chants for 4.5 million pounds, or roughly as much as the yearly service on
the British public debt. Thomas Jefferson commented, “These debts had
become hereditary from father to son for many generations, so that the
planters were a species of property, annexed to certain mercantile houses in
London.” Oliver Wolcott, a militia general, signer of the Declaration of
Independence, and later governor of Connecticut, believed it was this debt
that converted the generally conservative gentry of Virginia into rebels.
Certainly the English merchants gouged their colonial customers. Not
only did they supply, as George Washington mildly complained, inferior or
shopworn goods, but, acting as agents, they probably manipulated the
prices of the tobacco they sold on behalf of growers. More significant was
the cost of transporting tobacco. Since a ship could make only one round
trip a year, transport averaged nearly 20 percent of the sale price. Producers
were lucky to end up with one-third of the gross. Market forces then as
today were against “primary products.”
Prices of primary products fell disastrously during the seventeenth cen-
tury. When the colonists at Jamestown first began to grow tobacco, it sold
for 5 shillings a pound. A decade later, the price had fallen 98 percent.
Horrified, the fledging colonial government of Virginia tried to limit pro-
duction, but its efforts failed. Marylanders jumped in to flood the market
with their tobacco, setting off a century-long conflict, the first of many
among the colonies, as Maryland and Virginia fought for market share.
North Carolina then joined in, and Virginia retaliated by closing its ports to
North Carolina’s shippers for half a century. Tobacco prices never recov-
ered, despite a vigorous and questionable advertising campaign. There
is “a singular virtue against the Plague in fresh, strong, quick-sented
Tobacco,” wrote William Byrd, a large producer in Virginia, in a pamphlet
published in 1721 in Virginia’s most important market, London. “The
sprightly effluvia sent forth from this vegetable, after it is rightly cur’d, are
by nature peculiarly adapted to encounter and dissipate the pestilential
taint, beyond all the antidotes that have been yet discover’d.”
Americans were slow to learn that distributors rather than producers
controlled the market and gained the most from trade. So most American
farmers continued to borrow in order to buy. Borrowing from London was
a taste most indulged but a luxury few could afford, and many went bank-
150 THE BIRTH OF AMERICA