The English who settled in Virginia starting in 1607 asserted that they owned the land. The pre-existing ownership rights of the Native Americans, the current occupants, were dismissed. At various times the English stated simply that they owned the land through "right of discovery" and "right of conquest." Treaties were negotiated with different tribes in the 1600's and 1700's to extinguish Native American claims.
Charters issued by James I did recognize the land claims of the Spanish in the New World, based on prior settlement. The first charter issued to the Virginia Company in 1606 authorized the investors "to make Habitation, Plantation, and to deduce a colony of sundry of our People into that part of America commonly called VIRGINIA, but settlement was allowed only on territory "not now actually possessed by any Christian Prince or People."1
The Europeans who settled first at Jamestown were employees of the Virginia Company. The investors in that company controlled all the initial English land claims in the colony. That lasted less than a decade, after which land titles for individuals were established by treasury rights, headrights, creation of "hundreds," militia rights, and land grants.
The Virginia Company was not a successful investment. The Spanish had found gold in the Caribbean, then seized vast wealth from organized Native American societies in Mexico and Peru - but there was no gold on the Coastal Plain of Virginia, and the paramount chiefdom led by Powhatan offered no stores of mineral wealth to exploit.
After John Rolfe made a profit from shipping his crop of Nicontiana tabacum tobacco in 1614, the Virginia Company recognized that it might generate a positive return on investment from agriculture. If farming was the answer, then the company certainly had one of the key requirements: land. The Third Charter issued in 1611 had granted the company a block of land 400 miles in one direction (200 miles north and 200 miles south of Jamestown), plus all the land "from Sea to Sea West and North-west."2
Tobacco farming required large amounts of land because the plant exhausted key nutrients in the soil in just 2-3 years. New fields had to be cleared and planted regularly, so growing tobacco required owning large tracts of land.
At the same time as Rolfe revealed a basis for profit in Virginia, the company was struggling to find new workers willing to be transported across the Atlantic Ocean. Negative reports from returning colonists discouraged even the poor in England from choosing to go to Virginia. After the Starving Time of 1609-1610, Lord de la Warre (as governor) and Sir Thomas Gates (as first marshall) had turned Jamestown into an armed camp with military discipline. They issued Laws Divine, Moral, and Martiall to control the behavior of the company's employees and soldiers.
Growing tobacco was a labor-intensive operation; large numbers of workers were needed to plant, weed, and harvest the crop. Owning a massive block of land in Virginia generated no profit for the investors unless there were farmers growing tobacco on that land. The Virginia Company needed to increase immigration to Virginia, and to decrease emigration of servants who had completed their time of required service.
The company adapted. Investors retained dreams of finding valuable minerals or generating profits from manufacturing items in Virginia such as glass, but the revised business plan took advantage of the company's greatest asset - its ownership of a vast amount of fertile land.
In 1613, Governor Sir Thomas Dale began to grant three-acre parcels to colonists willing to stay after their seven-year indentures expired. Those who stayed could work for themselves on their private three-acre plots, rather than serve the company by working full-time on its common land.
In 1616, colonists in Virginia ("ancient planters") were given 50 acres in exchange for remaining rather than returning to England. Since the Virginia Company had no cash to distribute as a dividend in 1616, investors were also each given rights to claim 50 acres. Another 50 acres were granted for each new share purchased in the joint stock company, for twelve pounds ten shillings per share. The right to purchase land, in exchange for a payment of twelve pounds ten shillings into the company's treasury, established the principle of land sales by "treasury right."3
Any additional investment in the company became a speculation on the value of the land, rather than on the potential for company profits from manufacturing, mining, or trading.
In 1617, the company declared that all new immigrants to the colony who paid their own costs for transportation would be rewarded with 50 acres of land. Immigrants unable to pay their own costs would also be worth 50 acres each. For each new immigrant ("head"), the company granted a "headright" to survey and own 50 acres of land to whoever financed the trip.
Englishmen interested in a free trip to Virginia could sign contracts to provide seven years of labor, earning 50 acres of land at the end of their term of service. The opportunity to own land was the primary attraction for colonists to risk a trip across the Atlantic Ocean to the colony in Virginia in the Seventeenth Century. In England, social and economic mobility was limited. Few of the farmworkers had an opportunity to acquire land and enter the gentry class. Travel to Virginia was risky, but the chance to end up as a landowner provided strong motivation.
In 1618, the dividend was increased to 100 acres/share. Colonists who had financed their own trip to Virginia before 1616 were also given rights to claim 100 acres. To qualify, new colonists had to stay three years or die in Virginia before three years were completed. The first 50 acres would be distributed in an initial division of land, and the additional 50 acres would be distributed once the initial division of land was occupied by colonists:4
The Virginia Company also invited investors to create "particular plantations" in the colony, separate from the company-managed communities such as Jamestown and Henricus. The company granted large amounts of land to investors willing to recruit settlers and establish new communities in the colony. Those communities would not be responsible to company officials; decisions made in Jamestown would not apply to the particular plantations.
