The Whiskey Rebellion: Danger at The Forks (Part 2)

Transcript

The Compromise of 1790

It was the evening of July 20, 1790 and one of the most important dinners in American history was being served. But what was on the menu was the furthest thing from the minds of the participants. 

The host was the newly appointed Secretary of State Thomas Jefferson. And as the nation’s first official diplomat, he decided to bring his skills at mediation to two vexing problems that had been weighing heavily on Congress.

The first issue came from Article I, Section 8, Clause 17 of the newly minted Constitution. This clause clearly called on Congress to choose the location of a Federal district for the seat of the new Federal government. 

And there were two locations that had been discussed. One would have set the capital on the Potomac River near Georgetown and the other location was between York and Lancaster, Pennsylvania at Wright’s Ferry on the Susquehanna. 

The northern faction didn’t want the capital in the south and the southern faction didn’t want the capital in the north. The House and Senate both came up with bills featuring two separate locations, but couldn’t find reconciliation. One of Jefferson’s guests on this evening - Virginia Representative James Madison was in favor of placing the Federal district on the Potomac. The other guest, Secretary of the Treasury Alexander Hamilton, whose home base was New York, favored the northern Pennsylvania location.

The other issue was Alexander Hamilton’s pet project, the assumption of the state’s war debts by the Federal government. Southern states were opposed to the plan because many of the states in the South had made it through the war with little debt - so it felt like a bailout of the northerner’s wreckless money management with no benefit for southern states that would be giving up some of their power to the Federal government.

Historians disagree as to whether this dinner actually resulted in what would be called the Compromise of 1790, but whether it did or it didn’t - in the span of just over a month, the future capital would be given to the southern Potomac location in what would be called the Residency Act - and the Funding Act of 1790 would proceed with assumption of state debt at the heart of it. And it took just over half a year for Alexander Hamilton to swiftly take advantage of it, pushing the House of Representatives to pass the Whiskey Tax the following March.

So why was Hamilton so quick to jump on an excise tax?

Why the Whisky Tax Was Necessary

Well, beyond the recession/depression that gripped the public at large was experiencing, the Federal government was also feeling the pain. Hamilton estimated that the government's debts equalled $52 million even before the assumption of $25 million in state debts. 

Bond holders who would be trading old bonds for new, needed to be secure in knowing the United States was a good investment. Hamilton assured them that his plan to assume all of this new debt would be “a national blessing.”

But even with his initial tariffs and tonnage fees on imports, money was still tight and some doubt began to creep into Hamilton’s mind, that those tactics alone would not be enough to satisfy investors and support interest payments on the debt. 

His options were to raise the tariffs, which might upset trade - impose a wealth tax that would punish the very industrialists and monied men he hoped would build a strong industrialized nation - a land tax, which was seen as a tired old practice that should be put out to pasture - an income tax, which hit everyone but would be unpalatable and likely hard to collect, or a excise tax on a domestic product. Which put distilled spirits in his crosshairs.  

For Easterners and the monied class, this was likely the best option, so they gave little opposition to the whiskey tax, but Westerners the way the law was written was putting them in a precarious position. 

As I detail the law itself and how it was meant to be implemented, you will likely have the same reaction as me. How could a man of Hamilton’s financial acumen not see how this bill felt like an attempt to rid the country of rural farmers. 

There is little doubt in the detailed nature of the bill that Hamilton had a firm grasp on the costs of running a still and the process of making whisky - so it is hard to suggest that Hamilton had a blindspot when it came to farming economics. But when you take into account Hamilton’s ambitions for developing a strong market economy and an industrial prowess that rivaled the European powers, it makes more sense why he wanted this law written the way it was. 

The Law

When the law was first introduced, a city distiller would be charged on a per gallon rate for each batch of whiskey actually produced. This format worked well for the larger city distillers because their operations ran on a more consistent schedule and with larger volumes. 

Small country distillers would have to pay an annual flat fee for the entire distilling operation. And this is how we know Hamilton had a deep understanding of the financials of distillation. 

