Presidential Leadership

With all the talk this week about the role of the president during a crisis, I thought it might be interesting to revisit the first such example in American history.  I’m not referring to either the revolution or any of the wars that followed, but an emergency so large that it required the direct action of the federal government.

In 1793, the Secretary of the Treasury was Alexander Hamilton, who was concerned about the debts the 13 states and the federal government had run up fighting the British.  Desperately trying to bolster the nation’s economy, Hamilton’s policy for the federal government was to assume the debts of the states, then pay off the consolidated debt with a new tax on distilled liquor.

This was the first of a long, long list of sin taxes, wherein the politician decides to tax the “unnecessary” goods that, in his opinion, are harmful to society.  (Usually, these taxes are placed on something that the politician, himself, is not engaged in.  As far as I can tell, no one in history has ever proposed a tax on something they, themselves do).

Almost immediately, there were problems, as the tax burden was unevenly spread.  Needless to say, those who didn’t drink were not taxed at all.  More important, farmers who lived in the interior, farther from the coastal cities, were used to distilling their surplus crops into whiskey, which was easier to transport to the cities and less subject to spoiling than the original bulky grains. 

There was also the problem with licenses and how the taxes were paid.  The larger distilleries on the coast could spread the cost of the license out over their wider production.  And since the option existed to either pay a flat fee or to pay a tax per gallon, the tax itself was a third higher on the small producers than the larger ones.

In Kentucky and Western Pennsylvania in particular, farmers thought that they were being taxed without representation—a cause that echoed back to the Revolution.  These farmers flatly refused to pay the tax, starting a tradition of illegal stills that continues to this day.  Worse, they directly challenged the authority of the government to tax them, eventually even threatening to split off from the country.

These same farmers were justifiably concerned about several more issues.  The Mississippi River and the lands to the west of it were still the property of Spain, who flatly refused to allow the farmers to use the river to transport their crops.  More troubling to the farmers was the federal government’s inability to end the attacks of Native Americans along the frontier.  In the minds of the farmers, they were being picked out for heavy taxation to pay for a government that was proving to be ineffectual.

When federal revenue agents attempted to collect this hated tax in Pennsylvania, violence quickly erupted.  Several tax collectors were attacked, tarred and feathered, and at least one was run out of town on a rail.  Anyone doing business with tax collectors was threatened, and the home of one collector was attacked by a crowd of 600 men who burned the home down.

By this point, the issue of the ‘whiskey tax’ had become a political issue that though it was not the only cause, certainly helped divide politicians into camps that quickly evolved into political parties.  And we’ve been stuck with them ever since.

To President Washington in Philadelphia (then the nation’s capital), this was a major test of the legitimacy of the federal government.  Not only was this the very first direct tax placed by the fledgling government upon its citizens, but Washington was astute enough to realize that the very fate of the nation depended upon his response and how he ended the crisis.

What George Washington understood was governments don’t really exist—they are nothing more than shared myths among a group of citizens.  Our government exists because we all agree that it does, and an act that threatens that shared belief threatens the very life of a nation.  Throughout history, powerful nations have suddenly ceased to exist, not because of invading armies but, simply because their citizens stopped recognizing the authority of their governments.

Washington brought his cabinet together and asked each member to submit what each thought should be his correct response, in writing.  Every member, except Secretary of State Edmund Randolph, suggested that Washington call up the militia, since at the time, the United States did not have a standing army. 

Wisely, Washington chose a middle path:  While he sent peace negotiators into Western Pennsylvania, he also called up the National Guard troops of Virginia, Pennsylvania, New Jersey, and Maryland.  This was a large army of 13,000 men, comparable to the armies used during the Revolutionary War.

By law, Washington could not use the army to enforce domestic policy until a Supreme Court Judge ruled that the state government had proven incapable of maintaining order, something that Justice James Wilson quickly agreed to.  For the first time, an army of the United States was being used to maintain civil order within the United States.

President Washington personally led the army west, the only president to ever lead the US Army in the field.  All the history books say that, and it is true—up to a point.  Actually, after reviewing the troops, Washington turned the army over to the Governor of Virginia, Henry "Lighthorse Harry" Lee, a hero of the Revolutionary War and future father of Robert E. Lee, who had served under Washington during the war.  It was Lee who actually led the army into western Pennsylvania.

The western farmers were angry, but they weren’t stupid.  Long before the army arrived, the ‘Whiskey Rebellion’ had ended.  Through negotiations, the government agreed to lower the tax a little, and most of the farmers agreed to pay the tax.  The collection agents were gradually more effective in collecting the taxes, and the agents wisely ignored some of the smaller distillers who held out.

Every time the military is used, it is only natural to ask, Who won?  Well, Washington did:  He averted a major crisis and demonstrated that the government had both the means and the authority to meet a crisis, so he won.  The farmers eventually got a reduction in taxes, so they won a little, too.  Alexander Hamilton won, as he successfully imposed the nation’s first internal tax.

Most important, the people of the United States won.  The dream we all believe in survived an existential crisis.  And as bad as our government sometimes is, we need to remember that our shared dream is still better than all the alternatives.  That is something we really do need to remember before we jump to criticize it during a crisis.