Here’s a good illustration on how a myth gets started. Ken Schwarz, Colonial Williamsburg’s blacksmith since 1982 and the master blacksmith since 2003, says he hears this one every time they make handwrought nails at the Anderson Forge. It’s not true, yet there is a nugget of fact if you dig deep enough . . .
. . . back to a single Virginia law in the 1640s that forbade the burning of buildings for the nails. However, Ken explains that during the earliest years of the colonial period—the first few decades of the 1600s—buildings were constructed in a very slipshod manner, with wood touching the ground. They were meant to be temporary, because the earliest settlers hadn’t planned to “settle” at all–they were here in the New World to make a quick fortune and go home. So they built shoddy buildings that quickly rotted. Therefore, it was an occasional thrifty practice to get rid of these shacks by burning them, but then, why not sift through the ashes for the nails? Ken says the nails weren’t all that valuable, but why waste them?
The law aimed to stop Englishmen from deserting their plantations and from burning the buildings as they left (and taking the nails with them) by giving them the estimated number of nails. Here, read it yourself.
And it is further enacted by the authoritie aforesaid, That it shall not be lawfull for any person so deserting his plantation as afore said to burne any necessary houseing that are scituated therevpon, but shall receive so many nailes as may be computed by 2 indifferent men were expended bout the building thereof for full satisfaction, reservinge to the King all such rent as did accrew by vertue of the former grants or planting of the same from the expiration of the first seaven years.
Perfectly clear, right?
Okay, the translation: in essence, it says, if you’re going to desert your plantation (which you are leasing from the king, you don’t own the land), don’t burn the worthless buildings for the nails before you leave; we’ll give you as many nails as two men estimate are in the building, but you won’t get any of your rent back from the king.
Ken Schwarz says that this practice didn’t last long. Slipshod building techniques soon gave way to sounder architecture. No one would ever have burned a decent building for its nails.

I guess it also says that nails were not so valuable after all, when they could give them nails to stop them from burning buildings…
Could you put a source for the language of the original law? We’re looking for it and haven’t found it yet.
Thanks!
http://vagenweb.org/hening/vol01-12.htm#page_291
FYI. Here’s the law, from Feb. 1644/5.