He worked out the numbers to where he decided that the average 100 gallon still could produce 12 gallons of spirits from 100 gallons of wash. Based on an average of 15 runs the still could produce 180 gallons a month. So a 100 gallon still would be charged a fee of $60 for a four month season of distilling - averaging to around 9 cents tax per gallon. 

But the problem with this logic is that farm distillers are usually more farmers than distillers. A stillhouse was nowhere near running at 100% capacity during these four months. Cattle and livestock needed to be fed, crops needed to be maintained, and families needed to be attended to. This meant they were paying tax whether they were making whisky or not.

However, if you were one of the richer distillers in the country, with a large operation, then the flat fee worked out to a major advantage. Just figure out how to optimize your operations so you could produce much more than the 180 gallons, stretch your distilling season a few more days, and you found yourself paying well below the 9 cents per gallon - giving you a price advantage over smaller local competition. 

And before any of these taxes could be determined, you had to first register your still - and that was at a steep $150 dollars on any still over 40 gallons. 

But it wasn’t just a question of the cost of registration, the fees, or the competitive disadvantages. The biggest hurdle to meeting their obligations was how they had to pay all of these fees and taxes - in cash only. To an Easterner, cash and credit were easily accessible. But to the Western farmer in a barter economy, most literally had less than a dollar to their names. So it wasn’t that they didn’t want to pay, it was that they couldn’t.

During my recent trip to the Washington Library at Mount Vernon, I had a chance to talk with Dr. Jim Ambuske and Jeanette Patrick from the Center for Digital Research. We talked extensively about George Washington’s role in the Whiskey Rebellion and about the conditions that led to the rebellion. 

Jim pointed out that for those farmers that just decided to skip registering their stills, not only would they be fined, but to add insult to injury the location of the court would create another barrier.

“If you get caught, you know, it's it's a violation of federal as opposed to state law. And so the only federal district court in existence at that period was in Philadelphia and so that covered had jurisdiction for all of Pennsylvania. They do a change the law later and amend it so that those complaints can be heard in State Court. But initially right you if you get caught you'd have to go from Pittsburgh to Philadelphia ... that's that's quite a haul and especially if you're a farmer who doesn't have much to begin with, you know, that's an expensive Journey. Self before Federal magistrate and probably take a fine for not registering your Stills. And so the calculation then you have to make as a farmer is - do I actually answer this writ or do I simply ignore it, and a lot of people ignored it.”

So, if they decided to ignore the writ and forgo the 300 mile trip over bad roads and through mountains, what perils might the Western farmer face, if they were caught with an unregistered still?

Well, not only could the farmer’s whisky stocks be seized - equipment, horses, livestock, or wagons. Basically, they could lose just about everything attached to their farm.

And even if you did find the money for the registration fee and flat fee, penalties for not keeping accurate records or for mismarking casks would lead to a $100 fine and discovery of a counterfeited certificate would bring an exorbitant $500 fine.

With more than 25% of the stills in the United States located in Western Pennsylvania, the people targeted by this law were those that were least able to abide by. Frontier farmers felt targeted and disenfranchised by their government, they were tired of the sleepless nights worrying about debtor’s prison or losing their family farm. 

And what made it all worse, was that the monies being raised through taxes were being sent back to support rich eastern creditors, the very people who would have a chance to buy their seized property at pennies on the dollar - and the ones the farmers would have to beg to work for to help keep food on the table. 

Caught between a rock and a hard place, the time had come for them to take matters into their own hands.

The Forks

The area was known as The Forks, where the Allegheny River meets the Monongahela River to form the Ohio. To the east of the convergence of the rivers stood old Fort Pitt, a British outpost during the French and Indian War and the headquarters for the western theatre during the Revolutionary War. 

Beyond that lay the little frontier town of Pittsburgh. Filled with log homes and brick structures, by 1791 it was just starting to show signs of developing into the blue collar town it would later become. During those early days there would be mills, brickworks, and ironworks. Yet you didn’t have to go far, to be in the midst of the wild frontier.

