Paterson Entry in  

“The Scottish Nation;
or
the Surnames, Families, Literature, Honours
and
Biographical History of the People of Scotland”
by
William Anderson – 1872

PATERSON. A family of this name at one period possessed the estate of Bannockburn, Stirlingshire, and also a baronet­cy of Nova Scotia, conferred in 1686, but which has been long extinct. In 1745, Sir Hugh Paterson of Bannockburn, baronet, joined the rebellion. His mother, Lady Jean Erskine, was sister of the Earl of Mar, a strong Jacobite con­nection, and Prince Charles Edward slept at Bannockburn house on the 14th September of that year. Bannockburn house was also the prince's head-quarters during January 1746, Sir Hugh's grand-daughter is said to have been privately married to the prince, but she released him to promote the Stuart cause. Another Miss Paterson, belonging to a re­spectable family at Baltimore, made, in the present century, an equally romantic match, having married Prince Jerome, brother of Napoleon I.; but was obliged to separate from her husband by a dynastic divorce.

John Paterson, one of the ministers of Aberdeen, was consecrated bishop of Ross in 1662, by James Sharp, archbishop of St. Andrews. He had at one time signed the Covenant. His son, John Paterson, incumbent of the Tron Church, Ed­inburgh, was in 1674 consecrated bishop of Galloway, in his father's lifetime. He was bitterly opposed to the Presbyterians. In 1679 he was transferred to the see of Edinburgh. In 1587 he was appointed archbishop of Glasgow. At the Revolution he was deprived of his see. In 1692 he was arrested and committed to the castle of Edinburgh for plotting against the Revolution settlement, being at the time under sentence of banishment. In 1701 he was still in confinement. He died Dec. 9,1703, in his own house at Edinburgh, in his 76th year. He was the last archbishop of Glasgow, and his violent counsels seem to have contributed to the overthrow of the Stuart government His family went to England, and his grandson, an eminent solicitor in London, took an active part in the architectural improvement of the metropolis, as was recognised by the votes of the corporation, and borne witness to in his portrait by Sir Joshua Reynolds. He was a Member of Parliament and chairman of Wars and Means. With the Lord-chancellor Camden, he was one of the executors of the will of his friend, David Sattrick.

In the United States, as throughout the colonies, as well as on both sides of the Tweed, persons of this name are nu­merous. The progenitors of most of the families which bear it, are supposed to have been of Scandinavian origin.

PATERSON, William, the founder of the Bank of England, and projector of the Darien Expedition, was born at the farm of Skipmyre, Dumfries-shire, in March or April 1655. His father was a farmer, who appears to have possessed lands of his own, at some distance from the farm he held on lease. He seems to have received the education common to boys of his condition at the period, viz., grammar, writing, arithmetic, and some Latin, and, according to tradition, was destined for the Presbyterian church, but in 1672, in his 17^th year, he was obliged to leave Scotland, council warrants having been issued for his seizure, on a charge of having had communication with the persecuted ministers and others then in hiding in the wilds of Dumfries-shire. He went to Bristol, to a relative of his mother's, a widow, who, on her death soon after, left him some small amount of property. He was afterwards received into the counting-house of a relative, a merchant in London.  Subsequently, he was engaged in trade in the West Indies. There is no authority whatever for the loose statements that have been made that he was at one time a missionary, and, at another, engaged with the buccaneers. It seems certain, however, that he had acquired much information respecting Spanish America, which could only be furnished by the latter, as he had not been there himself.

On his return from the West Indies, he became eminent as a merchant in London. In 1690 he founded the Hampstead Water Company, and he was treasurer of a similar Company in Southwark. In 1691 he projected the Bank of England, taking, it is said, the bank of St. George, in Ge­noa, as a model.  The scheme met, at first, with great opposition, one of the most influential and most persevering antagonists of his 'financial views being Mr. Lowndes, the secretary of the treasury, but, being supported by the principal London merchants, the bank was established in 1694. Its shares, to the amount of £1,200,000, were taken with great rapidity. Its first body of proprietors numbered 1,300, among whom was the celebrated John Locke. Paterson himself sub­scribed for £2,000 stock, and was one of the first directors of this great national establishment. He next proposed to found the Orphan Fund bank, to relieve the Corporation of London, on account of money due to the city orphans, a project which led to his withdrawal from the bank of England. The directors conceived that he was, not entitled to do any other banking business than theirs, and, not to be restricted in his operations, he sold the stock he held as a qualification for a seat at the board, and voluntarily retired. With the bank of Scotland, founded in 1695, he had no participation whatever, although this has been  frequently erroneously stated.    

