If one follows “History.com” (not recommended), one finds the following:
On August 26, 1794, 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.”
If one prefers their history to match what you heard all your life, with George Washington chopping down a cherry tree, then the above clip probably sounds good to your ears.
If you prefer the truth, then “Mises.com”, “LewRockwell.com” and Murray Rothbard are better educators, but hang on.
If you are curious about the Whiskey Rebellion, you can start here:
The Official View of the Whiskey Rebellion is that four counties of western Pennsylvania refused to pay an excise tax on whiskey that had been levied by proposal of the Secretary of Treasury Alexander Hamilton in the Spring of 1791, as part of his excise tax proposal for federal assumption of the public debts of the several states.
Western Pennsylvanians failed to pay the tax, this view says, until protests, demonstrations, and some roughing up of tax collectors in western Pennsylvania caused President Washington to call up a 13,000-man army in the summer and fall of 1794 to suppress the insurrection. A localized but dramatic challenge to federal tax-levying authority had been met and defeated. The forces of federal law and order were safe.
Pretty sure this is what you may have been taught, but you were lied to. Murray, who wrote this in the periodical ‘Free Market’ in September 1994:
This Official View turns out to be dead wrong. In the first place, 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.
Why was THIS type of tax hated? (a type we are faced with all the time these days in “the land of the free”) Hang on for some history to help understand the mindset of the American people in the 1790s:
- Americans .. 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!”
- 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.
In summary, “.. 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…” just 15 years prior!
It seems that this rebellion (as well as the appearance of an “insurrection” from this new president’s view, with borrowed glasses from his associate Alexander Hamilton) was much more wide spread than just some counties in Pennsylvania:
The main distortion of the Official View of the Whiskey Rebellion was its alleged confinement to four counties of western Pennsylvania. From recent research, 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.
Why Western PA then? Turns out that this was the ONLY region where wealthy officials willingly tried to collect these taxes. Other more southern areas consisted of a more principled and honorable type that refused to enforce an immoral law.
There were two attributes of this tax that really p*ssed the common folk off, and one had to do with the whiskey itself and the other had to do with who really benefited from Alexander Hamilton’s tax:
- The whiskey tax was particularly hated in the back-country because whiskey 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.
- … 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.
The truth is, in 99% of the area where this tax was ignored, it was non-violent. Only the 13,000 troops (more troops that were ever assembled in one place in the American Revolution) under George Washington (traveling in his carriage), but actually led by Alexander Hamilton, might start something:
Rather than the whiskey tax rebellion being localized and swiftly put down, the true story turns out to be very different. The entire American back-country was gripped by a non-violent, civil disobedient refusal to pay the hated tax on whiskey. No local juries could be found to convict tax delinquents. The Whiskey Rebellion was actually widespread and successful, for it eventually forced the federal government to repeal the excise tax.
Since the tax rate was $0.06 – 0.18 per gallon or $5 per year from the “producer”:
- the retail price of whisky in the West was about half what it was in the East, the effective tax rate in the West was twice as high, computed as a percentage of the price.
- Since the “producer” in the West were farmers who bartered with whiskey as a currency, there was no one to pass these costs on to as the large distilleries could.
The blow-back from this internal tax (verses the external tariff type) would sweep Thomas Jefferson into office who would then repeal this tax.
Not until the War of 1812 would Americans tolerate this tax once more. It was all downhill from there:
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.
One only has to look at the actions of those awesome early Americans to know how far the citizens have come in this country, and yet they call it “progress”.
Not cool.
-SF1