Modern history

Years of Crisis, 1792-1796

By 1792 Hamilton had succeeded in implementing his plan for U.S. economic development. Yet as Washington began his second term in the spring of 1793, signs of strain appeared throughout the nation. The French Revolution, which had begun to dissolve into chaos and terror, posed challenges to foreign trade and diplomacy. Reduced prices for western land fueled migration to the frontier, intensified conflicts between Indians and white settlers, and increased hostilities between the United States and Great Britain. Finally, the excise tax on whiskey inspired discontent among frontier farmers. This cluster of crises reinforced disagreements among Federalists, splitting them into warring factions during Washington’s second term.

Foreign Trade and Foreign Wars

Jefferson and Madison led the faction opposed to Hamilton’s policies. Their supporters were mainly southern Federalists who envisioned the country’s future rooted in agriculture, not the commerce and industry supported by Hamilton and his allies. Jefferson agreed with the Scottish economist Adam Smith that an international division of labor could best provide for the world’s people. Americans could supply Europe with food and raw materials in exchange for clothes and other items manufactured in Europe. When wars in Europe, including a revolution in France, disrupted European agriculture in the 1790s, Jefferson’s views were reinforced.

The French Revolution (1789—1799) had broader implications for U.S. politics than simply increasing the profits from American wheat. The efforts of French revolutionaries to overthrow the monarchy, end feudal practices, and institute a republic gained enthusiastic support from many Americans, especially the followers of Jefferson and Madison. They formed Republican societies, modeled on the Sons of Liberty, to keep tabs on Federalist encroachments on American rights. Many members adopted the French term citizen when addressing each other. Moreover, the strong presence of workers and farmers among France’s revolutionary forces sparked further critiques of the “monied power” that drove Federalist policies.

In late 1792, as French revolutionary leaders began executing thousands of priests, aristocrats, and members of the royal family in the Reign of Terror, wealthy Federalists grew more anxious. The beheading of King Louis XVI horrified them, as did the revolution’s condemnation of Christianity. When France declared war against Prussia, Austria, and finally Great Britain, merchants worried about the impact on trade, and Hamilton feared a loss of valuable revenue from tariffs. In response, Congress passed the Neutrality Act in 1793, prohibiting ships of belligerent nations—including France or Great Britain—from using American ports. This act overrode a 1778 treaty, signed in the midst of the American Revolution, in which the United States had agreed to defend France in any war with Britain.

The immediate effect of the Neutrality Act was positive for American merchants. They eagerly increased trade with colonies in the British and French West Indies, and U.S. ships captured much of the lucrative sugar trade. Employment rose, and a building boom transformed seacoast cities as affluent residents hired carpenters, masons, and other craftsmen to construct fashionable homes in the “Federal” style. At the same time, farmers in the Chesapeake and Middle Atlantic regions benefited from European demand for grain, and the price of American wheat soared.

Yet these benefits did not bring about a political reconciliation. Instead, tensions escalated in the spring of 1793 when the French diplomat Edmond Genêt visited the United States. Republican clubs poured out to hear Citizen Genêt speak, and their members donated generously to support the French Revolution. Thousands of young Americans enlisted as volunteers on privateering vessels that harassed British and Spanish shipping in the Caribbean. At the same time, the British navy began stopping U.S. ships carrying French sugar and seized more than 250 vessels. American merchants were outraged and demanded that the government intervene to protect the “free trade” guaranteed by the Neutrality Act.

President Washington sent John Jay to England to negotiate a settlement with the British. In the meantime, Genet’s popularity began to fade as he sought to pull the United States into the war. Pro-British Federalists were more adamant than Republicans in their disapproval, arguing that Genêtwas seeking to provoke conflict. Finally, in August 1793, just as yellow fever erupted in the nation’s capital, Washington demanded Genet’s recall to France. Jay returned from England in 1794 with a treaty negotiated with the British, although many congressmen thought he had given away too much and were hesitant to ratify it. The treaty, for instance, did not include an agreement by the British to stop impressing American seamen.

The Whiskey Rebellion

Despite these foreign crises, it was the effect of Federalist policies on the American frontier that crystallized Republican opposition and led to the development of a Democratic-Republican party. In the early 1790s, Republican societies from Maine to Georgia had demanded the removal of British and Spanish troops from frontier areas, while frontier farmers lashed out at Federalist enforcement of the so-called whiskey tax. Many farmers on the frontier grew corn and turned it into whiskey to make it easier to transport and more profitable to sell. The whiskey tax hurt these farmers, who considered themselves “industrious citizens” and “friends of liberty.” Hundreds of them in Pennsylvania, North Carolina, and Kentucky petitioned the federal government for relief.

