British Empire

Tobacco was the first great commercial success of England's empire in America. Indeed, if we date the creation of a formal imperial structure to the passage of the Navigation Acts in the mid-seventeenth century, then it was tobacco that called the empire into existence.

Before the middle of the seventeenth century, the British Empire in America had been an informal structure, bound together by the subordination of the several colonies to the crown, by the common culture and identities of the colonists, and, most important, by the activities of London merchants involved in colonial trades, who linked the relatively distinct enterprises scattered along the Atlantic from New England to the Caribbean into a coherent commercial whole. In this period the tobacco trade was already a major part of England's external trade, employing hundreds of ships and thousands of seamen while attracting the interest of some of the most prominent and richest merchants involved in colonial trades. By 1650, England imported roughly 10 million pounds of American tobacco, worth roughly 12 million pounds sterling in the colonies but worth several times that sum once safely delivered to markets in England.

Navigation Acts

The first navigation laws in 1650 were written in part by tobacco merchants determined to prevent the Dutch from wresting that valuable trade from their control. Although it is likely that evidence of Dutch inroads into the American tobacco trade has been greatly exaggerated, the English merchants had good reason to worry. During the Dutch revolt against the Hapsburgs, English merchants had been able to take advantage of Dutch distractions to seize control of trade to the Levant and in the Baltic. Once their issue with Spain was settled, the Dutch were able to use their commercial superiority and more efficient shipping to take back control of the trades previously lost to the English. English colonial merchants feared that the American trades might be next, so they turned to the state and wrote the Navigation Acts to protect their interests.

The navigation laws laid down only a few simple rules to regulate colonial commerce. First, all trade with the colonies had to be conducted in ships that were English-built, English-owned, and English-crewed. Although colonials were considered English for the purposes of the Navigation Acts, this rule effectively excluded foreigners from American trades. Second, certain commodities, tobacco among them, were designated as enumerated, which meant that they had to be shipped first to England no matter what their destination.

Expansion and Settlement

The tobacco trade continued to grow under the new system: By the early 1680s, England was annually importing from its American colonies about 20 million pounds of tobacco worth roughly 80 million sterling at the farm and much more at English markets. Most of this crop came from the Chesapeake colonies Maryland and Virginia. Tobacco, however, was a good small man's crop, and as such it played an important role in creating the opportunities that attracted so many to the colonies. A profitable crop could be grown by a man working alone or with the help of a few family members and perhaps an indentured servant or two on a small patch of ground, using only simple tools. Tobacco played an important role in the settlement stage of several colonies. Before the 1640s, several of the Caribbean islands had also shipped substantial quantities of tobacco to England, but with the sugar boom of that decade, Caribbean tobacco production soon faded to insignificance.

Taxes and Smuggling

Planters insisted that the restrictions of the navigation system and the high taxes that system placed on tobacco brought hard times to producers. Because tobacco paid a basic customs levy that boosted its price several times over its price at the farm in Virginia, one might think the planters had a case. Total British customs on Chesapeake tobacco fell from 12 pence per pound in 1619 to 2 pence in 1657. There they remained until 1685, when they increased sharply. In 1685, Parliament raised the nominal duties on tobacco from 2 pence to 5 pence per pound. Subsequent increases raised the charges to 6 pence in 1697, 6.3 pence in 1703, and 7.3 pence in 1748 (the effective rates were slightly lower, depending on the method of payment). Duties on reexported tobacco declined at about the same rate. After 1723, all customs on re-exported tobacco were rebated, so the tobacco of English colonial producers would be competitive in the markets of Europe. Since farm prices for Chesapeake tobacco in this period hovered between 2 and 3 pence per pound and occasionally fell below a penny, one can understand why planters often complained that customs charges were too high. However, tobacco from other parts of the Americas paid a much higher tax, while farmers in England were not allowed to raise tobacco. These policies gave English colonial producers a near monopoly of the large English home market. Further, customs charges fell over the seventeenth century, so they can hardly be said to have forced the price down.

