Whiskey Rebellion
The Whiskey Rebellion was a violent tax protest in the United States beginning in 1791 and ending in 1794 during the presidency of George Washington. The so-called "whiskey tax" was the first tax imposed on a domestic product by the newly formed federal government. The "whiskey tax" became law in 1791, and was intended to generate revenue to pay the war debt incurred during the American Revolutionary War. Farmers of the western frontier were accustomed to distilling their surplus rye, barley, wheat, corn, or fermented grain mixtures to make whiskey. These farmers resisted the tax.
Throughout western Pennsylvania counties, protesters used violence and intimidation to prevent federal officials from collecting the tax. Resistance came to a climax in July 1794, when a US marshal arrived in western Pennsylvania to serve writs to distillers who had not paid the excise. The alarm was raised, and more than 500 armed men attacked the fortified home of tax inspector John Neville. Washington responded by sending peace commissioners to western Pennsylvania to negotiate with the rebels, while at the same time calling on governors to send a militia force to enforce the tax. Washington himself rode at the head of an army to suppress the insurgency, with 13,000 militiamen provided by the governors of Virginia, Maryland, New Jersey, and Pennsylvania. The leaders of the rebels all fled before the arrival of the army, and there was no confrontation. About 150 men were arrested, but only 20 held for trial in Philadelphia, and only two were convicted.
The Whiskey Rebellion demonstrated that the new national government had the will and ability to suppress violent resistance to its laws, though the whiskey excise remained difficult to collect. The events contributed to the formation of political parties in the United States, a process already under way. The whiskey tax was repealed in 1802 during the Jefferson administration.
Whiskey tax
A new U.S. federal government began operating in 1789, following the ratification of the United States Constitution. The previous central government under the Articles of Confederation had been unable to levy taxes; it had borrowed money to meet expenses and fund the Revolutionary War, accumulating $54 million in debt. The state governments had amassed an additional $25 million in debt. Secretary of the Treasury Alexander Hamilton sought to use this debt to create a financial system that would promote American prosperity and national unity. In his Report on Public Credit, he urged Congress to consolidate the state and national debts into a single debt that would be funded by the federal government. Congress approved these measures in June and July 1790.A source of government revenue was needed to pay the respectable amount due to the previous bondholders to whom the debt was owed. By December 1790, Hamilton believed that import duties, which were the government's primary source of revenue, had been raised as high as feasible. He therefore promoted passage of an excise tax on domestically produced distilled spirits. This was to be the first tax levied by the national government on a domestic product. The transportation costs per gallon were higher for farmers removed from eastern urban centers, so the per-gallon profit was reduced disproportionately by the per-gallon tax on distillation of domestic alcohol such as whiskey. The tax applied to all distilled spirits, but consumption of American whiskey was rapidly expanding in the late 18th century, so the excise became widely known as a "whiskey tax". Taxes were politically unpopular, and Hamilton believed that the whiskey excise was a luxury tax and would be the least objectionable tax that the government could levy. In this, he had the support of some social reformers, who hoped that a "sin tax" would raise public awareness about the harmful effects of alcohol. The whiskey excise act, sometimes known as the "Whiskey Act", became law in March 1791. George Washington defined the revenue districts, appointed the revenue supervisors and inspectors, and set their pay in November 1791.
Western grievances
The population of Western Pennsylvania was 75,000 in 1790. Among the farmers in the region, the whiskey excise was immediately controversial, with many people on the frontier arguing that it unfairly targeted westerners. Whiskey was a popular drink, and farmers often supplemented their incomes by operating small stills. Farmers living west of the Appalachian Mountains distilled their excess grain into whiskey, which was easier and more profitable to transport over the mountains than the more cumbersome grain. A whiskey tax would make western farmers less competitive with eastern grain producers. Additionally, cash, which at this time consisted of specie, was always in short supply on the frontier, nevertheless the law explicitly stipulated the tax could only be paid in specie. In lieu of specie, whiskey often served as a medium of exchange, which for poorer people who were paid in whiskey meant the excise was essentially an income tax that wealthier easterners did not have to pay.Many of the resisters were war veterans who believed that they were fighting for the principles of the American Revolution, in particular against taxation without local representation, while the federal government maintained that the taxes were the legal expression of Congressional taxation powers.
Small-scale farmers also protested that Hamilton's excise effectively gave unfair tax breaks to large distillers, most of whom were based in the east. There were two methods of paying the whiskey excise: paying a flat fee or paying by the gallon. Large distilleries produced whiskey in volume and could afford the flat fee. The more efficient they became, the less tax per gallon they would pay. Western farmers who owned small stills did not typically have either enough time nor enough surplus grain to operate them year-round at full capacity, so they ended up paying a higher tax per gallon, which made them less competitive. The regressive nature of the tax was further compounded by an additional factor: whiskey sold for considerably less on the cash-poor Western frontier than in the wealthier and more populous East. This meant that, even if all distillers had been required to pay the same amount of tax per gallon, the small-scale frontier distillers would still have to remit a considerably larger proportion of their product's value than larger Eastern distillers. Less-educated farmers, who in this era were often illiterate, also feared they would be cheated by corrupt tax collectors. Small-scale distillers believed that Hamilton deliberately designed the tax to ruin them and promote big business, a view endorsed by some historians. However, historian Thomas Slaughter argued that a "conspiracy of this sort is difficult to document". Whether by design or not, large distillers recognized the advantage that the excise gave them and they supported it.
Other aspects of the excise law also caused concern. The law required all stills to be registered, and those cited for failure to pay the tax had to appear in distant federal courts, rather than local courts. The only federal courthouse was in Philadelphia, some away from the small frontier settlement of Pittsburgh. From the beginning, the federal government had little success in collecting the whiskey tax along the frontier. Many small western distillers simply refused to pay the tax. Federal revenue officers and local residents who assisted them bore the brunt of the protesters' ire. Tax rebels harassed several whiskey tax collectors and threatened or beat those who offered them office space or housing. As a result, many western counties never had a resident federal tax official.