The settlement of Bermuda set an example of providing investors some extra control over the settlements they sponsored. The island was surveyed, and specific parcels of land called "tribes" (later called "parishes") were allocated to individual investors.
In Virginia, those who established particular plantations often were also company officials. The decision to create independent units within the colonies created confusing loyalties, but did stimulate some of the company's investors to provide new funding for colonization. Funding a particular plantation was a way of betting on the success of colonizing Virginia independently from betting on the success of the Virginia Company.
By creating private land rights, the London Company traded total control over its land in exchange for profits from handling tobacco and collecting property taxes ("quitrents") at the rate of 2 shillings/100 acres. It was a long-term strategy, and collection of most quitrents was deferred initially to encourage new investment. Incentives for settling Virginia also helped to maintain enough colonists to provide military protection in the colony against European or Native American threats.
In 1618, the company loosened its control even more. A faction of investors led by Sir Thomas Sandys outmaneuvered its opponents in the company. They forced Sir Thomas Smith out of the role of Treasurer, which was equivalent to Chairman of the Board and Chief Executive Office, and issued the 1618 Charter of Orders, Lawes, and Privileges.
That "Great Charter" was a set of instructions from the investors in London, not a fourth charter from the king. It gave greater responsibility for local government to the colonists, and authorize the first General Assembly which met in 1619. Under Sir Thomas Sandys, the company expected that granting land and freedoms to colonists would increase the population enough so investors could finally make a profit.5
Goveror Wyatt issued patents to land based on headrights claims until the Virginia Company failed. After Charles I took direct control of the colony in 1625, his appointed royal governors continued to issue headrights. The award of 50 acres for everyone imported into Virginia incentivized people in England to sign indentures and spurred wealthy individuals to find and transport indentured servants to Virginia. Within 50 years, 70,000 people came to Chesapeake region.6
The headrights system also led to fraud. Some ship captains arranged for county officials to award headrights for sailors who came to Virginia but did not stay.
Servants would work 3-7 years clearing new land, moving the edge of English settlement further west into the North American continent and increasing the volume of tobacco exports. If an indentured servant had been transported by a investor who claimed the 50-acre headright, then that servant did not acquire title to any land through their work during their term of service.
At the end of their term of indenture, the contracts usually required that the freed servant be given some basic clothing and farming equipment. Without land of their own, the freed servants had four choices. The first three were to return to England, negotiate a deal to work for someone else in exchange for support and wages, find unclaimed land on the edge of settlement and become a squatter.
The fourth option was to purchase low-cost land (typically on credit), then "improve" it by cutting down the trees and preparing fields suitable for growing crops such as corn and tobacco. That was the dream of many of those who signed indentures, trading up to seven years of labor for the chance to become a landowner.
As the forested frontier was converted into farms, many of the servants who lived long enough to finish their indenture transformed into landowners. In Virginia, they could provide their children a better opportunity at gaining wealth.
The former servants may have been cash poor, but they could usually buy land on credit from one of the many members of the gentry. The gentry were the wealthy top 5% at the top of Virginia's stratified society. Some were "Cavaliers" who had moved to Virginia during the English Civil War, arriving with sufficient wealth to join the gentry immediately. They acquired large tracts of land and speculated on it gaining in value over time. Speculation was successful when someone was able to acquire title to land at a low cost per acre and then to find settlers willing to pay a higher price per acre for it.
The "headright" system did not provide free land to the initial investor. Transportation costs were as high as six pounds per person in the 17th Century, but abuses of the system allowed some people to expand legitimate claims. Both ship captains and the person paying the transportation costs might try to obtain headrights for the people transported to Virginia, or a claim would be filed for more immigrants than actually arrived in Virginia.
Virginia planters who imported their labor were awarded 50 acres per slave, just as they were awarded 50 acres per indentured servant. Both large and small landowners imported slaves, or purchased them from ship captains who brought them to the colony for sale. George Menefie was the first to claim a large number of headrights for one shipment of slaves, obtaining 1,150 acres for the 23 slaves he imported along with 37 other (white) servants in 1638. The headright claims for the indentured servants listed the names of the individuals, but the claims for slaves rarely identified individual slaves.7
The Virginia Company encouraged wealthy individuals to establish settlements called "hundreds" along the James River. Each hundred was authorized to send representatives to the first General Assembly in 1619. Starting in 1618 and lasting through the 17th Century (and technically until cancelled by the General Assembly in 1779), the "headrights" system authorized the grant of 50 acres for every individual brought to Virginia.8
The colony had an excess of land and a shortage of people, so it was public policy to encourage population growth through immigration and to induce immigration through promises of cheap land.
In 1699, after European immigrants became harder and harder to attract, the colony began to sell "headrights" allowing people to claim 50 acres for 5 shillings. Landowners who surveyed tracts and actually acquired patents (certifying their exclusive ownership of a particular parcel) might sell 100 acres for as much as three pounds. Since there were 10 shillings in a pound, that was a 600% markup.9