This is the story of Shays’ Rebellion, which I contend is the most important falsified event in American history. It is a story of speculation in government bonds, political intrigue, propaganda, and systematic deception. But it is ultimately the story of John Hancock’s big toe.
As recently as 2001, only one historian knew that the event that is acknowledged as key political event in the success of promoters of the Constitution was not what it appeared to be. That lone historian, Leonard Richards, had not yet finished his revolutionary book, Shays’ Rebellion: The American Revolution’s Final Battle. In 2002, the book appeared. His thesis has not yet moved into the textbooks. It should.
Shays’ Rebellion was an armed resistance movement of about 4,000 men in western Massachusetts. Contrary to reports from the anti-Shays faction in 1787, and contrary to historians’ accounts ever since, it was not a revolt of impoverished, indebted rural radicals. It included men of all economic classes. Many of them were veterans of the American Revolution, including Daniel Shays, who served from the battle of Bunker (Breed’s) Hill onward, and was a distinguished officer who worked his way up from the ranks to captain. Lafayette awarded him a sword for his valor. These men revolted against a group of speculators who had recently gained control of the governor’s office.
For over two centuries, Americans did not know the truth. Then, in one of those fluke events that every historian dreams about, Professor Richards of the University of Massachusetts (Amherst) stumbled onto a fact that no previous historian had bothered to investigate. After the defeat of the rebels, the state required each of them to sign a loyalty oath. Unlike previous political rebellions, there were archival records of those who had participated. These records were right under Prof. Richards’ nose, yet it took several months for him to learn that they were actually in his own university’s library: on microfilm. He then made a detailed investigation of the participants: the towns they lived in, their family connections, their debt position in 1786, and their political offices, if any. What he learned enabled him to re-write the story of Shays’ rebellion. It was not a revolt of indebted farmers. It was a tax revolt.
TAXES AND SPECIAL INTERESTS
During the Revolution, the Continental Congress had issued irredeemable paper currency to pay for the war, the infamous Continentals, as in “not worth a Continental.” These notes quickly fell to zero value. States issued IOU’s to pay militia members. Notes issued in April, 1778, in Massachusetts quickly fell 25 percent of their face value. By 1781, they were at two percent of face value. Other states followed suit. Virginia’s notes fell to one-thousandth of face value. Soldiers in the field sold these notes in order to keep their families solvent. The political question after independence was attained in 1783 revolved around the redemption price. At what percent of face value would states repay note-holders?
Unlike all other states, Massachusetts’ legislature passed a law to redeem the notes at face value. The legislature was dominated by Boston’s mercantile interests. While it is not possible to trace the ownership of all of the debt after the war, what can be traced indicates that 80 percent of the speculators lived in or near Boston, and almost 40 percent was held by 35 men. Most had bought these notes at tremendous discounts. Then, to add insult to injury, interest on these notes was retroactively made payable in silver. To pay off these speculators, taxes were raised. The main ones were the poll tax and the property tax, beginning in 1785. Prof. Richards describes the nature of this tax burden:
Every farmer knew that he was going to have to pay for every son sixteen years or older, every horse he owned, every cow, every barn, every acre in tillage. Everyone also knew that the tax bite was going to be regressive. Only about 10 percent of the taxes were to come from import duties and excises, which fell mainly on people who were most able to pay. The other 90 percent was direct taxes on property, with land bearing a disproportionate share, and polls. The latter was especially regressive, since it mattered not a whit if a male sixteen years of age or older had any property or not. Rich or poor, he was going to have to pay the same amount, and altogether polls were going to pay at least one-third of all taxes.
But would these taxes actually be collected? After the Revolution, the most popular politician in Massachusetts was John Hancock, the ex-smuggler/merchant whose signature is so large on the Declaration of Independence. He was among the richest men in the state. He was lenient to all poor debtors who owed him money personally. He let them pay him in depreciated paper money. The rich had to pay in silver. He was elected governor in 1780 and served for five years. He also was elected in 1787 and served until his death in 1793. He did not serve in 1785 – 87, the crucial period. He declined to run in 1785 because of gout. Gout normally affects the big toe. It can accurately be said that the great turning point in post-Revolutionary America was John Hancock’s big toe.
