Bourbon Empire (5 page)

Hamilton’s justification for the tax, which started at eleven cents per gallon of whiskey, was that it would pay off $45 million worth of debt from the Revolutionary War. The idea that such a little tax could pay off such a huge debt also indicates how much whiskey Americans were drinking by this point. The tax revenue would also help Hamilton fund ambitious national projects like roads, canals, and a central bank. Hamilton ironically took his blueprints for the whiskey tax from England, where small distilleries and government had long clashed, moonshining thrived, and big distilleries helped the British government write tax laws. In return, Parliament offered commercial distilleries tax rebates and banned stills under a certain size. This sort of arrangement had given the small island nation the kind of mighty industrial power and efficiency Hamilton wanted for America. He could only imagine what America, a land of much greater natural wealth, could become if its resources were utilized in the same fashion.

But even though the tax was good for big whiskey producers, it wasn’t necessarily good for the development of the product. Just as in England, distillers attempting to avoid the tax would flee into an underground economy. Those making whiskey illegally would be focused on simply getting their product out the door, not refining it, experimenting, or devoting the necessary time to refine their craft.

Hamilton’s whiskey tax—the first of its kind on an American-made product—supported larger distillers over smaller ones because of how the tax was collected. In cities, distillers only paid taxes on how much spirits they produced, since tax collectors could easily monitor output and collect accordingly. But in areas the government defined as “the country,” distillers paid according to their still capacity, which was assumed to run at full production all the time. The problem was that
most frontier distillers used their equipment only when they needed to, meaning they’d theoretically have to pay taxes on spirits they didn’t even produce. To smaller distillers, the tax echoed the oppressive government policies that had driven the United States to revolt against Britain.

When small distillers balked, Hamilton responded by giving them a few breaks, such as assigning local courts jurisdiction so tax evaders wouldn’t have to travel three hundred miles for their hearings. But, at the same time, he gave large commercial distilleries additional advantages like leakage and shipwreck allowances, which bailed them out of unforeseen disasters. The gestures to small distillers were largely symbolic—the inefficient cottage industry bothered Hamilton. He also thought the tax would be a way for the freeloading frontier to pay for the expensive military protection it required against hostile Indians.

Hamilton also argued for the tax on moral grounds, claiming it was a way to transform intemperance into something productive. It was a “luxury tax” on personal consumption and people would pay based only on how much they drank. The tax, he claimed, would improve sobriety and prevent untimely deaths, and he even enlisted Philadelphia’s College of Physicians to argue his case in front of Congress. Opponents in Congress responded by telling the physicians they didn’t have the right to tell other Americans how to live.

Ask anyone on the frontier, and they would disagree with Hamilton. To them, whiskey was far more than a luxury. The excise was essentially a selective tax on income, since many on the frontier used whiskey for barter. They were basically being asked to convert an untaxed product into a taxable one. For many, the decision of whether or not to convert grain into spirits wasn’t a choice. Spirits used as currency were often more stable than the continental dollar, were easily divided, and were the most efficient way to transport their crops to market in areas with poor infrastructure—a horse could carry six times as much grain in whiskey form. On top of it all, the whiskey tax had to be paid in cash, which was precisely what frontier distillers didn’t have.

Then there was the expensive military protection they supposedly required. Those in the backwoods were unimpressed with the government’s performance, pointing out their tomahawk wounds.

Both sides had their points. Hamilton’s vision could generate revenue to build infrastructure that frontier distillers could use to efficiently get their grain to market and not have to rely on converting it to whiskey. But it also meant control in the hands of a few corporate bosses and efficiency gained at the loss of individual ownership. Some on the frontier argued for a progressive tax allowing them to contribute their part, but not under a tax structure that put them under an inherent disadvantage. Others simply hated the government’s taking a cut no matter what the money would be used for.

Whatever the case it made, the frontier was on its own. Jefferson and his political ally James Madison had originally opposed the tax but ceased fighting for it after a bout of political horse trading regarding banking and the location of the nation’s new capital. Once the dust settled, Jefferson was out of the conversation, Hamilton had made his case to Washington, and the tax went into effect.

