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Wednesday, July 2

The Form of Money: A Treatise
by
mammon
on Wed 02 Jul 2008 09:21 PM AKDT
Money is the lowest common denominator of valuation amongst a society, the blood of trade, primary to societal interaction, and should be perfect in concept and form. If the form of money is not perfect in concept and form, societal stress will ensue with potentially horrific consequences if ignored. Money is not the root of all evil; however, flawed money is the root of significant evils.
Money has had many forms over the millenniums, extending long before written history. Some remnants of those ancient forms of money remain with us today: the penny looks copper, the quarter and dime look silver, and nickel is supposed to be nickel, and the dollar coin looks gold, testimony to the endurance of the ancient forms of money. The transition from these ancient forms to the now dominant form, Legal Tender, birthed 2,600 years ago by King Croesus, has been a prolonged epic of consolidating monetary control by nation/states and has been the prime
driver of Western Civilization expansion.
Legal Tender is a legal contrivance, and when issued in the form of debt is nothing more than a pyramid/ponzi scheme. The quantification of debt wrongfully applies the algebraic concept of exponential growth - compounding interest - upon money. The distinction between usury and interest is an arbitrary legal determination with no basis in mathematics. Nothing can grow forever at an ever-increasing rate. As time moves on, the emphasis of ever-increasing growth becomes omnipresent, is quantified and institutionalized in the societal structure, encouraging over consumption, over development, and excessive expectations, pushing economic stress to its upper limit of expansion, eventually inciting conflict and spawning War to insure growth.
Economic systems of capitalism, communism, socialism, imperialism, colonialism, totalitarianism, fascism, nazism, monarchism, corporatism, and all other centralist monetary-isms maintain the monopolized control of money, and hence the control of society itself, through their own brand of Legal Tender that excludes other forms of money from the Market.
Today, Legal Tender is a near global reality, an epochal consolidation of Markets, heading exponentially towards a global conclusion. Legal Tender is a severely flawed form of money, the Mother Lode of Law itself.
The eventual conclusion of this monetary epoch, the triggering event, and the ensuing transition to the next, offers extreme potential of good and bad, impacting everyone and rippling for generations to come. Beyond Legal Tender is a truly Free Market where money is adaptable and flexible, in balance with individual needs, societal needs, environmental needs, and the needs of the greater reality.
Chance favors the prepared mind.
Table of Contents
1: Money Defined
2: The Market
3: Minting Money
4: Transitioning from Commodities to Fiat Money
5: Legal Tender
6: Interest and Money
7: Civilizations and Usury
8: Interest, Usury, and Religion
9: Social Groups and Money
10: Alternate Forms of Money
Structure Flaw of Corporations
Tuesday, July 1

