By 1630, Virginia's previous boom in tobacco sales had collapsed, and prices had plummeted to a few pence per pound. However, the price of a beaver fur was a profitable '1 sterling. Because of the milder climate of the Chesapeake region, furs of animals caught locally were not nearly as rich and full, and therefore not as profitable as those caught further north. William Claiborne had been trading with the Susquehannock indians, who could obtain higher quality furs through their trade routes and ties to other tribes. Claiborne had an exclusive trade with the only source of high quality furs in the region. Maryland's new charter included the entire northern part of the bay, and Lord Baltimore's agents acted quickly in attempts to remove Claiborne, and take over his connection for furs.

This was the beginning of Maryland's first territorial dispute. Claiborne had obtained his royal trading license before Maryland was established, but Kent Island was included in Maryland's boundaries. While relations were good between the governments of Maryland and Virginia, Claiborne had no intentions of giving up his trading post without a fight. Maryland's Governor, Leonard Calvert, prohibited Virginians to trade in Maryland waters in spring of 1635. Governor Harvey of Virginia agreed to enforce this ruling, and soon thereafter, one of Claiborne's pinnaces was captured and its cargo of valuable items seized by Maryland authorities. Claiborne reacted violently, and sent armed ships from Kent Island to attack Maryland ships in the bay.

At this same time, outraged by Governor Harvey's 'Treason, for ... betray[ing] theyr Forte into the hands of theyr enemies of Marylande,' Claiborne and his supporters 'thrusted out' Harvey and sent him to England. Claiborne continued to control Kent Island for two more years. Harvey was sent back to Virginia by King Charles in 1637, and arrested those responsible for the rebellion. In February of 1638, a Maryland ship invaded Kent Island and confiscated goods estimated to be worth '10,000 sterling. Later that year in April it was ruled by the Commission for Foreign Plantations that Kent Island belonged to Maryland.

In his 'Declaration shewing the illigality and unlawfull proceedings of the Patent of Maryland' , Claiborne stated his frustration of the situation, and justified his reasons for claim to Kent Island.

'Wee say that after wee had discovered and brought the Indians of those parts of Maryland to a trade of Corne and Bever, by vertue of the King's Instructions under the broad scale with expense of our bloud and estate and exercised annuall entercourse with them above eight and twentie yeares How can it be said that our interests are preserved, when wee are interdicted this trade, our vessells and goods seized, our persons imprisoned and men slaine and the whole trade assumed onely to the Lord Baltimore's use. Wee clearely claime right by possession haveing planted the lie of Kent almost three yeares before ever the name of Maryland was heard of, and Burgesses for that place setting in the Assemblyes of Virginia whereby it is evident that the Lord of Baltimore's suggestion to the king that those parts were uncultivated and unplanted, unlesse by barbarous people not haveing knowledge of God, was a misinformation, and by it that Patent appeares illegally gotten.' (AOM 5:230)

Lord Baltimore's charter for Maryland included only those lands 'not yet cultivated and planted' within the described boundaries. Claiborne argued that because he had established his trading post on Kent Island before the Maryland Charter was granted, Maryland had no claim to the land. It would seem that the ruling was indeed unfair to Claiborne, but Maryland was victorious in this first dispute.