The lure of easy money, a grand scheme, and a big talker: These are ingredients for a disaster in any time or place, but in 1820, they nearly brought down the English economy.
More than 300 years after Europeans bumped into the other side of the world, South America was still a land of mystery. And that's all it took for one Gregor MacGregor to pull off a great con.
An adventurer, MacGregor traded rum and jewels to a local king in Honduras for 8 million acres of swampland before he got on a ship and headed back to England. On the way, MacGregor conjured up a grand fantasy. He called his swamp Poyais, a country with 20,000 citizens who worked hard to produce three harvests a year and where globs of gold were randomly scattered about the ground.
Oh, yes — and he was king.
Well, the story charmed the British public, and they quickly bought into Poyais bonds, land in Poyais (four shillings an acre), commissions in the Poyais army, and royal titles. By 1823, those people finally wanted to see the land of plenty. But the first two of nine ships of colonists arrived to find an indigenous tribe, but no opera houses. When they were finally rescued the next year, they blew up the scheme, but MacGregor was already in France telling the same story.
The London market nearly collapsed when news broke that the Poyais bonds were worthless and could not be redeemed. Twelve banks closed and another 70 collapsed.
Meanwhile, MacGregor fled to Venezuela, where he lived in obscurity and died peacefully in 1845. According to Terra Nullius, the land of the supposed Poyais remains undeveloped in 2024.
