The United States borrowed — heavily — to finance the Revolutionary War. Soldiers and supplies cost about $75 million in foreign money. The United States could have relied on the goodwill of its supporters to forgive the debt, but the newly-chosen Secretary of Treasury, Alexander Hamilton, would have none of it. “[T]he debt of the United States was the price of liberty,” he said, insisting that every dollar should be repaid. And to help raise the money, the U.S. Treasury imposed its first ever excise taxes.

On this day, March 3, in 1791, the United States Congress passed the first ever Internal Revenue Act, providing for taxes on distilled liquor and tobacco products. It was the first “internal” tax — one on domestically-produced and domestically consumed products.

The new measure was quickly dubbed the “Whiskey Tax” and was strongly resisted in the farms of Pennsylvania. Farmers who turned their grain into whiskey drove out tax collectors with violence. In response, President George Washington travelled to Western Pennsylvania to negotiate with the rebels — at the head of a 15,000-man army from the neighboring states. And that was the end of the short Whiskey Rebellion.