The Whiskey Rebellion was the first constitutional crisis in the United States. To understand the rebellion, you must first understand the background as to why it happened, you have to understand why the whiskey tax was so important to the new United States government.
In order to get the new constitution approved by the States, it was promised that this new Federal government would assume the debt from the individual States from the American Revolution. In order to pay this debt, the government needed a source of income. It was decided that excise taxes on certain luxury items and whiskey was the answer. Alexander Hamilton, the Secretary of Treasury, designed these taxes, which were then put to Congress and passed.
Hamilton intentionally designed the whiskey tax in a way that would discourage small distilleries and encourage large business. The tax was based upon a proof gallon of 100 proof whiskey at 68 degrees Fahrenheit and paid as the whiskey was made. It was also required to be paid in hard currency.
There were several problems with these tax regulations for small distillers on the frontiers of the United States. The biggest problem was that hard currency was hard to come by in the United States in these years, but almost unknown in the frontier regions of Western Pennsylvania and Kentucky. On the frontier, whiskey was being used as currency place of coins. A pioneer would barter a quart of whiskey for a yard of cloth or other items they needed. Hard currency was seldom used by the people on the frontier.
The next problem was that since the tax was on whiskey as it was made, it depended upon a government gauger coming to the distillery every day to collect the tax on that day’s production. To make matters worse, on the frontier most of the distilleries were part of the farm, making whiskey from excess grain. Small farm distilleries were scattered across the area and there was usually only one gauger for a larger area. This large area and a small number of tax collectors meant that the tax was collected at one time based upon the amount of whiskey the farmer could make in six months. That meant first of all, the farmer had to have a large amount of coinage to pay the tax and then, most farmers did not distill for a full six months so they were being taxed for whiskey they never made.
The unfairness of this caused these frontier distillers to rebel against the tax. This was the same generation of people who rebelled against the British government over taxation, so they were not inclined to sit back idly when faced with another tax they considered unfair. They tarred and feathered a few tax collectors and refused to pay the tax. Things climaxed in Pennsylvania when, they organized and attacked the lead tax collector’s cabin and shots were fired. One of the rebels was killed and this violence caused the Federal authorities to finally take action by raising an army to put down the rebellion.
Hamilton convinced President Washington to raise the army. The army raised was larger than any army led by General Washington during the revolution. This army marched into Western Pennsylvania and met no resistance. The leaders of the rebellion fled to Spanish territory and ended up settling near New Orleans. The government arrested ten people for the rebellion. Only two were convicted and Washington pardoned both of them. One of the convicted rebels was described as being an imbecile and the other as an idiot and Washington did not see the justice in hanging them for their crimes. One of my favorite Thomas Jefferson quotes was from this period. Jefferson was in France at the time of the rebellion and protested against the armed response to the rebellion. Jefferson said “an insurrection was announced and proclaimed and armed against, but could never be found.”In the end, the taxes were to be paid. The farmer distillers continued to make whiskey in Pennsylvania, but the government had proved its ability to collect taxes. Thomas Jefferson, when he ran for the office of the President of the United States, had the campaign plank of balancing the budget and eliminating the whiskey tax. In 1802, he did just that. The tax was gone only to come back briefly in 1814 to pay for the War of 1812. It was repealed again in 1817 and would not come back till the American Civil War.