"The decline of the beaver trade brought wampum money into disrepute. When it ceased to be exchangeable in large sums for an article of international trade the basis of its value was gone. Moreover it was extensively counterfeited, and the white beads were turned into the more valuable black ones by dyeing. Nevertheless it lingered in the currency of the colonies as small change till the early years of the eighteenth century. While it was in use it fluctuated greatly in value.
"The first General Assembly of Virginia met at Jamestown July 31, 1619, and the first law passed was one fixing the price of tobacco 'at three shillings the beste, and the second sorte at 18d. the pounde.' Tobacco was already the local currency. In 1642 an act was passed forbidding the making of contracts payable in money, thus virtually making tobacco the sole currency.
"The Act of 1642 was repealed in 1656, but nearly all the trading in the Province continued to be done with tobacco as the medium of exchange.
"In 1628 the price of tobacco in silver had been 3s. 6d. per pound in Virginia. The cultivation increased so rapidly that in 1631 the price had fallen to 6d. In order to raise the price, steps were taken to restrict the amount grown and to improve the quality. The right to cultivate tobacco was restricted to 1,500 polls. Carpenters and other mechanics were not allowed to plant tobacco 'or do any other work in the ground.' These measures were ineffective. The price continued to fall. In 1639 it was only 3d. It was now enacted that half of the good and all of the bad should be destroyed, and that thereafter all creditors should accept 40 lbs. for 100; that the crop of 1640 should not be sold for less than 12d., nor that in 1641 for less than 2s. per lb., under penalty of forfeiture of the whole crop. This law was ineffectual, as the previous ones had been, but it caused much injustice between debtors and creditors by impairing the obligation of existing contracts. In 1645 tobacco was worth only 1-1/2d. and in 1665 only 1d. per lb.
"These events teach us that a commodity which is liable to great and sudden changes of supply is not a desirable one to be used as money.
"In the year 1666 a treaty was negotiated between the colonies of Maryland, Virginia, and Carolina, to stop planting tobacco for one year in order to raise the price. This temporary suspension of planting made necessary some other mode of paying debts. It was accordingly enacted that both public dues and private debts falling due 'in the vacant year from planting' might be paid in country produce at specified rates.