Such high customs charges, often more than 10 times the price of the crop at the farm, raise the question of smuggling. Certainly such high taxes created an incentive to violate the navigation laws, for if one could avoid the tax and sell tobacco at market prices, one's profits would be substantial. Unfortunately, it is impossible to measure the extent of smuggling with any certainty; successful smuggling does not leave extensive tracks in the records. Despite the potential profits, smuggling does not seem to have been a major problem in the colonial tobacco trade, although there may have been a flurry of illegal activity just after the customs charges were raised in 1685. If caught, smugglers would lose not only their cargo but also their ship and face a substantial fine. Most merchants apparently concluded that the risks were too high and worked within the law. Smuggling, then, seems not to have been a major problem in the tobacco trade once metropolitan officials put an effective enforcement structure in place, something that had happened by the end of the seventeenth century. Smugglers apparently preferred low-volume, high-value commodities such as tea and brandy.

Planters and Merchants

As the data in Table 1 make clear, this seventeenth-century expansion of the tobacco industry took place within a context of rapidly falling prices. Falling prices for tobacco did not mean declining revenues for the state. Indeed, the revenues earned by the government from the tobacco trade climbed fairly steadily across the colonial period. As a consequence, the influence of the tobacco merchants over state policy remained substantial. A case in point is the Colonial Debts Act of 1732. Planters, to buy more land and slaves to expand operations, borrowed heavily from English merchants. When the loans came due, the planters often resisted repayment. Colonial legislatures, usually dominated by planters heavily in debt, often aided the foot draggers in finding ways to frustrate the efforts of merchants to collect what was owed them. So difficult did collecting become that in 1744, Micajah Perry III, perhaps the leading tobacco merchant of his day, gave up his assets to his creditors in large part because of his inability to collect from planters.

Before his bankruptcy, however, Perry led a successful effort to have Parliament pass the Colonial Debts Act of 1732, despite the planters' fierce opposition. The act outlawed many of the obstacles colonial legislature had thrown up to make collection difficult. According to the act, all of a planter's property, including land and slaves, could be seized for debt, and a creditor could simply swear an oath before a British magistrate to prove his claim in court, which permitted creditors to bypass colonial judges and juries. This procedure could be counted on to protect local interests (the indebted planter) against grasping foreign creditors. Such demonstrations of their weakness within the empire and their inability to defend their interests against the merchants played no small part in the decision of many Chesapeake tobacco planters to join the revolutionary movement.

Productivity and Prices

While the planters were perhaps partially correct in blaming falling prices on overproduction and the restrictions of the navigation system, their complaints obscure a more complex and more interesting process. In a classic new-industry pattern, tobacco prices fell because planters and merchants discovered better and more efficient methods of raising and marketing the crop. These improvements in productivity permitted planters to lower prices. Lower prices meant that more people could afford their product. More customers required more tobacco. The argument that prices fell because planters produced more tobacco is backward. Falling prices expanded the market for colonial tobacco, which prompted increased production. It is not clear exactly how planters effected this change, but it is undeniable that productivity (output per each worker) increased. In seventeenth-century Maryland, the mean output crop per hand rose from about 900 pounds in the 1640s to over 1,500 pounds in the 1660s and to nearly 1,900 in the 1690s.

One major boost in productivity came from the late seventeenth-century shift from a work force dominated by British indentured servants to one dominated by African slaves. Since tobacco was widely cultivated in West Africa, slaves often possessed skills that servants did not have. Further, this transition in the labor force permitted planters to drive their workers harder and to ignore the conventions that protected English servants from overwork and other forms of abuse. In the Chesapeake colonies, these conventions included a rest period in the heat of the day, many traditional holidays, Saturday afternoons free of work, and conventions that governed the gender division of labor and the work. As long as English indentured servants dominated the work force, planters seem to have been reluctant to assign women to field work. With the shift to African slaves, that reluctance disappeared. Slaves could be made to work more hours per day and more days per year than could servants. Further, through liberal use of the whip they could be forced to work faster and harder. Productivity increase also reflected the cumulative impact of many small changes in technique as planters gradually discovered more efficient ways of growing tobacco.

The completion of the farm-building process also played a key role in productivity increases. Once planters had working farms in operation, they could ignore such tasks as land clearing, fence and barn making, and orchard planting and concentrate all their labor on making tobacco. The tobacco industry also benefited from innovations in commerce, which lowered interest rates and the commission fees that merchants charged for handling the business of planters in England. In addition, improvements in shipping lowered freight charges.