The fighting started in 1791, after the federal government began sending tax collectors into the frontier. One of the first to ride into western Pennsylvania, a man named Robert Johnson, soon found himself confronted in a dark forest by a group of torch-bearing frontiersmen, mainly disillusioned war veterans. They wore women’s dresses and blackface makeup that transformed their eyes into angry round moons. The wardrobe was an old tradition inherited from European populist uprisings; it had been used to protest the unpopular whiskey taxes in the Old World and to terrorize neighbors who collected rewards by reporting unregistered stills. It was clear that Johnson was the frontiersmen’s enemy. And their prey. They pulled the whiskey tax collector from his horse, sheared him bald, slathered him in hot tar and feathers, then stole his horse and left him in the dark. He almost died before he found his way back home, days later.

Events boiled to a head during the three years following the assault
on Johnson. Tempers flared and the rebel attacks got bigger and better organized. Whiskey was much more than the “luxury” Hamilton had called it. The liquid was a way of life, woven into the economic and social fabric of the countryside. It soon became a symbol of dueling ideologies and threatened to spark a civil war.

The West threatened to secede from the East, and some of the voices calling out from the wilderness described an appealing vision. Herman Husband, a frontier preacher, wanted to create a utopian “New Jerusalem” in the forest. He urged a peaceful transition into a place free from slavery, with public support for the arts and sciences, an income tax, progressive wealth taxes, safeguards against nepotism, and a paper currency with a well-tended rate of inflation, limiting the frontier’s reliance on whiskey as a form of currency.

Husband’s ideas were startlingly sane, but his voice was quickly marginalized by the frontier’s other emerging leaders. David Bradford, a wealthy and mouthy lawyer, took greater control of the movement by stoking the frontier’s bloodlust. He compared their cause to the ongoing French Revolution, calling himself the Robespierre of the West, after the French terrorist who led mass killings of French citizens during the revolution’s Reign of Terror. Some rebels suggested replacing tar and feathers with the guillotine and attacking Pittsburgh, calling it a “Sodom” of merchant cartel operations.

The “Sodom” cry was an extension of what the whiskey tax represented. The measure was another nail in the frontier’s coffin as people watched their other fledgling industries—mills, lumber yards, ironworks—taken over by eastern finance men and speculators with little personal investment in these projects. Now whiskey—one of the most profitable businesses they had—was going to be part of the same machine built to enrich the few.

For a symbol of what the tax represented, the rebels need not look any further than General John Neville, the tax inspector in charge of southwest Pennsylvania. Neville had moved there after the Revolution and started the Neville Connection, a business concern dabbling in a number of pursuits, the most lucrative of which was supplying whiskey to army
forces fighting the Indians. Neville’s business was a Hamiltonian affair attempting to centralize and streamline the army supply process. Under his system, the army would buy whiskey in bulk only from large contractors, who were then responsible for delivering it to army outposts. This gave Neville and other big operators, who had access to more efficient methods of transportation, a way to block small farmer-distillers from the army, their most lucrative market. Neville and his colleagues would then buy the little guys’ whiskey cheap and mark it up for their own profit. It was a huge conflict of interest—Neville was in charge of collecting taxes on an industry he was involved in, and had a government-sanctioned tool to undersell smaller producers competing with him. To small distillers, the system was rigged.

In July 1794, Neville was accompanying a federal marshal to issue a court summons when a posse of local militants fired on both men. Neville escaped to his home and prepared for continued violence. Elsewhere, another militia group plotted to take Neville prisoner and try him in what was essentially a kangaroo court. By the time the second militia reached Neville’s home, they found the windows boarded up and the government official prepared for battle. Neville’s wife, daughters, and slaves reloaded weapons for him as he fought off the small group, leaving four dead on his front lawn. The rebels retreated to gather reinforcements.

In the meantime, eleven soldiers sent from Fort Pitt joined Neville at his home for the looming showdown. Then the rebels returned . . . about six hundred of them.

