Warehouses 1730-1800
In most instances the warehouses were private property, but they were always subject to the control of the legislature. Regulations regarding the location, erection, maintenance and operation as official places of inspection were set forth by special legislation. Owners of the land sites selected were ordered to build the warehouses and rent them to the inspectors. If the land owner refused to build, then the court could order the warehouse built at public expense. Just how many warehouses were built at public expense is difficult to determine, probably only a few, if any, were built in this manner.
The rent which the proprietor received usually depended upon the number of hogsheads inspected at his warehouse, though the rates were regulated by the General Assembly. In 1712 theproprietors received twelve pence for the first day or the first three months and six pence every month thereafter per hogshead. In 1755 the owners received eight pence per hogshead. During the Revolution the rate was raised to four shillings, but was lowered to one shilling six pence after the cessation of hostilities. At the beginning of the nineteenth century rent per hogshead, including a year's storage, was twenty-five cents.
To keep pace with the movement of the tobacco industry, new warehouses were built and others discontinued from time to time. And by observing the warehouse movement it is possible to grasp a general picture of the decline of the tobacco industry in Tidewater Virginia. The expansion of the industry into Piedmont is more difficult to follow during this period owing to the fact that inspection houses were not permitted above the Falls until after the Revolution.
In 1730 seventy-two warehouses located in thirty counties were ordered erected and maintained for the purpose of inspection and storage by the General Assembly. Twelve years later warehouses were erected in only one additional county, Fairfax. A few of those established in 1730 were discontinued, but twenty-six new ones had been erected by 1742, making a total of ninety-three in operation at that time. From 1742 to 1765 the total number of inspection houses increased by about six, but this does not reveal a complete picture of the warehouse movement. A closer examination shows a much greater shift in the movement. Sixteen new inspection warehouses were erected during this period, twelve of them near the Fall Line; in the meantime, ten of the old established warehouses far below the Falls were discontinued.
After a year without an official inspection system the lapsed inspection law was revived in October, 1776; seventy-six of the warehouses were re-established as official inspection stations. Soon after the end of the war the number of inspections began to increase again, and it was chiefly through the efforts of aDavid Ross that inspection warehouses were permitted above the Falls. The first inspections seem to have appeared above the Falls in Virginia in 1785: one at Crow's Ferry, Botetourt County; one at Lynch's Ferry, Campbell County; and a third at Point of Fork on the Rivanna River, Fluvanna County. Tobacco inspected in the warehouses above the Falls could not be legally delivered for exportation without first being delivered to a lower warehouse for transportation and reinspection upon demand by the purchaser.
There were a number of reasons why the inspection warehouses were restricted to Tidewater Virginia until after the Revolution. It was not until after the Revolution that a strong need and demand for them was felt above the Falls. Inadequate transportation facilities in the interior made exportation from upland inspections less feasible. It is also probable that the Legislature was opposed to upland inspections as it would be more difficult to control the inspections, spread out over a larger area, as rigidly as those concentrated in a smaller area. And no doubt Tidewater Virginia recognized the economic value of having all of the inspections located in its own section. However, the sharp decline in tobacco production in the Tidewater followed by an equal increase in the Piedmont made inspections above the Falls inevitable.
Of the ninety-three inspection warehouses in operation in 1792, only about twenty were above the Fall Line; but by 1820 at least half of the 137 legal inspections were above the Falls. Of the forty-two new inspections established in the period 1800-1820 only three were in Tidewater Virginia; one in Prince George County in 1807, one in Essex County in 1810, and the third in Norfolk County in 1818, owing to the opening of the Dismal Swamp Canal.
Sale of the Leaf
Under the original plan of colonization the Virginia settlers were to pool their goods at the magazine, the general storehousein Jamestown. All of the products produced by the settlers, and all goods imported into the colony were to be first brought to the magazine. In 1620 the London Company made plans to abolish the magazine and open the trade to the public. The colony was then forced to rely on peripatetic merchant ships which came irregularly. These casual traders dealt directly with the planters, going about from plantation to plantation collecting their cargo. These merchants were without agents in the colonies, and they relied solely upon the chance of selling their goods as they passed the various plantation wharves. They usually sold their goods on credit, expecting to collect their dues in tobacco on the return trip the next year. Occasionally the crops were small, or they discovered that most of the tobacco had been sold or seized by other traders, and consequently they were forced to wait another year to collect from their debtors.
