This is endlessly fascinating … it is a story about the Scots-Irish frontiersmen in North America, who came here to be left alone, to get out from underneath the British and later scheming bankers and bureaucrats in the Union.
Far from being an ideology, this spirit of “freedom” in America, the hatred of the federal government that thrives in Dixie, is something that the Scots-Irish brought here from Britain, where it went viral on the American frontier beyond the Appalachians.
In this episode, the ancestors of the “Tea Party” (i.e., the Americans) take on the forerunners of Wall Street in the “Whiskey Rebellion.”
The Borderlanders’ uprising were long dismissed as the thuggish behavior of backcountry louts too ignorant to understand the merits of taxation or the need to settle their debts. In reality, the Borderlanders weren’t against taxation or creditworthy behavior but were resisting a scheme so corrupt, avaricious, and shameless it ranks with those of Wall Street in the first decade of the twenty-frist century.
In the dark hours of the wars of liberation, the Continental Congress had no money to pay salaries to their soldiers or to compensate farmers for requisitioned food and livestock. Instead Congress gave all these people government IOUs. This practice continued for years until, under the financial administration of the notoriously unethical banker Robert Morris, the state of Pennsylvania announced it would no longer accept the congressional IOUs as payments for taxes. With no other form of money in circulation in much of the countryside, many poor families had no choice but to sell the notes for whatever they could get, and wealthy speculators purchased them for one-sixth to one-fortieth of their face value. Soon just over 400 individuals held over 96 percent of Pennsylvania’s war debt, and nearly half was controlled by just twenty-eight men, most of whom were Robert Morris’s friends and business partners. Shortly thereafter, Morris and his protege Alexander Hamilton took control of federal financial policy, rigging it so as to literally turn their friends’ worthless paper into silver and gold. Under Morris and Hamilton, the federal government would buy back the bonds for face value, plus 6 percent interest, paid in precious metals raised by assessing new federal excise taxes designed to fall most heavily on the poor people who’d been forced to take the worthless congressional scip in the first place.
But, wait – there’s more. Most people in Appalachia hadn’t seen hard cash in years. The closest thing to cash that Borderlander farmers could create was whiskey, which was nonperishable, marketable, and easy to transport. Knowing this, Morris and Hamilton cynically imposed a sharp tax on this all-important Appalachian product, even as they discouraged their underlings from collecting taxes owed by merchants on the coast. Meanwhile, they used their influence to give themselves and their private banker friends effective control over the new nation’s currency supply – much of it printed by Morris’s private Bank of North America – but with federal taxpayers on the hook to clean up their mess if things went wrong. It’s also worth nothing that Morris and Hamilton were both immigrants without ethnoregional allegiances; English-born Morris and Barbados-born Hamilton both saw North America as the British had; as a cow to be milked for all it was worth.
But unlike in 1929 or 2008, the victims of this scheme were well aware of what was going on, and it was the people of Appalachia who resisted the federal elite’s machinations most strongly. The greatest uprising that followed would come to be known, derisively, as the Whiskey Rebellion.
Alexander Hamilton’s vampire financial scheme has been resurrected in our own times as Wall Street and the Federal Reserve.
Thomas Jefferson hated those scheming Federalist bankers. That is why he trusted the common sense of the people more than the scam artists and wannabee banker aristocrats of his day like Alexander Hamilton.
Old Hickory killed that damn bank in the 1830s – it was the “Second Bank of the United States” back then, having been resurrected again after the War of 1812 – and paid off the American national debt.
The popular uprising against the Federalists – against the precursors of Wall Street – was a mass movement in the North and South. By the time it was over, there was a Democratic-Republican Party, which later split into two factions when John Quincy Adams struck the “corrupt bargain” with Henry Clay to steal the election of 1824.
Note: There are plenty of people in the South who are delighted to see Wall Street get occupied, who would love to see a flash mob burn down the Hamptons, but who don’t necessarily care for the “progressive” crowd with their Che Guevera posters.