Tobacco in Colonial Virginia Part 2

The act of 1712, providing for the regulation of public warehouses, remained in force and became a part of the rather effective inspection system established in 1730. The act was amended in 1720 giving the county courts the authority to order warehouses inconvenient to the landings discontinued. These two pieces of legislation brought all of the public warehouses near convenient landings and made the warehouse movement flexible. From this point on, as the tobacco industry shifted from one area to another, the warehouse movement kept pace. From time to time established warehouses were ordered discontinued, or new ones erected; and occasionally warehouses ordered discontinued were revived.

However, it appears that inspection warehouses were not permitted above the Fall Line until after the Revolution.

In 1730 the most comprehensive inspection bill ever introduced, pa.s.sed the General a.s.sembly. The common knowledge that the past and present inspection laws had failed to prevent the importation of unmarketable tobacco, plus a long depression, had changed the att.i.tude of many of the influential planters and merchants. Nevertheless, the act did meet with opposition from some of the English customs officials and a few of the large planters. Soon after the pa.s.sage of this new inspection law a prominent planter wrote complainingly to a London merchant, "This Tobo hath pa.s.sed the Inspection of our new law, every hogshead was cased and viewed by which means the tobacco was very much tumbled and made something less sightly than it was before and it causes a great deal of extraordinary trouble". There were complaints that the new law destroyed tobacco that used to bring good money. Still another planter complained that the planter's name and evidence on the hogshead had much more effect on the price of the tobacco than the inspector's brand. While some of the planters expressed their disapproval of the new inspection law verbally, others resorted to violence. During the first year some villains burned two inspection houses, one in Lancaster County and another in Northumberland.

The inspection law pa.s.sed in 1730 was frequently amended during the colonial period, but there were no changes in its essential features.

The act provided that no tobacco was to be shipped except in hogsheads, cases, or casks, without having first pa.s.sed an inspection at one of the legally established inspection warehouses; thus the shipment of bulk tobacco was prohibited. Two inspectors were employed at each warehouse, and a third was summoned in case of a dispute between the two regular inspectors. These officials were bonded and were forbidden under heavy penalties to pa.s.s bad tobacco, engage in the tobacco trade, or to take rewards. Tobacco offered in payment of debts, public or private, had to be inspected under the same conditions as that to be exported. The inspectors were required to open the hogshead, extract and carefully examine two samplings; all trash and unsound tobacco was to be burned in the warehouse kiln in the presence and with the consent of the owner. If the owner refused consent the entire hogshead was to be destroyed. After the tobacco was sorted, the good tobacco was repacked in the hogshead and the planter's distinguishing mark, net weight, tare (weight of the hogshead), and name of inspection warehouse were stamped on the hogshead.

A tobacco note was issued to the owner of each hogshead that pa.s.sed the inspection. These notes were legal tender within the county issued, and adjacent counties, except when the counties were separated by a large river. They circulated freely and eventually came into the possession of a buyer who, by presenting them at the warehouse named on the notes, exchanged them for the specified amount of tobacco. And these particular notes were thus retired from circulation. The person finally demanding possession of the tobacco was allowed to have the hogsheads reinspected if he so desired. If he was dissatisfied with the quality, he could appeal to three justices of the peace. If they found the tobacco to be unsound or trashy, the inspectors paid a fee of five shillings to each of the justices, and they were also held liable for stamping the tobacco as being good; should the tobacco be declared sound, the buyer paid the fee.

Parcels of tobacco weighing less than 200 pounds in 1730, later increased to 350, and finally 950 pounds, were not to be exported, in such cases the inspectors issued transfer notes. When the purchaser of such tobacco had enough to fill a hogshead, the tobacco was prized and the transfer notes were exchanged for a tobacco note. The tobacco could then be exported. Such small parcels were often necessary to pay a levy, or a creditor, or it might have been tobacco left over from the crop after the last hogshead had been filled and prized. These tobacco notes provided the only currency in Virginia until she resorted to the printing press during the French and Indian War. By the end of the eighteenth century the reputation of the inspectors and the value of the tobacco notes began to decline, due primarily to lax inspecting.

Exporters and manufacturers frequently demanded that their tobacco be reinspected by competent agents.

The inspection law was allowed to expire in October, 1775, but it was revived the following October. During this period the payment of debts in tobacco was made on the plantation of the debtor, and if the creditor refused to accept the tobacco as sound and marketable, the dispute was referred to two competent neighbors, one chosen by each of the disputants.