This wasn’t the first time the area was breathing hints of insurrection. Their detachment from the east and the fact they were being claimed and being taxed by both Virginia and Pennsylvania, almost led them to becoming part of a new frontier state called Westsylvania. 

After the conclusion of the Revolutionary War, there was hope on the horizon for small profits through farming and providing sustenance for the troops stationed all around. And if they could only get Congress to negotiate with Spain to open up the Mississippi River to trade, times could become very bright for producers of Old Monongahela rye whiskey. 

But Mr. Hamilton’s tax was casting a dark shadow over their dreams.

General John Neville

But not everyone in Western Pennsylvania struggled with the new tax. Revolutionary War hero General John Neville, a well respected citizen who initially opposed the tax, soon changed his tune in early 1791 when he was appointed the tax Inspector of the 4th Survey District of PA, receiving not only a $450 a year salary, but also collecting a 1% commission on any tax collected from his neighbors.

At aged 60, he had done quite well for himself in life. He married Winifred Oldham whose wealthy family gave him status and the war had brought him $10,000 in retirement bonds and land grants. A contemporary of General George Washington, they had both served under British General Braddock during the French and Indian War. Neville’s path would follow Washington’s and he would see action at Trenton, Princeton, Germantown, and Monmouth Courthouse. He would end the war as a colonel, but be giving a brevet promotion to brigadier general for merit in the field. Upon returning to Western Pennsylvania, he established a successful distilling business among a host of other businesses in Pittsburgh under the name the Neville Connection while enjoying one of the grandest plantations West of the Alleghenies, Bower Hill.

A crafty business man, he would leverage his family relationships with his son-in-law, Isaac Craig - Deputy Quartermaster at Pittsburgh and his brother in law Major Kirkpatrick to corner the market in whisky sales to the local military. 

Mr. Hamilton’s Excise

But others that weren’t served by these advantages started to become frustrated and it wouldn’t be long before community leaders started organizing protests and creating petitions to get the Federal government to hear of their issues with the tax.

The first major meeting was organized on July 27th, 1791, south of Pittsburgh at Redstone Old Fort. A wealthy landowner and associate judge for Fayette County, Colonel Edward Cook and the future Senator and Secretary of the Treasury Albert Gallatin appealed to a group of angry locals to voice their discontent with the excise law publically. They published their resolutions in the Pittsburgh Gazette. 

A month later, a circular started spreading about the countryside leading to an anti-excise convention on September 7th, at the Sign of the Green Tree Tavern in Pittsburgh. And the attendees of this convention weren’t just a rag tag group of angry farmers, several prominent voices with political aspirations attended this meeting. They came from Fayette, Westmoreland, Washington, and Allegheny counties all signed a petition that was sent off to both the state and federal legislatures in Philadelphia. The document charged that the citizen’s liberty was being infringed upon and Westerners were being unfairly targeted. 

But both governmental bodies dismissed the petition, pointing out that each farmer who hadn’t registered their still would get their day in court, so no liberty was being infringed upon. This incensed local men like Daniel and John Hamilton and soon they were gathering their friends around Mingo Creek and discussing alternative forms of persuasion. 

If they couldn’t sway the government by petition, then they would need to take more drastic actions. This would mean boycotting whisky from the East, development of a coalition between the 5 Western counties, the raising of a militia, the inception of their own court system, and a goal of putting the fear of God into any whiskey revenuer, that dared collect the tax. 

Within days of this meeting, the first of General Neville’s tax collectors, Robert Johnson became the first victim of these vigilantes.

Poor Robert Wilson

Between the fear and frustrations of farmers and the talks of revenuers and militia men, tensions were rising at The Forks and it wouldn’t take much to spark further  violence. 

That October, a man named Robert Wilson started poking around the area asking questions about local stills, suggesting that he had been sent by Congress to scour the countryside, to determine how many stills there were in the area. As word got out, suspicions were raised and The Blacks decided it was time to send another message. They weren’t about to condone having a spy in their midst.