Hancock had understood that the soldiers had been forced to sell their promissory notes for a small fraction of their face value. He was accused by opponents of refusing to collect taxes. When he left office, he was replaced by James Bowdoin, a holder of at least £3,290 in depreciated notes. He did not receive enough votes to command a majority, so the legislature had to choose. The senate insisted on him, and the house capitulated. Under his leadership, the political faction whose members had bought up these notes gained power. The government passed new taxes and insisted on collecting taxes that were in arrears. That tax burden was now higher by several times what they had been under Great Britain.
Western counties had petitioned the government for relief for several years, but their petitions had been ignored. In July, 1786, a revolt began. It soon became an armed political revolt by towns, not by individuals. The rebels met as a convention to draw up a list of 21 grievances. This was not a mob. Daniel Shays became the head of this revolt after it had begun.
Until Richards’ book appeared, the standard account of Shays’ rebellion emphasized the theme of farmers in the state’s western counties as being heavily in debt to merchants in Boston. This account never had much evidence to support it. Boston merchants traded little with western towns, which were close to self-supporting. Also, western towns in Connecticut did not revolt. If the decisive political issue was debt, why not? There is no evidence of any debt-revolt relationship in western counties, two-thirds of which had not revolted. The revolt’s leaders were often from the higher classes. Most of the insurgents were not heavily in debt. Kinship ties, town by town, accounted for recruiting far more than debt did.
The state of Massachusetts petitioned Congress to send in Federal troops, but the U.S. Army at that time had approximately 700 men. Congress responded by promising to add another 1,340 men, but Massachusetts was supposed to raise 660 of these. Congress then made up a phony war story to justify sending troops to quell a tax revolt. There was a pending Indian war, Congress said. Few believed this ruse. The U.S. Army raised a total of 100 recruits. Meanwhile, militia members in Massachusetts were joining the rebels. Boston’s militia responded to the call; western counties ignored it. Especially revealing were Revolutionary War veterans. Of 637 veterans in the militia in Northampton, only 23 volunteered for duty. The two senior officers from Northampton who responded had between them a total of 14 days of service in the War. All of the rebel captains had at least three years’ experience. Baron von Steuben, who had served under Washington, identified the problem in an article signed “Belisarius.” Massachusetts had 92,000 militiamen on its rolls. Why did the state need military support from Congress? He provided the correct answer: the government was not representative of the opinions of the people.
The rebellion was defeated in battles and skirmishes in the winter and early spring of 1787. The commander of the state’s militia was General Benjamin Lincoln, who had served under Washington during the American Revolution. Lincoln’s force had not been authorized by the legislature, so 153 private citizens, mostly Bostonians, provided the funds to pay the troops. None of the contributors served in Lincoln’s army. One impoverished Harvard graduate did serve, Royall Tyler, and soon wrote a play about the rebellion. It became the first American play, and it made his reputation.
Shays and other leaders escaped across the northern border into New Hampshire, and from there went west into Vermont. Vermont’s governor refused to extradite any of them, despite protests from the Massachusetts government. Shays and several other rebel leaders were staying at a farm next door to the governor.
MOTIVATING GEORGE WASHINGTON
Without the participation of George Washington at the Constitutional Convention, there would not have been a Constitution. The nationalists who were preparing to overturn the country’s legal order were convinced of this. So are most historians of the Constitutional Convention. Washington had resisted offers from Madison and others to attend the Convention. He wanted to stay out of public life. Shays’ Rebellion provided the motivational hook for the nationalists to persuade him to reverse his position and attend.
General Lincoln wrote to Washington, lamenting the rebellion and painting it in terms of revolution. So did Washington’s former general, Henry Knox, a former Bostonian. So did David Humphreys, who had been his aide. He also was a New Englander. Knox’s letter of October 23, 1786, was as persuasive to Washington as it was misleading. This letter undermined Washington’s resolve to remain a private citizen, although he did not consent to attend the Convention until the following spring. Knox wrote that he had been east of Boston on business, and had hurried back because of “the commotions.” He immediately launched into a critique of the present political structure under the Articles of Confederation.
