The
Whiskey Rebellion by William Hodgeland, 2006, Excerpts
Hamilton’s
inspiration was the British Empire, where distilling and government had a long
history together. From as early as the seventeenth century, large distillers
had actually favored whiskey excises – had even contributed expertise to
helping the government write excise laws. In 1785, an act of Parliament gave a
tax rebate to big distillers, and later acts went all the way, placing an
outright ban on small stills, making it actually criminal in England to distill
on anything but the largest scale. Even as the U.S. Congress was passing its
whiskey tax in 1791, Parliament was banning stills of less than
five-hundred-gallon capacity.
The goal was industry
consolidation. Hamilton had learned from the English that commercial
agriculture and large industry, when publicly chartered, given tax breaks, and
financed by large loans, might turn the United States into an industrial empire
to compete with England’s. Big distilling had the potential, given American
drinking habits, to be highly profitable – yet small, seasonal producers,
especially in the west, competed with industrial distillers and kept revenues
scattered, engines weak. Hamilton’s whiskey tax didn’t merely redistribute
wealth from the many to the few and subdue rural economies; it also served as
one of the heavier cogs in a machine for restructuring all of American life.
In every
configuration, on every level, Hamilton had designed the law to charge small
producers who could least afford it a higher tax. And the most significant
effect of the higher tax was that it would, as Hamilton said, have to be passed
on to consumers. Small producers would have to raise prices. Big producers
could lower prices, sharply underselling the small distillers, taking over
their customers, ultimately driving the small producers out of business.
Closing down local whiskey economies, the whiskey tax pushed self-employed
farmers and artisans into the factories of their creditors.
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