Darién Scheme, Scottish project to establish a colony on the Isthmus of Panama (Darién). In 1695, the Scottish Parliament passed an act that chartered a company for trading with Africa and the Indies. William Paterson directed the first efforts of the company to found a colony on the Isthmus of Panama to compete with the Dutch and Spanish for trade. Stock was subscribed in England and Scotland, but opposition by the English government and by the East India Company caused English investors to withdraw. The company's two expeditions (1698, 1699) failed because of poor leadership and equipment, disease, and the hostility of the Spanish; many lives were lost. The failure, with its immense losses to Scottish investors, vividly demonstrated Scotland's commercial disadvantage outside the British realm. By the terms of the Act of Union with England (1707), Scotland secured equality in trade. Investors in the Darién venture were partially indemnified for their losses.