His great plan for the formation of a Company of trade and colonization in Africa and the Indies, afterwards called the Darien Company, was not at first a Scottish affair. For ten years he had offered it to the English minister, to the merchants of Hamburg, to the Dutch, and to the elector of Brandenburg, who all declined to entertain it. On the invitation of some of his countrymen he next propounded his scheme in Scotland. It is stated by Sir John Dalrymple, that that ardent patriot, Mr. Fletcher of Salton brought Paterson to Edinburgh, to submit his plan of trade to the Scottish parliament and people, and that Fletcher introduced him to the marquis of Tweeddale, then Scots minister, and persuaded him to adopt the project. Lord Stair and Mr. Johnston, the two secretaries of state, with Sir James Stuart, the lord advocate, also gave their sanction to the scheme; and, in June 1695, a statute was passed in the Scots parliament, followed by a charter from the crown, for creating a trading Company to Africa and the Indies, with power to plant colonies in places not possessed by other Europeans.

Paterson's plan was to form an emporium on each side of the isthmus of Darien, for the trade of the opposite continents. The manufactures of Europe were to be sent to the Gulf of Darien, and a thence conveyed by land across the ridge of mountains that intersects the Isthmus, there to be a exchanged for the produce of South America and of Asia; and thus, to use his own emphatic language, he would wrest the keys of the world from Spain, then in possession of South America. English as well as foreigners were admitted into the Company. The original leaders in the scheme, whose -names are inserted in the Act 1695, were nine-residents in Scotland, with Lord Belhaven, and Sir Robert Chiesley, lord provost of Edinburgh, at their head, and eleven merchants of London, headed by William Paterson and Thomas Coutts. The sum of £300,000 was, in a few t days, subscribed in London and there the first meetings, for the constitution of the Company, were held. 

This magnificent project was ruined through the infamous partiality of William III, who was mainly indebted for his crown to the Presbyterians of Scotland, and the mean jealousy of the English nation. The alarm was first excited by the East India Company and the West India merchants. In Holland and Hamburg the sum of £200,000 had been subscribed. In the latter city the English consul presented a memorial to the senate, disowning the Company, and warning them against all connection with it. But though the assembly of merchants returned a spirited reply, they soon withdrew their subscriptions, and the Dutch followed their example. Both houses of parliament, on December 13, 1695, concurred in a joint address to the king, remarkable for its absurd, narrow, and illiberal views, against the establishment of the Company. The House of Commons instituted an inquiry into the case, and after examining Paterson, his Scottish colleagues in London, and their English partners, started impeachment against them for raising money in England by shares in their Company, under an act of the Scottish parliament. Although the impeachment was soon abandoned, the English subscriptions were withdrawn, and the prospects of the Company in London were nipped in the bud. Paterson, however, waa not easily intimidated and the Scots people, indignant at the opposition which the scheme had met with in England, avowedly because it would be beneficial to Scotland, immediately subscribed £400,000, although at that time there was not above £800,000 of cash in the kingdom. So great was the national enthusiasm, that young women threw their fortunes into the stock, and widows sold ther jointures to get the command of money for the same purpose. Paterson himself subscribed £3,000 to the stock of the company. At the very outset a mishap befell the Scottish company and its pro­jector which had an adverse influence on the for­tunes of both. This was the loss of a large por­tion of the Company'’s capital, amounting to £25,000, which had been entrusted by Paterson to an agent in Holland, for the purchase of stores for the Company's projected expedition of five ships to America, but misappropriated by the latter. A board of inquiry was appointed to inves­tigate the circumstances, and their report acquitted Paterson of all blame, and recommended that his services should be continued by the Com­pany. The directors approved of the report, ex­cept as to that part relative to the acceptance of his services, and to the great detriment of the in­terests and prospects of the Company, the man who had called it into being, was not employed officially in its first expedition, and had no part in its guidance. He sailed simply as a pri­vate adventurer, with his wife, and one servant. The name of the latter stands in the Company’s books for a subscription for £100.

On the 26th of July 1698, five large vessels laden with merchandise, military stores, and pro­visions, with 1,200 persons on board, sailed from Leith to form the projected colony. On the arrival of the colonists at the isthmus of Darien, they purchased lands from the natives, and established their settlement at Acta, a place midway between Porto Bello aud Carthagena, having a secure and capacious harbour, formed by a peninisula, which they fortified, and named Fort Saint Andrew. The settlement itself they called New Caledonia; and, on the suggestion of Paterson, their first public act was to publish a declaration of freedom of trade and religion to all nations.

