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Economy in Jamestown

England's Most Valuable Colony—Eventually

By 1675, Virginia had become Great Britain's most lucrative American colony, exporting more than ten million pounds of tobacco to England annually. Import duties collected on this tobacco earned the crown £100,000 a year—a figure that would rise, by 1700, to roughly £400,000. Not even England's valuable sugar colonies in the West Indies yielded such high revenues. While these revenues hardly compared to the staggering mineral wealth extracted by Spain from the New World a century earlier, in many ways tobacco was England's gold. Foreign pirates lurked off the American coast hoping to waylay English vessels carrying the valuable weed, and British ships of war were deployed just to ensure its safe passage to England.

Tobacco profits also filled the coffers of the Virginia's colonial government and made officials of the colony the most generously compensated in America. Representatives to the House of Burgesses received travel stipends and per diems more than five times higher than those paid to New England legislators. By 1675, prosperous Virginia was one of the brightest jewels in the crown of England's growing overseas empire.

But Virginia did not start out so profitably. In fact, the colony's first years were miserable, marked by economic disaster, devastating outbreaks of disease, and even starvation. Only 38 of the 105 settlers deposited in Jamestown in 1607 survived the first winter. Two years later, only 60 of Jamestown's 500 residents made it through an even more disastrous cold season. Through its entire first decade, the colony failed miserably to just feed itself, much less turn a profit for company investors back in England.

Misplaced Expectations

To a certain extent Virginia's early economic problems can be traced to the misplaced expectations that accompanied the colony's planting. Lacking detailed geographic knowledge of the North American continent, many believed that a great waterway linking the Atlantic and Pacific oceans might be located among the many rivers converging in the Chesapeake. Jamestown, in other words, might provide a link to the far eastern trade—a pit stop for ships carrying spices and goods from India and China. Unfortunately, 3000 miles of rugged land stood between Jamestown and the Pacific; there was no Northwest Passage allowing easy journeys to the riches of Asia.

But even in the absence of a direct connection to the Far East, most of the theorists and adventurers who advocated settlement in North America envisioned a rich continent filled with its own wealth and opportunity. Not all expected to find the same sort of gold and silver seized by the Spanish from the indigenous peoples of Central and South America, but they did expect to find plenty of resources that could extracted for export to England. Earlier reports had described rivers filled with sturgeon whose roe could be turned into caviar, and forests filled with mulberry trees that could house the worms that would turn native grasses into silk. It was believed that great deposits of iron would be found in America, as well as copper and even pearls.

These visionaries therefore planned to build in North America a complex economy filled with skilled workers who would turn the continent's natural resources into valuable products. These craftsmen would be assisted by England's unfortunate poor, relocated to the New World for a fresh start. And working right alongside them would be the friendly Indians of North America, willingly and harmoniously integrated within England's model community. The goods they all produced together would be returned to England, and then possibly re-exported for even greater profit. The planners of England's imperial ventures imagined America's mineral wealth shaped into jewelry, its exotic plants turned into herbs and perfumes, and its caviar and silk sold in markets throughout Europe.

But they were wrong. For more than a decade, rather than flourishing, Jamestown teetered on the brink of failure.

It is not all that surprising that the colony would begin with misguided expectations—or that there would be a period of adjustment to the new conditions or economic realities of North America. What is surprising is that this difficult period of adjustment lasted so long—that company directors in England clung to the old vision of Jamestown for as many years as they did. And it is even more surprising that the settlers, those actually suffering through the harsh conditions of life in the New World, did so little to remedy their own situation. It was not what they expected, but the land was fertile and the climate was hospitable; the surrounding Indians lived relatively easily on the game they hunted and the corn they grew. Why should the English settlers struggle so miserably just to survive?

Why Did Jamestown Struggle to Survive?

