Chapter 24 The Ruling Elite: The Jay Treaty

  

Chapter 24 The Ruling Elite: The Jay Treaty

 

The Jay Treaty

American relations with Britain did not improve following the Revolutionary War. British exports flooded the American market while British trade restrictions and tariffs blocked American exports. Britain and their bankers still attempted to dictate terms and who should be paying war reparations. Britain maintained control of northern forts in the Northwest Territory (the area west of Pennsylvania). They should have surrendered them according to the Treaty of Paris in 1783. Yet, thirteen years later, they are still occupying the forts, after America supposedly won the war but Britain was still acting dictatorial. Britain still seized naval and military supplies from neutral ships. James Madison suggested a trade war, sure to work given that the current warfare with France had debilitated Britain. Washington rejected that idea and sent John Jay, from a wealthy family of New York merchants, to Britain to negotiate a new treaty. The treaty demanded that Britain leave the northwestern posts; grant America “most favored nation” status, while America agreed to limit their commercial relations in the British West Indies.

Attorney John Jay, a leader in the Federalist Party and former ambassador to Spain and France, was the first Chief Justice of the United States (1789-1795). He was also the chief negotiator of The Jay Treaty, a document crafted by Treasury Secretary Alexander Hamilton to resolve issues with Britain following the Revolutionary War that the Treaty of Paris of 1783 apparently failed to address or else the British simply ignored. Because Britain and France were engaged in warfare, British officials wanted to improve their relationship with America. Jefferson and his supporters opposed the Jay Treaty but the Senate ratified it by a two/thirds majority. The debate over the Jay Treaty led to the development of the nation’s “First Party System.” Officials in both countries signed Jay’s Treaty in November 1794, and both countries officially ratified it and it became effective on February 29, 1796.

According to the Jay Treaty, America, the winner of the Revolutionary War (1775–1783), agreed to pay reparations of £600,000 sterling to King George III, more than a decade after the war. The Senate, perhaps bribed by the British-serving Federalists, ratified the Jay Treaty during a secret session. The Senators ordered the newspapers no to publish the details of the treaty. However, Benjamin Franklin’s grandson published the facts, which resulted in a public outrage. In angered retaliation, members of Congress passed the Alien and Sedition Acts (1798) so that federal judges could prosecute editors and publishers for exposing corruption within the government.

President George Washington, in his support of the Senate and their ratification of the Jay Treaty, exercised Executive privilege, a practice that people can trace back to the English Crown Privilege.[829] Professor John Kozy wrote, “Executive privilege, deliberative process privilege, state secrets privilege, and public interest immunity are forms of English crown privilege. They are attributes of monarchial systems. All are derived from the common-law principle that the internal processes of the executive branch of government are immune from normal disclosure, and all are based on the belief that by guaranteeing confidentiality, the executive branch receives more candid advice than would be given if confidentiality were not assured. Such advice, it is claimed, results in better decisions for society as a whole, but not a jot of empirical evidence has ever been cited to support this claim. In fact, the evidence supports the opposite view that confidential advice results in decisions that produce horrid results for society.”[830]

In 1796, members of the House of Representatives requested John Jay’s negotiation documents regarding his discussions with British officials from President George Washington. However, the president denied their request explaining that the Senate had an exclusive responsibility in the ratification of treaties. Therefore, Washington decided that the House had no justifiable reason to evaluate the material.

Consequently, Washington supplied the documents to the Senate but refused to provide them to the House.

[831]

President Thomas Jefferson used the executive privilege precedent during Aaron Burr’s trial for treason in 1807. Burr wanted the court to compel Jefferson to supply Burr with his private letters regarding him. Chief Justice John Marshall, a leader of the Federalist Party and therefore a powerful advocate for a strong federal government, was Jefferson’s political adversary. Marshall, the architect of a strong Supreme Court, ruled that the Sixth Amendment did not exclude the president from providing the requested letters. Jefferson claimed that revelation of the document’s contents would jeopardize public safety. Marshall said that the court would make such decisions, not the president. Jefferson complied with

Marshall’s order but insisted that he was doing so voluntarily and not because of the authority of the court.

[832]

The Jay Treaty failed to resolve American complaints regarding neutral shipping rights and to obtain adequate compensation for the slaves the British seized during the Revolution, the reason so many Southerners objected to the treaty. Jefferson and Madison suspected that a closer commercial alliance and economic ties with Britain would ravage republicanism and strengthen the Federalists. However, George Washington and John Jay supported Hamilton’s newly created Federalist Party, which strongly supported the treaty. The Federalists, with Washington’s prestige, mobilized public opinion in favor of the treaty. The debates over the Treaty “transformed the Republican movement into a Republican party.”[833] Additionally, Jay failed to acquire just compensation for the slaves the British seized which provoked the South and encouraged their opposition.

