The coast was even more beautiful than the passengers of the cargo ship “Honduras Packet” had imagined. 70 passengers from the ship were waiting to meet their new home. No one had ever been there before, but in the guidebook by Gregor MacGregor the area had been described well without saving compliments, “The spectacular climate of this precious land is a source of well-being and energy to the European settler.”
The settlers had bought land in Poyais from Gregor MacGregor, the ruler of the region. Gregor MacGregor had very convincingly described the vast natural riches of the fertile land: The water, so pure and refreshing it could quench any thirst – and as if that wasn’t enough, chunks of gold lined the riverbeds which were just waiting for someone to take them. When “Honduras Packet” sailed deeper into the lagoon, the views no longer corresponded to the guide’s descriptions. The captain dropped the anchor and fired a cannon shot to call the pilot. The locals would guide the settlers to their plots, which they had bought from MacGregor at a cheap price. No one had yet guessed that they were victim to a big scam and were in danger of losing not only their property, but also their lives- many of them would not be able to survive in their new home for even a year.
Gregor MacGregor was a veteran of the Napoleon Wars and a well-known freedom hero in South America where the colonies had risen up against Spanish oppression. The British did not know that MacGregor had fled Venezuela because he was facing the death penalty for fraud. Instead, he was seen as a great adventurer, and this hero who had returned to his homeland now offered other British people the opportunity for a great adventure. MacGregor had with him a document of ownership of more than 30,000 km2 of land in the Caribbean. The document had been granted by the ruler of the Mosquito Coast, King George Frederic Augustus I. MacGregor had bought the area honestly with a few barrels of rum and cheap jewelry, but that land was worthless and the document didn’t even make him prince of that area. However, the documents he provided to MacGregor were valuable because he was able to build and rely his scam on them.
As a newly independent country, Poyais needed international investments. Since the land MacGregor ruled was close to the planned Panama Canal, it would be an excellent investment target. What MacGregor didn’t mention was that he himself had never been to Poyais. Because the whole country didn’t even exist.MacGregor managed to raise around 1.3£ million (3,6£ billion nowadays) for his imaginary state through bonds and direct land deals. From England’s point of view, the names of the South American states changed quickly, and no one really knew who was in possession of the territories at any given moment. Therefore, when MacGregor returned to Great Britain in the middle of 1821, there was really no way to claim that he could not be the prince of the exotic Poyais. MacGregor made all the official documents, designed the uniforms for the Poyais army and printed the local currency. In addition, everyone would have the opportunity to contribute to the building of a new nation by investing in Poyais bonds. It made people excited about it.
MacGregor opened “embassies” of his state in London, Glasgow and Edinburgh to make it seem more real. Some of the Brits got so excited about the paradise named Poyais that they definitely wanted to move there. MacGregor didn’t directly say no to the idea either, because he had another way of making money in his mind. At the port of departure, the “cacique” offered to exchange the remaining shillings of all passengers for Poyais dollars. In the end, malaria and yellow fever made sure that less than a hundred of the 250 new settlers ever returned home. After that MacGregor didn’t stay to sort out the issues. He moved with his family to Paris and tried to raise money again with the same story. In France, however, the authorities no longer issued passports to settlers because their destination did not even exist. In 1825, however, he was caught in France, which extradited him to Britain. After his true identity was revealed, he was deported from Britain. When his wife died in 1838, MacGregor no longer wanted to spend his retirement days in Europe. Perhaps some of the settlers who lost their savings began to pressure MacGregor to flee. He moved to Venezuela, where old army buddies were able to get him citizenship.
He is an example to modern pyramid schemes. This story has no morals. Indeed, there is no story more immoral than this, for it plays with all the legitimate beliefs about the rewards of virtue and retribution for the wrongdoers. A career which, with no miscarriage of justice, might have ended under the dark walls of Newgate instead of the sunlight of Caracas where he died in 1845 at age of 59. He had a military funeral in Caracas Cathedral the same year. Gregor MacGregor was never convicted of any crime.
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