The planter soon discovered that he was in an equally precarious situation, and largely at the mercy of the merchant, for if he failed to sell on the terms offered, another ship might not come his way until the following year. The planter's bargaining power was also hampered by his ignorance of market conditions abroad. Such conditions encouraged the practices of engrossing and forestalling, by the merchants, to the point that much legislation was passed to prohibit such actions. Increasing competition by the Dutch traders gradually reduced the dependence of the planter on the casual trading merchant. The danger from pirates and frequent wars caused the English to inaugurate the convoy system, which also helped improve the market conditions. However, trading directly with the casual merchants was still common after 1625, and a few still operated as late as 1700.
The consignment system developed along with the system of casual trading, and it also operated upon the practice of the ships collecting cargo from the various plantations. Importation was based on the same idea: the ship which gathered the planters' tobacco usually brought goods from abroad. Originally the merchantacted only as the agent of the planter. He advanced him the total cost necessary to export and market the crop abroad, sold the crop on his client's account and placed the net proceeds to the planter's credit. Soon the merchant was advancing the planter goods and money beyond the amount of his net receipts; the planter frequently discovered that he was at the merchant's mercy and was forced to sell on the merchant's terms. To make matters worse, the tobacco was sold by the merchants to retailers in England on long term credit at the planter's risk. If the retailer went bankrupt, or his business failed, the planter not only lost his tobacco but still had to pay the total charges, freight, insurance, British duties, plus the agent's commission, which amounted to about eighteen pounds sterling in 1730. Planters frequently complained that their tobacco weighed much less in England that it did when it was inspected and weighed in the colony. There were reports that the stevedores were supplying certain patrons in England with tobacco of superior quality obtained by pilfering. An agent in England was certainly not apt to look after a planter's crop as though it were his own.
The gradual destruction of the fertility of the soil in the Tidewater country and the expansion of the tobacco industry into the back country made direct consignment less feasible. This, and the various other causes of dissatisfaction with the consignment system, led to the system of outright purchase in the colony. This new procedure was carried on largely by the outport merchants, especially the Scottish, who were doing quite a bit of illicit trading before the Union of 1707. Since the Tidewater business was controlled largely by the London merchants, the new Scottish traders penetrated the interior and established local trading posts or stores at convenient locations, many of which became the nuclei of towns. After the Union their share of the trade increased very rapidly, and at the beginning of hostilities in 1775 the Scots were purchasing almost one-half of all the tobacco brought to Great Britain. On the eve of the Revolution only about one-fourthof the Virginia tobacco was being shipped on consignment.
The factorage system appears to have been introduced in Virginia around 1625, and was actually a part of the consignment system. A factor was one who resided in the colony and served as a representative and the repository of the English merchant. With the establishment of a repository in the colony, trade became more regular, debtors less delinquent, and the problem of securing transportation for exports or imports was mitigated. Some of the factors were Englishmen sent over by the English firms, others were colonial merchants or planters who performed for the foreign firms on a commission basis. As the tobacco industry expanded beyond the limits of the navigable waters, it became the custom of the planters located near such streams to act as factors for their neighbors in the interior. By 1775 the factorage system had developed to the extent that one planter found four firms at Colchester, eleven at Dumfries, and twenty at Alexandria which would buy wheat, tobacco, and flour in exchange for British goods and northern manufactures.
The rise of a class of factors in Virginia, aided by the Scottish merchants, made it possible for the planters to break away from the London commercial agents. The Revolution cut the connection between England and the Virginia planters, but the factorage system was not destroyed. The merchants and businessmen in the former colonies simply replaced the English factors. Soon after the cessation of hostilities, England had reestablished her commercial predominance owing to the superior facilities and experience of British merchants in granting long term credits, and perhaps the preference of Americans for British goods. The British were again willing to extend to the planters the accustomed long term credits, but they were careful to grant it only to merchants of high standing.
Lax inspecting caused the buyers to lose faith in the inspectors' reputation and guarantee. As early as 1759 tobacco was being sold by displaying samples. It was quite natural then for thebuyers to begin visiting the warehouses as the tobacco was being inspected, to enable them to purchase the better hogsheads directly from the original owner. But it seems that even as late as 1800 such practices were only occasional. While lax inspections caused a few buyers to visit the warehouses, the presence of these buyers led many of the planters to bring their tobacco to the warehouses most frequented by the buyers. As these buyers paid higher prices for the better tobacco, the ultimate result was the development of market towns and the disappearance of the tobacco note. Within a decade after the turn of the nineteenth century Richmond, Manchester, Petersburg, and Lynchburg had become major market towns.
