What’s in a fraud? The many worlds of Gregor MacGregor, 1817–1824

Journal article

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.

Authors: Clavel, D

• Publication status: Published
• Peer review status: Peer reviewed
• Publisher: Cambridge University Press
• Journal: Enterprise and Society
• Volume: 22
• Issue: 4
• Pages: 997-1036
• Publication date: 2020-07-27
• Acceptance date: 2020-04-28
• DOI: 10.1017/eso.2020.25
• EISSN: 1467-2235
• ISSN: 1467-2227
• Language: English
• Keywords: financial fraud; capital markets; colonialism; FFR; Latin America; Europe 19th