The Whiskey Rebellion, Suppressing Opposition

Small farmers and others on the western edge of the United States opposed numerous policies advocated by the eastern-based national government that, in 1791, imposed an excise tax on whiskey. Treasury Secretary Alexander Hamilton suggested this tax as part of his program to centralize the national debt following the Revolutionary War. When tax collectors attempted to collect this tax, violence finally erupted in July 1794 after a U.S. marshal, a stranger in the area, attempted to deliver officials writs to distillers who refused to pay the tax. Over five hundred armed men convened at the home of General John Neville, the local tax inspector. George Washington then sent a group of mediators to western Pennsylvania to negotiate with the rebels. The president, at the suggestion of Alexander Hamilton, also raised a militia force to quash the hostility. Before the military arrived, the insurrection had already subsided. However, the military arrested about twenty men who officials later acquitted.

This incident, which people refer to as the Whiskey Rebellion, revealed that the national government was prepared, willing and capable of using physical force to suppress violent opposition to its laws. Government officials still found it almost impossible to collect the whiskey excise tax. This event contributed to the development of political parties in the United States. President Thomas Jefferson repealed the whiskey tax in opposition to Hamilton’s Federalist Party, when his party assumed power in 1800.

In 1789, a new government began operations after the states ratified the U.S. Constitution. The Articles of Confederation, the authority of the previous government, did not have the power to levy taxes but rather, had borrowed money to pay the government’s debts, which now totaled $54 million. Additionally, the states had accumulated $25 million of debt. Secretary of the Treasury Alexander Hamilton sought to exploit the accrued debt through imposing a financial system like the British structure. He claimed it would encourage prosperity and national unity. In his Report on Public Credit, he advised Congress to combine the state and national liabilities into one debt that the federal government would fund. Congress approved Hamilton’s recommendations in June and July of 1790.

Consequently, the national government now needed a revenue source to satisfy the debts of the bondholders. By December 1790, Hamilton suggested that the national government increase import duties, the government’s principal source of revenue, as high as possible. He promoted the passage of an excise tax on domestically distilled liquors, the first tax imposed by the national government on all domestic merchandise, supposedly a luxury, according to Hamilton. Because people considered distilled liquor as a luxury, they would be less likely to oppose an excise tax on it. Of course, the social reformers supported what they viewed as a “sin tax” and hoped they could exploit the situation to raise public awareness about the negative effects of alcohol.

However, many people, especially in the west, drank whiskey. The small farmers augmented their income by trading or selling whiskey from their own stills. Farmers residing in the Appalachian Mountains

distilled their extra grain into whiskey for retail purposes, as it was easier to transport over the mountains than grain. With this whiskey tax, the western farmers could not be competitive with the eastern grain producers. Poorer people often received whiskey rather than wages so essentially the excise tax was an income tax that the wealthier easterners escaped. Small farmers, who distilled whiskey on a seasonal basis, opposed the tax because it gave unfair tax breaks to large eastern distillers. A distiller could pay a base fee or by the gallon. Large distillers produced more whiskey and chose to pay a flat fee, which equated to less tax per the gallon. Small western farmers usually paid a higher tax per gallon making them less competitive.

The majority of the residents, especially in the four southwestern counties, of the western frontier opposed legislation on the whiskey excise tax. Nevertheless, the legislators passed it, so several Pennsylvanians collaborated in order to repeal the law. Residents in four counties, Allegheny, Fayette, Washington, and Westmoreland, joined in a meeting on July 27, 1791 in Fayette County to select delegates for a meeting in Pittsburgh in September 1791 in an attempt to repeal the law. The leaders of the Pittsburgh convention petitioned the Pennsylvania Assembly and the U.S House of Representatives, both in Philadelphia. The government reduced the tax in May 1792. On September 11, 1791, in Washington County, a gang of men tarred and feathered Robert Johnson, a new tax collector. Because of this and other similar incidences, government officials did not attempt to collect tax in 1791 and early 1792.

Small farmers in Maryland, Virginia, North Carolina, South Carolina, and Georgia also opposed the whiskey excise. Officials did not collect the tax in Kentucky. In 1792, Hamilton wanted to send the military to suppress resistance in western North Carolina. In August 1792, people held a second convention in Pittsburgh to talk about the whiskey tax. Attendees included Albert Gallatin, a future Treasury Secretary. The Mingo Creek Association, a militant group, controlled the convention. Hamilton viewed the second Pittsburgh convention as a threat to the federal government’s authority. Washington and Hamilton were uncomfortable by the resistance in Pennsylvania, as the national capital was located there. Hamilton drafted a presidential proclamation condemning opposition to the excise laws. Washington signed the declaration on September 15, 1792, and had it published in numerous newspapers.