Series Break
by
mammon
on Tue 01 Jul 2008 09:01 PM AKDT
So, I’ve finished the Constitution Series which I’ll edit occasionally. There are some topics that still need to be expanded, like, the presidents under the Articles of the Confederation. There were seven presidents after the 1776 Declaration of Independence before the ratification of the Constitution in 1789, under which General George Washington became the “first” President. If John Hanson, the first president under the Articles of the Confederation, had been recognized as the “first” US President, the quarter and dollar bill would picture a pudgy, pampered, privileged looking merchant aristocrat.
Like most Americans, I was spoon fed the sanctity of the Constitution drafted by the divinely inspired Founding Fathers. The reality is that economics, not ideals, was the driving factor to implement a national Constitution. In essence, the American Revolution usurped the British tax masters only to be supplanted by local tax masters. The debt masters, mostly foreign and otherwise, were never challenged. The debt before, during, and after the revolution, which increased substantially, was held sacred, and the Founding Fathers insured that this debt, along with newly imposed taxes, was honored and upheld with military might. Miscreants who thought otherwise about taxes and debt were on the receiving end of this military might, as evidenced in the Shays’ and Whiskey Rebellions.
I’m reminded of the lyrics by The Who – “Meet the new boss, same as the old boss.” Unfortunately, we have been fooled again. What will it take to exorcize the embedded flaw, noted by every prophet, perpetuated in the legal tender form of money?
So, for now, I’ve taking a break from any more series. I’ll fine tune the existing series and post topical. I’m now indulging myself in an escapist historical fiction novel, mental porting back to the time of Egypt and Rome, Cleopatra and Caesar. She birthed his son, and then three of Marc Antony’s children, while maintaining the independence of Egypt to the bitter end. I’ m close to finishing this 950 page epic, and I now look forward to reading Margaret George’s other novel, Henry the VIII. And what happened to the son of Cleopatra and Caesar, the rightful heir to the Roman and Egyptian empires? Well, there’s a story worthy of a great fictional history novel.
As usual, when I read a novel like this, there’s the economic angle. Cleopatra ruled over a vast wealth in gold and assets that would be the envy of King Croesus and the Federal Reserve. She financed Marc Antony’s army of 100,000 against Octavia. Her image was stamped on coins of gold, not on a debased metal where George Washington’s image now resides; however, George’s image does serve well as a public relations medium for perpetuating the Founding Fathers myth.
Several days later......
Well, I finished Margaret George's Cleopatra, and Octavia had the son of Cleopatra and Caesar hunted down and killed as he was escaping to India. Imagine if he had lived, what a legacy! So he died in his late teens which could make an interesting novel from the son's perspective. Cleopatra's three other children from Marc Antony [2 sons, 1 daughter] went to live in Rome, and were eventually married off to minor Kings and Queens. Through Marc Antorny's daughter from his Roman wife, Antony became an ancestor to Caligula, Cladius, and Nero. Caligual eventually killed one the sons of Cleopatra and Marc Antony. Such a loving family!
Monday, June 23

Constitution Series
by
mammon
on Mon 23 Jun 2008 08:29 AM AKDT
This series draws primarily from two primary sources: An Economic Interpretation of the Constitution of the United States by Charles Beard, 1913, and The Anti-Federalists by Jackson Main, 1961.
Charles Austin Beard [1874-1948] is widely regarded as one of the most influential American historians of the early 20th century. While Beard published hundreds of monographs, textbooks and interpretive studies in both history and political science, he is most widely known for his radical re-evaluation of the Founding Fathers of the United States, whom he believed were more motivated by economics than by philosophical principles.
“The concept of the Constitution as a piece of abstract legislation reflecting no group interests and recognizing no economic antagonisms is entirely false. It was an economic document drawn with superb skill by men whose property interests were immediately at stake.”
Jackson Main [1917-2003, Academic and Historian]: “I had chosen to tackle Beard’s Economic Interpretation with the notion that Beard erred, but discovered that the secondary literature supported him, at least in general if not in detail.”
Howard Zinn: When economic interest is seen behind the political clauses of the Constitution, then the document becomes not simply the work of wise men trying to establish a decent and orderly society, but the work of certain groups trying to maintain their privileges, while giving just enough rights and liberties to enough of the people to ensure popular support. The American system is the most ingenious system of control in world history.
The Constitution illustrates the complexity of the American system: that it serves the interests of a wealthy elite, but also does enough for small property owners, for middle-income mechanics and farmers, to build a broad base of support. The slightly prosperous people who make up this base of support are buffers against the blacks, the Indians, the very poor whites. They enable the elite to keep control with a minimum of coercion, a maximum of law - all made palatable by the fanfare of patriotism and unity.
The Articles of Confederation
The First President - John Hanson
Class Distinctions 1780's
Debt and Taxes 1780's
The Antifederalists
1780's Post Revolution Depression
Shays' Rebellion Series
Society of Cincinnati
Federalists Push for a Constitution
The Federalist Papers - Economic Excerpts
The Constitution as an Economic Document
Fear of Aristocracy
Skewed Power Structure
Philadelphia Convention of 1787
The Founding Fathers’ Economic Interests
Constitution Ratified
The Whiskey Rebellion Series
The Revolution Financiers and Creditors
Robert Morris - Revolution Financier
Alexander Hamilton
Haym Salomon
Timeline
1776: Declaration of Independence
1777: Continental Congress drafts Articles of Confederation
1781: Americans defeat British at Battle of Yorktown
1783: Treaty of Paris signed
1786 to 1787: Shays' Rebellion
May 1787: First meeting of Philadelphia Convention
Sep 1787: Proposed Constitution signed, ratification called.
Oct 1787: First Federalist Paper appears:
Mar 1789: First United States Congress is seated.
Apr 1789: George Washington is inaugurated as the first President of the United States.
Tuesday, June 17

