"It is obvious that any criticism of England's regulation of the colonial tobacco trade, which is based on a laissez-faire social philosophy," says George Lewis Beer, in _The Old Colonial System_, "is equally applicable to the arrangement by means of which the tobacco planter secured exclusive privileges in the home market."[5-1] Yet it is certain that the tobacco growers of England could never have competed with Maryland and Virginia had there been free trade. The prohibition of planting in the old country was necessary only because of the tariff, varying from 200 per cent in 1660 to 600 per cent in 1705, upon the colonial product. And though the exclusion of Spanish tobacco was a more real benefit, for the Spaniard produced varieties unknown in Virginia, there is exaggeration here also. This is clearly shown by the fact that at the end of the Seventeenth century England was sending millions of pounds of her colonial tobacco to Spain itself.[5-2] The leaf was brought from Virginia and Maryland, forced to pay a duty of about fifty per cent, and re-exported to the Spanish ports, where it found a ready sale. Had there been free exchange of commodities, the English colonies would have sold to Spain more tobacco than the Spanish colonies to England.
In truth the loss of the foreign market was a terrible disaster. In framing the Navigation Acts it was not the intention of the Government to stop entirely the flow of tobacco to the continent of Europe, but to divert it from the old channels and make it pass through England. It was therefore provided that in case the leaf was shipped out again to foreign ports, all the duties, except one half of the Old Subsidy, should be withdrawn.[5-7] The remaining half penny, however, amounted to forty or fifty per cent of the original cost of the goods, and proved at first an almost insuperable barrier to the European trade. Moreover, the shortage of ships which resulted from the exclusion of the Dutch merchants, the expense of putting in at the English ports, the long and troublesome procedure of reshipping, all tended to discourage the merchants and hamper re-exportation.
We may take for granted also that the resentment of Holland at the Navigation Acts, which struck a telling blow at her maritime prestige, played an important part in blocking foreign trade. The Dutch had been the chief European distributors of the Virginia and Maryland tobacco, and if they refused to take it, now that it could be secured only in England, it would pile up uselessly in the London warehouses. They understood well enough that the half penny a pound duty was a tribute levied upon them by their most dangerous rival. It is not surprising that instead of bowing to the new restrictions, they sought to free their trade entirely from dependence on British tobacco, by fostering the cultivation of the plant in their own country.