Regulating Trade and Monopolies in Virginia

March 24, 1629/30[1]

It was the end of the year, and nagging issues presented themselves to the plantation owners, and other burgesses in the colony of Virginia.

Thanks in large part to the cultivation of tobacco as a staple crop, population growth had finally taken hold in Virginia after numerous false starts and near-abandonments. The census of 1625 showed a population of 1,210, but this had more than quadrupled ten years later, and had increased nearly ten-fold by 1639. But as more and more planters cultivated tobacco, the value decreased proportionately to the increase in supply.[2]

The Governor, his council, and the burgesses petitioned the Privy Council in London, asking to alter the set prices on tobacco, for intra-colonial purchase at 3s, 6d per pound,[3] and exported tobacco to be set at 4s per pound.[4] Furthermore, they asked that the king allow the colonists to sell their crops to other countries after giving the first-fruits of 500,000 pounds of tobacco to England.[5] Planters knew they could get a higher price from other countries who did not have England’s extensive cultivation efforts.

But it was the age of Mercantilism and Colonialism, and mother countries were very protective of their trade. In September of 1628, King Charles I sent a reply to Virginia’s governor commanding that all “Planters, Adventurers & others shall returne their commodities of the growth and proceede of Virginia into our owne dominions of England and not els where upon paine of our high displeasure and condign [appropriate to the crime] punishment of the offendors.”[6] Virginians were to sell their goods to no one but their mother country.

Export prices were dropping, but import prices were increasing. One particular problem for planters during this time were the merchants, who, like every man, wished their craft to be as immune to market fluctuations as possible. Ships laden with goods from England, which could not be produced locally, presented a prime opportunity for businessmen to buy up all the goods, corner the market, and resell to Virginians at an exorbitantly marked-up price. At the same time a Mercantile England was monopolizing exports, the mercantile English in Virginia were monopolizing imports. Planters were thus doubly punished.

Since the King would not allow free trade with other countries, the burgesses sought other measures to preserve market equity. The King had given them sufficient charge to do so, requiring “the Governor and counselle there to cherish & respect such persons as intend to make Virginia in their countrey and to profferr such places of benefit, and trust that there may be a reall difference made between them and such as goe thither only to enrich themselves by a cropp of Tobacco.”[7] It was a 17^th-century version of class warfare, and merchants were caught right in the middle.

Prices were set on exports, so why couldn’t prices be set on imports; why couldn’t prices be set on intra-colonial trade?

The fourth act of the March 24^th meeting of Burgesses, Council, and Governor limited the amount of goods merchants could purchase at import, and made it illegal for any merchant to resale his wares at any price higher than he originally paid for it, else they would pay the government triple the value of their goods in fine.[8] It also created new bureaucracy, costing wharvesmen and dockmasters more money, and created an incentive to prompt investigation by promising half of any illegally-sold goods to common store, and the other half to the informant.

It is no small wonder that the monopoly problems on both sides–export and import–persisted, and that despite regulation upon regulation, the exploitation of market demands could not be halted. Virginians–that is, the industrialists working the ground–recognized firstly the benefits of a freer trade, and petitioned the king to allow it a century and a half before Adam Smith’s Wealth of Nations. Their petition was refused by a mercantilist state, which believed the path to a perfect society was blazed through regulation, control, and favoritism.

John Harvey, the governor at the time, was deposed six years later through a widespread mutiny throughout the burgesses; and Charles I would himself suffer the gravest of capital losses in two short decades.

 

ACT IV.

“FORASMUCH as many inconveniences doe often happen to the inhabitants and planters of this colony by the excessive and exorbitant ingrossing of commodities brought into this country For repressing whereof, it is ordered and concluded by the whole body of this Assembly, Tha noe person or persons of what degree, quality, condition, or profession soever they bee, doe at any tyme eyther aboard the shipps or on shore or elsewhere ingrosse or Forestalle any <commodity> whatsoever, but that such as [they] may buy only for their particular use, and if they can spare any of the same, then not to sell any of the same goods at any dearer rate to their neighbours for more than they paid at the first penny. And that all marchants whatsoever now residing or that hereafter shall aryve in Virginia may upon such penalty and severe punishment as the quality of the offence shall deserve, deliver their bills of lading or a true copy thereof to the Governor and Councell or one of them. And that a true invoice of such goods consigned to marchants here bee delivered in alsoe as before upon oath, that they country may not be defrauded, neyther the marchants ioyne [join] with any to colour their ingrossings. And that this may bee upon the forfeyture of treble the value of any such goods soe bought, ingrossed or coloured, the moytie [a half] thereof to goe to the generall good of the colony, and the other moytie [other half] to any man that shall complayne and really prove the same witnesses.”