The economy of Virginia was very dependent on tobacco. Approximately 70% of its revenue came from tobacco. There was no fixed price on the commodity, which was produced abundantly some years, and was scarce other years. The response of the Virginians was to produce more, and to ship the dregs of the crops along with the prime tobacco. The market was an expanding market, since tobacco was relatively new, and more and more people were experimenting with it. But it was obvious that, most of the time, too much tobacco was being produced and shipped.
When Alexander Spotswood came as Lt. Gov., he perceived there was an income problem for the Virginia planters. So, he attempted to put in place a program to reduce the amount of tobacco that was shipped, in an effort to raise the price. Prior to Spotswood, the Virginians attempted some remedies, such as establishing towns and centralizing the trade. But the towns did not materialize, and the measures were not effective. Other Virginians attempted to solve the problem for themselves by opening new lands in the west, and growing even more tobacco. They even passed legislation forbidding the shipment of second growth tobacco, and of trash tobacco. But there were no teeth in the legislation.
In 1713, Spotswood planned to impose strict quality controls on the shipments, to reduce the total quantity, and to improve the quality. He did correctly perceive that this was not the Virginia way of doing things, and it was going to be difficult to get it past the Assembly. Under his plan, all tobacco for export, or for use as commodity money, had to be inspected by agents of the government, and bonded in designated public warehouses. Tobacco which would not meet the inspection standards would be burned. The agents would issue bills of exchange for this stored tobacco, and these bills of exchange could be used for money. Several objectives were met by this plan. Exports would be reduced, but of a higher quality, and the stored tobacco could be used as reliable money.
To get the legislation passed, Spotswood promised the burgesses that, if they voted for the bill, they would have jobs as a colonial tobacco agents. Thirty-three of the forty positions did go to burgesses, or their relatives, and the legislation did pass. Many planters were opposed to the legislation, because they saw it as a destruction of tobacco they could sell in England. At the next election, only one of the burgesses who had been appointed agents was reelected to office. Spotswood's attempt to build a loyal political party, based on patronage, collapsed. When the next Assembly attempted to revoke the legislation, Spotswood vetoed the act. From then on, Spotswood and the burgesses were locked in combat.
From time to time, other legislation was passed in an attempt to reduce tobacco production and to raise the quality of it. But, generally, these laws were not enforced strongly, and inferior tobacco, in quantities too large for the demand, continued to be shipped to Europe. Prices remained low until Lt. Gov. Gooch, in 1733, came up with a plan that was satisfactory for the planters, and the merchants in England.
(18 May 01)
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