Our political machine, composed of thirteen independent sovereignties, have been perpetually operating against each other and against the federal head ever since the peace. The powers of Congress are totally inadequate to preserve the balance between the respective States, and oblige them to do those things which are essential for their own welfare or for the general good. The frame of mind in the local legislatures seems to be exerted to prevent the federal constitution from having any good effect. The machine works inversely to the public good in all its parts; not only is State against State, and all against the federal head, but the States within themselves possess the name only without having the essential concomitant of government, the power of preserving the peace, the protection of the liberty and property of the citizens.
So far, none of this has anything to do with Shays’ rebellion. It is clear that Knox was a nationalist. He was offering a general critique of the Confederation. He then offered what seems to be substantiating specific evidence. But his account was neither accurate nor relevant. The state of Massachusetts was in a position to suppress the rebellion, assuming that the militia would respond to the call. The fact was, the handful of speculators close to the governor could not persuade the legislature to fund the counter-attack, nor could local officers persuade militia members to respond to the call to arms. This was a grass-roots rebellion, as surely as the American war for independence had been, and with far better cause. None of this impressed Knox, who continued, in the same paragraph:
On the very first impression of faction and licentiousness, the fine theoretic government of Massachusetts has given way, and its laws [are] trampled underfoot. Men at a distance, who have admired our systems of government unfounded in nature, are apt to accuse the rulers, and say that taxes have been assessed too high and collected too rigidly. This is a deception equal to any that has been hitherto entertained. That taxes may be the ostensible cause is true, but that they are the true cause is as far remote from truth as light is from darkness. The people who are the insurgents have never paid any or buy very little taxes. But they see the weakness of government; they feel at once their own property compared with the opulent, and their own force, and they are determined to make use of the latter in order to remedy the former.
That the western farmers had not paid high taxes prior to 1786 was true. Hancock had refused to collect them. But Bowdoin, as a holder of Massachusetts notes, was ready to enforce the law. He had the support of his cronies, who also held the state’s notes, but not of the Massachusetts legislature, which never did vote to fund Lincoln’s army. Knox did not convey any of this information to Washington. Instead, he turned the revolt into a revolt against property. It was in fact a revolt against the confiscation of property by a tiny group of speculators in government debt. But Knox painted the movement as an organized, inter-state conspiracy of communists against property.
The creed is, that the property of the United States has been protected from the confiscations of Britain by the joint exertions of all, and therefore ought to be the common property of all; and he that attempts opposition to this creed is an enemy to equality and justice, and ought to be swept from the face of the earth. In a word, they are determined to annihilate all debts public and private, and have agrarian laws, which are easily effected by means of unfunded paper money, which shall be a tender in all cases whatever. The numbers of these people may amount, in Massachusetts, to one-fifth part of several populous counties; and to them may be added the people of similar sentiments from the States of Rhode Island, Connecticut, and New Hampshire, so as to constitute a body of twelve or fifteen thousand desperate and unprincipled men. They are chiefly of the young and active part of the community, more easily collected than kept together afterward. But they will probably commit overt acts of treason, which will compel them to embody for their own safety. Once embodied, they will be constrained to submit to discipline for the same reason.
None of this was true. The men were led by adults, and these adults were leaders in their respective towns. There was no connection to Rhode Island, which had debased the currency, or any other colony. They were fighting a system of oppressive taxation that was being imposed in the name of paying off investors who had bought the depreciated notes of the Revolutionary War era from the soldiers who made that political rebellion successful. They were fighting against the transformation, mostly at their expense, of the unfunded paper money of the war era into post-war currency, with interest payable in silver. They had been stiffed by the politicians during the war, who paid them with unfunded promises to pay. Now they were being stiffed by the politicians again – by the very speculators who had taken advantage of them when they were on the battlefield. But Knox ignored all of this. He had a political agenda, and Washington’s presence at the Convention was the linchpin, the sine qua non, of the nationalists’ political agenda. Knox proceeded with the grand deception of the grand old man:
Having proceeded to this length, for which they are now ripe, we shall have a formidable rebellion against reason, the principle of all government, and against the very name of liberty. This dreadful situation, for which our government have made no adequate provision, has alarmed every man of principle and property in New England. They start as from a dream, and ask what can have been the cause of our delusion? What is to give us security against the violence of lawless men? Our government must be braced, changed, or altered to secure our lives and property. We imagined that the mildness of our government and the wishes of the people were so correspondent that we were not as other nations, requiring brutal force to support the laws.