Neville managed to escape out the back while the soldiers traded shots, killing the rebel commander, another disillusioned war veteran. But there was no way the government forces could win, and soon they surrendered. The army commanders were arrested and the other soldiers sent back to Pittsburgh with news of the defeat. As for Neville’s home, the rebels walked inside and drained his private stash of whiskey, according to one account. Then they burned his entire plantation to the ground.

Washington’s decision to rally thirteen thousand troops—more than
had beaten the British at Yorktown—to quash the rebellion wasn’t made without difficulty. Thomas Jefferson and Edmund Randolph, who had recently replaced Jefferson as secretary of state, both argued against using the military against U.S. citizens. Hamilton, on the other hand, told Washington he needed to restore order, and could use the rebellion as an opportunity to show the nation that a strong central government would enforce the law.

For Washington, it was a matter of either provoking civil war or abandoning part of the country. The rebels were his countrymen, but by this point they were also marching on Pittsburgh. Seven thousand of them had already rolled out of the mountains to converge at Braddock’s Field, about eight miles outside of the city. They even brought their own flag: six alternating red and white stripes representing the unified counties of western Pennsylvania and northwestern Virginia. They were going to secede.

Washington made the call to suppress the rebellion with troops he would lead to the frontier himself, calculating that articulate radicals such as Bradford had coerced much of the frontier into a frenzy and that cooler heads could prevail. Washington didn’t normally drink whiskey, but chose to do so as he rode into Pennsylvania, his aides writing, “As the President will be going . . . into the Country of Whiskey, he proposes to make use of that liquor for his drink.”

Washington’s assumption was correct. With the federal troops en route, the rebels disbanded and the leaders fled to Spanish Louisiana or other points west. It all ended with a whimper, with just two men sentenced to hang: Philip Wigle and John Mitchell. When Washington met the men, however, he pardoned them after determining that Wigle was “insane” and Mitchell was “simple,” demonstrating the kind of compassion for his fellow countrymen that many hoped the president would exhibit. Wigle and Mitchell were just two incompetent pawns the rebellion’s leaders had enlisted to do dirty work like commit arson and steal the mail. Nevertheless, in 2012 a new distillery in Pittsburgh would name itself after Wigle, calling him a “good-natured man who was sentenced to hang for his unsinkable love of whiskey,” and adopt a noose as its logo.
Wigle and the noose are odd choices no doubt, but a perfect example of the romantic appeal the Whiskey Rebellion still holds for many, even if the history has to be creatively reinterpreted for marketing reasons.

The Whiskey Rebellion failed, but so did the tax. The rebellion cost $1.5 million to suppress, about a third of the amount collected in tax over the next six years, which was how long the tax remained in place before it was abandoned. Washington, however, prospered: the value of his land investments in western Pennsylvania increased by about 50 percent. Hamilton’s success was mixed. He had asserted the federal government’s authority, but distilling remained a cottage industry as smuggling and moonshining thrived under the tax. His coining of the term “Whiskey Rebellion” was a sly way to diminish the frontier’s larger concerns by refocusing attention on a drink that many in his social circle considered vulgar.

As for the farmer-distillers, the rebellion’s end only illuminated their concerns. The officers of the federal army were men of the coastal aristocracy, mounted atop fine horses. Many had agreed to join the army only if their demands for splendid uniforms and proper rank were met. They stayed in warm taverns or private homes, drinking Madeira, port, or brandy. The enlisted troops were poor laborers and farmers who weren’t very different from the frontiersmen. They slept on the ground or in stables, drinking whiskey.

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Thomas Jefferson’s home at Monticello, in central Virginia, is a portrait of how he wanted the world to see him. His interminable curiosity and pleasure seeking are apparent throughout the interior: books, gardening experiments, maps of Lewis and Clark’s expeditions to uncharted wilderness, and other accouterments of the tinkering philosopher are on display. Contraptions abound, including a dumbwaiter designed by Jefferson himself to carry wine from the extensive cellars up through the walls to the dining room. The cellars rest in the foundation of the home, and were the first part of the house built when construction began in 1769.