Socialized to Atrocity
by
mammon
on Tue 17 Jun 2008 08:00 AM AKDT
What it means when the US goes to war
http://www.atimes.com/atimes/Middle_East/JF07Ak01.html
June 7, 2008
The savagery and brutality of the occupation is tearing apart those who have been deployed to Iraq. As news reports have just informed us, 115 American soldiers committed suicide in 2007. This is a 13% increase in suicides over 2006. And the suicides, as they did in the Vietnam War years, will only rise as distraught veterans come home, unwrap the self-protective layers of cotton wool that keep them from feeling, and face the awful reality of what they did to innocents in Iraq
American marines and soldiers have become socialized to atrocity. The killing project is not described in these terms to a distant public. The politicians still speak in the abstract terms of glory, honor and heroism, in the necessity of improving the world, in lofty phrases of political and spiritual renewal. Those who kill large numbers of people always claim it as a virtue. The campaign to rid the world of terror is expressed within the confines of this rhetoric, as if once all terrorists are destroyed evil itself will vanish.
The Winter Soldier Project
Monday, June 16

The Whiskey Rebellion Series
by
mammon
on Mon 16 Jun 2008 08:11 PM AKDT
Constitution Series
The Whiskey Rebellion by William Hodgeland, 2006, Edited Excerpts
That struggle had financial, political, and spiritual aspects. In the most literal sense it was about paying the revolution’s debt. The whiskey rebels weren't against paying taxes. They were against what they called unequal taxation, which redistributed wealth to a few holders of federal bonds and kept small farms and businesses commercially paralyzed. Farmers and artisans, facing daily anxiety over debt foreclosure and tax imprisonment, feared becoming landless laborers, their businesses bought cheaply by the very men in whose mills and factories they would then be forced to toil. They saw resisting the whiskey tax as a last, desperate hope for justice in a decades-long fight over economic inequality. Alexander Hamilton and his allies, whose dreams had long been obstructed by ordinary people’s tactics for influencing public finance policy, saw enforcing the whiskey tax as a way of resolving that fight in favor of a moneyed class with the power to spur industrial progress.
The national crisis came to be known as the Whiskey Rebellion, a scene of climatic moments in the lives of famous founders like George Washington and Alexander Hamilton began in the fall of 1791, when gangs on the western frontier started attacking collectors of the first federal tax on an American product, hard liquor.
Colonial Americans had forged an alliance condemning the Stamp Act. With independence won, a U.S. Congress’s imposing the hated excise tax would seem the ultimate in ideological betrayal.
The Whiskey Rebellion Series
The People's Movement
Revolutionary War Debt
Manipulating a Mutinous Army
Constitution Ratified
Hamilton Pushes the Whiskey Tax
Whiskey and the Frontier
Mechanics of the Whiskey Tax
Mingo Creek Association
George Washington – Land Speculator
The Militia Act
The Army – Officers and Draftees
The Dreadful Night
Rebellion Defeated
Friday, June 13

Whiskey Rebellion - Rebellion Defeated
by
mammon
on Fri 13 Jun 2008 08:00 AM AKDT
The Whiskey Rebellion Series
On Christmas morning, 1794, twenty thousand Philadelphians mobbed the broad, cobbled streets of their city to see the defeated whiskey rebels brought in from the west. If the people were expecting a big show, they had reason to be disappointed. There were twenty prisoners, and General Blackbeard White himself had been given the job of escorting them from the Forks. Already skinny, pale, and exhausted by questioning and imprisonment when leaving Fort Fayette on November 25, they’d spent a month crossing mountains forbidding enough in summer, locked now in winter. Each prisoner had walked. General White ordered the beheading of anyone attempting escape: heads, he’s announced hopefully, would be displayed in the city. Only twelve cases went to trial, and in the end only two rebels were convicted. With the crisis over, Washington pardoned the condemned men.
In Washington’s stated opinion, suppressing the Whiskey Rebellion had drawn from the American people the support for law and government that marked their highest character. Washington also noted that the operation worked out well for him personally. With commercial distilling newly profitable, he added whiskey making to his endeavors at Mount Vernon.
Yet the whiskey tax remained hard to collect. There were occasional disruptions of court proceedings and occasional threats, but mainly there was sneakiness and recalcitrance, smuggling and moonshining. The authority that established itself at last in the western country was not challenged. It was eluded.
In the election of 1800, the Jeffersonians came to power and the whiskey tax was repealed.
Thursday, June 12

