Grain was the most valuable cash crop for many American farmers. In the West, selling grain to a local distillery for alcohol production was typically more profitable than shipping it over the Appalachians to eastern markets. Hamilton’s whiskey tax thus placed a special burden on western farmers. It seemed to divide the young republic in half—geographically between the East and West, economically between merchants and farmers, and culturally between cities and the countryside.

In western Pennsylvania in the fall of 1791, sixteen men, disguised in women’s clothes, assaulted a tax collector named Robert Johnson. They tarred and feathered him, and the local deputy marshals seeking justice met similar fates. They were robbed and beaten, whipped and flogged, tarred and feathered, and tied up and left for dead. The rebel farmers also adopted other protest methods from the Revolution and Shays’ Rebellion, writing local petitions and erecting liberty poles. For the next two years, tax collections in the region dwindled.

Then, in July 1794, groups of armed farmers attacked federal marshals and tax collectors, burning down at least two tax collectors’ homes. At the end of the month, an armed force of about 7,000, led by the radical attorney David Bradford, robbed the U.S. mail and gathered about eight miles east of Pittsburgh. President Washington responded quickly.

First, Washington dispatched a committee of three distinguished Pennsylvanians to meet with the rebels and try to bring about a peaceful resolution. Meanwhile, he gathered an army of thirteen thousand militiamen in Carlisle, Pennsylvania. On September 19, Washington became the only sitting president to lead troops in the field, though he quickly turned over the army to the command of Henry Lee, a Revolutionary hero and the current governor of Virginia.

As the federal army moved westward, the farmers scattered.  Hoping to make a dramatic display of federal authority, Alexander Hamilton oversaw the arrest and trial of a number of rebels. Many were released due to lack of evidence, and most of those who remained, including two men sentenced to death for treason, were soon pardoned by the president. The Whiskey Rebellion had shown that the federal government was capable of quelling internal unrest. But it also had demonstrated that some citizens, especially poor westerners, viewed it as their enemy.

Around the same time, another national issue also aroused fierce protest. Along with his vision of a strong national financial system, Hamilton also had a vision of an America busily engaged in foreign trade. In his mind, that meant pursuing a friendly relationship with one nation in particular: Great Britain.

America’s relationship with Britain since the end of the Revolution had been tense, partly because of warfare between the British and French. Their naval war threatened American shipping. Most obvious and galling to American citizens was the “impressment” of seized American sailors into Britain’s powerful navy, which made American trade risky and expensive—not to mention humiliating. Nevertheless, President Washington was conscious of American weakness and was determined not to take sides. In April 1793, he officially declared that the United States would remain neutral. With his blessing, Hamilton’s political ally John Jay, who was currently serving as chief justice of the Supreme Court, sailed to London to negotiate a treaty that would satisfy both Britain and the United States.

Jefferson and Madison strongly opposed these negotiations. They mistrusted Britain and wanted America to favor France instead. The French had recently overthrown their own monarchy, and Republicans thought the United States should be glad to have the friendship of a new revolutionary state. They also suspected that a treaty with Britain would favor northern merchants and manufacturers over the agricultural South.

In November 1794, despite their misgivings, John Jay signed a “treaty of amity, commerce, and navigation” with the British. Jay’s Treaty, as it was commonly called, required Britain to abandon its military positions in the Northwest Territory (especially Fort Detroit, Fort Mackinac, and Fort Niagara) by 1796. Britain also agreed to compensate American merchants for their losses. The United States, in return, agreed to treat Britain as its most prized trade partner, which meant tacitly supporting Britain in its current conflict with France. Unfortunately, Jay had failed to secure an end to impressment.

For Federalists, this treaty was a significant accomplishment. Jay’s Treaty gave the United States, a relatively weak power, the ability to stay officially neutral in European wars, and it preserved American prosperity by protecting trade. For Jefferson’s Republicans, however, the treaty was proof of Federalist treachery. The Federalists had sided with a monarchy against a republic, and they had submitted to British influence in American affairs without even ending impressment. In Congress, debate over the treaty transformed the Federalists and Republicans from temporary factions into two distinct (though still loosely organized) political parties.