Tags:
The Whiskey Rebellion: Seeds of Discontent (Part 1)

Was the Whiskey Rebellion simply a bunch of farmers that didn't want to pay taxes? Hear the real story.

Listen to the Episode

Show Notes

When you think of the Whiskey Rebellion, what comes to mind? Farmers not wanting to pay taxes? Alexander Hamilton goading President Washington into putting down an insurrection? Washington on horseback leading an army into Western Pennsylvania.

What if I told you that most of these assumptions are wrong? In part one of a series on the Whiskey Rebellion, I'll tell the story of the first victim of the rebellion, the events set up the rebellion, and how what many characterize as a fight for liberty - was actually a fight for survival.

  • The story of the first attack on a revenue man.
  • The art of tarring and feathering
  • General John Neville's proxy
  • Who is Alexander Hamilton?
  • Choosing distilled spirits as his first target for an excise tax
  • Why whiskey?
  • Eastern market economy vs Western barter economy
  • The inception of the rebellion at Newburgh, New York
  • Officer's pensions and march on Congress
  • General George Washington's most impactful speech
  • Three weeks pay in IOU's
  • Speculators take advantage
  • The great depression of the 1780s.
  • Whiskey as currency
  • No taxation without representation
  • Daniel Shay's example
  • Hamilton eyes the Constitution

Listen to the full episode with the player above or find it on your favorite podcast app under "Whiskey Lore." The full transcript is available on the tab above.

Transcript

Johnson Attack

On a peaceful afternoon along Pigeon Creek, not far from the point where it converges with the Monongahela, Robert Johnson pulled lightly on his horse's reins, slowing it, hoping so he could ground himself in the moment. The beautiful fall colors were exploding all around him, as the late afternoon sun shot its golden rays between the trees.

Hoping to gather his thoughts after a long stressful day, the sound of the rustling leaves started to mingle with the distance shouts of men. Out here in the wilderness about halfway between Pittsburgh and the Redstone Old Fort, if he was about to be approached by a raiding party of Shawnee, he knew his chances of survival were slim. 

The sounds were poking at his ears from all directions. Soon, he caught a glimpse of a couple of riders. He could make out feathers in their hair. They were dark skinned - no, wait, that wasn’t any kind of natural skin tone - these were the men he’d read about in the Gazette. A gang of local vigilantes that called themselves The Blacks. 

This motley rabble hid their faces beneath black soot, with some donning feathers and bandannas - others wearing buckskins or women’s dresses. There were rumblings about this crew going back to July. They had formed with the intention of spoiling the government’s efforts to enforce the nation’s first excise tax - a tax on whiskey - and a tax that they felt was unfairly targeting and undermining the poor farmers of Western Pennsylvania. 

And Robert, having just been appointed as the first Collector of the Revenue for the Counties of Alleghany and Washington by none other than Revolutionary War hero General John Neville, knew that he was just the man this posse would be targeting. 

It was a surreal scene and it would have been almost comical, if not for the rifles, muskets, and angry scowls on the men’s faces. It was clear, these men meant business.

Whooping and hollering like wild men, one of the men rode up alongside Robert, dismounted and pulled the frightened traveler from his horse. One of the men went into something that sounded like a cross between a rant and a judge's sentence. Two men approached Robert with knives flashing in the sunlight and the first began slicing away his clothing. The other man grabbed a fist full of hair, yanked it and began severing it from Robert’s head. The tax man wanted to scream and wrangel away, but he knew if he struggled too much, the man slicing his hair away might pearce his skull. 

With his head roughly shaven and his body stripped free of clothing, he felt a searing pain on the back of his neck - hot pine tar was dripping down his body, scalding him, with an intense pain that mercifully subsided as the cool September air zapped its energy. Another man loosened a sack that was strapped to his horse and brought it over and the men started grabbing fists full of feathers, thrusting them at the helpless naked figure. 

Their intention was not to hurt Robert, it was to humiliate him. Just as soon as they were there, they were gone, riding off into the woods, cackling and whooping as the sounds of hooves and men faded away. 

Alone and shivering, and having been relieved of his horse, it would be a painful and embarrassing walk through miles of backwoods, for Robert Johnson to reach his home. 

The Response

When General Neville heard of his inspector’s humiliation, he immediately reached out to the district court of Pennsylvania. This outrage must not stand. In all of the commotion of the attack, Robert did actually recognize three of the men. Warrants were issued. But charged with serving the offenders, deputy Marshal Joseph Fox showed he was no fool. He knew that if this band of rabble would tar and feather Robert Johnson, riding into the Pennsylvania wilderness with papers to serve would lead him to the same fate.

But General Neville had a solution. They enlisted the help of a proxy - an illiterate old cattle drover named John Connor. Surly these men would not harm this simpleton.

