Economic Aspects of Tobacco During the Colonial Period 1612-1776

In 1612 John Rolfe, an Englishman sent with the Virginia Company, found that tobacco would grow well in Virginia and sell profitably in England. This was wonderful news considering that many of the Jamestown colonists had died or suffered miserably as their farming efforts had been relatively unsuccessful. Throughout Virginia and the greater Chesapeake, the potential cash value of tobacco soon captivated the imaginations of the colonists. They began to plant it in every available clearing, from fields to the forts and streets of Jamestown, and eventually to much of Tidewater Virginia. "Dominating the Virginia economy after 1622, tobacco remained the staple of the Chesapeake colonies, and its phenomenal rise is one of the most remarkable aspects of our colonial history."

As gold and silver became scarce, and the use of wampum was terminated because of its complications, the Chesapeake colonies were able to rely on tobacco as a means of currency. Tobacco was the safest and most stable currency that the Chesapeake colonies had or could have, and it always had a value in exchange for gold.

As economic subsidiaries of England, the Chesapeake Colonies were bound by the mercantile system. This system enabled England to receive raw goods from the colonies, turn them into finished goods, and market them to the rest of the world.

In exchange for providing England with seemingly endless supplies of natural resources, the colonies were forbidden any production or trade outside of this arrangement. As the desire for tobacco grew in England, and the need for supplies grew in the colonies, the colonists were able to trade equally for goods from England without having to worry about the scarcity of the product. Thus, by necessity, it became the leading item of commerce with England.

In addition to being employed for purchasing goods, the tobacco currency was also used to pay fines and taxes. For example, persons encouraging Negro meetings were to be fined 1000 pounds of tobacco; owners letting Negroes keep horses were fined 500 pounds tobacco; if a person wanted to become married, he had to go to the rector of his parish and pay the man so many pounds of tobacco; a man's wealth was estimated in annual pounds of tobacco.

Tobacco also affected the government as all laws were made more or less with reference to it: to protect it, and to maintain its value in price, so that many of the civil and some of the criminal processes, were affected by it.

Tobacco provided the colonial governments of Virginia and Maryland with one of their principal sources of revenue. A duty of two shillings, or about 20 cents, levied on each hogshead of tobacco exported from those colonies yielded Virginia 3,000 pounds, or $4,541 in 1680, and 6,000, or $9,082, a year during 1758-1762. In Maryland the proceeds were steady at 2,500 pounds, or $3,784, a year from 1700.

As the tobacco colonies' populations increased, so did their production of tobacco. With the rise in production of the staple crop, exports to England rose drastically. Imports of tobacco into England increased from 60,000 pounds in 1622 to 500,000 pounds in 1628, and to 1,500,000 pounds in 1639. By the end of the seventeenth century, England was importing more than 20,000,000 pounds of colonial tobacco per year.

Despite this growth in tobacco production, problems in price-stability and quality existed. In 1660, when the English markets became glutted with tobacco, prices fell so low that the colonists were barely able to survive. In response to this, planters began mixing other organic material, such as leaves and the sweepings from their homes, in with the tobacco, as an attempt to make up by quantity what they lost by low prices. The exporting of this trash tobacco solved the colonists' immediate cash flow problems, but accentuated the problems of overproduction and deterioration of quality.

As the reputation of colonial tobacco declined, reducing European demand for it, colonial authorities stepped in to take corrective measures. During the next fifty years they came up with three solutions. First, they reduced the amount of tobacco produced; second, they regularized the trade by fixing the size of the tobacco hogshead and prohibiting shipments of bulk tobacco; finally, they improved quality by preventing the exportation of trash tobacco. These solutions soon fell through because there was no practical way to enforce the law. It was not until 1730, when the Virginia Inspection Acts were passed, that tobacco trade laws were fully enforced.

The memorable Inspection Acts revolutionized tobacco regulation and became a permanent feature of trade until the War for Independence. The Inspection Acts established public warehouses with official inspectors and required planters to transport every hogshead of tobacco in the colony to a warehouse for inspection. The inspectors were empowered to break open each hogshead, remove and burn any trash, and issue tobacco notes to the owner specifying the weight and kind of tobacco.

After 1730, Marylanders became aware that the inspection system gave Virginia a great advantage over Maryland by raising the quality and reputation of its' tobacco. In 1747 the Maryland assembly passed the Maryland Inspection Acts which remained a permanent feature of the trade in Maryland.

