The first major test of the authority of the American national government came from western Pennsylvania. Isolated from the east coast by the Appalachian Mountains, farmers in the region faced the serious problem of not being able to market their crops. Because they could not ship their corn and rye down the Ohio and Mississippi rivers, the farmers instead distilled the grains into liquor. By reducing the size of their crop, they both enhanced its value and made transport to market across the mountains by pack train possible.
Under Hamilton, an excise was imposed on whiskey amounting to 25 percent of the product's retail value, effectively erasing all of the farmers' profit. Moreover, anyone accused of evading the tax had to go at his own expense to Philadelphia for trial. Western Pennsylvania farmers were particularly incensed because they seemed to be the main targets of the tax, as it was not evenly enforced in all areas.
In July 1794, the Whiskey Rebellion broke out as farmers declared their defiance of the law and rioted against tax officials, burning buildings and even calling for secession from the United States. President Washington promptly ordered the militaries of Pennsylvania, Maryland, Virginia, and New Jersey to march against the rebels.
Opposition quickly evaporated against this combined force of almost 13,000 men. Of the 150 arrested, only two were actually convicted of treason, and Washington later pardoned both of them. The point had been clearly made, however: Federal law was to be obeyed, and violent protest, a method successfully employed against British policies two decades earlier, would not be tolerated.