But this was an unfortunate miscalculation. The bandits seized Old John Connor, stole his warrants and then horsewhipped and tarred and feathered him. Enforcing this excise law was not going to be easy.

How Did We Get Here?

It was 1791 - just a mere decade after the decisive victory of the War of Independence at Yorktown, under the steady leadership of General George Washington. That same man was now being charged with guiding a burgeoning nation under its new Constitution, as its chief executive. 

But nothing during that decade went smoothly. Diplomacy and transportation issues delayed the Treaty of Paris for a year and a half. And during that time, British troops remained held up in New York City. 

There were thirteen colonies, all working as separate entities, and scuffling under the weight of the now passe Articles of Confederation. The country needed a Constitution and even though some of the greatest minds of the era were set to the task, the proceedings were anything but easy.

This led to years of uncertainty and did nothing to ease the financial crisis Congress had been experiencing during the war. You see, Congress didn’t have the power to levy taxes on individuals and changing the laws required 9 out of 13 states to approve. But in 1787, the ratifying of a Federal Constitution changed all of that.

But while creating a framework for a national government was a major step forward, that simply wasn’t enough to make the debt crisis go away. And the country was in the midst of a crippling recession. 

But within what may well be considered the greatest presidential cabinet in history, there was one man, who was self-assured that he had the perfect plan to ease the new nation’s pain.  

Alexander Hamilton and the Excise

Alexander Hamilton always seemed to have a chip on his shoulder. Born out of wedlock on the little Carribean Island of Nevis, his status as a bastard in the eyes of the church restricted his access to a proper education. Undaunted and filled with big dreams, as soon as he was able, he made his way to New York, by way of Boston.  There he worked to raise enough money so he could afford to attend King’s College. 

But when the first shots were fired at Lexington and Concord, Hamilton sought glory and enlisted in the militia. He soon caught the eye of General George Washington, who offered him the post as his aide to camp. 

After the war, Hamilton returned to private life and finished his schooling at King’s College and then passed the bar in New York. It was soon after that the man known as the financier of the Revolution, Mr. Robert Morris noticed the financial acumen that Hamilton possessed. In 1782, Morris had him set up as a receiver of Continental taxes for the State of New York. It wouldn’t be long before he rose to become a member of the Continental Congress.

Never one to hold back his opinions, he went straight to a letter writing campaign, criticizing the legislative body he was a part of as nothing but a tool for grabbing power. His relationships with Washington and Morris served him well. His writing skills, along with James Madison’s, and John Jay’s in the Federalist Papers would be instrumental in framing the debate that led to the Constitution. 

With the new government now in place, he took his seat as a trusted adviser to the president as Secretary of the Treasury, along with Secretary of State Thomas Jefferson, Attorney General Edmond Randolph, and Secretary of War Henry Knox. 

Not only was Hamilton outspoken, but he was brilliant to a fault, and a bit of a schemer when he didn’t get his way. While many of Hamilton’s policies helped a struggling young nation find its footing - his dogged determination, demogogging, and devotion to industry and the monied classes were sure to create both avid supporters and plenty of enemies. 

When it came time to develop a plan for helping the country meet its debt obligations and shape a strong unified federal government - Hamilton’s plan found plenty of opposition - and one of the points of frustration came from his choice of distilled spirits as the target of the nation’s first tax on a domestic product.

But for Hamilton, a whisky tax was a no-brainer. In his mind, it was simply a luxury tax on a product that was far from a necessity.  And it wouldn’t harm distillers, as they could just pass the increased cost on to the consumer. 

And to bolster his choice, he would also point to a report by the Philadelphia College of Physicians that preached that, “domestic distilled spirits, the cheap drink of the laboring classes, had become a ravaging plague requiring immediate treatment.” So he felt it was in the nation’s best interest to see this as not only a necessity for paying interest on the debt, it was also solving a health issue - something that won over some of his biggest critics, James Madison.

But to the farmer in the West, whisky had nothing to do with luxury. In fact, that kind of thinking was part of the reason Westerners grew more and more frustrated with what they saw as the Eastern elites. Elites whose only concern with the West, was how much investable land they could add to their portfolios. 

When it came to protecting the Western settlers - especially from attacks by Shawnee and other tribes, the Easterners turned a deaf ear - unless, of course, it came to the issue of someone squatting on investor’s lands. 

The elites also didn’t seem to understand that the Westerners had a completely different economic system that the Easterners. In the East markets were close, so transportation and capital in the form of cash were easier to come by. In the West, the only two ways to transport perishable goods without spoilage would be to ship it, yet Easterners were in no hurry to negotiate with the Spanish to open up the Mississippi - and the other way was to convert it into alcohol. 

