Hello and welcome to a history of the United States. Episode 170, The Whiskey Tax.

Last time out, we looked at the tensions that were being felt in the Western settlements

of the United States around 1790. The frontiersmen were living hard lives with death

all around. They were isolated from trade

networks and the major settlements at the coast, such as Boston, New York, Philadelphia, Baltimore,

and Charlestown. This was both a physical isolation. It was difficult to get across the ablations

and mental, in that the

settlements of the West did not feel they were adequately represented by their governments.

They were short on currency and had started turning to making whiskey to use as currency,

and when Pennsylvania tried to create an excise tax on whiskey, the three western counties

caused such a commotion that the state gave in. However, this was just a prelude of what

was to come. On May 5th, 1790, a bill came before Congress proposing a duty on spirits distilled within the United States.

This naturally grew out of Hamilton's financial plan.

If the federal government was going to assume the debts of states, it would need to raise revenues to pay them off, or at least manage the debt.

The motion was handily defeated three times before Hamilton made a second move in December 1790. Hamilton reported

there was going to be revenue shortfall of $826,624 and $73, if they were going to manage the debt. This spirit tax was expected to raise

$975,000, including $270,000 raised by the excise tax.

Hamilton tried to fall stall potential opposition by pointing out how this system could not be used as a tool of oppression,

such as limiting the searching powers of collectors and giving the accused of the right to trial by jury.

He also argued that this was better than other solutions, such as a land tax, as the nation would

benefit from leaving a land tax on tap and give them options if they needed to raise a revenue

in future. He also wanted a financial safety net.

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