In addition to the whiskey tax, westerners had a number of other grievances with the national government, chief among which was the perception that the government was not adequately protecting the residents living in the western frontier. The Northwest Indian War was going badly for the United States, with major losses in 1791. Furthermore, westerners were prohibited by Spain from using the Mississippi River for commercial navigation. Until these issues were addressed, westerners felt that the government was ignoring their security and economic welfare. Adding the whiskey excise to these existing grievances only increased tensions on the frontier.
Resistance
Many residents of the western frontier petitioned against passage of the whiskey excise. When that failed, some western Pennsylvanians organized extralegal conventions to advocate repeal of the law. Opposition to the tax was particularly prevalent in four southwestern counties: Allegheny, Fayette, Washington, and Westmoreland. A preliminary meeting held on July 27, 1791, at Redstone Old Fort in Fayette County called for the selection of delegates to a more formal assembly, which convened in Pittsburgh in early September 1791. The Pittsburgh convention was dominated by moderates such as Hugh Henry Brackenridge, who hoped to prevent the outbreak of violence. The convention sent a petition for redress of grievances to the Pennsylvania Assembly and the U.S. House of Representatives, both located in Philadelphia. As a result of this and other petitions, the excise law was modified in May 1792. Changes included a 1-cent reduction in the tax that was advocated by William Findley, a congressman from western Pennsylvania, but the new excise law was still unsatisfactory to many westerners.File:Whiskey Insurrection.JPG|thumb|300px|left|"Famous Whiskey Insurrection in Pennsylvania", an 1880 artist's impression of a crowd forcing a tarred and feathered tax collector to "ride the rail".
Appeals to nonviolent resistance were unsuccessful. On September 11, 1791, a recently appointed tax collector named Robert Johnson was tarred and feathered by a disguised gang in Washington County. A man sent by officials to serve court warrants to Johnson's attackers was whipped, tarred, and feathered. Because of these and other violent attacks, the tax went uncollected in 1791 and early 1792. The attackers modeled their actions on the protests of the American Revolution. Supporters of the excise argued that there was a difference between taxation without representation in colonial America, and a tax laid by the elected representatives of the American people.
Older accounts of the Whiskey Rebellion portrayed it as being confined to western Pennsylvania, yet there was opposition to the whiskey tax in the western counties of every other state in Appalachia. The whiskey tax went uncollected throughout the frontier state of Kentucky, where no one could be convinced to enforce the law or prosecute evaders. In 1792, Hamilton advocated military action to suppress violent resistance in western North Carolina, but Attorney General Edmund Randolph argued that there was insufficient evidence to legally justify such a reaction.
In August 1792, a second convention was held in Pittsburgh to discuss resistance to the whiskey tax. This meeting was more radical than the first convention; moderates such as Brackenridge and Findley were not in attendance. Future Secretary of the Treasury Albert Gallatin was one moderate who did attend, to his later regret. A militant group known as the Mingo Creek Association dominated the convention and issued radical demands. As some of them had done in the American Revolution, they raised liberty poles, formed committees of correspondence, and took control of the local militia. They created an extralegal court and discouraged lawsuits for debt collection and foreclosures.
Hamilton regarded the second Pittsburgh convention as a serious threat to the operation of the laws of the federal government. In September 1792, he sent Pennsylvania tax official George Clymer to western Pennsylvania to investigate. Clymer only increased tensions with a clumsy attempt at traveling in disguise and attempting to intimidate local officials. His somewhat exaggerated report greatly influenced the decisions made by the Washington administration. Washington and Hamilton viewed resistance to federal laws in Pennsylvania as particularly embarrassing, since the national capital was then located in the same state. On his own initiative, Hamilton drafted a presidential proclamation denouncing resistance to the excise laws and submitted it to Attorney General Randolph, who toned down some of the language. Washington signed the proclamation on September 15, 1792, and it was published as a broadsheet and printed in many newspapers.
Federal tax inspector for western Pennsylvania General John Neville was determined to enforce the excise law. He was a prominent politician and wealthy planter—and also a large-scale distiller. He had initially opposed the whiskey tax, but subsequently changed his mind, a reversal that angered some western Pennsylvanians. In August 1792, Neville rented a room in Pittsburgh for his tax office, but the landlord turned him out after being threatened with violence by the Mingo Creek Association. From this point on, tax collectors were not the only people targeted in Pennsylvania; those who cooperated with federal tax officials also faced harassment. Anonymous notes and newspaper articles signed by "Tom the Tinker" threatened those who complied with the whiskey tax. Those who failed to heed the warnings might have their barns burned or their stills destroyed.
Resistance to the excise tax continued through 1793 in the frontier counties of Appalachia. Opposition remained especially strident in western Pennsylvania. In June, Neville was burned in effigy by a crowd of about 100 people in Washington County. On the night of November 22, 1793, men broke into the home of tax collector Benjamin Wells in Fayette County. Wells was, like Neville, one of the wealthier men in the region. At gunpoint, the intruders forced him to surrender his commission. President Washington offered a reward for the arrest of the assailants, to no avail.
In addition to the unrest in Fayette county, on August 9, 1794, 30 men surrounded the house of William McCleery, the local tax collector in Morgantown, Virginia, as retaliation for the new whiskey taxes. McCleery felt threatened enough by the angry mob to disguise himself as a slave, flee from his home and swim across the river to safety. The subsequent three-day siege of Morgantown by outsiders and townspeople led state authorities to fear that the events would influence other frontier counties to join the anti-tax movement.