Unintended Consequences of Good Intentions: George Washington and Whiskey

When political leaders fear that their young country needs to be violently protected from a peaceful protest you get a precedent that allows future political leaders towards doing the same.

While this article from The Burning Platform covers the event itself nicely, it does little to address the ripple effect of this brazen move by a republic which desired neither a king nor a tyrant be in position to command such a move under the 6 year old brand new constitution. (The Articles of Confederation would NEVER have allowed this kind of decision)

In August 1794, President George Washington would mount a horse toward directing 13,000 troops to confront a peaceful protest in Pennsylvania, consisting mainly of Revolutionary War veterans that were upset about the 25% Whiskey Excise Tax:

President George Washington writes to Henry “Light Horse Harry” Lee, Virginia’s governor and a former general, regarding the Whiskey Rebellion, an insurrection that was the first great test of Washington’s authority as president of the United States. In the letter, Washington declared that he had no choice but to act to subdue the “insurgents,” fearing they would otherwise “shake the government to its foundation.”

The Whiskey Rebellion of August 1794 was the product of growing discontentment, which had been expressed as early as 1791, of grain farmers who resented a federal tax imposed on their distillery products. As growers threatened federal tax collectors with physical harm, Washington at first tried to prosecute the resistors in the court system. In 1794, however, 6,000 men angry at the tax gathered at a field near Pittsburgh and, with fake guillotines at the ready, challenged Washington and the federal government to disperse them.

Now this may be what you remember from your high school or college history books, but know that the REAL anger was righteous in that its roots was in the hated Stamp Act that the British imposed on the American Colonies BECAUSE it was an “internal tax” verses an external tax like a tariff. There is a big difference as Murray Rothbard explains in this Lew Rockwell article:

.. we must realize the depth of hatred of Americans for what was called “internal taxation” (in contrast to an “external tax” such as a tariff). Internal taxes meant that the hated tax man would be in your face and on your property, searching, examining your records and your life, and looting and destroying.

The most hated tax imposed by the British had been the Stamp Tax of 1765, on all internal documents and transactions; if the British had kept this detested tax, the American Revolution would have occurred a decade earlier, and enjoyed far greater support than it eventually received.

Americans, furthermore, had inherited hatred of the excise tax from the British opposition; for two centuries, excise taxes in Britain, in particular the hated tax on cider, had provoked riots and demonstrations upholding the slogan, “liberty, property, and no excise!” To the average American, the federal government’s assumption of the power to impose excise taxes did not look very different from the levies of the British crown.

So in 1791 and in 1794 you had plenty of people who remember directly or indirectly the rejection of the Stamp Act on the part of a patriotic spirit that was alive at that time. In the 1790s, only a decade after the Revolutionary War completed in a peace treaty in 1783, one would think that George Washington of all people would understand. The sad truth is, George Washington and Alexander Hamilton were both less patriots (like Francis Marion, Sam Adams or Thomas Paine) than we want to believe. Their real agenda, much hidden during the war, was wielding political power after the war in a centralized nation not unlike England herself!

The honest question has to come up, did the only dissent from this internal tax happen in Pennsylvania? Again, Murray Rothbard sets the record straight:

… we now know that no one paid the tax on whiskey throughout the American “back-country”: that is, the frontier areas of Maryland, Virginia, North and South Carolina, Georgia, and the entire state of Kentucky.

President Washington and Secretary Hamilton chose to make a fuss about Western Pennsylvania precisely because in that region there was a cadre of wealthy officials who were willing to collect taxes. Such a cadre did not even exist in the other areas of the American frontier; there was no fuss or violence against tax collectors in Kentucky and the rest of the back-country because there was no one willing to be a tax collector.

There is also yet ANOTHER wrinkle in this episode, what was the use of whiskey that made this tax such a burden?

The whiskey tax was particularly hated in the back-country because whisky production and distilling were widespread; whiskey was not only a home product for most farmers, it was often used as a money, as a medium of exchange for transactions. Furthermore, in keeping with Hamilton’s program, the tax bore more heavily on the smaller distilleries. As a result, many large distilleries supported the tax as a means of crippling their smaller and more numerous competitors.

Geez, do you get it now? It wasn’t enough that you were threatened with the tax-man in your face (like what started to happen in 1765 with the Stamp Act) just like with the British Empire .. now you had an American Empire choosing winners and losers in the economy by allowing larger distilleries to align with government to gain a monopoly and reduce competition!

So this initial impact of this use of “Federal” force on an “internal insurrection” was that the political winds started blowing in another direction and Thomas Jefferson was able to win in 1800 and subsequently repeal the entire Federalist excise tax program. In Kentucky, whiskey tax delinquents only paid up when it was clear that the tax itself was going to be repealed.

