There are two aspects of the whole Colonial/Post Colonial period of American history which most people either pay no attention to or flat know nothing about. Among those who are acquainted with these events, many misunderstand their meaning or discount that meaning, preferring to talk about the years in between which make up the actual revolution. Both of these things I’m about to talk about are vital to any understanding of where we come from and why we seem to be where we are today. Anyone who tells you that events that occurred two hundred plus years ago don’t matter to the present have no real grasp of history. There’s a reason the Right likes to keep harking back to the Founders and why they so often mischaracterize what happened.
The first event—or really set of events—took place before, during, and after the Seven Years War. We like to call this war the French and Indian War, making it nicely central to our history, and indeed it was because it led almost inevitably, given the personalities and finances involved, to the revolution. But in fact is in many respects the first world war. As far as England and France were concerned, events on the Continent, across the oceans, in the Caribbean, and in the Indian subcontinent were just as important as the North American theater. This was a contest between them, the two great powers of the day, and the outcome would determine who called the shots for the next several decades. As it turned out, with a hiccup for the Napoleonic Wars, the winner called the shots for more than a century afterward.
But it began here. And George Washington, childless father of our country, was right in the thick of it.
Trans Appalachia was a demarcation of considerable interest both to England and to France. It led to both Kentucky and to the Ohio Valley, regions both countries saw as part of their future. The only problem, of course, was all the Indians still living there, among them tribes that had already migrated from the east coast to escape the burgeoning population of Europeans and their slaves. The French, from Canada in the north and New Orleans in the south, already had entree to the interior of North America, but they were small in numbers compared to the British, Scottish, and Irish colonials rapidly building up the coasts from Maine down to the southern end of Georgia. Florida was claimed by Spain.
The Colonials had their own interests. Land. The thing that brought more people here in the 18th Century than anything else was the prospect of cheap land, land an individual could actually own, the cheapest land on the globe, and for all intents and purposes not a king or duke or count in sight to tell the commoners that it couldn’t be theirs. This is vitally important to everything that follows, unto the present. At a time when owning land was the privilege of the elites—aristocrats and their immediate supporters—the idea that some peasant from Northumbria or County Cork or anywhere else could own his land and do with it what he wanted was the holy grail. It was surreal. It was unheard of at least since the height of the Roman Empire and even then there were conditions. This is the single biggest attractor of immigration the 18th Century and well into the 19th and the idea of personal ownership, free of any by-your-leave from the local nobleman still drew people from the rest of the world here through a good part of the 20th Century. Ownership.
For the wealthier colonials whose families had already been here a while, this meant something further—more wealth. Land speculation companies sprung up like mushrooms after rain before the Seven Years War and resumed after it was over.
The Ohio Company was one of these. This company had a royal grant to lands in the Ohio Valley, to survey, parcel, and sell to settlers. The problem was, the French were moving into the area and fomenting discord among the Indians living there against the English settlers. Washington was appointed Lt. Colonel and put in charge of 300 militia by Virginia to go out and enforce the royal grant on behalf of the Ohio Company. In the course of the endeavor he had his hat handed to him in the debacle of Fort Necessity and the wars were triggered.
Washington later was part of another land speculation company with interests in the same area. Many of the Founders had a piece of land speculation companies. They invested in this land, hired surveyors with the intent of parceling it for sale, and they fully expected to make a lot of money. Many of them used their public offices and military careers to further these efforts. There was no illegality in this as the idea of conflict of interest was then nebulous at best. What was illegal was pursuit of settlement after the Treaty of Paris that ended the conflict. Britain had treaties with the Indian tribes in the region and the deal was that this land, so coveted by the colonists, was off limits.
Many of these men had a lot of money invested in land deals that were now not going to happen because of a treaty signed between England and France. Worse still, England intended to tax the colonies for the privilege of “defending” them during the war and, as far as the colonists were concerned, preventing them from pursuing the one thing that made coming to America worth while—getting rich.
Speculation companies continued to be formed, surveyors sent over the mountains, and deals struck despite the law and the more the British tried to enforce the barrier and relieve their debt burden by taxing the colonists. It might be argued that one (minor, but important) reason Britain was loathe to grant the colonists seats in Parliament was the obvious consequence that these new M.P.s would work to undo the Treaty of Paris so these speculators could reap the profits of their investments. In any case, it should never be forgotten that while the Founders risked much—in fact, everything—in pursuing independence, one of the things they fought for was the freedom to make money. And after the revolution, make it they did.
Which brings us to the next event that ties all this together.
The Whiskey Rebellion is often characterized as settlers in western Pennsylvania rising up in arms to protest a tax laid on them by the federal government without their consent. The tax is characterized as the first internal tax and a tax on a luxury—whiskey.
This misrepresents the entire affair.
In the wake of the revolution, two completely incompatible views of what the new nation should look like emerged and famously fought it out. What is bandied about as Jeffersonian Republicanism is the one that lost the fight. Basically, this was the view that America should be a nation of independent stakeholders, largely agrarian, with subsistence economies at work. The idea was that each family, however it was defined, would own the land, the equipment, and the means to support itself and perhaps produce enough extra to sell at local markets. Decentralization was key and concentrations of wealth and political power the antithesis. Jefferson’s “yeoman farmers” were to be the freeborn ideal of this system, which would deny the possibility of powerful central governments through diffusion and the independence of its citizens. (Interesting such an idea should come from a slaveholding plantation owner. Still…)
Federalism countered this. One of its strongest advocates was Alexander Hamilton, who was the brilliant mind behind our economic system, our first treasurer, close adviser to President Washington, and staunch enemy of Thomas Jefferson. (Interestingly enough, Adams didn’t like Hamilton much, either, and Adams supported Federalism, at least more than the Jeffersonian idea.)
