Every day, with sad hearts, the colonists laid some tired comrade in his last resting-place.

But although Scotland was far off, there were English colonies in America quite near. So now the Scottish settlers sent to them, asking for food and help. But the English colonists had been told that the Scottish settlers had come to Darien without leave from the King, and that therefore they must not be helped. This was not true, but the English colonists believed it, and refused their starving fellow-subjects the slightest aid. They let them die.

The savage Indians were kinder, and brought fish and wild animals which they had caught, to the hungry white men. But all that they could bring was not enough. Day by day more and more died, and at last, filled with despair, the few who were left went on board one of their ships and sailed away from the dreadful place.

Meanwhile, in Scotland there had been a very bad harvest. It was so bad that there too many people were starving, and there was no food to spare to send to Darien. But the Scots, feeling sure that their settlers would be able to get food from the English colonies, were not greatly disturbed. At length the bad time passed, and a fresh fleet, carrying new stores, and thirteen hundred men, set out for the golden land of Darien.

They had a bad passage, and one of the ships was wrecked on the way. But at last they sighted land, and all the difficulties and dangers were forgotten in the thought of the glad meeting with their comrades.

But as they neared the shore their hearts sank. No flag fluttered from the silent fort; no gun answered their salute. No smoke rose from the deserted town; all was silent and still. The new colonists landed. Instead of shouts of welcome, they heard only the scream of sea birds. Instead of a busy, prosperous town, they found a ruined fort, shuttered houses, grass grown streets.

It was a sad beginning, but the new colonists would not despair. They began to rebuild the ruined town and to cultivate the fields, which had even in so short a time grown wild again.

Two months later, another ship arrived, bringing three hundred soldiers. These came none too soon, for the Spaniards, who had founded a colony near, seeing that King William would give his people no help, threatened to attack the Scots.

Already disease and death had begun to waste the little colony a second time, and daily their numbers grew smaller. The Spaniards then determined to crush them altogether, and gathered an army of sixteen hundred men, and eleven battleships.

With only two hundred men the Scottish captain, whose name was Campbell, marched against them. lie surprised the Spaniards, defeated their whole army, and put them to flight, killing many of them. Then, with his gallant little army he marched back again to fort St. Andrew, only to find it bombarded by the Spanish ships.

For six weeks the little fort held out. They had no food left, the Spaniards had cut off their supply of water, they had no more shot, even the pewter plates and dishes having been melted down to make balls. All the officers, and many of the men, were killed, when at last Captain Campbell surrendered.

The Spaniards were so filled with admiration for their gallant foes, that they allowed them to march out with all the honours of war.

One morning the gates were opened, and with banners flying the sad little company marched down to the harbour. There were so few of them that they could only man one ship. They chose one called the Rising Sun. With what glad hearts, with what high hopes, they had set sail in that same ship. Now, with broken hearts and crushed hopes they crept on board again. The Rising Sun, which had seemed such a good name, now seemed a mockery.

The men were so weak and ill that they could not raise the anchor. They were so helpless that had the Spaniards wished they could have killed them every one. But instead, they helped them to raise the anchor and to steer the ship out of harbour, and at last they sailed away. Of all those who had gone out so full of hope, not more than thirty broken, worn men ever reached home again.

So ended William Paterson's brilliant dream.