When considering the history of Christmas in the early American republic, it’s essential to understand the history of Christmas in Britain. Not all of the population of the first states were British in origin, but the government had been.
What most people do not know is that Christmas was banned in England in the 17th century, by an Act of Parliament: “19 December, 1644 Ordinance to observe the Monthly Fast, especially on the day which heretofore was called The Feast of the Nativity of Our Saviour” (The power of the internet: lists of the acts of Parliament!). Puritans, Oliver Cromwell among them, were concerned that the celebration of Christmas was too Papist and too unruly. Medieval celebrations of Christmas were a time of feasting, drinking, and a great deal of chaos (consider the traditions of the Lord of Misrule and the Feast of Fools).
So, they banned Christmas. It was against the law to hold Mass, receive Communion, or have a feast. Instead, it was to be a day of fasting, and otherwise business as normal. This wasn’t exactly a new idea on the island; the Presbyterians up in Scotland had done essentially the same thing years back.
With the Restoration of the Monarchy, there was more or less the restoration of Christmas in England, but it was a little quieter than it had been. The large-scale misrule was replaced by smaller-scale partying, although in some places the tradition of wassailing was preserved. In the American colonies, there were places where it remained illegal to celebrate on Christmas – mostly in the north-east colonies which had been established by Puritans. The celebration of Christmas in other colonies, Virginia included, depended as much on your background as your location. Presbyterians didn’t make much of Christmas on either side of the Atlantic, well into the eighteenth century.
One short side note about Christmas in Scotland: it only ‘came back’ as a public holiday within recent memory. In the course of a dicsussion about holidays (and the Americanisation/Comercialisation of them), one of my mentors in Scotland told me that when he was a boy, it was just another day. His father and most everyone else went to work as normal. The major winter celebration in Scotland was and is Hogmanay, even with the commercial, Santa-Claus Christmas just a few days before.
(a note: this post and some of the others like it are a consolidated version of my research on Christmas in Virginia in the early 19th century. As such, there won’t be all that many footnotes or other citations. However, if you’d like something sourced or cited, comment and I’ll try to remember where I read it)