From all accounts it was a paradise in the new world: rich soil for farming, a temperate climate for European settlers, a thriving mercantile community in the capital of St. Joseph (where most people spoke English), and plenty of land and cheap labor to go around. Moreover, it was looking for new settlers and investors.
MacGregor convinced London banks to back about £200K in Poyaian securities and bonds. The securities that he later traded with speculators would today be worth over £1 billion in today’s currency. He opened an embassy in London, sold books on Poyais, traded Poyaian currency, and sold hundreds of plots of land in the new country.
He also arranged passage for hundreds of settlers to travel to this Latin American paradise. In 1823 two ships bearing about 250 settlers arrived on the Mosquito Coast. Many of these settlers were fellow Scots who were swayed by MacGregor’s promise of a new “Scottish Colony” in Poyais and a chance at a new life.
What they found was an inhospitable jungle infested with mosquitos. Poyais did not exist.
They assumed a mistake had been made—surely Poyais was somewhere further along the coast and would send ships to rescue them. In the meantime they stayed in the jungle for months. Then the rainy season hit, and malaria and yellow fever became rampant.
Between disease, starvation, and despair, over 180 of the 250 settlers perished before they were rescued by a ship from British Honduras. The survivors either returned to Great Britain or settled in Honduras and the United States.
When the survivors shared their story with the newspapers, the truth finally came out—everyone had been taken for fools. MacGregor had invented an entire country.