Lecture Notes: The Whiskey Rebellion

Context and Background

• Post-American War for Independence, the U.S. was financially strained.
• The federal government faced a debt of $54 million; states owed $25 million.
  • Comparable to $4.1 trillion in modern GDP terms.

Alexander Hamilton's Financial Plan

• To establish creditworthiness, the U.S. needed to pay off its debt.
• Hamilton proposed consolidating state and federal debt, funded by issuing bonds.
• Interest on bonds to be paid by tariffs and an excise tax.

Introduction of the Excise Tax

• March 1791: Congress passed the Whiskey Act, taxing distilled spirits.
• First domestic product tax by the federal government.
• Met with resistance, particularly in Western Pennsylvania.

Opposition and Unrest

• Tax seen as unfair by small farmers who used whiskey as currency.
• Large distillers in the East benefited more due to tax structures.
• Resentment rooted in past British excise taxes (e.g., the Stamp Act).

The Whiskey Rebellion

• Protests included tarring and feathering of tax collectors.
• Calls for negotiation by some statesmen ignored.
• Washington led a 13,000-man army to suppress the rebellion in 1794.
  • Only instance of a sitting president leading an army against citizens.

Repercussions and Aftermath

• 12 arrests; 2 convicted of treason but were pardoned.
• Whiskey tax repealed in 1800 under Thomas Jefferson.
• Viewed as a victory for liberty over federal taxation.

Analysis of Federal Response

• Hamilton's actions motivated by the need to secure government bond value.
• Use of a large force demonstrated federal authority.
• Tax seen as integral to Hamilton’s financial vision.

Conclusion

• Rebellion non-violent; tax largely uncollected and later repealed.
• Seen by some historians as a victory for individual liberty over federal imposition.

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