As some in the Colony of Virginia prospered from the Tobacco Trade, many others were less fortunate.  Bacon's Rebellion, occurring in 1676, was a conflict between the established, wealthy planters on the coast of Virginia, and the newly-founded poorer planters further inland, who were frequently beholden to those on the coast to move their product to market in England. Those on the coast ran the colony in addition to controlling the shipping to Europe; those inland were frequently the recently manumitted indentured servants, or Indians and Africans. The tax burden fell most heavily on those in the west.

The cultural divide between eastern and western Virginia was exacerbated by westward expansion; as more Europeans came into Indian land, there was bloodshed -- and the Eastern half was unresponsive.  Taking matters into his own hands, Nathaniel Bacon began wholesale Indian slaughter in the west, and turned east to demand concessions from the governor. Fearing a coup, Governor Berkeley declared Bacon a rebel; Bacon, having nothing to lose, began to destroy what settlements in the east that he could. He became ill and died in the midst of the conflict.

In order to unify all planters and maintain political power after the rebellion, Virginia altered the tax structure, but more importantly, institutionalized slavery -- only Africans were considered slaves, with a different set of laws applied to them as opposed to the poor Whites who were their socioeconomic peers.  By disguising the economic inequalities as a racial issue, those in the east may have mitigated the poor Whites reasons for rebellion, but they consequently instituted racism that lasted for centuries.