The 1868 Law That Made Moonshine Illegal

Long before moonshine flowed from hidden stills deep in the Appalachian woods, at-home liquor distilling was an ordinary part of rural American life.

Daniel Pierce, professor emeritus of history at the University of North Carolina Asheville and author of Tar Heel Lightnin’ and Corn From a Jar: Moonshining in the Great Smoky Mountains, explains that Scots-Irish immigrants brought their whiskey-making traditions to North America in the 1700s. In the rural South, he says, liquor production eventually became “almost universal.”

Liquor “was a part of social life,” Pierce says. “It was medicine. And probably most importantly for farmers, it was something that you could get a reliable trade value for at a store.” Homemade liquor could also be sold for cash, which farmers needed to pay property taxes.

“It was central to their economic life,” Pierce says, adding that in most parts of the country, but especially in the South, “just about everybody…had a still.”

For generations, Americans made liquor at home with little interference from the federal government. But in 1868, that changed when Congress decided to crack down on home distilling.

Long before the Civil War era, federal officials had briefly taxed distilled spirits. The experiment did not go well.

In 1791, Congress passed an excise tax on whiskey and other distilled spirits at the urging of Treasury Secretary Alexander Hamilton. The tax was deeply unpopular among small frontier distillers, particularly in western Pennsylvania, where many Americans depended heavily on whiskey production for income.

Resistance escalated into the Whiskey Rebellion in 1794. Tax collectors were threatened, beaten and sometimes tarred and feathered. Armed clashes broke out in Pennsylvania before President George Washington mobilized troops to restore order.

The tax survived the rebellion but not the election of 1800. Congress repealed the federal whiskey tax in 1802 after Thomas Jefferson took office.

For the next several decades, federal restrictions on distilling largely disappeared, but that changed during the Civil War. In 1862, Congress imposed a new excise tax on liquor as part of a broader effort to raise revenue for the war, Pierce says. The tax remained in place after the conflict ended.

Whiskey was an attractive target because Americans produced enormous quantities of distilled spirits, says Kevin Kosar, author of Whiskey: A Global History and Moonshine: A Global History. “Even a small tax on each gallon of liquor promised to bring in lots of revenue, assuming the law was obeyed and the money collected,” he says.

At the time, there was no federal income tax. Instead, Kosar notes, the U.S. government relied heavily on customs duties and excise taxes. “Advocates for taxing liquor thought they could bring in a steady stream of funds for the federal government,” he says. “Some supporters of federal liquor laws also imagined that taxation could reduce the consumption of liquor by raising its price. These Temperance advocates saw alcohol as an evil that fomented violence and brought financial ruin on men and their families.”

But collecting those taxes was another matter.

Immediately after the war, federal officials focused enforcement primarily on large distilleries. Broader collection remained relatively limited, partly because authorities wanted to avoid provoking unrest in the recently defeated South, Pierce says.

Then came the 1868 tax act on distilled spirits and tobacco.

To combat widespread post-war tax evasion, the new law went beyond taxation to impose a much more comprehensive liquor regulatory system than Americans had previously experienced. Distillers had to pay taxes, obtain licenses, submit to inspections and follow federal rules governing production and storage. Failure to pay taxes could mean hefty fines or imprisonment.

The law, which still stands today, also upended at-home liquor distillation. It established a federal ban on operating a still in a “dwelling-house” or its shed, yard or other connected enclosure.

“As soon as the excise tax was passed, moonshining became a reality in the United States,” Pierce says. “Anyone making it and not paying the tax was violating the law.”

Congress’s ban on home distilling did not stop Americans from making their own liquor, which became known as moonshine. “It continued to be a pretty standard part of rural life,” Pierce says. “Although, you had to hide your activities at that point and take it to the woods or to the swamp or somewhere like that.”

Many rural Americans believed the 1868 law was an attack on their economic independence. “A lot of people saw [home distilling] as a constitutional right,” Pierce says. “They’re just exercising their economic liberty to make a living and support their families.”

Like earlier liquor laws, enforcement was difficult. “Americans were scattered across the continent, which meant having enforcement officials everywhere would require hiring a massive number of federal agents,” Kosar says. “Moreover, nearly everyone in America was only one or two relationships removed from a home distiller. Making booze at home was ubiquitous, and many Americans had no interest in tattletaleing on their families, friends or neighbors.”

Plus, he adds, small home stills were easy to hide. “People tucked them in sheds, basements, fields and forests,” Kosar says. “City dwellers kept them in alleys, garages and even their cramped apartments. Federal officers would have to scour every inch of the nation to ferret out all the illicit hooch operations.”

The 1868 law also brought new opportunities for corruption. At the local level, Pierce says, scandals were often rampant, with some law enforcement officers ignoring illegal distilling, accepting kickbacks or warning moonshiners before raids.

Widespread tax evasion and lax enforcement eventually contributed to national scandals including the Whiskey Ring of the 1870s, in which whiskey producers and government officials conspired to cheat the federal government out of tax revenue.

Kosar says the regulations also had unintended economic consequences. “The law’s regulatory costs were significant, which meant that bigger and more profitable distillers could more easily comply,” he says. “So bigger companies grew, as smaller distillers struggled.”

But for people operating on an even smaller scale, whether to support their families or to keep their own liquor cabinets well stocked, home distilling has remained an illicit American tradition ever since.