In addition to tariffs placed on imports to raise needed money, Congress passed an excise tax on the production of whiskey in 1791. It was the first tax levied by the government on a domestic product and was met with swift opposition by farmers west of the Appalachian Mountains.
At the time, Spain controlled access to the Mississippi River. This meant, for frontier farmers, that the only route to market available was over the mountains to the east. Because grain was so bulky and difficult to transport, it was easier to first convert it into whiskey and then transport it east where it could be used to barter for goods and services. So in addition to viewing the excise tariff as a tax on their crops, it also affected their prospects of trade.
From the start, the government had little success in collecting the tax because most simply refused to pay it. Others made more dangerous opposition. As popular refusal mounted, episodes of violence against tax collectors broke out with collectors being tarred and feathered, beaten, and having their homes destroyed. The situation escalated when, during the last week of July 1794, 6,000 armed rebels gathered near Pittsburgh, Pennsylvania. On 7 August, Washington issued a call for the rebels to disperse and ordered the Mid-Atlantic States to send 13,000 militiamen to Carlisle, Pennsylvania, about 100 miles from Pittsburgh.
In a last bid to avoid a confrontation, Washington sent a three-man commission to hold talks with the rebel leaders, but no peaceful solution could be reached. Returning to Philadelphia, the temporary capital at the time, they reported that it was ‘absolutely necessary that the civil authority should be aided by a military force in order to secure a due execution of the laws.’ On 25 September 1794, Washington issued a proclamation declaring that he would not allow ‘a small portion of the United States to dictate to the whole nation.’ Washington himself, then led troops fromCarlisle to Bedford, Pennsylvania. There he turned command over to General ‘Light Horse’ Henry Lee, giving him the authority to combat those who were in opposition to the national will. In late October, the Federal militia entered western Pennsylvania, put the rebellion down, and returned order to the land. The Whiskey Rebellion of 1794, the nation’s first test under constitutional law, proved that the Federal government could ‘insure domestic tranquility’.