Rick,
Your quotation is from Sir Arthur Conan Doyle's detective novel " A Study in Scarlet".
Sherlock is speaking with Doctor Watson.
from Chapter 1
......Sherlock Holmes seemed delighted at the idea of sharing his rooms with me. "I have my eye on a suite in Baker Street," he said, "which would suit us down to the ground. You don't mind the smell of strong tobacco, I hope?"
"I always smoke `ship's' myself," I answered.*
"That's good enough. I generally have chemicals about, and occasionally do experiments. Would that annoy you?"
"By no means." ......
*ship's tobacco...... is slang for navy tobacco.
The pipe, by its nature, is a contemplative device, as is evidenced by its place in the tales of Sir Arthur Conan-Doyle. In the Sherlock Holmes stories, a tricky conundrum is referred to as a "three pipe problem", and it is obvious from a peremptory study of the great detective’s methods that he was a devotee of "ship’s" tobacco*, a tough shag (tobacco cut into fine shreads) sometimes chewed by sailors, who occasionally referred to it as "pig’s tail".
Here is the reference:
http://news.scotsman.com/kirkelder/Mysterious-pipes-and-tough-shag.2562528.jp