Whiskey Rebellion - The Dreadful Night
by
mammon
on Thu 12 Jun 2008 08:00 AM AKDT
The Whiskey Rebellion Series
The whole population had been defined as insurgent. The very presence of federal troops made the Forks a kind of battlefield. Rules for capturing and interrogating prisoners of war weren’t governed by the Bill of Rights. By the time the army began making mass arrests at the Forks, it seemed to Forks moderates that more than two thousand men had fled the area; almost anybody who had committed an act of terror, and wasn’t within amnesty, had gone down the Ohio or into the countryside.
Hundreds of Forks residents, within and without amnesty, were yanked from bed at bayonet point in the cold. Foot soldiers prodded the startled prisoners, close to naked and some barefoot, out of cabins into new-fallen snow while mounted officers barked commands and told furious wives and crying children that the men were being taken to be hanged. All were run through the snow in chains, toward various lockups in town jails, stables, and cattle pens, to await interrogation.
General Anthony “Blackbeard” White, of the New Jersey militia, was well known for mental instability. For more than two days, White starved and dehydrated his shivering, exhausted captives, steadily cursing and castigating them, glorying in their helplessness and describing their imminent hanging. He quick-marched them twelve miles through bad weather to the town of Washington, where in physical and emotional collapse, they were held in jail, without charge, ready for questioning by the military.
In the days after the Dreadful Night, mass arrests went on anyway: the brutality of the arrests and the torment of detention served the purpose of discouraging citizens of the Forks – and everywhere else – not only from engaging in resistance but also from forming societies and organizations.
Wednesday, June 11

Whiskey Rebellion - The Army - Officers and Draftees
by
mammon
on Wed 11 Jun 2008 08:00 AM AKDT
The Whiskey Rebellion Series
The citizen army that Washington and Hamilton were moving west had two classes. Officers came from the ranks of the creditor aristocracy in the seaboard cities. The men these cavaliers were commanding were mainly militia draftees. Because better-off draftees hired substitutes to serve in their places, the ranks were crowded with the poorest laborers and landless workers, recent immigrants and subsistence farmers.
The draftees had no uniforms. Their clothing couldn’t keep out autumn dampness and chill. To Hamilton’s frustration, the supply process was chronically sluggish, and desperately needed tents, overalls, and jackets, even blankets, were scarce. The men slept in cold fields, sometimes in tents but always on the ground, usually without straw for insulation. Drinking water could be bad, food paltry. Officers stayed in warm taverns and homes, where they spent their plentiful coin on extra food and drink. At times they were lavishly fed and entertained by hosts who could proffer fine wines and the charms of piano-playing daughters. Out in the camps, men drank whiskey and fired newly issued muskets for fun. Drunk on wine in brick houses, officers didn’t focus on orders not to waste powder.
Mornings began with floggings. Draft evasion had been rampant, with militiamen simply running and hiding. Once pressed into service, men deserted incorrigibly, embarrassing state governors and undermining the mission’s political spin: this was supposed to be a patriotic citizen army, reporting eagerly for duty to suppress ambitious traitors.
Foot soldiers felt resentment for the mission and had hopes mainly for plunder. They were all hungry and cold. While families cowered in farmhouses, freelancing soldiers crashed drunk through fields of just-ripened crops, tearing down fences for firewood, slaughtering chickens and pigs, buildings fires, and sleeping where they fell.
This army seemed thirstier for blood, more intent on murder, less disciplined. Rebel militias had been trying to take over the legitimate government. These soldiers were even more frightening: they were the legitimate government.
Tuesday, June 10