The infant colony was soon exposed to internal dissensions, from want of a proper head; and the native Indians continued to alarm them with preparations of the Spaniards for their expulsion. It was much harassed by the latter, and, in consequence of orders sent from England, the governors of the colonies in the West Indies and. America issued proclamations, prohibiting any succour being given to the Scots at Darien, on the weak pretext that their settlement there was an infringement of the alliance between England and Spain. But in the papers of the Darien council, preserved in the Advocates' Library, it is averred that previous to the colony leaving Scotland, the right of the Cornpany was debated before King William, in presence of the Spanish ambassador, and that, during the time the subscriptions were in course of being collected, Spain had made no complaints against the formation of the Company. Besides this, that part of the country where the colony settled was a territory never possessed by the Spaniards at all, and was inhabited by a people continually at war with them. To add to the misfortunes of the settlers, their provisions were soon exhausted, and they were indebted to the hunting and fishing of the natives for the scanty supplies they received. At the end of eight mouths those who survived were compelled, by disease and famine, to abandon the settlement, and return to Europe, Paterson himself was seized with fever, and his wife dying was buried in the colony. In his illness he was carried on board the Unicorn, one of the Company's ships, and conveyed to NewYork, where his life was for some time despaired of. On his recovery, he sailed for Scotland, and arrived at Edinburgh on the 5th December, 1698. He soon regained the confidence of the Company, was admitted among the directors, and his name appears to their subsequent acts.

In the meantime, two other expeditions had sailed from Scotland. When the second arrived they found the huts burned, and the forts demol­ished. After being joined by the third party that went out, they were attacked by the Spaniards from Panama, but having stormed the enemy's camp, they repulsed the Spanish force with great slaughter.  At last a larger force arrived from Carthagena, and, after a siege of nearly six weeks, they were obliged to capitulate, on condition that they should be allowed to embark with their ef­fects for Europe. Of the three expeditions, not more than thirty persons survived, to carry to their native country the disastrous intelligence of the utter ruin of the colony. An interesting de­scription of the rise, progress, and failure of this well-conceived, but ill-fated, undertaking will be found in Sir John Dalrymple's Memoirs of Great Britain and Ireland.

Paterson's spirit was still ardent and unbroken, and while he was among the foremost to calm the public irritation at the treatment received from the English government, to avoid a war between the two countries, which appeared imminent, he set himself to devise suitable means for recovering the Company's losses. He projected a new plan, admitting England to a large share in the advan­tages of the settlement, which he presented to the Darien Company. In 1700 he is said to have published, anonymously, “Proposals and Reasons for Constituting a Council of Trade,” a work which has been erroneously attributed to the pen of John Law of Lauriston.  Although the latter was a relative of his own, he invariably opposed his schemes as unsound and pernicious. The provi­sions contained in this pamphlet were, in 1705, embodied, to a limited extent and in a modified form, in the “Act for appointing a Council of Trade,” one of the last efforts at independent action of the Scots parliament and nation. To Paterson's enterprising spirit the trade and prosperity of his country were much indebted. He was an ardent advocate of free trade, and his principles were those which now govern the mercantile policy of this country.

In 1701, he submitted to King William his new plan of commerce and colonization in Span­ish America, in order to counteract the ambi­tions designs in Europe of Louis XIV. It was adopted by the king, with whom he had several personal interviews on the subject. The decided character of the Revolution in the politics of Europe and the acknowledgment of King James’ son by the French King, had led his majesty at last to or turn a favourable ear to the project of the Darien Company. Unfortunately, his death, soon after, put an end to the scheme altogether.

Paterson was a warm advocate of the union with England, and he was employed, both in London and Edinburgh, to settle one of the most difficult branches of the treaty, namely, the arrangement of the public accounts between the two kingdoms. In this office two other gentlemen were associated with him, Dr. Gregory and Mr. Bower, and they had £200 sterling each for the work. He was elected a member of the first Imperial parliament for the Dumfries burghs, but there being a double return, a Mr. Johnstone having been also chosen, he was unseated on petition.

