Published online by Cambridge University Press: 27 July 2020
This article revisits the story of one the greatest financial frauds in history: Poyais. In the 1820s, Gregor MacGregor issued bonds for this alleged fictitious Central American state on the London capital market. Putting together scattered evidence reveals a complex, multifaceted experiment undertaken by a private adventurer hoping to politically and economically position himself in a changing world. Poyais was a failed project to establish a settlement on a territory granted by an Indigenous leader and financed through British capital markets. Studying a financial failure provides nuanced insights into the political and legal frameworks defining origination processes of early nineteenth-century foreign loans. Following MacGregor’s actions entails drawing a story with contours that extend well beyond the City of London, revealing a rich set of transatlantic actors and spaces not known to be traditionally linked to the London-based capital market. The story of Poyais constitutes a window into the early financial dynamics of private colonialism and how these contributed to British imperial expansion. The Poyais loan appears as constituting a financial endeavor born from the encounter of different “worlds,” with MacGregor mediating these together but ultimately failing to legally and politically guarantee their lasting encounter.
The author would like to express his most sincere gratitude to Marc Flandreau. He thanks Pilar Nogues-Marco, Susanna Hecht, Richard White, Peter Conti-Brown, Philip Scranton, Maylis Avaro, Alberto Gamboa, Sophie Serrano, Sofia Valeonti, and anonymous referees at Enteprise & Society for their most generous comments. He is also grateful for comments from seminar participants at the Penn Economic History Forum, Philadelphia, April 2019, and the White-Collar Crime in Financial History UCBH Workshop, Uppsala, September 2019. The author acknowledges financial support from the Swiss National Science Foundation, the Graduate Institute (Geneva), and the Howard S. Marks Chair in Economic History (University of Pennsylvania). The opinions reflected in this work and any possible mistake remain the author’s.