Whiskey Rebellion - The Militia Act
by
mammon
on Tue 10 Jun 2008 08:00 AM AKDT
The Whiskey Rebellion Series
The Militia Law Act, as well as certain parts of the Constitution itself, had been constructed for the very purpose of allowing troops to police citizens. The militia could “enforce the law,” “cause the laws to be duly executed,” and “suppress combinations,” all of which must mean, Hamilton said, that the militia can also break up meetings and assemblies that exist simply for the purpose of noncompliance with the law, when such meetings are supported by violence that baffles ordinary law enforcement.
The federal commissioners threatened the entry of troops into the Forks area and implied strongly that military incursion could be avoided it total submission were demonstrated by all people in the region. Repeal of the excise tax law was out of the question. Members of the entire Parkinson’s Ferry committee of sixty must unanimously declare their determination to submit to the laws of the United States and to refrain from obstructing the operation of the excise law. Two-fifths of the Parkinson’s Ferry committee preferred civil war.
The fate of males eighteen and older would depend on their signing, on September 11, and not a day later, an oath of submission to federal law. Those who signed on time, did not resist the troops in any way, and complied with the law in the future could count on an amnesty for past crimes. Anyone else, regardless of anything he’d done or not done during the insurgency, would be fair game for arrest by the troops.
The federal marshal for Pennsylvania was sent to serve summons to the people on the list. The writs required defendants to appear in court in August; courts were closed then. The rebels moved instantly to shut down all tax offices and punish not only officials but also civilian collaborators. Under the Militia Act, the president of the United States was now empowered to call out an army against them. And with Congress in recess, the president would be empowered by the new militia law to call out the largest possible force on his own discretion.
Hamilton and Knox were arguing for moving immediately, with an overwhelming force of at least twelve thousand men, bigger than any American army to date, more than had beaten the British at Yorktown. The question of delay was somewhat academic anyway: Troops would need time to mobilize. Negotiations would meanwhile fail, revealing rebels as intractable.
Eastern newspapers railed against the insurgency; the officer classes in city militias were gung ho to march for glory. The seaboard cities filled with patriotic fervor, expressed hatred for the rebels, and wondered why the president hadn’t already moved against them. The troops could now move with impunity.
Hamilton began ordering arms and supplies and sending work to Henry Lee of Virginia, who would serve under Washington as commander of the whole force. Troops from New Jersey, Maryland, Pennsylvania, and Virginia began marching west. On September 30, Washington and Hamilton stepped into a presidential coach and rode together down Market Street, leaving Philadelphia to join the army at Carlisle. Washington had always excelled at military administration, and Hamilton was enjoying a new one as secretary of war.
Sunday, June 8

Whiskey Rebellion - George Washington - Land Speculator
by
mammon
on Sun 08 Jun 2008 08:00 AM AKDT
The Whiskey Rebellion Series
Washington felt he knew the Forks well. He’d been getting immensely frustrated with the major project of his life, western land speculation. In five decades, that speculation had given him a total of sixty thousand acres across the Appalachians. He’d deployed land scouts with instructions to break and get around laws limiting tract size. He’d threatened and bullied people who were eyeballing plots to which, by virtue of having eyeballed them first, he claimed title. When the royal proclamation of 1763 prohibited land purchases west of the mountains, he told his agent to buy there anyway. The War of Independence legitimized his titles by overturning royal injunctions. After the revolution, he showed no patience for illegal possession: he spent much energy bringing actions against squatters, disdaining their idea that title – or at least affordable rents – should be offered to those willing to live on and improve the land.
He needed full rent. He had a constant need for cash. Making Mount Vernon pay for itself was always a problem, and his late mother had been a carping, ungrateful drain on his slim cash resources. He’d hoped to gain solvency through collections of western rents and then – when canals and roads were supported by the government and built by his own company, when Indians were suppressed by the United States Army, when regional government became what he called well toned – make a fortune by selling those lands.
But his hopes for the west were growing dreary, his patience thin. The land was still squatted on; rents were uncollected The absence of cash in the west was well known to Washington: he had to accept grain and other barter as rent, which always sold, through his agents in the west, for less than he knew it was worth.
The whole problem was becoming encapsulated for Washington in the western people’s resistance to the tax law, which hadn’t been enforced anywhere over the mountains, from Kentucky to the Northwest Territory. Failure to collect a national tax imposed an embarrassing limit on the national reach. Tax resistance weakened big creditors’ confidence in the financial stability of the United States, which had promised to pay bondholders interest derived from excise revenues. To make up the shortfall, Hamilton had been forced to propose new federal taxes: excises on snuff, sugar, and carriages, as well as stamp taxes and new import duties. Because such taxes shifted burdens back to eastern merchants and creditors, now even federalists were worried about excessive taxation.
The western land bubble would soon burst for everybody if lands appeared not to be under effective control of the United States.
Friday, June 6

