William Paterson (merchant)

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William Paterson

William Paterson (born April 1658 in Tinwald , Dumfriesshire , † January 22, 1719 in London ) was a Scottish merchant , author and politician . He was the founder of the Bank of England and the initiator of the failed Scottish colony of New Caledonia in Darién, Central America .

Beginnings

Paterson was born into a poor family on a farm in Scotland. He was probably brought up with relatives in Bristol . At the age of 17 he emigrated to Boston, Massachusetts , where he married Elizabeth Turner, the widow of a Presbyterian minister. From there he moved on to the Bahamas and Central America. At the beginning of the 1680s he returned to Europe, where he established business relationships in Hamburg and Amsterdam, among others. He became a member of the Worshipful Company of Merchant Taylors on November 16, 1681 , the guild of cloth merchants. He grew his fortune considerably in the 1780s and became known in the Lombard Street coffeehouses as a proponent of sophisticated business ideas.

The Bank of England

In 1692, Paterson first appeared before a parliamentary committee whose task it was to find new funding opportunities for King William's War . Paterson's proposal was to set up a public company whose assets could be used to offer the government low- interest loans. This would allow shareholders to receive interest profits on their deposits, the company would profit from the difference between the dividends paid to shareholders and the interest rate on government loans, and the government would have a permanent and reliable source of money.

Paterson's first proposal was rejected as "too Dutch". So shortly after the Glorious Revolution (1688/89), in which England voted for the Dutch governor Wilhelm III. von Orange-Nassau had decided as king, no further Dutch influence was wanted. Only the third version of the plan, worked out by Paterson, the merchant Michael Godfrey and the Treasury Secretary Charles Montagu , was adopted in 1693/94. Montagu, who expected a deficit of one million pounds, introduced Paterson to other ministers and parliamentarians. In April 1694 a law was passed that diverted the income from various taxes (including alcohol taxes) once into a fund that was to be used to set up the Bank of England.

The subscription period began on June 21, 1694, after only 10 days shares worth 1.2 million pounds had already been subscribed. The bank was officially incorporated on July 27, with Paterson named one of its 24 directors. His new plan for an (interest-bearing) fund for the benefit of London orphans was seen by the other boards of directors as competition for the bank, and Paterson was urged to resign. On February 27, 1695 he indignantly resigned his mandate and sold his shares in the bank.

Scotland

Contemporary map of Darién

Paterson had met Andrew Fletcher , Laird of Saltoun, in London . In the spring of 1695 they both traveled to Scotland together. Saltoun's neighbor in Scotland, John Hay, 1st Marquess of Tweeddale , was Lord High Commissioner, that is, he was the personal representative of James II in the Scottish Parliament. Paterson and Fletcher wanted to get support from him for Paterson's plan for a colony in Central America, more precisely in Darién, Panama . The timing was ideal, Hay was under great political pressure to hold those guilty of the Glencoe massacre accountable. The project of a colony in Panama came in handy as a distraction for Hay: In the opening address to Parliament in 1695, he announced a law to promote a Scottish colony. The law included the founding of the Company of Scotland Tradeing with Affrice and the Indies (Scottish Company to trade with Africa and the East Indies ).

The details of the law reveal the intentions of Scotland: The company had a monopoly on non-European trade in Scotland for 31 years, it was tax-exempt for 21 years, it was allowed to build and equip ships for 10 years, and last but not least, it had the right to To seize "uninhabited land". In the legal text both the trade with "the Americas" and the building of warships were explicitly mentioned. In his proposals, Paterson had dreamed of a central trade hub between Europe and Asia, the realization of Columbus' dream . He claimed that Darién was not owned by the Spaniards and described life there in an overly positive light: the soil was fertile, the climate temperate, the sea full of (edible) turtles and the terrain flat and ideal for transporting goods between the oceans .

Company of Scotland

After English economic interests had prevented a sale of bonds of the Company of Scotland in London, the subscription book was finally opened on February 26, 1696 in Edinburgh. Within a few weeks, bonds worth £ 400,000 had been subscribed, the equivalent of roughly a quarter of Scotland's national wealth. Paterson had given his colony-related documents to the company, had given his friend John Smith a substantial sum from the company's inventory for initial purchases, and was now traveling to Hamburg to recruit German and Dutch financiers.

In Hamburg he found out that the English consul Sir Paul Ryant was successfully raising the mood against him and the Company of Scotland. Without the support of continental European bankers, Paterson returned to Edinburgh, where he learned that Smith had embezzled the Company's money and left for London. Paterson was acquitted of all charges, but excluded from running the company.