Because markets weren’t open, Westerners were locked into bartering. So whisky took on an even greater importance, as a form of currency. And whisky was almost as valuable as metal and much more value than the devalued Continental dollars, which most farmers had less and a single dollar to their names.

So as a form of currency to the Westerners, Mr. Hamilton wasn’t proposing a luxury tax; he was proposing an income tax that would pass by the merchant class and Eastern elites - and would punish the hard working farmer and their workers out on the frontier.  It smacked of aristocracy and class warfare - and it wasn’t just the tax, it was how the government proposed to collect it. 

But before we dive into the specifics of the law itself, there were a couple of events that set up this simmering frontier drama. One will explain the actions that Hamilton took during the development and implementation of his tax, and the other will show how those farmers scraping by on the frontier likely developed their distrust and anger toward the Federal government.

The Creditor’s Revolution

The story of the rebellion can trace its roots all the way back to the Revolutionary War itself. If you ask many casual history fans, they’ll suggest that after the hostilities ended at Yorktown, the war was over.  However, the long and laborious task of getting a treaty signed had left British soldiers occupying territory in New York City. And because of this, the Continental Army couldn’t go home and instead, was forced to be furloughed. They remained at their commander’s beck and call at nearby Newburgh, New York.

But in the days prior to the treaty’s arrival, soldiers started worrying that Congress, who everyone knew was broke at the time, wouldn’t uphold their agreement to provide soldiers the generous pensions they had promised - basically half-pay for life. That concern was exacerbated when Robert Morris, the man who had already personally financed a decent portion of the Revolution, asked Congress to suspend Army pay, to save money. To Morris, he felt it was a debt that could be settled at a later date.

The soldiers became disenchanted and sent a message to Congress suggesting the level of their discontent. But they wouldn’t be unreasonable - they would gladly be willing to accept five years pay now instead of half pay pensions later. But the note also suggested that there might be fatal consequences for dismissing their concerns.

Congress had no money and there was no way the struggling states were going to be able to meet that obligation either. 

Hamilton and Madison, during the years when they were on friendly terms, began to see this crisis as possible leverage in the battle to get the Articles of Confederation amended, so as to give the Congress the power to tax individuals. 

Hamilton, wrote to Washington, urging him to take the Army’s side against Congress. But Washington, in a sign of his future willingness to yield to civilians over military authority, said he sympathized with both the Army and Congress and would not use the military in a civil dispute. 

As tensions grew at the camp, there became a real concern that Washington was losing control and that the Army might not disband when ordered to. If there was a challenger to Washington’s standing as the head of the army, it was General Horatio Gates. And when Gates’ aide sent out a message convening a meeting on March 11th to discuss an ultimatum to Congress, it looked like a military coup might be on the horizon. 

Hearing of the meeting, Washington countermanded the order and changed the date to the 15th. It must have looked to Gates’ followers like Washington was just flexing his muscles, because all he had done was change the date and ask for the minutes to be taken. 

When the officer’s convened for the meeting on the 15th, Gates called the meeting to order. But to everyone’s surprise - especially Gates, General Washington entered the room. Gates could only step aside and leave the floor to the commander. But that moment in no way could have been a comfortable one for Washington. It is said that many of the officers were fuming with anger that he had foiled their plans. 

Washington gave an impassioned address, imploring the men not to take matters into their own hands by marching on Congress. The cause of civil liberty, he said, should not be extinguished in blood. Then he slowly reached into his pocket and pulled out a letter that was a response from Congress. As he started to read it, he paused, then reached inside his coat and pulled out a pair of reading glasses - to which, in an embarrassed voice he said, “Gentlemen, you will permit me to put on my spectacles, for I have not only grown gray but almost blind in the service of my country.”

The officers were stunned and the embarrassment all at once shifted from Washington to the soldiers who stood watching him. In a moment, their emotions had shifted from anger to shame. How could they have built up so much anger against a man who had sacrificed ever as much as they had in the service of their country. Some of the officers were moved to tears. At that moment, the men almost unanimously backed Congress and Washington, and a military coup had been averted.

When the treaty was confirmed, Congress disbanded the Army without incident. 

But the best the enlisted men had received was three months pay and this had to come in the form of notes tied to Robert Morris’ personal funds, because Congress was still too broke to pay. 

And sadly, these IOU’s couldn’t support the cost of the journey home for many of the enlisted soldiers and so they sold the notes to speculators for pennies on the dollar. For those lucky soldiers that were given land grants, speculators roamed the countryside, taking advantage of veterans looking for a way to save their existing homesteads and farms. Washington, wishing to give them something of value, allowed them to keep their muskets, equipment, and uniforms - most ended up being sold to raise money as well. 