Production, Trend of Prices, and Exports
When tobacco was first planted in Jamestown, Spanish tobacco was selling for eighteen shillings per pound. Virginia tobacco was inferior in quality, but it was assessed in England at ten shillings per pound. On the basis of these high prices the Virginia Company of London agreed to allow the Virginia planters three shillings per pound, in trade at the magazine in Jamestown, for the best grades.
Even though it seemed that the London Company was getting the lions share, these prices proved to be very profitable for the colonists and the infant tobacco industry increased very rapidly. During the period 1615-1622 tobacco exports increased from 2,300 to 60,000 pounds, and by 1630 the volume had risen to 1,500,000. Meanwhile prices had fallen as rapidly as production and exports had increased. In 1625 tobacco was selling for about two shillings per pound, but in 1630 merchants were reported to be buying it for less than one penny per pound.
It was quite obvious that the fall in prices was due to overproduction. The English first attempted to alleviate the condition in 1619 through monopolistic control. Negotiations were conducted with the Virginia Company of London, Henry Somerscales,and Ditchfield in 1625. All were opposed by the colony, except that of the London Company, because the colonists thought that the various proposals would benefit the King and a small group of court favorites at the expense of the planters.
The next move was made by the colony. In an attempt to restrict the production of tobacco, Governor Wyatt ordered that production be limited to 1,000 plants per person in each family in 1621. These same instructions provided that only nine leaves were to be harvested from each plant. Similar laws were enacted in 1622 and again in 1629, but these laws were probably not strictly enforced as prices failed to improve. Undaunted by failure in its first attempt to cope with the situation, the General Assembly made several attempts at price fixing. In 1632 tobacco prices in the colony were fixed at six pence per pound in exchange for English goods; in 1633 it was increased to nine pence.
The 1639 crop was so large that the legislature ordered all of the bad and half of the good tobacco destroyed; merchants were required to accept fifty pounds of tobacco per 100 of indebtedness. English goods were to be exchanged for tobacco at a minimum rate of three pence per pound. The minimum rate of the 1640 crop was fixed at twelve pence. Such legislation failed to meet with the approval of the home government and in 1641 tobacco averaged about two pence per pound.
Following the depression of 1639 tobacco prices failed to rise above three pence, and probably never averaged more than two pence per pound for the next sixty years. To prevent the complete ruination of the tobacco planters, the General Assembly established fixed rates for tobacco in the payment of certain fees. In 1645 these fees were payable in tobacco rated at one and one-half pence per pound; ten years later the rate had increased only a half pence. The war with Holland, restrictions on the Dutch trade, and the plague in England brought forth another serious depression in the colonies in the 1660's. In 1665 thetobacco fleet did not go to the colonies on account of the plague in London. Tobacco prices dropped to one pence per pound.
METHODS OF TRANSPORTING TOBACCO TO MARKETMETHODS OF TRANSPORTING TOBACCO TO MARKETa, Upon canoes. b, By upland boats. c, By wagons. d, Rolling the hogshead.
PLANTATION TOBACCO HOUSES AND PUBLIC WAREHOUSESPLANTATION TOBACCO HOUSES AND PUBLIC WAREHOUSESa, The common tobacco house. b, Tobacco hanging on a scaffold. c, The operation of prizing. d, Inside of a tobacco house, showing the tobacco hanging to cure. e, An outside view of a public warehouse. f, showing the process of inspection.
This new depression stirred the Virginia legislature. In 1662 the Assembly prohibited the planting of tobacco after the last of June, provided that Maryland would do the same. Maryland rejected the idea. This would have eliminated a great deal of inferior tobacco, for much of the tobacco planted in July seldom fully matures before it must be harvested to save it from the frost. The planters in both colonies continued to produce excessive crops and the depression became more acute. Led by Virginia, the North Carolina and Maryland legislatures prohibited the cultivation of tobacco in 1666. Lord Baltimore again refused to permit a cessation in Maryland, consequently Virginia and North Carolina repealed their legislation. Instead of cessation the Virginia crop was so large in 1666 that 100 vessels were not enough to export the crop. The possibility of another enormous crop in 1667 was eliminated by a severe storm that destroyed two-thirds of the crop. However, the glutted market resulting from the large crop grown in 1666 caused prices to fall to a half pence per pound.
