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Wall Street History
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04/23/2004
Alexander Hamilton, Part II
As the nation’s first Treasury Secretary, Alexander Hamilton
insisted that the U.S. assume full responsibility for its
Revolutionary War debts as well as those incurred by the states.
One of the first steps in his program of fiscal responsibility,
though, proved to be most controversial, a 1791 excise tax on
distilled whiskey. You have to appreciate the America of this
time. You had the established urban areas along the sea coasts
and inland waterways, farming in the middle, and then a wild
frontier generally running along the Appalachian and Allegheny
Mountain chains. The excise tax on whiskey aroused anger in
the cash-poor backcountry.
You see, the frontiersmen grew corn as the main staple but it was
difficult to transport to market. When it was distilled and turned
into whiskey, though, the whiskey was easily movable and
treated as currency and the chief source of income for these
folks. One gallon jugs of moonshine, for example, fetched a
quarter in every store on the slopes of the Alleghenies. And let’s
be honest; the main reason why the frontiersmen made whiskey
was because they liked to drink it, as best captured in the 20th
century moonshiner’s song “Copper Kettle.”
My Daddy, he made whiskey,
My granddaddy made it too.
We ain’t paid no whiskey tax
Since 1792
[Richard Brookhiser]
Alexander Hamilton didn’t have much sympathy for those
complaining about the excise tax. If they didn’t like it, they
should drink less, he told them. But Hamilton taxed the large
distillers at a lower rate, further infuriating the smaller, seasonal
ones who either absorbed the added costs or charged their
customers more, most of whom in turn were small farmers and
rural laborers like themselves.
From Georgia to Pennsylvania, protests erupted and many of the
settlers refused to pay the tax; along with blowing up the stills of
those who could afford to cooperate with the federal government,
robbing the mails, assaulting the tax collectors (a few were tarred
and feathered), and threatening insurrection.
By 1794, President George Washington’s non-violent, pacifist
approach to the budding crisis having failed to elicit more
cooperation, it was generally agreed in the capital of Philadelphia
that things were getting a bit out of hand, particularly in western
Pennsylvania. That July, when a federal marshal appeared in
Pittsburgh with a list of delinquent distillers, a gun battle erupted
and at least two were killed. [There are various accounts as to
casualties throughout the entire rebellion. Suffice it to say, they
were minimal.]
Two of the leaders of the frontiersmen appointed a committee of
public safety and brought together the militia of four counties in
the Pittsburgh area. But back in Philadelphia, coercion by law
was still preferable to coercion by arms. Alexander Hamilton,
though, always believed that society was “inherently chaotic and
in need of a strong figure to keep them all in awe.” He was
spoiling for a fight.
Congress had been granted the power to ‘provide for calling
forth the militia to execute the laws of the Union,’ specifically,
Congress authorized the President to call out state militia.
Hamilton took to the newspapers, writing under the name
“Tully.”
“(The) question is plainly this – Shall the majority govern or be
governed? Shall the nation rule or be ruled? Shall the general
will prevail, or the will of a faction? Shall there be government
or no government The instruments by which (government)
must act are either the AUTHORITY of the laws or FORCE. If
the first be destroyed, the last must be substituted; and where this
becomes the ordinary instrument of government, there is an end
to liberty!” [Richard Brookhiser]
President Washington met with his cabinet and Pennsylvania
Governor Thomas Mifflin. Mifflin and Secretary of State
Edmund Randolph argued against force, while Hamilton and
others voted for. It was thus up to Washington and he quickly
made up his mind. He ordered the formation of an army.
The situation was worsening in western Pennsylvania as 5-7,000
frontiersmen massed at Braddock Field, threatening an assault on
nearby Pittsburgh. [Frankly, it was a lot of drunken talk, as more
than one historian has observed.] But on September 9, President
George Washington, dressed in full army regalia, reviewed a
force of 13,000 militia from Pennsylvania, Maryland, Virginia
and New Jersey at Carlisle. At this moment, Washington thus
became the only president to lead an army in the field.
Alexander Hamilton was by his side.
Washington stayed with the troops until they reached Bradford,
at which point, having bestowed his personal prestige to the
effort, he returned to Philadelphia to conduct other business.
Hamilton remained with the army, now under the control of
General Henry Lee (father of Robert E.).
Well, talk about anti-climactic, as the federal army approached
the frontiersmen, the rebels simply melted away. Thomas
Jefferson called it “The Rebellion that could never be found.”
But the show of force was nonetheless of historical importance in
establishing obedience to federal law.
Now there are varying accounts of what happened next, but at
least 20 insurgents were eventually rounded up and paraded
down the streets of Philadelphia to set an example. [Some say
the prisoners were merely humiliated.] Two were then found
guilty of treason, but President Washington pardoned them on
the grounds that one was a “simpleton” and the other “insane.”
And this, folks, was the first constitutional use of a pardon.
Hamilton, in Federalist 74, had argued: “A well-timed offer of
pardon to insurgents or rebels may restore the tranquility of the
commonwealth.”
But what the Whiskey Rebellion really meant in the years after
was that any grievance brought against the federal government
needed to have the backing of the entire state, and so this
principle evolved into the doctrine of states rights vs. federal
authority. Back in the 1790s, hostility between the western
territories and the elite along the seaboard only grew. It’s not a
stretch to see this as the beginning of the process leading up to
the Civil War.
Of course smaller rebellions over whiskey in the Appalachian
region continued for about another 150 years until the formation
of NASCAR!
Sources:
Michael Beschloss, general editor: “American Heritage: The
Presidents”
Paul S. Boyer, editor: “The Oxford Companion to United States
History”
Richard Brookhiser: “Alexander Hamilton: American”
Paul Johnson: “A History of the American People”
Samuel Eliot Morison, Henry Steele Commager and William E.
Leuchtenburg: “The Growth of the American Republic”
George Brown Tindall and David Shi: “America: A Narrative
History”
Jules Witcover: “A History of the Democrats”
Howard Zinn: “A People’s History of the United States: 1492-
present”
Wall Street History returns May 7.
Brian Trumbore
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