William Paterson and Bank of England
- Name : Paterson
- Born : 1658
- Died : 1719
- Category : Finance
- Finest Moment : Foundation of the Bank of England (1694)
Born in Tinwald, Dumfriesshire, Paterson was brought up in England from an early age. By 1686 he was established in London as a merchant and member of the Merchant Taylors' Company. In 1691 he proposed the foundation of the Bank of England, becoming one of its first directors after its establishment in 1694. So now you know who to blame for your mortgage rate.
He resigned as a director of the Bank a year later, and was unsuccessful in trying to start a rival bank. He remained Scottish at heart, and when, in 1695, the Scottish Parliament passed an act allowing for the establishment of a Company of Scotland Trading to Africa and the Indies, Paterson was energetic in raising the necessary capital in Scotland, following London's failure to do so.
Paterson suggested Darien, on the Isthmus of Panama, as a possible Scottish settlement. He and his wife and son went as private citizens in 1698, as he had been deprived of his position of a director on the company. The English East India Company went into a blue funk as they were going through a bad time and the last thing they needed was competition for their investors' money. English investors in Paterson's company were threatened with impeachment and they withdrew their money. Politics, Politics.
The Darien experiment was a disaster. Provisions fell to a low level. An attempt to buy some from Jamaica failed, as the English colonists there had been forbidden by King William to deal with them. The Spanish also resented the settlers, and as William expected a war with France he was keeping in with the Spanish, a troop of whom attacked the settlers. Yellow Fever, endemic in Panama, scythed through the Scots. Of the 1200 Scots who sailed from Leith, only 900 survived. His wife and son were amongst those who died, and he returned to Scotland in 1699, his health shattered.
A long supporter of the Treaty of Union, he was closely involved in drafting the commercial aspects. In 1707 he was elected MP for Dumfries in the first Union Parliament. In 1715, the British government awarded him compensation for his losses in the Darien Venture.