Hence, it was time to brace, change, or alter the national government, so as to supply the required brutal force.
But we find that we are men, – actual men, possessing all the turbulent passions belonging to that animal, and that we must have a government proper and adequate for him.
Knox was writing what turned out to be the most influential direct-response sales letter in the history of the United States, and perhaps in modern history. Every direct-response letter needs a powerful close, what is called the “act now” offer. He called Washington to join with the besieged men of property in Massachusetts – speculators in government bonds – to turn back these rural communists of the lower sort. The leaders are ready to defend the true interests of society. What about you, George? Will you wimp out at this crucial juncture? Knox was a master of the close.
The people of Massachusetts, for instance, are far more advanced in this doctrine, and the men of property and the men of station and principle there are determined to endeavor to establish and protect them in their lawful pursuits; and, what will be efficient in all cases of internal commotions or foreign invasions, they mean that liberty shall form the basis, – liberty resulting from an equal and firm administration of law.
They wish for a general government of unity, as they see that the local legislatures must naturally and necessarily tend to the general government. We have arrived at that point of time in which we are forced to see our own humiliation, as a nation, and that a progression in this line cannot be productive of happiness, private or public. Something is wanting, and something must be done, or we shall be involved in all the horror of failure, and civil war without a prospect of its termination. Every friend to the liberty of his country is bound to reflect, and step forward to the dreadful consequences which shall result from a government of events. Unless this is done, we shall be liable to be ruled by an arbitrary and capricious armed tyranny, whose word and will must be law.
In a series of letters to Washington, the nationalists put pressure on him to attend. In his replies, he made it clear that he was on the side of law and order, and that he was becoming pessimistic regarding the future of the country. He resisted making a commitment to attend, but eventually he consented. He was already a nationalist, as letters reveal from 1783 on. He had written to John Jay the previous spring, “That it is necessary to revise, and amend the articles of confederation, I entertain no doubt; but what may be the consequences of such an attempt is doubtful. Yet, something must be done, or the fabrick must fall.” The gun was already loaded. The misinformation passed on to him regarding Shays’ Rebellion was the trigger. Eventually, Washington pulled it. He attended the Convention and even agreed to keep Madison’s secret notes of the debates, which were not made public until every participant had died.
Shays’ Rebellion was used effectively by the nationalists to scare voters into accepting both the legitimacy of the Convention and the legality of the Constitution. Richards writes: “Within months, Shays’s Rebellion gave the nationalists the edge they needed. It provided the spark on which to advance the nationalist cause and play on the fears of others.” In the post-Convention debates over ratification, anti-federalists were labeled “Shaysites.” With respect to Massachusetts, the accusation was inaccurate. Two-thirds of the towns opposed ratification. Yet only one-third had joined the rebellion.
Had John Hancock not been struck by gout in 1785, he would have run for governor. He would have won, just as he did in 1787, the year that the rebellion was put down. Because Governor Bowdoin’s faction gained control of law enforcement in 1785 – 87, the rebellion took place. This was what forced Washington’s hand. The Constitution turned on John Hancock’s big toe.
CONCLUSION
The Constitutional Convention did not take place because of a democratic movement of the people. The people were generally uninterested in national politics and jealous of a transfer of sovereignty to the central government. This outlook was not shared by the men who became the Constitution’s Framers and then, retroactively, the Founders. Yet what they did was illegal. It was far more illegal than what Daniel Shays did. What is more, they knew they were acting illegally.
Shays’ Rebellion provided an opportunity for a majority of a group of 55 men, more than half of whom were lawyers, to break the law of the land and get away with it. This is not how historians of the Constitution have treated the Convention in Philadelphia. This fact provides additional support for the ancient rule of historiography, indeed, its only known rule: the victors write the textbooks.
February 9, 2004
Gary North [send him mail] is the author of Mises on Money. Visit http://www.freebooks.com. For a free subscription to Gary North’s newsletter on gold, click here.