So many of the impoverished enlisted men made their way back to their farms poor, frustrated, and with a sense of betrayal. What had they sacrificed all of those years for, not to mention their family’s well-being, and their property which many lost to creditors. And it wasn’t like they were coming back to prosperous times. With the old Articles of Confederation in effect until the new Constitution was ratified in 1787, and the country’s economy floundered and fell into a depression, one that could have rivaled the one in the 1930s. 

Those that retained their farms in Western Pennsylvania could feed themselves and their workers on their own crops, but money just wasn’t something they had. Even if they did, Continental paper was of little value. When farmers needed to hire help, they often paid their workers with whisky - knowing the workers could use that whisky to pay rent and to settle debts. So as you can see, to the poor Western farmer, any tax on whisky was akin to a targeted tax on income. 

But it would be unfair to say that everyone in the West was suffering. Those few officers who came from the army, like General John Neville would receive up to $10,000 in government bonds for their service, in a time when the average family only made $200 a year. 

Some have suggested that the Whiskey Rebellion occurred because citizens didn’t want to pay any taxes - arguing that we had just fought a war for liberty, free of taxation. But the phrase “no taxation without representation” clearly states that the grievance was  not about the tax, but instead not having a voice in the legislative process. And to the poor farmers of the West, Philadelphia and Congress had to feel as far away as Great Britain. And with rules being written to unfairly favor Eastern markets, it was bringing the whole War for Independence into question. 

And with no other way to turn, if the farmers of Western Pennsylvania were to rebel, they only needed to look at a blueprint drawn out by the farmer’s of Massachusetts, just a few years earlier.

Shay’s Rebellion

In the lead up to the Constitutional Convention, Massachusetts farmers had been experiencing the same financial hardships as their Pennsylvania brethren. Taxes were being levied in the state, but bartering farmers didn’t have cash available to pay those taxes. However, the governor John Hancock was lenient and never pushed the issue. But when Hancock unexpectedly retired, his replacement Governor James Bowdoin, a member of the merchant class, was frustrated he was paying a tax that the farmers weren’t. So he started taking farmers to court in civil trials, and farmers started losing their lands and livelihoods to creditors. 

A Revolutionary War soldier who had not received pay after being discharged in 1780, came home to find himself in court for non-payment of debts. And soon this man, Daniel Shays realized this was much more than just his problem. 

When Bowdoin started prosecuting farmers, Shays and the rebels sought relief by storming and shutting down the courts. When that didn’t work, they escalated the attacks by storming the federal armory in Springfield, Massachusetts with the goal of overthrowing the state’s government.

Massachusetts was in crisis and needed help from the Federal government. But under the Articles of Confederation, Congress didn't have the money to fund an army, and Massachusetts had to raise its own militia to put down the uprising. In the end the state backed off and when farmers stopped paying again, the creditor class became the losers again. 

This toothless response that victimized the merchant class - convinced Hamilton that something had to be done and it all had to do with supplying the Federal government with money and allegiance, so it could have a say in these types of outcomes.

For Hamilton it was simple, just give the Federal government the power to levy taxes in states through the new Constitution. People might not bow to a state tax collector, but they would definitely respect a Federal tax collector.

But how do you get the states to give up this power? You would do this by assuming the state's debt - which makes them more of a stakeholder in the new national government, and then levy taxes to pay interest to the bond holders that were supporting the government.

Simple, all he needed was the power and the Constitution was just the thing to open the door.

Next week's episode, Alexander Hamilton builds his master plan for making the United States an industrial and market economy that can rival European powers. But one of the major features of his plan, the tax on whisky, stirs the seeds of discontent and brings violence and rebellion to an area known as The Forks. That’s next time on Whiskey Lore.

Whiskey Lore is a production of Travel Fuels Life, LLC

Research, stories and production by Drew Hannush

If you enjoyed this episode, help spread the word by telling a friend about the show. And find show notes, Whiskey Lore branded products and more at whiskey-lore.com.

And if you want to keep Whiskey Lore producing episodes well into the future, consider joining the Whiskey Lore Society at patreon.com/whiskeylore

I hope you enjoyed today’s opening presentation of the story of the Whiskey Rebellion. I originally intended to make this a single episode, but I feel like too many others have taken a shorthand approach to this story...and it’s that approach that has left with this impression that it was just a bunch of angry farmers that didn’t want to pay taxes.

There is a lot of action, intrigue, and scheming in this story - and in upcoming episodes I will be joined at times by Jim Ambuske and Jeanette Patrick of the Washington Library at Mount Vernon and we will round out all of this with the story of George Washington the distiller and will visit it’s current master distiller Steve Bashore.

That is all coming up in Season 4. I’m. And until next time, cheers and slainte mhath.

Listen To Whiskey Lore