Whiskey Rebellion - Mingo Creek Association
by
mammon
on Fri 06 Jun 2008 08:00 AM AKDT
The Whiskey Rebellion Series
Even as Alexander Hamilton began considering ways of bringing a federal army presence to the Forks of the Ohio, five hundred men calling themselves the Mingo Creek Association emerged as a power at the Forks. The association had a long ancestry. Men who became members and allies of the association had, in the years leading to ratification of the U.S. Constitution, closed roads to towns where debt cases were heard and foreclosed property was auctioned; they’d enforce boycotts on liquor brought in from the east, they’d condemned tax collectors, and they’d corresponded with Virginians and Kentuckians of the need for western unity.
When word spread that a deputy was trying serve papers in the Johnson case, the tax collector encountered a gang that took him into the woods and began by using a horsewhip on him. His naked body, stripes new and raw, received the blistering tar. He was stuck with feathers, tied up, and left in the woods in agony, his horse, money, and warrants seized.
Now the association set goals far broader than attacks on collectors. It planned to unite the four western counties, and the whole trans-Appalachian west into armed opposition to eastern oppression. Conveniently for the association’s plans, the sanctioned state militias, which organized and armed all able-bodied adult white males, was subject to extreme degrees of popular democracy.
From Colonels down, officers were elected by the militiamen themselves, including by landless men and dependents in others’ households. Anyone possessed of charisma and effectiveness, even if lacking gorgeous uniforms, proud mounts, gleaming arms, or money, could rise in the militia system.
The association took an even more radical step. The revised, conservative state constitution had ended popular elections for local judges. The governor appointed judges. Creditors had been finding debt cases easier to bring and win. No citizen in the militia’s district, the association announced, was to bring suit in county court against any other citizen in the district without first applying to the association for what it presented as mediation. Mediators would be chosen by popular elections, held outside sanctioned political process.
Not surprisingly, given the association’s identity with the local militia, and the assaults for which it was becoming known, lawsuits for debt collection in the county court dropped off sharply. Going to law to collect debts or bring foreclosures suddenly took courage, even foolhardiness.
By May 1794, liberty poles were rising. Up to a hundred feet tall, these were symbols made most famously in Boston. The appearance of liberty poles in the western country thus had a meaning that was clear to everyone. Rebellion against tyranny was under way.
The western country had its own flag now too. Six stripes, alternating red and white, stood for the unified six counties of western Pennsylvania and northwestern Virginia. The people saw the whiskey tax only as a symbol. They wanted repeal, but they were also talking about a redistribution of wealth, especially of land, with rules for access to land and rewards for improvement.
Mingo Creek Militia – Colonel John Hamilton
Herman Husband – Philosopher of the Allegheny
Wednesday, June 4