Much like their counterparts in Massachusetts in the 1780s, western Pennsylvania farmers rallied in 1792 and 1793 to protest the tax and those who enforced it. Former North Carolina Regulator Herman Husband was one of the most outspoken critics of the excise tax (see chapter 5). They burned sheriffs in effigy, marched on courthouses, assaulted tax collectors, and petitioned the federal government. Washington and his advisers failed to respond, paralyzed by a yellow fever epidemic in Philadelphia that ground government operations to a halt. By 1794 an all-out rebellion erupted, with protesters adopting slogans from Stamp Act protests, Shays’s Rebellion, and even the French Revolution.

President Washington and his advisers worried that the rebellion could spread and feared that uprisings by white settlers might encourage Indians to rise up as well. Furthermore, Spanish and British soldiers were eager to foment trouble along the frontier, and the Whiskey Rebellion might spark intervention by either Spain or Great Britain. Federalists suspected that pro-French immigrants from Scotland and Ireland were behind the insurgency.

When Shays’s Rebellion had erupted in 1787, the confederation government had had no power to intervene. Now, however, the United States could raise an army to quash such insurgencies. In August 1794, Washington federalized militias from four states, calling up nearly thirteen thousand soldiers. The president asked Hamilton, author of the whiskey tax, to accompany the troops into battle. The army that marched into western Pennsylvania in September vastly outnumbered the “whiskey rebels” and easily suppressed the uprising. Having gained victory, only two of the leaders were tried and convicted, and they were later pardoned by Washington.

Washington proved that the Constitution provided the necessary powers to put down internal threats. Yet in doing so, the administration horrified many Americans who viewed the force used against the farmers as excessive. Jefferson, who had resigned as secretary of state in 1793, joined Madison in his outrage at the governments action. Despite a strong aversion to partisan politics among leaders of the Revolutionary generation, the divisions inspired by Hamilton’s policies convinced Jefferson and Madison to launch an opposition party known as the Democratic-Republican Party.

Further Conflicts on the Frontier

In one area, Federalists and Democratic-Republicans voiced common concerns: the continued threats to U.S. sovereignty by Indian, British, and Spanish forces. In 1790 Congress had passed the Indian Trade and Intercourse Act to regulate Indian-white relations on the frontier and to ensure fair and equitable dealings. However, the act was widely ignored. Traders regularly cheated Indians, settlers launched private expeditions to claim Indian lands illegally, and government agents approved sham treaties. Federal troops sent to the Northwest Territory to enforce the law ended up fighting against the Indians.

The government’s failure to stem the flood of settlers into the Ohio and Mississippi River valleys proved costly. In 1790 Little Turtle, a war chief of the Miami nation, gathered a large force of Shawnee, Delaware, Ottawa, Chippewa, Sauk, Fox, and other Indians. This pan-Indian alliance successfully attacked federal troops in the Ohio valley that fall. A year later, the allied Indian warriors defeated a large force under General Arthur St. Clair, governor of the Northwest Territory (Map 7.2). The stunning defeat shocked Americans, who continued to blame British forces encamped in forts on U.S. soil for encouraging Little Turtle and his warriors. In the meantime, Spanish authorities negotiated with Creeks and Cherokees to attack U.S. settlements on the southern frontier.

Washington decided to deal with problems in the Northwest Territory first, sending 2,000 men under the command of General Anthony Wayne into the Ohio frontier. In the spring of 1794, Wayne’s troops built Fort Defiance in the heart of Ohio territory. Augmented by several hundred mounted Kentucky riflemen, Wayne’s forces then attacked some 1,500 to 2,000 Indians gathered at a nearby British fort. In the Battle of Fallen Timbers, the pan-Indian forces, led by Little Turtle, suffered a bitter defeat. A year later, the warring Indians in the Northwest Territory signed the Treaty of Greenville, granting the United States vast tracts of land.

Amid this turmoil, in November 1794 the Senate finally approved the Jay Treaty with Great Britain, which required the withdrawal of British forces from U.S. soil by 1796. But it also required Americans to make “full and complete compensation” to British firms for debts outstanding at the time of the American Revolution and limited U.S. trade with the British West Indies. Before Jay’s controversial treaty took effect, Spain agreed to negotiate an end to hostilities on the southern frontier of the United States. Envoy Thomas Pinckney, a South Carolina planter, negotiated the treaty, which recognized the thirty-first parallel as the boundary between U.S. and Spanish territory in the South and opened the Mississippi River and the port of New Orleans to U.S. shipping. The Pinckney Treaty, ratified in 1796, advanced the interests of the South, while the Jay Treaty promoted those of the North.

MAP 7.2

American Indians in the Ohio River Valley, c. 1785-1795 In the early to mid-eighteenth century, despite periodic conflicts, Indian tribes in the Ohio River valley forged trade and diplomatic relations with various colonial powers. But once the United States established the Northwest Territory in 1785, conflicts between Indians and U.S. settlers and soldiers escalated dramatically. As tribes forged pan-Indian alliances, the United States constructed numerous forts in the region.


• How did events overseas shape domestic American politics in the 1790s?

• What common concerns underlay the Whiskey Rebellion and Shays's Rebellion? How did the U.S. government deal differently with each?

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