The most common explanation for the settlers' failure was that they were simply lazy. The Virginia Company report of 1610 said as much in describing the almost universal 'idleness and bestial sloth' of Jamestown's population. George Sandys, the company treasurer, offered a similar, albeit more poetic summary in 1623: 'A more damned crew hell never vomited.'8

Historians have refined this explanation by emphasizing the sorts of settlers the company delivered to the colony in its early years. Because of its complex ambitions, the Virginia Company sent to North America in 1607 and 1608 a diverse batch of skilled craftsmen, including two goldsmiths, six tailors, a jeweler, and a perfumer. The list of immigrants also included apothecaries, metal refiners, coopers, and even a pipe maker. In future years the company would recruit an even more exotic crew of specialists—glassblowers from Italy, saltmakers from France, and metal workers from Germany and Poland.

In addition to these highly specialized (and somewhat impractical) settlers, Jamestown's population included a disproportionate number of gentlemen—aristocrats and members of the wealthy gentry. Drawn by the prospect of adventure and even greater wealth, 36 gentlemen joined the first shipment of 105 settlers to the colony. Another 56 gentlemen followed in the next shipment of 190 settlers sent to the colony, and they brought with them their own personal servants. Would-be aristocrats were in no short supply during Jamestown's first years.

In short, the new colony at Jamestown was populated by all sorts of people—except the sort most desperately needed, farmers and common laborers willing and able to raise the food and do the manual labor necessary to carve a colony out of the wilderness.

Other historians have argued that Jamestown's greater problem was organizational, that the governing powers of the colony were too broadly diffused among a group of councilors that quarreled constantly. These historians point out that when John Smith briefly assumed more complete command of the colony in 1608, it fared much better. Still other historians suggest that the collective land-holding arrangements of the colony stifled individual initiative and discouraged the sort of hard work the colony needed. Why should a man knock himself out in the fields when he received no more food or compensation than the slacker barely working next to him?

All of these explanations have some merit... but they all come up short in the end. By 1610, the colony had revised its collective land policies—individuals were now able to own and work their own land—but still the colony struggled. Similarly, within a few years political power within the colony was consolidated. Under the revised charter negotiated in 1609, the company-appointed governors exercised almost complete control over the settlement. Nor did these governors shy away from harsh and coercive measures in order to advance the colony's goals. The Lawes Divine, Morall and Martiall introduced in 1611 made blasphemy, rape, and lying capital crimes and—acknowledging the critical importance the colony's food supply—made theft of the colony's food or livestock also punishable by death. When one man was caught stealing a few pints of oatmeal from the storehouse, his tongue was pierced with a needle and he was then chained to a tree to starve to death.

Yet despite these reforms to landownership and governance, the colony still struggled. One prominent historian, Edmund Morgan, has therefore argued that the colony's real problem was racism. Jamestown's settlers refused to engage in the common labor needed to produce food because it reduced them to the level of the Indians they had expected to control. Having come to America with expectations of building a complex economy in which they would turn local resources and local Indian labor into exportable goods, this collection of skilled artisans and gentlemen refused to degrade themselves by toiling in the dirt like the Indians. It is a troubling argument, and in many ways counterintuitive; it is hard to believe that an entire colony of people would rather starve than compromise its racial identity. But in the absence of any other satisfying explanation for the colony's initial failure, this might just be the most reasonable explanation.

Jamestown's Smoky Redemption

Regardless of the exact cause of the colony's troubles, at the end of its first decade of existence, Jamestown was in serious trouble. By 1617, Jamestown had been repeatedly re-supplied with food and men—and yet it still hovered on the edge of starvation. Moreover, it had failed to even come close to realizing any of its founders' more elaborate economic ambitions. Collapse and abandonment loomed as a real possibility. Within a few years, however, it was clear that the colony would survive. But it would be saved not by reorganization, tougher laws, more intelligent recruiting, or the resolution of its racist ideas. What saved Jamestown was the discovery of tobacco.