On August 1, 1794, approximately 7,000 protestors, primarily non-land owning poor people, congregated at Braddock’s Field, a historic battlefield. They did not own whiskey stills or otherwise participate in its production but were outraged over the excise tax, along with other economic injustices. Some of the protestors wanted to march on Pittsburgh and wage havoc on the wealthy who they felt had brought about this situation. David Bradford, deputy attorney-general for Washington County, Pennsylvania, praised the French Revolution and likened himself to Robespierre, a leader of the French Reign of Terror. The protestors wanted to separate themselves from the United States and ally with Spain or Britain.

On August 14, 1794, delegates from the six protesting counties convened a meeting at Parkinson’s Ferry where they drafted resolutions and appointed a committee to meet with a group of men that President Washington had sent. He wanted to stop an armed insurrection, maintain the government’s authority, all without alienating the public. While he had commissioners, Attorney General William Bradford, Justice Jasper Yeates of the Pennsylvania Supreme Court, and Senator James Ross, prepared to negotiate, he also raised the militia, as he had no confidence in the commissioners’ ability to squelch the rebellion and prevent violence. The Militia Act of 1792 required that a justice of the Supreme Court make certain that law enforcement was necessary.

On August 4, 1794, Justice James Wilson claimed that people in western Pennsylvania were in a state of rebellion. On August 7, Washington decided, with “the deepest regret,” to use the military to suppress the rebellion. He ordered the insurgents in western Pennsylvania to disband by September 1.

President Washington accused the “self-created societies” of initiating the rebellion in Pennsylvania,

which people refer to as the Whiskey Rebellion. People, even then, revered Washington and he would not have used military authority to put down the insurrection. Rather, other powers within the administration instigated the military action. However, the secret societies soon went underground. People, because of his position, would not attack Washington as a witch-hunter for making claims about secret societies. Nonetheless, they organized in America and waited for the right opportunity for a world-revolution. People able to withstand the constant “brainwashing” of the press understand the high stakes that are involved.[834]

The committee agreed to abide by the government’s directions and submit to its conditions. Some of the protestors supported that decision while others opposed it, especially those who felt they had no voice, the poor and the landless. Two of the representatives, William Findley and David Redick, were to meet Washington to stop the oncoming militia. Washington and Hamilton argued that if they turned the military back, violence would erupt. They called up a military force of 12,950 men using a draft to acquire that many people as relatively few men volunteered for the militia. However, the people in three Virginia counties and in some places in Maryland attempted to evade the draft. Therefore, Governor Thomas Sim Lee of Maryland sent 800 men to suppress the anti-draft riot in Hagerstown during which officials arrested about 150 people.

The military marched into western Pennsylvania in October 1794 and subdued the insurrection. Some of the leaders fled to the west for safety. Government officials investigated, arrested, and tried about twenty individuals. They convicted two men for treason – Philip Vigol and John Mitchell, who they sentenced to hang. Washington later pardoned both men. President Washington’s management of the Whiskey Rebellion brought approval from the majority of the population. This incident was evidence that the new national government was willing to crush strong opposition to its laws. President Washington viewed his actions as appropriate and successful. Officials still had a difficult time collecting the whiskey excise, a situation that contributed to the development of political parties. President Thomas Jefferson and his party repealed the whiskey tax in opposition to Hamilton’s Federalist Party.

Numerous people, using the Whiskey Rebellion as an example, have inquired about what kinds of protests are legitimate according to the Constitution. Christian G. Fritz, legal historian and a law professor claimed that although certain people had ratified the Constitution, there lacked a consensus about sovereignty. Federalists maintained that the government was sovereign because the people had established it. Therefore, protest actions, like those during the American Revolution, were now illegitimate. However, the Whiskey Rebels and their supporters argued that the war had established the people as a “collective sovereign.” Therefore, the people had a collective right to challenge the government through constitutional measures.

Historian Steven Boyd suggests that the government suppression during the Whiskey Rebellion aggressively persuaded anti-Federalist westerners to acquiesce and finally assent to the Constitution. Further, they believed the way to change the things in the government they opposed was through voting rather than by resisting the government. Federalists ultimately agreed to allow the people to participate more in the way officials governed them. Federalists still attempted to constrain freedom of speech that was critical of the government through the enactment of the Alien and Sedition Acts in 1798, following the Whiskey Rebellion. However, the Federalists abandoned their efforts to inhibit and challenge the freedom of assembly and the right to petition.

The Original Thirteenth Amendment