The system worked like this: if the planter turned in his tobacco "loose" or in bundles he received a receipt known as a transfer note, which entitled the holder to a certain number of pounds of tobacco drawn at random from the total stock of transfer tobacco. Transfer tobacco was derived from several sources. It often happened that after filling his hogsheads, a planter had an insufficient quantity left over to fill another. This excess was usually delivered to the warehouse, where the planter would receive a transfer note to cover it. The clergy, innkeepers, artisans, and others, whose main occupation was something other than tobacco planting, often tended a small patch in their spare time in order to meet the various country and parish levies, and to make purchases in local stores. The people carried their small quantities to the warehouse and received transfer notes that could either be sold or tendered as payment of debts, fees, and taxes.

There were two major kinds of tobacco present in the Chesapeake colonies; Oronoco and Sweetscented. Each was distinguished by its different thickness, texture, and shape of the leaf. The Oronoco leaf was bulkier, coarser, and had a sharper look like a fox's ear. The Sweetscented leaf was rounder and had finer fibers. Oronoco, which was grown all around the Bay, was stronger in flavor, while Sweetscented, which was grown on the banks of the James, York, Rappahannock, and Potomac rivers, had a milder taste. Sweetscented was considered the best in the world and as a result it brought a better price than Oronoco. However, Oronoco, which was thought to be too strong for the Englishmen, was in great demand in the rest of Europe. For that reason Oronoco, although inferior by English standards, came to have a much wider market than the Sweetscented, and was usually more profitable to planters.

Although less strenuous than many other occupations, tobacco production was not without its anxieties and dangers. The planter always ran the risk of crop failure, loss from improper curing and prizing. This detailed attention caused a laborer to cultivate no more than 3 or 4 acres of plants. In addition, like other agricultural products, tobacco was greatly affected by the weather. A dry spell in the spring or fall delayed planting. On the other hand, an extreme wet spell drowned the tobacco and ruined the crop by causing the leaves to spot.

It neither supplied food to him nor fodder to his beasts; it could not yield him roof-timber nor firewood. He had to shelter, watch over, nurse it at every stage of growth and curing, for never was there a more tender plant or one subject to a greater variety of plagues, diseases, and disasters. The preparation and sowing of a tobacco seed bed was a process as elaborate as the making of pillow-lace; the weather, a fly, a dozen various accidents, may have defeated a planters prospects of a supply of plants. Not until the summer came, after a year of growing the delicate tobacco and until seventeen months had elapsed, were the planter's troubles over. Then at last he brought his crop to market, had it sampled, and sold it for half the price he expected to get for it.

Another increasing problem was that tobacco was extremely exhausting to the soil. After three years of being harvested, the tobacco had exhausted the soil of its nutrients, leaving much of the land worn out and of no use to farmers. For example, in Montgomery county, by 1783 much of the land had become a relatively barren landscape thus forcing many people to move on in order to have any opportunity of succeeding economically. In order to solve the need for more land, many settlers bribed the Native Americans into taking pots and pans and other various items that the natives had never seen before. In exchange for these novelties, the natives lost control of ancestral lands in and around the Chesapeake region. As a result, the colonists were able to take away the natives' land without much resistance.

In Maryland's slavery-dominated southern counties, "instead of homes or barns,... settlers invested much of their money in an institution that was an important element of the contemporary landscape--slavery. Slaves served as the backbone of the tobacco economy. Without them there would have been no one to till the ground, plant the seeds, raise the plants, harvest, and cure the tobacco. In some areas slave populations grew from 7% to 35% of the Chesapeake regions' population between 1690-1750. For example, situated between the Patuxent and Potomac rivers, (what is now Rock Creek Park in Northwest, Washington DC), had a huge slave population.

Despite some opposition to slavery, by the time of the Revolution, slavery was both politically and socially accepted. To compensate for their inability to purchase land, many farmers became tenants on the properties of larger land holders such as the prestigious Hopkins, Dulaney, Ridgely, and Carroll families. For tobacco planters, buying a slave often made sound economic sense, considering how rapidly tobacco exhausted land. Instead of land, they bought laborers whom they could move when their rented acreage became infertile. So long as slave labor existed, a crop of tobacco paid all advances.

Certainly the success of tobacco cultivation brought economic prosperity to the Chesapeake colonies. Without tobacco, it can be argued, the colonists might have been left to subsistence farming and had little if any opportunity for economic growth independent of England. That nearly anyone could grow "cash" in his or her backyard, to pay off debts and taxes, implies the high demand for tobacco as a means of stabilizing the economy. From the point of view of the colonists, the negative legacies of displacement of the natives, slavery, and land loss were more than compensated for by the incredible economic growth experienced by the enterprising white men. In fact, long term effects of tobacco production were not a major concern of the white settlers until after World War II.

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Original Author Unknown - Economic Aspects of Tobacco during the Colonial Period 1612-1776 ©1996 Gene Borio, Tobacco BBS http://www.tobacco.org

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