Overview: It all started with a tax. What came to be known as the Whiskey Rebellion of 1794, or the Western Insurrection, took place over a period of time beginning in 1791. Congress instituted an excise tax on distilled liquors that set the rebellion of 1794 in motion.
What was the root cause of this rebellion?
Western Pennsylvania was separated from the east by the Allegheny Mountains. With the majority of the population being farmers, there was a limited market for the sale of their grain locally and it was difficult to transport the grains to the east for sale. Converting the grain to whiskey made it more transportable and there was a better market for the product.
The government was deep in debt from the Revolution. In 1791 Congress approved a bill putting an excise tax on all distilled spirits. The tax was required to be paid in cash—something unusual for the time as whiskey was often the monetary unit westerners used to pay for their goods and services. Large producers in the east didn't protest the tax, because their cost to get goods to market was less and they could decrease their tax by increasing their volume, something the farmers in the west were not able to do.
Already at odds with the government with regard to Indian attacks, the farmers felt that this interference into their business was unjust and ignored their rights. Many of the westerners refused to pay the tax and those coming to collect the tax were often ambushed or humiliated.
Violence continued to escalate and spread to other counties over the next few years. President Washington's 1792 proclamation condemning interference with the "operation of the laws of the United States..." did not calm matters. Despite appeals for a peaceful resolution, a militia gathered at Braddock's Field during the last week in July 1794. On August 7, the President issued another proclamation calling for the rebels to disperse and return to their homes as well as invoking the Militia Act of 1792, which allowed the President to use State military (militiamen) to put an end to the rebellion.
Approximately 13,000 militiamen from surrounding states marched with President Washington to put down the rebellion. While no real battle ensued, about 150 rebels were arrested. Most were released due to lack of evidence, 2 were convicted of treason and then later pardoned.
Why was this rebellion significant in our history?
The Whiskey Rebellion was the first test of federal authority in the United States. This rebellion enforced the idea that the new government had the right to levy a particular tax that would impact citizens in all states. It also enforced the idea that this new government had the right to pass and enforce laws impacting all states.
Source: The Whiskey Rebellion #2
Library of Congress