In spite of everything, when the expedition fleet finally left for Darién in 1698, Paterson, his wife and their toddler were among the passengers. In October they reached the Caribbean, the fleet seized an uninhabited island between Puerto Rico and St. Thomas and hoisted the St. Andrew's flag of Scotland. To the surprise of the settlers, they were soon told by an officer who had been sent to St. Thomas by the English that “their” island was owned by the Danish king. A pirate named William Alliston, whom Paterson knew from his first visit to the Caribbean and who had observed the Scottish fleet, agreed to show the fleet the way to Darién on his behalf.

Darién

The peninsula on which New Caledonia was founded

On November 2, 1698, the fleet anchored in the Bay of Darién . Contacts with the native Indians were positive. They understood Spanish and were pleased that the newcomers were not Spanish. The Scots made a “contract” with the local leader, Andreas. They chose a small peninsula as a settlement and built the first huts of New Caledonia . The tropical climate soon claimed its first victims - Paterson's secretary Thomas Fenner, for example, died on the day of arrival in Darién an der Ruhr , and Paterson's wife and child shortly afterwards.

Continuous rain prevented the planned cultivation of crops, and it turned out that a large part of the supplies had rotted in the ships. The urgently awaited ship with supplies of food failed to materialize because it had already sunk off Islay , still in Scottish waters.

At the beginning of May Paterson, suffering from a fever, wrote a letter which he gave to a sloop sailing to Jamaica . He asked for supplies and assured that the colony's success would make the Company of Scotland's stocks the most valuable in Europe. Two weeks later, a Scots ship met one from England, the captain of which handed over a proclamation from the Governor of Jamaica in which all Englishmen were threatened with punishment not to give any assistance to the Scottish settlers. This news and an attack on Darién by a small Spanish contingent sealed the fate of the colony; the settlers decided to withdraw. The still feverish Paterson was brought to one of the ships, the Unicorn , to protest .

return

Half of the crew of the Unicorn , which had to be abandoned as wreckage in New York, died on the journey north . Paterson moved to the Caledonia , with which he finally reached Glasgow on November 21, 1699 . Still weakened, it took him 14 days to travel 70 kilometers to Edinburgh, where he was to report.

The catastrophic failure of the expedition to Darién weakened Scotland's finances and thus the Scottish position vis-à-vis England considerably. The Act of Settlement of 1701 and the Act of Union of 1707, which meant the unification of Scotland and England, were accepted by the Scottish Parliament, not least because of the dire financial situation. In the course of the unification, England paid the sum of 398,085 pounds and 10 shillings to Scotland, of which 232,884 pounds and 5 shillings were made available to the investors in the failed Darién project as repayment with 5 percent interest. The calculation of these sums was incumbent on Paterson.

In 1716, Paterson was instrumental in planning the redemption bond initiated by Robert Walpole . He spent his final years in Westminster and died there in 1719.

literature

swell

  • The writings of William Paterson, founder of the Bank of England . Ed. by Saxe Bannister, reprint of the edition WP Nimmo: London 1858, New York 1968.

Representations

  • Norman Davies: The Isles. A history . Macmillan, London 1999, ISBN 0-333-76370-X , pp. 663-694.
  • Simon Schama: A History Of Britain 1603–1776 . BBC Worldwide Ltd., London 2001, ISBN 0-563-53747-7 , pp. 332-337.
  • John Patterson MacLean: Settlements of Scotch Highlanders in America . The Helman-Taylor Co., Cleveland 1900, Chapter 4 ( accessible online ).

Web links

Individual evidence

  1. ↑ Patterson's Latin motto, which goes back to Virgil , Sic vos non vobis (loosely translated: “you [work], but not for yourselves”) describes the service to the general public, without any direct personal benefit.
  2. ↑ Norman Davies: The Isles. A history . Macmillan, London 1999, ISBN 0-333-76370-X , p. 664.
  3. ↑ David Armitage : Paterson, William (1658-1719) , Oxford Dictionary of National Biography, Oxford University Press, Sept. 2004; Online Edition, October 2006 as of May 22, 2007
  4. ^ Street of the Bankers in London, but also the location of coffee houses such as Lloyd's Coffeehouse . One of these coffeehouses belonged to Paterson's second wife, Hannah Kemp.
  5. ↑ This means that he must have been an English citizen at the time.
  6. ↑ David Armitage: Paterson, William (1658-1719) , Oxford Dictionary of National Biography, Oxford University Press, Sept. 2004; Online Edition, October 2006 as of May 22, 2007
  7. ↑ Lord Macaulay: The History of England . Vol. IV, pp. 469-471. Quoted from Norman Davies.
  8. ↑ Norman Davies: The Isles. A history . Macmillan, London 1999, ISBN 0-333-76370-X , p. 674.
This version was added to the list of articles worth reading on May 15, 2007 .
personal data
SURNAME Paterson, William
BRIEF DESCRIPTION Scottish merchant, author and politician
DATE OF BIRTH April 1658
PLACE OF BIRTH Tinwald, Dumfries and Galloway
DATE OF DEATH January 22, 1719
Place of death London