In the 1670's prices climbed to one and one-half pence, but a tremendous crop in 1680 glutted the market again. The crop was said to have been so large that it would have supplied the demand for the next two years, even if none were produced in 1681. The General Assembly once again came to the aid of the planter by rating tobacco in payment of debts at one and one-fifth pence in 1682, and two pence in payment of quit-rents in 1683. Once again Virginia renewed attempts to bring about a cessation of production, but the English government refused to permit such action claiming that it would stimulate foreign production and thereby reduce the revenue to the Crown. In April, 1682 the General Assembly convened but was prorogued by Lieutenant Governor Sir Henry Chicheley a week later, whenit was apparent that the members were determined to discuss nothing but the cessation of tobacco. A week later a series of plant cuttings broke out in Gloucester County followed by others in New Kent and Middlesex counties. Approximately 10,000 hogsheads of tobacco were destroyed before these riots were put down by the militia. Probably as a result of this destructive act, prices rose to two and a half pence in 1685, but a bumper crop of over 18,000,000 pounds in 1688, the largest ever produced to that date, caused prices to drop to one penny per pound in 1690.
Throughout most of the seventeenth century the tobacco planters were plagued with the problem of overproduction and low prices. To add to their woes the entire eighteenth century was one of periodic wars either in Europe or in America, or both. King William's War ended in 1697 and the following year tobacco prices soared to twenty shillings per hundred pounds and prices remained good for the next few years. The outbreak of Queen Anne's War and another 18,000,000 pound crop ushered in another depression. Several thousand hogsheads of tobacco shipped on consignment in 1704 brought no return at all, and the next year many of the planters sold their tobacco for one-fourth of a penny per pound. Instead of attempting to limit production in an effort to relieve the market conditions, these low prices caused the planters to increase production as they attempted to meet their obligations. In 1709 tobacco production reached an all-time high of 29,000,000 pounds.
The Peace of Utrecht in 1713 seems to have brought little relief. Tobacco prices failed to improve until after the passage of the inspection act in 1730. In 1731 tobacco sold for as much as twelve shillings six pence per hundred pounds, despite the fact that Virginia exported 34,000,000 pounds. In a further attempt to improve the quality and the price of tobacco the General Assembly ordered the constables in each district to enforce the law forbidding the planters to harvest suckers. Anyone foundtending suckers after the last of July was to be heavily penalized. These two measures seem to have produced the desired effects; in 1736 tobacco sold for fifteen shillings per hundred pounds.
Unlike Queen Anne's War, King George's War seemed to stimulate tobacco prices and they remained relatively good for a number of years after the Peace of Aix-la-Chapelle in 1748. During the early 1750's merchants paid up to twenty shillings per hundred pounds, even though Virginia had been exporting from 38,000,000 to 53,000,000 pounds annually. During the French and Indian War the belligerents agreed to continue the tobacco trade, but in spite of this arrangement there were unusual price fluctuations owing primarily to inflation and occasional poor crops. In 1755 a period of inflation was created when Virginia resorted to the printing press for currency. At the same time war operations hampered production and only about one-half of the usual annual crop was produced, and tobacco prices rose to twenty shillings per hundred weight. During the years of peace just prior to the American Revolution, tobacco averaged about three pence per pound and never fell below two pence. With the outbreak of hostilities the General Assembly prohibited the exportation of tobacco to the British Empire.
Frequent overproduction and the numerous wars during the eighteenth century seem to have caused more violent price fluctuations than those of the previous century. Although the American colonies did not participate in all of the wars involving England, all of them had their effects upon the colonies. Virginia depended primarily upon England to transport her tobacco crop and during the war years there was a frequent shortage of ships used for the tobacco trade. As this cut off the tobacco supply to the foreign markets, many of them began to grow their supply of tobacco.
The tobacco crops were small almost every year during the Revolution. Owing to the increase in the demand for foodstuffs many of the planters switched from tobacco to wheat. During thefirst year of the war tobacco exports dropped from 55,000,000 to 14,500,000 pounds. It has been said that for the entire period 1776-1782 Virginia's exports were less than her exports of a single year before the Revolution. Wartime prices and inflation caused tobacco prices to increase from eighteen shillings per hundred pounds in 1775 to 2,000 shillings, in Continental currency, in 1781. An official account in the latter part of 1780 related that twenty-five shillings per hundred pounds in specie was considered a very substantial price. A very small crop in 1782 was followed by one that topped any of the pre-war crops, and by 1787 prices had fallen to fifteen pence per pound. Prices dropped to $12.00 in 1791, and a period of relatively low prices continued until 1797 when prices increased as a result of an extensive shift from tobacco to wheat. In 1800 prices dropped to $7.40 per hundred pounds as Virginia exported a near record crop of over 78,000 hogsheads of tobacco.