Longer term, this early unconstitutional effort led to further erosion of the efforts idealized during the American colonies fight for freedom from the British Empire:

Except during the War of 1812, the federal government never again dared to impose an internal excise tax, until the North transformed the American Constitution by centralizing the nation during the War Between the States. One of the evil fruits of this war was the permanent federal “sin” tax on liquor and tobacco, to say nothing of the federal income tax, an abomination and a tyranny even more oppressive than an excise.

Beyond this, there was a law placed on the books during Washington’s term in office that Abraham Lincoln used to justify calling up troops and preparing for war within this country.

The authority to call forth the militia was first invoked by George Washington to put down the Whiskey rebellion in Western Pennsylvania in 1794, just before the law granting that authority expired. Congress quickly passed the Militia Act of 1795, which by and large mirrored the provisions of the 1792 Act.

“whenever the United States shall be invaded, or be in imminent danger of invasion from any foreign nation or Indian tribe”… “whenever the laws of the United States shall be opposed or the execution thereof obstructed, in any state, by combinations too powerful to be suppressed by the ordinary course of judicial proceedings, or by the powers vested in the marshals by this act”

Since secession was legal (both northern states in 1800, 1814 and southern states 1832 and 1860 considered this actively and considered it a check against general government acting beyond the power they were given under the US Constitution). Lincoln used the “insurrection” as the reason to call 75,000 troops from the remaining states. This move caused four more states to reverse their decision NOT to leave the Union and join the other seven states.

Abraham Lincoln, above all else was most concerned about how the general government could fund itself without the South while also subsidizing the Northern industry as noted in this article:

“If I do that, what would become of my revenue? I might as well shut up housekeeping at once!” ~ Lincoln, in response to the suggestion by the Virginian Commissioners to abandon the custom house of Fort Sumter. Housekeeping is a euphemism for federal spending, in otherwords, taxing consumers to subsidize special interests, or what we would call today, corporate welfare.

“But what am I to do in the meantime with those men at Montgomery [meaning the Confederate constitutional convention]? Am I to let them go on… [a]nd open Charleston, etc., as ports of entry, with their ten-percent tariff. What, then, would become of my tariff?” ~ Lincoln to Colonel John B. Baldwin, deputized by the Virginian Commissioners to determine whether Lincoln would use force, April 4, 1861

Above all else, Lincoln was a tax and spender, and loved the Union because it would allow him to tax the South to spend on “internal improvements” in the North.

With Washington’s help, Hamilton’s help, Lincoln was able to become the most admired by Karl Marx and whose actions were actually defended by him as noted in this article:

“Naturally in America everyone knew that from 1846 to 1861 a free trade system prevailed, and that Representative Morrill carried his protectionist tariff through Congress only in 1861, after the rebellion had already broken out. Secession, therefore, did not take place because the Morrill tariff had gone through Congress, but, at most, the Morrill tariff went through Congress because secession had taken place.” – Karl Marx

As is true of almost everything Marx ever wrote about economics, this statement is patently false. The Morrill Tariff passed the U.S. House of Representatives on May 10, 1860, before Lincoln’s election and before any state had seceded. It passed the U.S. Senate on March 2, 1861, two days before Lincoln’s inauguration.

Lincoln, as a successor to Washington’s and Hamilton’s centralization efforts was also a hero to Adolf Hitler as this article points out the parallels of thought:

On page 566 of the 1999 Mariner/Houghton Mifflin edition of Mein Kampf Hitler clearly expresses the Lincoln/Jaffa view: “[T]he individual states of the American Union . . . could not have possessed any state sovereignty of their own. For it was not these states that formed the Union, on the contrary it was the Union which formed a great part of such so-called states.”

This is consistent with the argument put forth in Lincoln’s First Inaugural Address (March 4, 1861) where he said: “[T]he Union is much older than the Constitution. It was formed in fact, by the Articles of Association in 1774. It was matured and continued by the Declaration of Independence . . . by the Articles of Confederation in 1778 . . . and establishing the Constitution. . . . It follows from these views that no State, upon its own mere motion, can lawfully get out of the Union . . .” …

Hitler (p. 567) mocked what he called “so-called sovereign states” in Germany because they stood in the way of a centralized Reich with their “impotence” and “fragmentation.” Such impotence and fragmentation of government was purposely designed by some of the American founders precisely because they wanted to limit the powers of the central government.

Yes, all centralizers love to call it democracy when in fact they are most aligned with Socialism, Marxism and Communism in the end.