In the last Scots parliament, resolutions had been passed recommending Paterson to her Majesty for his good services, but the recommendation, like many others, was disregarded. By the treaty of union, a sum amounting to nearly £400,000 was agreed to be paid by the United Kingdom, as an indemnity to Scotland, for the losses sustained by the Darien Company, and this was secured by an act of the Imperial parliament. Of this money Paterson claimed about £30,000, chiefly founded on his contract when forming the Company, and a special act of parliament passed in his favour in 1708. The Court of Exchequer decided that he had "a just right to be paid out of the equivalent money," and "in regard that he had been very instrumental in carrying on other matters of a public nature, much to his country's service, the judges thought it just that some way should be found to give him the recompense for his services he merited, and of which he had been disappointed." Pursuant thereto, the House of Commons, March 18, 1708, passed a resolution in Paterson's favour, in regard to his Darien claims, " and likewise that such a recompense be given to him as might be suitable to his services, expenses, losses, and public cares." The ministers of Queen Anne, however, were not to be moved into doing him justice, and it was not till after the accession of George I, and he had been reduced to great poverty, that he obtained the sum due to him.

Meantime he continued to urge financial reform on the attention of ministers. A representation which he made to Lord-treasurer Godolphin, in December 1709, on the disorders of the finances, was disregarded. Lord-treasurer Harley, Godolphin'a successor, adopted some of his views, but did not employ him. He had presented a memo­rial to ministers on his claim and stating his distress, but all the relief he seems to have got were two or three sums of £100 and £50, which stand opposite to his name.in Queen Anne's boun­ty list in 1712 and 1713.

His latter years were spent in London, and it is believed that, in the period of his extreme dis­tress, he taught mathematics in Westminster. In 1703 he proposed that a public library of agricul­ture, trade, and finance, should be formed, and gave his own books towards founding such an institution in London. It is thought that he was the original of Addison's Sir Andrew Freeport in the 'Spectator.' 

Having, on the accession of George I. to the throne in 1714, presented a memorial to his Majesty, the latter referred it to his Treasury, and an act of parliament was passed, whereby Paterson obtained the sum of £18,241 10s. 10 2/3d., charged on the Scottish equivalent. His last successfol effort in finance was the construction of the Sinking Fund in 1717, for the redemption of the national debt, which is still an essential element in our financial system. He died, January 22, 1719. In the obituary of the 'Register' of 1718-19, he is styled "the great calculator."

He was a voluminous writer on mercantile and financial subjects, but all his works were published anonymously. A volume entitled “William Paterson, the Merchant Statesman, and Founder of the Bank of England: his Life and Trials.” by S. Bannister, M.A., formerly Attorney-general of New South Wales, was published at Edinburgh in 1857. The author mentions the following as among his principal publications:

A Brief account of tile Intended Bank of England. London. 1694, 4to.

The Occasion of Scotland's Decay in Trade; with a proper Expedient for Recovery thereof, and the Increasing our Wealth. 1706,4to.

Proposals and Reasons for Constituting a Council of Trade, 1700. This work was reprinted in 1751, by Robert and Andrew Foulis, Glasgow, and by them erroneously attributed to John Law of Lauriston. This mistake led Professor Dugald Stewart in 1761, to mention Law as its author, but there can  be no doubt it was written by Paterson.

An Inquiry into the Reasonableness and Consequences of an Union with Scotland. With Observations thereupon, as communicated to Lawrence Philips, Esq., New York. London, 1706, 8vo, p. 160.

Essay Concerning Inland and Foreign, Public and Private Trade. 1705.

Fair Payment is no Sponge. 1717. A tract written in reply to a pamphlet by one Broom, against the proposal of a Sinking Fund, entitled “No Club Law,” declaring that it would apply a sponge to the public debt.   

                .

Wednesday Club Conferences. London, 1717.

Several of Paterson's Letters are contained in a volume entitled  “The Darien Papers, being a selection of Original Letters and Official Documents,” relating to the Company, printed by the Bannatyne Club in 1849, from the manu­scripts preserved in the Advocates' Library.

Of his other numerous writings it is impossible now to give even the titles.

An Historical Romance, entitled  “Darien; or the Merchant Prince,” by Eliot Warburton, published in 1852, in 3 vols, is founded on the Darien expedition, and has William Paterson for its hero. So imbued with admiration of Paterson's character and genius was the author, that he was proceeding to the very scene of his enterprize, with the view of promoting its revival, when, with all on board, the ship went down, and was lost at sea.

Paterson's family are said to have been related to that of Paterson, Archbishop of Glasgow.