In 1791, tumultuous proceedings in Philadelphia caught the attention of Kentucky’s farmer citizens. The federal government, having assumed the Revolutionary War debts of the states, needed a way to raise money. Since the government’s only source of revenue at that time was import duties, Treasury Secretary Alexander Hamilton convinced Congress to pass an excise tax on distilled spirits. The “Internal Revenue Act” created an immediate furor in the West, where it was often said that “every farmer was a distiller.”
At the time, Kentuckians often converted their excess corn harvest to whiskey, a more portable and saleable product. Instead of taxing wealthy eastern merchants and manufacturers, it appeared Congress had targeted the poor western farmers’ most marketable commodity. As a further insult, the whiskey tax had to be paid in cash by citizens who were largely subsisting in a barter economy.
In southwest Pennsylvania, open hostilities broke out with refusal to pay the tax and a fierce reaction against tax collectors. Numerous violent incidents resulted: assaults, tar and featherings, house burnings, and more. In 1794 the situation escalated into gun battles with multiple fatalities. President George Washington, faced with an armed insurrection, called out the militia to put down the “Whiskey Rebellion.” That October, an army of 13,000 men, headed by Gen. Daniel Morgan of Revolutionary War fame, approached Pittsburgh, and the uprising was suppressed without a shot being fired.
For a long time, it has been assumed that Kentucky generally, if reluctantly, complied with the internal revenue law. But it turns out that there was a whiskey rebellion in Kentucky too.
Kentuckians were already incensed over the federal government’s failure to protect them from Indian incursions and failure to secure open access to the Mississippi River, the lifeline of western commerce. Violent incidents here were rare. Distillers simply refused to pay the tax. The Treasury Department was certainly aware that no revenues were forthcoming from Kentucky, but they were at a loss as to how to force compliance. Military action was impractical and could have thrown Kentucky into the arms of Spain.
The chief revenue officer for the Kentucky District, Col. Thomas Marshall, could not compel state or county courts to bring lawbreakers to trial and had difficulty finding men to serve as tax collectors. Marshall declared, “No person worthy of trust… could be got to accept the job.”
The situation had a theoretical solution. This was a federal law, and a highly respected Virginia attorney, Harry Innes, had been appointed judge of the federal court in Kentucky in 1789. In practical terms, however, violators could not be prosecuted until a competent U.S. Attorney was appointed. That commission went first to William Murray, who refused to bring charges against distillers during the 15 months he held the office. It took the Washington administration four years to find his replacement. Finally, in December 1796, William Clarke of Maryland accepted the appointment.
As an outsider, Clarke received no coöperation from a determined populace. He proved to be less skilled than his adversaries, who took advantage of every loophole in the law. Of the 231 cases Clarke presented in federal court, not one distiller paid the penalties prescribed by law.
Judge Innes was a stickler for procedure and due process in his court. First, a grand jury had to hear the charges. If they returned an indictment, the case then had to go before a petit jury which required a unanimous vote to deliver a guilty verdict. Grand juries initially required 24 members. At many court sessions, the summoned jurors failed to show up.
All distillers were required to register their stills with the revenue collector and keep complete records of production. In Kentucky, they did neither. At Treasury, Hamilton tried modifying the rules to achieve compliance. He agreed to allow payment in whiskey and to forgive taxes owed before 1795. Both failed to result in payment. He then offered to pay informers, a tactic that had worked in Maryland. But Kentuckians refused to turn in their neighbors.
Finally, in 1798 Innes decreed that no distillers would be called to serve on grand juries, which had an immediate effect. The number of cases before the court increased dramatically. Sadly for U.S. Attorney Clarke, these were not followed by convictions, as juries refused to return guilty verdicts against distillers whose only crime was not paying what they perceived to be an unjust tax.
The bumbling prosecutor often sabotaged his own cases by failing to follow proper procedures. For example, in 1796, Clarke charged one “James Smith” with obstructing a revenue collector. The case was continued for nearly two years when a jury concluded that Clarke had served a subpoena on the wrong James Smith. Clarke then charged one “James Smith, merchant,” but could never bring him to court.
According to one account, Clarke managed to earn “the contempt of the judge, censure by the Treasury Department, and the embarrassment of his supporters.” In 1800, Colonel Marshall arranged for Clarke’s “promotion” to territorial judge in Indiana.
His capable replacement, Joseph Hamilton Daveiss, oversaw a radical turnaround. His first case against a distiller resulted in a conviction, something Clarke had never achieved. In all, Daveiss brought 315 cases. Few ever went to juries. Kentucky distillers got the message and paid their fines. Fortunately for those who had not yet been charged, the law was repealed in 1802 during the Jefferson administration.
Clark County distillers got caught up in the whiskey rebellion too. This will be the subject of the next column.