'Discovery' is in certain ways a misleading term; tobacco was not unknown by the English in 1617. A drug native to the Western Hemisphere, tobacco was introduced to Europeans by Columbus's sailors, who carried it back home from the New World on their return voyage after 1492. There had long been a market in England for the tobacco cultivated by Spanish settlers in the West Indies, and the Indians surrounding Jamestown smoked their own strain of the addictive weed—a cruder strain, though, than that cultivated by the Spanish. John Rolfe, an unusually curious and capable Jamestown resident, had begun experimenting with planting tobacco as early as 1612. But still, the word "discovery" does capture the gold rush-type boom that followed the realization that valuable Spanish tobacco could be successfully grown in Jamestown for export to England. Between 1617 and 1630, tobacco prices soared to three shillings per pound, as more and more Englishmen began to smoke it recreationally, and not just for its supposed medicinal value. As a result, virtually every ounce of human labor in Virginia was diverted to the production of tobacco. Land around Jamestown was abundant, but clearing the dense forests to create new fields took time, so every last inch of usable space in the town—"the market-place, and streets, and all other spare places," in the words of John Smith—was quickly planted with the leafy green gold. One estimate suggested an individual in Jamestown during the 1620s could earn £200 sterling in a year—almost seven times the average income of skilled craftsman in England—by planting tobacco. With five or six servants, a colonist could earn £1000 annually, making him a wealthy man.

The dizzying profits in tobacco would collapse by 1630, as a huge increase in production from Virginia led to sharply falling prices in England. But there was still enough money in the crop to encourage its cultivation. Over the rest of the seventeenth century, Virginia's human population, its tobacco production, and the European market for tobacco would grow roughly in sync with one another. The price of tobacco would fluctuate some, but it held relatively steady between a penny and 2.5 pennies per pound until 1680.

At these prices, Jamestown's inhabitants would not grow rich as they had in the 1620s. But at least through the middle of the century, they would earn more than they could expect to earn in England. Even the vast majority of male settlers who arrived as indentured servants—men who exchanged several years of unpaid labor in return for passage to Virginia—were able to transition from servitude to land-ownership within Virginia's tobacco economy. The names of former servants routinely show up on tax rolls and jury rosters—proof that they were able to acquire land and become full citizens once their terms of service had ended. A number of ex-servants even achieved a different sort of status, serving as militia officers and county officials. Tobacco made upward mobility possible.

In the end, the discovery of tobacco enabled Jamestown to finally realize a certain degree of success in America. It wasn't exactly the sort of success its planners had anticipated, but the tobacco trade ensured Virginia's survival and offered a type of opportunity and social mobility for even the poorest settlers that could never have been achieved back home in England.

The Problem with Tobacco

But there were still problems. For starters, Virginia's economy remained throughout the entire seventeenth century far too one-dimensional. A collapse in the local tobacco crop or the international tobacco market could have ruined the colony. Contemporaries recognized this danger, and some even took steps to correct it. Sir William Berkeley, the governor of the colony from 1642 to 1652 and again from 1660 to 1677, proposed a variety of measures ranging from limiting the acreage allowed to go into tobacco production to paying government bounties to colonists who developed alternative industries. And in 1664, the Virginia Assembly followed Berkeley's lead in legislating bounties for the production of silk, woolen cloth, and boats. The assembly also passed laws requiring towns to build tanneries and more permanent public buildings. In 1667, Berkeley's efforts culminated in an agreement between the governments of Virginia, Maryland, and North Carolina to impose a one-year moratorium on all tobacco production.

But the agreement was short-lived. Back in London, government officials protested the loss of import tax revenue that would result from the moratorium on tobacco, and in the Chesapeake smaller planters complained that they could ill afford so complete and abrupt a restriction on their income.

The reform effort thus faded away quietly—but it revealed a growing division between Virginia elites and the London government. And more significant in the short term, it revealed a growing division within the colony between large and small planters—those who were willing and able to slow production temporarily in order to boost tobacco prices over the long haul, versus those so desperate to scratch out an annual living that they were unable to suspend production for even a moment.

