The Whiskey Rebellion & the Federal Government's First Tax

America’s first federal tax would lead to the Whiskey Rebellion. Americans fear that this tax would lead to an invasion of federal agents into their homes and property to collect the government’s money. When Western Pennsylvanians refused to pay this tax, the government raised an army, which marched into their lands to enforce their law. Many were arrested for treason. In 1794, the Federal government should there resolve to enforce their laws. A similar invasion would occur in 1861 when the South would refuse to pay unjust taxes.  

In order to protect our commerce and merchant sailors on the high seas, it was growing apparent in America that a new system was needed to generate the revenue necessary to build and maintain a national Navy.  It was also necessary to pay off war debts accumulated from the Revolutionary War throughout the States. In 1789, the States ratified and created the Federal government as an economic solution to this and other financial concerns. This new central government would also act as a liaison between the States and foreign governments. Taxes would be indispensable in realizing all these new federal goals.

Naturally, Americans were extremely leery about giving too much power to a central government and the military might that it would control. The inclusion of the Bill of Rights to the new Constitution and the slim majority by which it was ratified would be evidence that Americans had some trepidation with this new Federal government. They were right to be afraid, because Alexander Hamilton would champion a British-style economic system as a result of the Federal government’s new found power. “One cornerstone of that policy was an excise tax on alcoholic beverages.”¹ This first federal tax would generate the revenues that the new Federal government would need to pay off war debts, build and maintain a navy, and fund all the new public offices.

The new government decided to tax alcoholic beverages. Excise taxes or what Americans would call “internal” taxes like this new federal tax were extremely unpopular. Many would accept duties on imported goods, but they would not tolerate taxation on domestic products. Long before American independence, the colonists opposed such duties levied on them by the British Parliament. The first excise tax on “beer, ale, cider, and perry” was imposed by the British government in 1643.² Soon afterwards, violence erupted in the colonies and the riots would lead to partial repeals to the law. Americans particularly did not condone taxes on their alcoholic beverages. One tax collector said that “whenever any endeavor is made to gauge the drink brewed…riots are daily committed on the officers by the inhabitants.”³

The war with Great Britain would reduce the importation of rum into the colonies and many Americans would build their own stills to manufacture their own spirits. “Whiskey distilling became very profitable” in American at this time.⁴ The distilling of grain-based alcohol would become so extensive that it would lead to a shortage of bread.⁵ Western Pennsylvania would be one region among the thirteen states that relied on whiskey as their cash crop and a monetary means of bartering. The Federal government set their sights on these domestic distillers as a means to raise the money needed for their political machine. 

In order to build up the central powers of the Federal government, Hamilton wanted the new government to assume the debts of all the states. The southern states had paid off nearly all their war debts by this point, but Washington (a Virginian) and other Southerners were interested in having the new national capital moved to the South. A deal was made and the capital was moved to the Potomac and Hamilton would now have permission to tax all the states. “Hamilton proposed that about eight hundred thousand dollars should be raised by a duty upon imported liquors and upon those distilled within the country.”⁶

 

The bill to create an excise on liquor was introduced to the House of Representatives and many Americans were outraged by the new Federal government’s actions. Americans had just fought a war to free themselves “from an excise only to have one laid by the new government.”⁷ If excise laws were being passed, which were oppressive and against the will of the people, a law maker in the new capital was then no different than a law maker in London. Domestic alcohol was being made from private property. An excise law would not only violate the citizen’s right to private property, but it was sure to allow the tax collector permission to enter their private property. It was believed that this excise tax would open a Pandora’s box of taxes. House representative from Georgia, James Jackson, said that the excise was “odious, unequal, unpopular, and oppressive,” and “that the time will come when a shirt shall not be washed without an excise.”⁸

The seeds that would lead to a war between the states were beginning to sprout with the passing of this excise bill on January 27, 1791. The bill was passed by a vote of thirty-five to twenty-one, with the majority of the New England states for the bill and the majority of the deep South opposed to it.⁹ This new law supported by New England states would support the larger distillers and “it would act to put the smaller ones out of business.”¹⁰ This attack on the small business owners was seen as an infringement upon the rights of Americans, which were supposed to be protected by the Constitution. Many were beginning to fear that the new government was attempting to “reduce [the common man] to the economic, political, and legal status of a European peasant.”¹¹ 

Despite Southern opposition, it would be the farmers of western Pennsylvania that would rebel against the new federal tax in 1794. Opposition would lead to the destruction of property and physical attacks against the tax collectors. Rioting in the west would force the Federal government to take action to show their resolve and power to enforce their laws. An army of 13,000 men would be raised from militiamen. President George Washington would command a force greater “than he had ever at one time commanded during the Revolution”¹² against these riotous farmers. Even Hamilton would join the army on their march against these tax evaders. 

After three weeks, the Whiskey Rebellion was over. The Federal tax army would arrest a few men for treason, who all later would be set free. The tax evaders would win this contest in the end, when the excise law was repelled in 1802 by the Jeffersonian government. However, the Federal government had shown that they would use military might to enforce their laws. This would not be the last time that they would raise and army to invade a citizen’s private property to impose their will upon the American people. Sixty-seven years later, they also invade the Southern States when they opposed their oppressive and unconstitutional taxes.

Notes:

1.       Burner, David. "Firsthand America: A History of the United States, Volume I, 4th ed." 197. St. James: Brandywine Press, 1996.

2.       Slaughter, Thomas P. "The Whiskey Rebellion: Frontier Epilogue to the American Revolution." 12. New York: Oxford University Press, Inc., 1986.

3.       Ibid.

4.       Baldwin, Leland D. "Whiskey Rebels: The Story of a Frontier Uprising." 57. Pittsburgh: University of Pittsburgh Press, 1967.

5.       Ibid.

6.       Ibid, pg. 61-62.

7.       Ibid.

8.       Ibid, pg. 64-65.

9.       Ibid, p. 66.

10.    Ibid, p. 71.

11.    Ibid.

12.    Burner, Firsthand America: A History of the United States, p. 197.