Here’s the most bizarre currency you’ve probably never heard about.

November 21, 2014
Santiago, Chile

John Lynn was bound and gagged, as the angry mob tied him to a tree and poured a barrel of scalding hot tar over his freshly shaven head and coated him in feathers.

It was June 1794 and the crowd was absolutely frantic. They were taking justice into their own hands.

Lynn’s crime, in their eyes, was having extended lodging to a federal tax collector, who’d come down to enforce a recently imposed excise tax on whiskey.

The brand new US government was deeply in debt and starved of revenue sources to pay back their bondholders. So they did what all governments do in that position: they created a new tax.

They targeted whiskey simply because it was far and away the most popular drink in America.

It was so popular that it was even used as a medium of exchange and a store of value.

You could pass a bottle of the stuff to somebody as a payment for debt owed, and farmers would often turn their excess crop into whiskey as a way to store value for the future.

Whiskey is what people had, what people used, and what people wanted. Therefore it was whiskey that was taxed.

This was a dangerous move, as the American-made drink had risen to popularity during the Revolution, giving it a flavor of patriotism and rebellion—which is why the citizens of Western Pennsylvania weren’t going to take this lying down.

So to enforce their tax law, the new government did so at the point of a gun. Going against all the principles that people had just fought for in the Revolution.

It was the first time in US history that this happened, but it certainly would not be the last.

You can learn more about this in today’s podcast as we discuss where this is going and what bankrupt governments are going to tax next.

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