Virginia's Growing Social Divisions

For the first half of the century, Virginia's society was characterized by a rough fluidity. The availability of land and the immaturity of Virginia's governing institutions allowed virtually all settlers to make their way in the tobacco industry. Even Virginia's horrific mortality rates contributed to economic opportunity by restraining population growth, ensuring that plenty of arable land remained available even to poor servants once their indentures were completed. A few powerful families tried to twist the colony's laws and institutions to their advantage but, given the immaturity of these institutions, common planters were generally able to force the government to do their bidding.

But by 1660, Virginia's society and economy had begun to take on a new rigidity—land became more scarce as the population grew, the transition from servitude to independent farming became more difficult, and political power became less democratically accessible.

One indicator of the change was the shortage of land that forced more and more former servants and new immigrants deep into the interior of Virginia. Anticipating the impending land shortage and seeing an opportunity for easy profit, wealthier speculators staked claims to the most desirable land along the waterways of the Chesapeake. Governor William Berkeley tried to force this land onto the market by legislating property taxes. But the speculator-filled assembly resisted his efforts.

Another indicator of the economy's growing rigidity was the rising rate of tenant farming. Detailed records are scarce, but we know that opportunities for land-ownership for poor colonists declined sharply. At mid-century, the vast majority of Virginia's servants were able to eventually own land; by the end of the century, however, more than one-third of all farmers were working land they did not own.

The combination of scarce land and increased tenancy combined to produce another change that was more subtle—the ascendance of the larger planters within the overall commercial infrastructure of the region. While tenants may have worked a parcel of land, a large percentage of their crop—often as much as 25 percent—had to be turned over to the landowner. This increased the large landholder's market share and his control over prices. For the small landowner forced into the interior, there was a different problem. Distant from the waterways down which the tobacco ships would sail in order to collect the crops produced by individual planters, these interior farmers were forced to make different arrangements in order to get their crop to market. Again, the larger planters benefited, because what most commonly happened was that the small interior farmers were forced to consign their crop to large planters living on the river who—for a price—delivered the crop to market.

Parliament's passage of a navigation act in 1660 further complicated the economic prospects of the small planter. In an effort to more tightly control colonial trade and generate more revenue for the Crown, Parliament required that certain goods, including tobacco, be sold only to England or one of its colonies. Virginia planters argued that they had a right to trade freely with anyone who sailed into the Chesapeake. The Dutch, for example, were anxious to buy American tobacco. But the navigation act severely limited their ability to do so. And without the lucrative Dutch market, Virginians' profits dropped.

It was still possible to circumvent Parliament's laws; enforcing the navigation act from across the ocean was difficult. But even illicit trade with the Dutch became impossible when England and the Netherlands went to war during the 1660s and 1670s. All Virginians lost a crucial trading partner. But poor farmers operating on narrow profit margins, in particular, suffered when Dutch merchant ships were replaced by Dutch ships of war. Nor were they comforted by British government demands that these same cash-strapped colonists spend extravagant sums on coastal defense.

By 1670, the rigidities within the Virginia economy had grown quite pronounced. Large, wealthy planters had secured a dominant position, while small landholders and tenant farmers increasingly struggled to get ahead. And this growing economic stratification carried over into the political arena. The disfranchising of Virginia's poorer planters began with the restriction of the vote to those owning property. For the colony's first sixty years, all free men—meaning all those not bound as servants—could vote. But after 1670, only those owning property were allowed to cast ballots for county officials and representatives to the House of Burgesses. Historians have also found subtler evidence of decreasing class mobility; by 1670, the names of former servants appear only rarely on jury lists. Nor are they listed on militia musters as officers.

Pushed to the Brink

Falling prices, land shortages, government trade restrictions, the economic burdens of war, and finally political impotence; these factors combined, by 1675, to push Virginia's small planters to the brink. It was only a matter of time until these accumulating grievances would produce a crisis.

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