"Independence and Rebellion (in a bottle)"


Independence and Rebellion (in a bottle)

As settlers expanded America’s borders west, a new frontier was established. These settlers, largely farmers by necessity, discovered a land that yielded large amounts of small grains: wheat, rye, and of course, maize (corn). But what to do with all that grain? They could not consume it all and were too far west to transport it back to the populated areas of the eastern US to sell there. But many of these settlers came from England, Ireland, Scotland and Germany and were very familiar with distillation. And they, like their forebearers in the “old country”, consumed liquor, sometimes in prodigious quantity. They had already discovered how easy it was to turn some of these grains into liquor, so why not boil them down and store them in glass jugs?

Liquor stored in glass jugs had relatively universal intrinsic durable value, like currency, and ultimately these western frontiersmen (and women) began using this liquor for barter and payment. One could even “make change” by pouring some liquor from one bottle to another. In effect, liquor, especially corn liquor, became currency: stored value!

While this was happening, back east the new government was fretting over repayment of debt incurred from the Revolutionary War. By the end of the war, the new United States had accrued approximately $45 million in debt. Inflation adjusted from 1776 that would be approximately $100 billion dollars today! In those times such debt was unheard of, and Alexander Hamilton pointed out that if we did not pay it off in a timely manner, then we will not have established independence, but rather just inherited a new set of owners – a valid point. So the new government focused on revenue generation. That meant, among other things, new taxes. This included taxes on trade, even when currency was not utilized, such as the trade of corn liquor out west. The “whiskey tax” was born.

Tax levies are more easily set than collected, especially out in the frontier regions, and especially where no monitored government issued currency is used. It is hard to track jugs of liquor being shuffled around. Some of it was even being consumed in transit. Better to monitor production and require producers to register it when it was first created. Then we could know how much of the “stored value” there was.

Many folks did not want to pay this tax and began making liquor in places and at times when government authorities might not be looking…or might not even be awake…out in the woods at night, for instance…while the moon  shines. (Get it?)

When it comes to money and tax collection, governments adapt quickly though. And soon “revenuers” were roaming the remote areas of the western frontier looking for unregistered stills. Inevitably skirmishes developed. Many government agents were shot at and mistreated, including some tarring and feathering.

Finally it fell upon congress and president Washington to do something about this. So in 1794 George Washington assembled 13000 militia and marched out to the western frontier to put down “The Whiskey Rebellion”. The good news is that the rebellion was ended without bloodshed or loss of life. But the country was changing: this was the first time American troops had confronted American citizens. The whiskey tax also set a precedent for how taxes would be levied and collected. Here was another point in the evolution of America in which corn liquor had significant impact.

Up next: "Criminals, Congress and other Charletons".