6 January 1639: Virginia orders the destruction of its tobacco crop

Faced with the plunging price of tobacco, the colonists of Virginia directed that half of the crop should be destroyed to avoid an economic catastrophe, on this day in 1639.

King James I of England found smoking tobacco repugnant. It was "a custom loathsome to the eye, hateful to the nose, harmful to the brain, dangerous to the lungs". But when it came to the tax revenues it raised, well, that was different.

In 1607, John Rolfe and his band of colonists had been dispatched to the Americas to find and send back gold. They didn't find it. But they did discover that tobacco plants flourished in the surroundings of the colony they established in Virginia, and it turned out to be the next best thing. Smoking became all the rage back home. The king granted English merchants a monopoly on the supply, which was subject to duty upon being unloaded in London. To keep prices (and the tax-take) high, growing tobacco in your back garden was banned (although many did it anyway).

In Virginia, tobacco became so valuable that it replaced coins (which were in short supply) as the main medium of exchange. Everything from debts, wages and taxes were paid for in tobacco, while warehouses stuffed with the leaves became de facto reserve banks. Even the governor's salary was calculated on the price of tobacco.

The colonists became fixated with growing the crop so much so that farmers had to be forced to grow food. Immigration rose and slaves were brought in from Africa, swelling the exportation of tobacco to Europe from ten tons in 1619 to 750 tons by 1639. In that time, the price plummeted from 27 pence per pound to just three.

The colonial authorities panicked. Yield restrictions were imposed, and the leaves were subject to quality controls. Yet, the price of tobacco plunged so far that it became no longer economical to grow it. In January 1639, half of the tobacco crop was ordered to be destroyed. But it was to no avail. To the north, Maryland had since sprung up as a competitor, and with its more diversified economy, it was better able to weather the storm. Virginia was condemned to suffer years of economic depression.

Recommended

1 April 1999: The minimum wage is introduced in Britain
This day in history

1 April 1999: The minimum wage is introduced in Britain

On this day in 1999, the national minimum wage was introduced in Britain, bringing an instant pay rise to 1.9 million low-paid workers.
1 Apr 2021
27 February 1900: The launch of the Labour Party
This day in history

27 February 1900: The launch of the Labour Party

Responding to the need for a single political party to represent the trade unions, the Labour Party was formed on this day in 1900.
27 Feb 2021
24 February 1981: Prince Charles and Lady Diana Spencer announce their engagement
This day in history

24 February 1981: Prince Charles and Lady Diana Spencer announce their engagement

On this day in 1981, Prince Charles and Lady Diana Spencer made their engagement official in front of the world's press at Buckingham Palace.
24 Feb 2021
24 February 1809: Drury Lane theatre burns down
This day in history

24 February 1809: Drury Lane theatre burns down

On this day in 1809, celebrated playwright Richard Sheridan was effectively ruined when the Drury Lane theatre went up in smoke.
24 Feb 2021

Most Popular

“Joke” cryptocurrency dogecoin goes to the moon. What’s going on?
Bitcoin

“Joke” cryptocurrency dogecoin goes to the moon. What’s going on?

Dogecoin – a cryptocurrency created as a joke – has risen by more than 9,000% this year alone. Saloni Sardana looks at how something that began as an …
19 Apr 2021
The FTSE 100 has clawed back above 7,000 – how much higher can it go?
UK stockmarkets

The FTSE 100 has clawed back above 7,000 – how much higher can it go?

The FTSE 100 index has risen to over 7,000 for the first time in over a year – it now sits just above where it was in 1999. But its era of neglect cou…
19 Apr 2021
The bitcoin bubble will burst: here’s how to play it
Bitcoin

The bitcoin bubble will burst: here’s how to play it

The cryptocurrency’s price has soared far beyond its fundamentals, says Matthew Partridge. Here, he looks at how to short bitcoin.
12 Apr 2021