Hamilton from the beginning advocated a strong central government that would not only establish the law of the land but, most significantly, would take on the debt of the states. (This would give us credibility in dealing with foreign banks and potentates, among other things.) Hamilton wanted a stable currency and he argued—correctly—this was unachievable if every state set its own currency and exchange rates. That work had to be centralized. Hamilton wanted a central bank. Hamilton wanted the infant United States to build its industrial might as quickly as possible because, he argued, we were vulnerable to the depredations of the world at large without the kind of unity of purpose and finance and industry that can only be brought to bear under centralized authority.
To the man in the street (or on the farm), centralized authority was everything they had just finished fighting and bleeding to be rid of.
But the politicking was being done in the well-settled east and businessmen recognized the utility in all these proposals. The more agrarian south, as usual, disliked much of Hamilton’s plans, but they lacked the votes to carry the day in congress.
The Whiskey Tax was Hamilton’s first venture in large scale nation-building with a view toward subjugating Jefferson’s “yeomanry.” The Frontier was a problem for Hamilton because it frayed away from control. People on the frontier set themselves up any way that made sense for them in their location and rarely did these new institutions conform to establish business models in the east, which for Hamilton was the preferred template. Remember, he wanted to build a strong, unified nation, able to forge cannon, float warships, raise armies, and compete with Europe. All through the war there had been problems keeping soldiers fed, clothed, and armed and in the army. Farmers would leave when they felt they needed to tend their steads. It was difficult getting states to pay up to support the men in the field. They weren’t plagued by desertions so much as an inability to maintain something to which to remain committed. Hamilton looked at the more disciplined and usually better-supplied British troops and understood what needed to be in place to duplicate it. And duplicate it he believed we must just to survive.
Convincing individual freeholders of this necessary was another matter. What he intended to do, then, was bring them all under control through economics and the best tool for this was a tax. Or so he thought. Even in England, internal taxes were difficult, fey things that failed as often as they succeeded. But for this first one he thought he had one no one could object to. A tax on a luxury—whiskey.
None of the distillers in the cities of the east objected. They passed the tax on to their customers and ended up out of pocket nothing. But in Western Pennsylvania, it was a completely different matter. There, whiskey was not a luxury. It was currency.
Here’s what Hamilton did. He based his tax on capacity, basically a tax on the volume a given still could produce. That made it simple to estimate. For a distiller who was in business to bottle whiskey and wholesale it to distributors, this offered little burden, and they sold everything they produced and they produced usually to capacity.
But that was their business. For a farmer outside Pittsburgh in 1790, whiskey was the way he put aside excess grain production. For him, that still was a way to offset losses because it was so far from major markets. Rather than store the grain as harvested and see it rot, he would convert unsold quantities to whiskey, which had no shelf life, and then use it as liquid money. He sold some retail, sure, but a lot of it was used to pay debts to merchants. Moreover, it was rare that his still produced to capacity. To tax him on what his still could produce overlooked the fact that he rarely produced that much and that what production he did have was erratic at best. So this tax on a so-called luxury was for him a huge imposition.
Hamilton claimed later not to understand their complaint. He kept telling them, through their representatives, that all they had to do was pass to expense on to their customers. What he seemed not to understand was that these people were not distillers. They were subsistence farmers. This was not a business expense for them, it was an attack on their livelihood at its base. When the first tax collectors showed up to start assessing and collecting, the uprising began.
Hamilton urged Washington to act and act massively. Washington raised one of the largest armies to date of Americans, over 13,000, and marched on Pittsburgh. The rebellion was over before he got there, but Hamilton held trials anyway. The tax was suspended afterward.
In fact, Hamilton knew very well what he was doing. He was crushing individual entrepreneurs to establish a pattern in which only those who could afford to play were allowed to play. It was the first American war on mom-and-pop enterprises. Hamilton wanted these people under the umbrella of industrial concerns so he could pool the collective resources into the building of his mighty nation. Taxes structured to benefit a particular model of business and destroy competing forms, especially forms that served exclusively individual, familial, or even village needs, as such forms were inefficient and could be too easily kept from serving the national interest.
These two aspects of colonial and post-colonial America are important to understanding how we got here, today, and what it is the Right is trying to do. Almost at the outset, this country has tacitly recognized that there are citizens and there is everybody else. Citizens have money, have power, have the capacity to generate wealth. Everybody else is, well, everybody else. The Revolution was fought on the principle of self-determination. But once the shooting stopped and constitution-building began, it emerged quickly that these Founders were deeply suspicious of democracy, of “the people” and formed a republic instead in which the franchise was limited to white males with property. Certainly many of the Founders wrote warnings about the growth of corporate power and certainly provisions were built into the Constitution to enable people to fight the encroaching feudalism that might potentially dominate, but it was still there from the beginning—this country was founded for people who wanted to be rich and the rich were the ones everyone expected to call the tune.
Everyone can mull this over for a while. Stayed tuned for part four.
