You don’t need a canal. Ships would go from Asia to Panama, unload on smaller ships along the rivers and worst case roads to new Edinburgh on the east coats. The Scotland company would either buy on the west coast and sell in the east, taking their profit on the way, or buy in the west, load on company ships in the east and then sell in Europe.
Still better than sailing through the Magellan straight.
They wanted to be like the other European powers and get in on the wealth America had to offer.
The Scots saw an opportunity in creating an overland trade route that can run goods from the Atlantic to the Pacific. A sort of less efficient pre-cursor to the Panama Canal.
They also had the wealth to do it after a quick wealth consolidation move, so why not?
They were not to know that their destination would be completely inhospitable, their trade good of choice (trinkets and wool) was worthless to the natives and passing merchants, the climate was unbearable to a native Scot, the land was unusable, the accidents, threat of Spanish attack, and the wealth gathered to make the trip was… shadily put together lets say…
There was no risk assessments back then, they took a shot and it missed.
To my knowledge, the ONLY wealth gathered from this absolute disaster was in a small bit of turtle hunting. The meat and shells would have sold for a good price. But the death rate of up to 10 colonists per day in a newly established colony meant this was aggressively unsustainable.
There were two expeditions, and of the 3.5k+ colonists that went, only a few hundred returned to Scotland.
An interesting footnote to this absolute failure is that this was likely a driving factor to Scotland unifying with England. The Scottish elite saw this colony as a path to European power, but when it failed the only other option available to them was to unify England to form Great Britain. The Scottish aristocracy had lost a fuck tonne of money, and in unifying with England, the lions share of their debts were written off. So this is something that we’ve never seen before, rich people were good at staying rich, even back then.
A canal through Panama has been conceptualised for almost as long as Europeans have known about the Americas. Even today, not everything passes through the canal. There is a Panama Canal Railway (which predates the canal) and road trucking which carry goods across Panama. Ports on both the Atlantic and Pacific load and unload goods moving between the two. In the 17th century it would have likely been horse or ox-carts which would have moved goods between the two oceans over land until the canal was completed.
Basically misinformation, specifically that it would be easy to build a land route across the Panama isthmus. IIRC there was a sailor who swore that it could be done and people took him at his word.
The plan was some ‘light’ colonialism and to make a lot of money charging tolls to use their road.
Of course this was a ridiculous fantasy that was an utter failure which bankrupted many individuals (this venture was largely bankrolled by the general public) and the fallout played a large part in signing of the Treaty of Union.
I’m in no way an expert on the subject, but the Panama canal is about 50 miles wide. Sailing around South America at the time took about 2 months on average from NY to SF (based on rough Google search) while the canal cuts that trip from about 13k mile to about 5k miles. So let’s say it takes about 1 month to do the 5k miles. With a primitive road and horses, you can easily push 10-20 miles in a day of travel by road, so you can cut over 3 weeks off your journey by using 2 boats and transporting cargo overland between the 2 (minus loading/unloading time). Then with trains, that gets even quicker to move even more cargo. Not to mention there is much less risk crossing land for several hours/days than sailing around cape horn, which is known to be extremely dangerous sailing territory, for a month.
In theory, the route through Panama could almost double your trade volume/time period while being less risk than sailing