As a result of these improvements in productivity, prices fell. In 1618, Chesapeake tobacco brought 8 and 9 shillings per pound in London; by the 1620s it sold for as little as 2 shillings and by the 1630s for less than one shilling per pound. Prices continued to decline in the middle decades of the century, although at a slower rate than before: In the 1660s prices of 6 to 8 shillings per pound were common. By the 1680s, York River sweet-scented tobacco, generally regarded as the best made in the Chesapeake colonies, brought as little as 4 pence per pound. Prices at Amsterdam, the major European market for Chesapeake tobacco, also declined sharply: in the mid-1630s, Chesapeake tobacco sold for 2 shillings a pound in the Dutch port; by the early 1680s, it brought less than four pence.

As a result of falling prices, tobacco was made affordable to an increasing number of Englishmen. The market for tobacco widened, spreading from the major port cities to the countryside. Once a luxury used chiefly by the rich, it was becoming a product that a growing number of the working poor regarded as a necessity. The results of this expanding market are clear in figures on percapita consumption. In the 1620s, annual per-capita consumption of tobacco in England and Wales was only one-tenth of a pound; by the turn of the century, that figure had grown to 2.3 pounds. Tobacco, if not quite yet an article of mass consumption, had become a daily presence in the life of thousands of English men. One can also trace the increased consumption of tobacco in the growth of linked industries. The number of pipe makers in England rose from 7 in the 1630s to 66 by the 1690s.

It would be difficult to overstate the importance of this process for the impressive growth of the English Empire in the Atlantic during the seventeenth century. By 1700, when the population of the English colonies of America was roughly 400,000, about a quarter of whom lived in the Chesapeake region, England's Atlantic empire had become a colossus, in part because of the successes of tobacco. Had tobacco planters not found ways to lower prices by increasing their efficiency, tobacco would have remained a high-priced luxury item with a limited market; the impressive expansion of the English American Empire over the seventeenth century would not have occurred, for much of that empire rested on a foundation of smoke.

The great seventeenth-century expansion of the colonial tobacco industry led by productivity gains tended to slow as the century progressed. By the 1680s, it finally ground to a halt, and the industry began a thirty-year period of stagnation. By the 1680s, planters and merchants had exhausted the possibilities of improved efficiencies, and they faced rising prices for land and labor. Growth began again during the 1720s as the industry entered a second long expansion that lasted until the American Revolution. In contrast to the first period of growth, this eighteenth-century expansion was driven by increased demand as population growth and rising incomes in Europe slowly pushed prices up and persuaded planters to make more tobacco to satisfy the rising demand.

? RUSSELL R. MENARD

BIBLIOGRAPHY

Carr, Lois Green, Russell R. Meard, and Lorena S. Walsh. Robert Cole's World: Agriculture and Society in Early Maryland. Chapel Hill: University of North Carolina Press, 1991.

Goodman, Jordan. Tobacco in History: The Cultures of Dependence. London: Routledge, 1993.

Harper, Lawrence A. The English Navigation Laws: A Seventeenth-Century Experiment in Social Engineering. New York: Columbia University Press, 1939.

Main, Gloria L. Tobacco Colony: Life in Early Maryland, 1650–1720. Princeton, N. J.: Princeton University Press, 1982.

McCusker, John J., and Russel R. Menard. The Economy of British America, 1607–1789. Chapel Hill: University of North Carolina Press, 1985.

Morgan, Edmund S. American Slavery, American Freedom: The Ordeal of Colonial Virginia. New York: W. W. Norton, 1975.

Price, Jacob M. Perry of London: A Family Firm on the Seaborne Frontier, 1615–1753. Cambridge, Mass.: Harvard University Press, 1992.

Navigation Acts laws passed by the British Parliament that forced the American colonies to sell only to Britain, buy only from Britain, and ship only in British vessels. The Navigation Acts were one of the background causes of the American Revolution.

indentured servant a person who agreed to work for another for a specified term (usually a few years) to satisfy a financial obligation. During the American colonial period, immigrants sometimes paid their passage with indentured service.