William G. Thomas III, et. al., The Countryside Transformed

The Eastern Shore Produce Exchange offered shares at $5 each to white farmers. No subscriber could own as much as one-tenth of the total stock and most of the shares were held in blocks of one to five. Black farmers were not allowed to participate as shareholders but could use the Exchange to market and sell their crops and were eligible for the frequently lucrative patronage dividend. By 1915 the organization had 2,500 stockholders and, extending its services to 1,000 non-stockholding farmers, controlled 75 percent of the potato crop on the Eastern Shore. The Exchange expanded the potential market for local produce by employing agents in cities throughout the North and Midwest. Where once farmers had consigned their crops to a handful of commission merchants in five or six cities on the Atlantic coast, within two years of its founding the Exchange directly supplied over one hundred customers in more than twenty states. "By its system of distribution, in finding customers all over the country," an Accomack man noted, "it has contributed its part in relieving the demoralizing congestions of shipments to New York, Boston and Baltimore of a few years ago." By 1930 the Exchange had further extended its network to 616 cities in the United States, Canada, and Cuba. The Exchange improved the reputation of Eastern Shore produce by requiring that goods shipped under its Red Star brand be subjected to tight quality control (previous to the Exchange, some Eastern Shore farmers had packed pumpkins in the bottoms of barrels of sweet potatoes). Twenty-eight local boards organized and coordinated the activities of Exchange agents who inspected and graded the produce shipped from forty depots and wharves on the peninsula. The Exchange also bought seed potatoes in bulk and negotiated with (and on occasion brought legal action against) the railroad and steamboat companies for better freight rates.41

Map of Eastern United States Featuring Cities Linked to Eastern Shore Through Trade

The Produce Exchange invested in the latest technologies of the day. From its headquarters in Onley it ran a private telephone system between the local offices and shipping points. It used the telephone and telegraph to receive and monitor prices through its agents in major cities across the nation and world - Chicago, New York, Boston, Pittsburgh, Toronto, Scranton, Havana. The Exchange obliterated economic hierarchies. "Do not make the mistake of supposing that Baltimore can ever become the distributing point for Eastern Shore of Virginia goods," the general manager of the Exchange warned a Baltimore reporter. "The little country town of Onley, Va., is now the distributing point and will be such so far as man can see into the future.

Don't you know, sir, that we can get as good rates from this point as Baltimore or Philadelphia or New York can possibly get?" The Exchange pooled the prices for each day’s sales and paid the farmers the prevailing price. The system assured farmers that they would not pay commissions for this service, that they could gain the highest average market price, and that their products would be marketed with a brand, “The Red Star," nationally recognized for quality. The Exchange could handle the sale of 200 to 350 railcar loads of potatoes each day with this system.42

Aggressive marketing and improved quality control stimulated demand for Eastern Shore produce. “Better potatoes of better grades went out in better packages to better markets at better prices than ever in the history of the two counties,” an observer declared. The value of real and personal property increased exponentially. Between 1870 and 1920 the average value of farmland and buildings per acre jumped in Accomack from $16 to $137 and in Northampton from $15 to $197. In 1910 Accomack enjoyed the highest per capita income of any non-urban county in the United States and in 1919 Northampton and Accomack led all American counties in value of crop per acre. Annually, the Produce Exchange alone amassed receipts of $6,000,000 to $7,000,000. The exceptional year of 1920 saw the Exchange’s receipts climb to an astounding $19,000,000. The influx of cash encouraged the formation of new businesses. Between 1880 and 1928 the number of mercantile establishments in Northampton County increased from 46 to 306. Banks, hitherto nonexistent on the peninsula, opened in the larger towns. By 1919, total deposits averaged $7,000,000.43

The Richmond News-Leader ascribed the Eastern Shore’s prosperity to the Produce Exchange, “adequate and quick transportation,” and the willingness of the farmers to abandon the ways of the fathers, to experiment, and to plant “those products that promise most from the land.” While the News-Leader was correct to identify agriculture as central to the peninsula’s prosperity, it failed to note that the fisheries and lumbering industries were also, in the words of a Northampton man, “on the boom."44