Daniel Hamilton took the lead in gathering men and storming on the residence of Robert Wilson. They ripped him from his bed, took him a few miles down the road to a blacksmith’s shop, burned his clothes, and grabbed a red hot branding iron and went to work torturing his naked body. They demanded he confess, but Wilson wouldn’t ask for mercy. Finally fed up with this lack of cooperation after a night of torture, they tarred and feathered him and as the sun came up on the horizon, they left him there naked and wallowing in pain.

As word of the attack made its way around town, the rebels were embarrassed to find out that Robert Wilson did not work for the government. He had never approached Congress and definitely wasn’t doing their bidding. General Neville had no record of him. Robert Wilson was simply a delusional man who wanted to live the life of the spy and he was willing to put his life on the line to do it. This embarrassing turn of events gave the militia men a black eye and Alexander Hamilton would play up the story later on, when trying to convince President Washington of the need for action against the insurgents. 

The Wilson case went to court, but armed men carted off the only two witnesses to the event that were willing to testify and leaders of the mob were never brought to justice. 

So, just like with Shay’s Rebellion, the Federal and state governments were looking pretty toothless at this time. As the Winter of 1791-1792 approached, the attacks on revenue men subsided, but so did the collection of taxes.

Hamilton’s Slap In The Face

Undeterred, Alexander Hamilton took the Winter repreve to review the excise law, hoping to patch up some of its flaws. But if the vigilantes at The Forks thought their actions would positively impact his decision making, this was a grave miscalculation.

When the amendments to the bill were introduced in March of 1792, Hamilton took under advisement the changes that large scale distillers had proposed to him over the previous few months.

Gone would be the distinction between City and Country distilleries; also gone would be the restrictive by the gallon mandate. Now large scale country distillers could pay the flat fee and optimize their processes to squeeze the tax burden down below a penny a gallon. 

And while the initial law had exempted stills under 40 gallons capacity, the revised law removed this exemption - ensnaring even casual distillers. 

To show how serious the government was in pursuing tax evaders, the fine for not registering a still went from $150 to $250 along with the confiscation of the still.

Registration offices were to be opened in each county. Licenses could now be renewed monthly, instead of yearly, to cut down on the upfront cost, but it would be illegal to distill outside of the months you registered.

And to further needle the Westerners, Hamilton began pushing the army to buy whisky in bulk, cutting out small distillers. And on top of all of that - tax still remained a cash only proposition.

As you would expect, the amended bill did nothing to curb the growing violence and intimidation tactics in the four Western counties of Pennsylvania - nor did it help tax collection efforts there, in Maryland, Virginia, the Carolinas, Georgia, or the newly minted state of Kentucky. 

If Hamilton thought his efforts would bring the simmering countryside in line, he had another thing coming - and soon rebels would be moving from attacks on tax collectors to all out insurrection. 

Coming up, an ad placed by General John Neville in the Pittsburgh Gazette sets off a violent attack against the person and property of one of his revenue agents. Alexander Hamilton, frustrated by the violence begins laying the seeds in President Washington’s mind that troops may be needed to stop the insurrectionists. And the battle lands right on General Neville’s doorstep at Bower Hill.  That is next time on Whiskey Lore. 

Whiskey Lore is a production of Travel Fuels Life, LLC

Research, stories and production by Drew Hannush

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So, we’ve had a little bit of mayhem in this whisky drama, but things are going to ratchet up quite a bit in our next episode. I’m reminded of a book by James Mitchener that I read when I was younger, called Space. I think it was around page 700 after a lot of character development that he started a chapter with “and now our story begins!”

Well, the Rebellion has been fairly tame up until now, but it is about to kick into high gear. And are the Whiskey Lore interviews. I’ve got some fun ones coming up in the next few weeks, talking scotch, bourbon, George Washington’s distiller and distillery and more we’ll dip into the character of the former General and President. 

And until next time, cheers and slainte mhath.