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The New York Times

 

Distillation Without Taxation

February 06, 2009

By Walter Olson

If you like the idea of “sin” taxes as a way for the government to raise revenue, be aware that Alexander Hamilton got there first. In Federalist No. 12, he called for taxing drinkers to help finance the new federal government. A levy on spirits importation, he argued, would also be of benefit “to the morals, and to the health of the society” by curbing the “national extravagance” of consuming ­spirits. Sound familiar?

As history relates, the scheme backfired badly when Hamilton pushed it through in modified form as an excise. Plausible enough on its surface (no one, after all, is obliged to drink liquor), the tax in practice laid oppressive burdens on the settlers of the western frontier, for whom whiskey was the one solidly profitable article of production, grain itself not being economical to ship east over the mountains. And the same frontier was the section of the new nation where ready money to pay the tax was scarcest. The resulting turmoil, which has come to be known as the Whiskey Rebellion, set aflame the Appalachian region until, in 1794, George Washington marched an army into western Pennsylvania to put it down. The widely evaded tax had collected little revenue, and Congress eventually repealed it.

Despite its title, David Liss’s latest historical thriller uses the frontier revolt only as a springboard to its real story, the emergence of Hamiltonian finance capitalism back east. As Treasury secretary, in the words of one of the characters in “The Whiskey Rebels,” Hamilton “had single-handedly transformed the country from a republican beacon for mankind into a paradise for speculators.” Such at least were the views of the Jeffersonians, who bitterly opposed Hamilton’s fledgling Bank of the United States and felt vindicated when his restoration of public credit (via repayment of state war debt) led to a bubble of speculation in government securities that was to culminate in the Panic of 1792. Of the financiers laid low in that panic, the most prominent was a high-rolling New Yorker (and, briefly, aide to Hamilton at the Treasury Department) named William Duer, whose double-­dealings stank badly even by the relaxed ethical standards of that day.

The book’s two central characters (also its two narrators) follow separate paths that converge on the Duer scandal. Ethan Saunders, a spy for General Washington during the Revolution, is living in disgrace in Philadelphia after falling under suspicion of traitorous dealings with the British, while his lady love has married one of the book’s many villains.Clearing his name and reclaiming her are just a matter of time. Meanwhile, spirited young Joan Maycott and her husband, lured west by promises of land, realize too late that Duer and his cronies have gulled them into a worthless deal. They make a success on the frontier anyway in whiskey distilling, but lose everything to a landlord of fabulous rapacity. Bent on revenge, Mrs. Maycott, along with other ruined farmers, returns east in search of Duer,their aim to “destroy him and save the nation from Hamilton.” As the panic nears, the stories merge in a single hard-to-follow tangle of intrigue.

You may have noticed a problem here: the Whiskey Rebellion climaxed in 1794, too late for its leaders (even in a novelist’s fancy) to have instigated the Panic of 1792. To solve that problem, Liss pulls his characters back from the frontier action halfway through the book and never returns to it, thus missing out on a great mass of colorful detail from the real-life Whiskey Rebellion (mobs of men disguised as women, the threatened pillaging of Pittsburgh). Instead, following his bent for financial chicanery in earlier novels like “A Conspiracy of Paper” and “The Coffee Trader,” he indulges in a fascination — which I doubt will be shared by most readers — with the arcana of bond ­issues, collateral, short-selling and discount rates. Equally numbing, Liss’s jack­hammer “capitalism is not your friend” social commentary comes across like Naomi Klein without the light touch. Most of his speculators and big landlords are so dastardly that they’d need to be nuanced up before even an old-line Maoist would let them into a rewrite of “Red Detachment of Women.”

To leaven the dough, there’s plenty of action: ambushes and roadblocks, code-breaking and party-crashing, trailing of suspects through city streets, errant wives, nasty landladies, assumed identities and on and on. (Just as on TV, it’s a good bet that the question “Who sent out the cutthroat assassins?” will turn out to have as an answer “The respectable businessman.”) And yet the real-life Hamilton is presented in an oddly colorless fashion (as is Washington, in a cameo), perhaps because Liss appears unsure about how closely to associate these figures with the overall gangland atmosphere.

Finally, though, the book’s peculiar ­aftertaste doesn’t derive from its anachronisms (I don’t believe 1790s speakers used words like “parameters” or “womanizer” in their modern sense, and I know they didn’t boast of reading Macaulay, as does the heroine, since that historian wasn’t born until 1800) but from the fact that it traffics in the sort of musty populist caricatures of Hamilton and his era that Ron Chernow laid to rest in his 2004 biography. Another whiskey, please, bartender, and this time, leave off the tax.

Original Source: http://www.nytimes.com/2009/02/08/books/review/Olson-t.html?_r=2

 

 
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