Whiskey Rebellion - Mechanics of the Whiskey Tax
by
mammon
on Wed 04 Jun 2008 08:00 AM AKDT
The Whiskey Rebellion Series
Mechanics of the Whiskey Tax
A federal tax on whiskey was hardly, to the small distillers who made up the majority that would pay it, the mere luxury-tax-with-concomitant-health-benefit that Hamilton had described to a Congress eager to be swayed.
The poorest people, hired hands paid in kind, experienced the whiskey excise as a tax on income: if community distillers had to pay the tax, they’d have to compensate themselves by taking a larger share of whiskey from people who brought their grain salaries in for conversion. Growers too felt the pain. There was no tax on grain, but westerners who raised grain were forced to convert grain to whiskey in order to transport it eastward. The tax thus imposed a federal tax on western farmers while leaving farmers in more convenient and prosperous places untaxed.
The duty would be collected by federal officers, in coin, at the point of production, often a log stillhouse on a small farm. Having collected the duty or secured the bond, the deputy then issues a certificate stamped with a Treasury Department seal. The certificate is the prize. It travels with the whiskey, proving to buyers that the duty has been paid. Certification makes the product legal.
It wasn’t clear where cash for the payment would come from, and failure to pay would make the product non-transportable. Not registering a still was punishable by a cash fine. Assets – the whiskey and the still itself – could be seized.
Consolidating an Industry
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.
Military Contracts
The major customers for western liquor had always been armies. But now, in concert with the excise tax, Hamilton was launching from the treasury a reform of the army-supply system, dispensing with small, independent sellers. He created commissary offices willing to buy only in bulk, with responsibility for delivery shifted to the sellers.
Merchants with access to big transport could buy up small batches of whiskey cheaply, from farmers suddenly bereft of markets, and sell them in wagonloads to the commissary.
Whichever way they turned now, small producers were further overtaxed by the government and undersold by big competition, and with the new army-buying procedures in place, they lost their best local customer just as it started bringing government to the west.
Tuesday, June 3

Whiskey Rebellion - Whiskey and the Frontier
by
mammon
on Tue 03 Jun 2008 08:00 AM AKDT
The Whiskey Rebellion Series
Whiskey came in vogue early in the eighteenth century with the influx of Scots-Irish settlers, who brought expertise in domestic distilling. The Scots-Irish were notably tough descendants of Protestant Scots peasantry, who had resettled in Ulster and then been forced, by exorbitant rents and English taxes, to migrate to North America. By the time of the revolution, domestic whiskey was gaining popularity and would replace rum as the country’s drink.
Eighteenth-century Americans distilled whiskey just as their ancestors had, using a pot still. The good product was clear. Inhaling it would water the eyes and rustle nose hairs. Swallowed, it made a hard impact, then a glowing heat; in the end, the feeling was surprisingly smooth, and soon after recovery, another shot might seem to be in order. Barrel storage darkened the drink and brought out redolent grain, woodsmoke, sugar. Drunken raw or aging, whiskey abruptly makes the drinker and the world different.
Many small farmers distilled seasonally. Whiskey was consumed by men, women, and children at all times of the day and every sort of gathering muster, church, election, work, dance, and fight. Often a community distiller kept pot stills going through the harvest, and farmers brought in their grain and took away the whiskey, paying the distiller in a portion of product.
The best whiskey was known to come from the Forks of the Ohio, whose “Monongahela rye” possessed consistent strength and purity. The region achieved brand recognition. Its whiskey was known by name in Philadelphia and in New Orleans. More than a fourth of the stills in America were located at the Forks of the Ohio.
Whiskey became currency in places where coin wasn’t seen. Barter paralyzed local economies, but whiskey was a true medium, always exchangeable for cash somewhere down the line, thus maintaining value against metal. A liquid commodity both literally and figuratively, the drink democratized local economies, offering even tenants and sharecroppers laborers a benefit. Tenants often wanted to pay rent, and laborers often got paid, in a portion of the grain they harvested. Community stills transformed, for a cut, such cumbersome forms of payment into something fungible. And while landlords often refused in-kind crops, or demanded them in extravagant quantities, they’d take whiskey for rent.
Sunday, June 1