Prior to 1776 tobacco that was damaged while stored in the public warehouses was paid for by the colony, but provisions were made in 1776 that such a loss was to be borne by the owner of the tobacco. In 1778 this was amended to the effect that losses by fire while stored in the warehouses would be paid for by the state. Four years later, owing to the great losses that had been sustained by the owners of the tobacco, the inspectors were held liable for all tobacco destroyed or damaged, except by fire, flood, or the enemy. The state continued to guarantee the tobacco against the fire hazard until well into the nineteenth century.

The law requiring "refused" tobacco to be burned in the warehouse kiln was repealed in 1805, and such tobacco could then be shipped anywhere within the state of Virginia. Stemmers or manufacturers were required to send a certificate of receipt of such refused tobacco purchased to the auditor of public accounts in Richmond. These receipts were then checked against the warehouse records of the amount of refused tobacco sold. Finally, in 1826, the General a.s.sembly legalized the exportation of refused tobacco, provided the word "refused" was stamped on both ends and two sides of the hogsheads in letters at least three inches in length.

In 1730 three inspectors were appointed for each inspection by the governor, with the advice and consent of the Council. This did not always mean that there were three inspectors at each warehouse at all times. Warehouses built on opposite banks of a creek or river were frequently placed under the same inspection; that is, the three inspectors divided their time at the two warehouses. In areas where the production of tobacco declined from time to time, two warehouses were frequently placed under the jurisdiction of one set of inspectors. And if the quant.i.ty of tobacco produced in that particular area necessitated separate inspections, the change was then made. The inspection system was very flexible in this respect. The inspectors were required to be on duty from October 1 to August 10 yearly, except Sundays and holidays. By 1732 it was discovered that it was unnecessary to have three inspectors on duty at all times. Consequently, the number of regular inspectors was reduced to two, but a third was appointed to be called upon when there was a dispute between the two regular inspectors as to the quality of tobacco.

As the governor was able to choose the inspectors and place them at any warehouse within the colony, the local county people began to complain and demand that they be given more authority in this governmental function. This procedure tended to provide the governor with the opportunity to provide his friends with jobs regardless of their qualifications. In 1738 the General a.s.sembly enacted legislation providing that the inspectors were to be appointed by the governor from a slate of four candidates nominated by the local county courts. Where two warehouses under one inspection were in different counties, two candidates were to be nominated by each county. This procedure remained unchanged until the middle of the nineteenth century.

The salaries of the inspectors were regulated by the General a.s.sembly, though the colony did not guarantee the sums after 1755. For the first few years each inspector received 60 annually, and if the fees collected were insufficient to pay their salary, the deficient amount was made up out of public funds. After 1732 it was found that this amount was too high and unequally allocated with respect to the amount of individual services performed, as some warehouses received more tobacco than others. So for the next few years salaries were determined on the basis of the amount of tobacco inspected and ranged from 30 to 50 annually. From 1755 to 1758 the inspectors received the amount set by the legislature only if enough fees were collected by the inspectors at their respective warehouses. During the next seven years the inspectors received three shillings per hogshead, plus six pence for nails used in recoopering the tobacco, instead of a stated salary. Out of this the inspectors had to pay the proprietors of the warehouse eight pence rent per hogshead. In 1765 the inspectors were again placed on a flat salary basis, and for the next fifteen years their salaries ranged from 25 to 70. After 1780 their annual salaries ranged from about $100 at the smallest warehouses to about $330 at the largest.

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 a.s.sembly. In 1712 the proprietors 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 a.s.sembly. 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 a David 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 Ess.e.x County in 1810, and the third in Norfolk County in 1818, owing to the opening of the Dismal Swamp Ca.n.a.l.

SALE OF THE LEAF

Under the original plan of colonization the Virginia settlers were to pool their goods at the magazine, the general storehouse in 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 pa.s.sed 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 pa.s.sed to prohibit such actions.

Increasing compet.i.tion 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 merchant acted 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-fourth of 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 cla.s.s 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 the buyers 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 a.s.sessed 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 a.s.sembly 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 a.s.sembly 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 the tobacco fleet did not go to the colonies on account of the plague in London. Tobacco prices dropped to one pence per pound.

[Ill.u.s.tration: METHODS OF TRANSPORTING TOBACCO TO MARKET

a, Upon canoes. b, By upland boats. c, By wagons. d, Rolling the hogshead.]

[Ill.u.s.tration: PLANTATION TOBACCO HOUSES AND PUBLIC WAREHOUSES

a, 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 a.s.sembly 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 a.s.sembly 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 a.s.sembly convened but was prorogued by Lieutenant Governor Sir Henry Chicheley a week later, when it 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 Middles.e.x 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 b.u.mper 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.