Virginia Tobacco Prices and Exports, 1615-1789
A complete and accurate price table would be virtually impossible to compile. Some of these averages represent only single individual quotations, or the average of only two or three such quotations. These charts are intended to give the reader a general picture of the prices during the Colonial period.
Conclusion
The history of tobacco is the history of Jamestown and of Virginia. No one staple or resource ever played a more significant role in the history of any state or nation. The growth of the Virginia Colony, as it extended beyond the limits of Jamestown, was governed and hastened by the quest for additional virgin soil in which to grow this "golden weed." For years the extension into the interior meant the expansion of tobacco production. Without tobacco the development of Virginia might have been retarded 200 years.
Tobacco was the life and soul of the colony; yet a primitive, but significant, form of diversified farming existed from the very beginning especially among the small farmers. Even with the development of the large plantations in the eighteenth century, there were quite a number of small landowners interspersed among the big planters in the Tidewater area, and they were most numerous in the Piedmont section. They usually possessed few slaves, if any, and raised mostly grains, vegetables and stock which they could easily sell to neighboring tobacco planters. The negligible food imports by the colony indicates that a regular system of farming existed. Nor was tobacco the sole product of the large tobacco plantations. This is indicated by the fact that practically all of the accounts of the product of one man's labor were recorded as so many pounds or acres of tobacco plus provisions. And had the plantations not been generally self-sufficient, the frequently extremely low prevailing tobacco prices would have made the agricultural economy even less profitable.
Tobacco was a completely new agricultural product to most, if not all, of the English settlers at Jamestown. There were no centuries of vast experience in growing, curing, and marketing to draw upon. These problems and procedures were worked out by trial and error in the wilderness of Virginia. Tobacco became the only dependable export and the colony was exploited for thebenefit of English commerce. This English commercial policy, plus other factors, caused the Virginia planter to become somewhat of an agricultural spendthrift. For nearly 200 years he followed a system of farming which soon exhausted his land. Land was cheap and means of fertilization was limited and laborious. By clearing away the trees he was able to move north, south, southwest, and west and replace his worn-out fields with rich virgin soil necessary to grow the best tobacco.
While struggling with the problems involved in producing an entirely new crop about which they knew little or nothing, the colonists also had to feed themselves, deal with their racial problems, and maintain a stable local government as they continually expanded in a limitless wilderness. Out of all this chaos grew the mother and leader of the American colonies.
Tobacco penetrated the social, political, and economic life of the colony. Ownership of a large tobacco plantation could take one up the social ladder; many of the men responsible for the welfare of the colony were planters, and everything could be paid for in tobacco. In 1620 the indentured servants were paid for with tobacco, the young women sent to the colonists to become wives were purchased by paying their transportation charges with tobacco. The wages of soldiers and the salaries of clergymen and governmental officials were paid in tobacco. After 1730 tobacco notes, that is warehouse receipts, representing a certain amount of money, served as currency for the colony.
The development of the inspection system with its chain of tobacco warehouses hastened urbanization. Around many of these warehouses grew villages and settlements; some of these eventually became towns and cities. Richmond, Petersburg, Danville, Fredericksburg, Farmville, Clarksville and others were once merely convenient landings or locations for tobacco warehouses. Even today the fragrant aroma of cured tobacco still exists in a number of these places during the tobacco marketing season. The tobacco trade was largely responsible for the birth and growth of Alexandria,Dumfries, and Norfolk into important export-import centers. For her birth, growth, and colonial leadership, Virginia pays her respect to John Rolfe and the other brave settlers at Jamestown.
Tobacco is still a vital factor in Virginia's economy. Of approximately 2,000,000 acres of cropland (pastureland excluded) in 1949, 115,400 were planted in tobacco which produced 124,904,000 pounds valued at $55,120,800 or twenty-three percent of the total value of all agricultural crops. Of the four largest agricultural products—poultry, tobacco, meat animals, and milk—tobacco ranked second only to poultry in terms of income in 1955. Poultry produced an income of $99,935,000, tobacco $84,128,000, meat animals $80,564,000, and milk $70,681,000. Peanuts and fruits were tied for fifth place, each producing an income of about $21,000,000.
Of the many different industries in Virginia today only five—food, textile, wearing apparel, chemical, and the manufacture of transportation equipment—employ more workers than the tobacco manufacturers. In 1953 a total of $40,000,000, in salaries and wages, was paid to production workers in the tobacco manufacturing industry in Virginia.
Although tobacco is no longer "king" in the Old Dominion, Virginia farmers produce enough of the "golden weed" each year to make one long cigarette that would stretch around the world fifty times.