Whiskey Rebellion - Hamilton Pushes the Whiskey Tax
by
mammon
on Sun 01 Jun 2008 08:00 AM AKDT
The Whiskey Rebellion Series
Hamilton’s goal for the domestic debt remained making reliable payments to creditors and inspiring confidence in federal bonds as articles of investment and trade. Funding the debt would spring-feed a pool of capital, from which the federal government could draw and draw again, in nurturing a growing nation. Wealth would be concentrated in the hands of moneyed investors. Their ambitions would fund the nation’s ambitions.
In January of 1790, Hamilton filed his proposed plan, the Report on Public Credit. The report urged a three-part program: paying interest on, rather than paying off or voiding, the federal domestic debt; hugely expanding that debt by absorbing all the states’ debts; and raising revenues for interest payments on the expanded debt by adding to the customs laws new duties on imported wine and spirits, and imposing an excise tax on domestically distilled spirits.
The product Hamilton proposed to tax, distilled spirits, was not, he said, a necessity but a luxury item consumed by those who could afford to pay the tax. Throughout debate, his allies had invited the House to see a whiskey tax as a public-health effort. Hamilton presented a letter for the Philadelphia College of Physicians, who said that domestic distilled spirits, the cheap drink of the laboring classes, had become a ravaging plague requiring immediate treatment. It was easy to see a federal excise tax on whiskey as an innocuous luxury tax, easily passed on by distillers to drinkers, surely nothing to tar and feather anyone over.
This law would be a good thing for the country, Hamilton told Congress, because it made collection of public revenue dependent not on the goodwill of the taxed, as state revenue laws always had, but on the vigilance of federal officers. The people’s movement had always made itself arbiter of whether taxes could be collected. States hadn’t been lazy, Hamilton said, or weak; they’d been scared. Federal officers, he promised, wouldn’t be. This tax would be collected everywhere. The means to use force existed.
March of 1791, the Whiskey Tax became law. The tax redistributed wealth by working itself deeply into rural people’s peculiar economic relationship with whiskey. Many of Hamilton’s congressional opponents wouldn’t have understood that relationship. Hamilton did.
Alexander Hamilton knew that in getting the act passed was a very smart bomb on a target he’d been softening for years. The secretary of treasury was celebrating a victory, which some at the Forks had every intention of cutting short, in a long struggle over nothing les than the power of money in the lives of the American people.
Passed by the first Congress of the United States in March 1791 heralded the first federal tax on an American product.
Saturday, May 31

Whiskey Rebellion - Constitution Ratified
by
mammon
on Sat 31 May 2008 08:00 AM AKDT
The Whiskey Rebellion Series
In 1789, the Constitution of the United States had been ratified. The first U.S. Congress was settling into its temporary home in New York City and confirmed Alexander Hamilton’s appointment to the executive branch.
Alexander Hamilton, working up his finance plan, had exciting new powers to work with. The U.S. Constitution, Article One, section eight, clause one, gave the federal government a right to collect every kind of tax from the whole people of the United States. Congress created and deployed a cadre of federal officers to collect the impost, and the officers’ power, which included search and seizure, were unhampered by state lines or state laws. The nation was being unified by tax officers. Furthermore, sections fifteen and sixteen empowered the federal government to call out the state militias to enforce federal laws, to organize and control those militias when so engaged, and to prescribe militias’ training at all times.
Section ten, clause one, prohibited states from printing paper money, issuing bonds, and making anything but gold and silver a legal tender for paying public or private debts.
District judges were no longer elected in the counties they served but were appointed by the executive in the capital.
The power that the people had been given in 1776 was taken away.
Thursday, May 29

Whiskey Rebellion - Manipulating a Mutinous Army
by
mammon
on Thu 29 May 2008 08:00 AM AKDT
The Whiskey Rebellion Series
The war was effectively won in late 1782. The past seven years had been a slog through cold, starvation, at time near-nakedness, along with the daily horrors of slaughter. Neither officers nor men had been paid in years. Tight cash forced choices between paying soldiers and paying creditors. Creditors came first: Morris officially suspended army pay. Washington himself was near bankruptcy. Mutiny was what Washington feared most. He blamed Congress. Uncertainty about pay was haunting – and uniting – a large, angry force, 550 officers and around 10,000 enlisted men, who might refuse to be sent home impoverished and in debt.
When officers met with Congress, they mentioned mutiny as the probable outcome of demands not being met. Hamilton was now determined to build the situation into a genuine crisis. That the crisis really might end in coup and military government was a risk they had to take. They even considered the potential benefits to their national agenda of the success of such a coup. But their main idea was merely to frighten the states with the threat of military takeover. The officer class was armed. Morris advised the officers to refuse to lay down their arms unless the states agreed to federal taxes.
In Philadelphia, Morris met with officers and hailed them as fellow creditors. The only solution was to demand federal taxes to pay not just officers but all creditors. Hamilton addressed Congress to rule out compromises. He opposed a motion to levy the impost only for paying officers: all bondholders must be included. Congress did just that. All army obligations thus passed easily to the federal government, adding to the debt. The officers agreed to take the interest-bearing bonds, to be funded after final settlement of states’ accounts with Congress.
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