Essential Question Essential Question: –What were the long-term problems with the Articles of Confederation? Reading Quiz Ch 7B (p ) Reading Quiz Ch 7B (p )

Examining the Articles of Confederation

The Weaknesses of the Articles The Articles of Confederation served as the framework for the U.S. gov’t from 1781 until 1789: –Early in the “Confederation Period,” the weakness of the national gov’t was seen as good because it eliminated tyranny –Later, these same weaknesses kept the gov’t from solving serious national problems

Economic Problems During the American Revolution, colonial boycotts hurt trade Everyone expected the economy to improve after independence, but the Confederation Congress had a difficult time: –Paying off debt & collecting taxes –Halting inflation –Generating a favorable balance of trade (foreign & domestic)

Debt, Taxes, & Inflation The U.S. was burdened with $40 million in war debt in 1783: –The Confederate Congress could not ease the national debt because it had no power to tax –Congress printed $200 million in new currency to pay off debt but this led to massive inflation –Creditors demanded repayment of debts at market value The gov’t could request, but not require, states to send money to Congress

Trade Problems under the Articles Congress was unable to create a favorable balance of trade: –To raise revenue, states created tariffs on goods from other states –The lack of hard currency made trade difficult –Desire for cheap British goods hurt infant American industries –England prohibited its Caribbean colonies from trading with USA Connecticut levied heavier duties on Massachusetts goods than on British goods This especially hurt Southern planters This especially hurt the North

U.S. Trade with Britain, Debt

Economic Problems The economic stagnation of the Confederation era led to uprisings: Newburgh Conspiracy –The lack of tax revenue & failure of the gov’t to pay soldiers sparked a military coup in 1783 called the Newburgh Conspiracy Shays’ Rebellion –Property foreclosures led to desperation & uprising farmers in 1787 called Shays’ Rebellion "Gentlemen, you will permit me to put on my spectacles, for I have not only grown gray but almost blind in the service of my country." Washington kept generals from overthrowing the new government: "Gentlemen, you will permit me to put on my spectacles, for I have not only grown gray but almost blind in the service of my country." the Shays’ Rebellion proved to be the convincing event that led to the Constitutional Convention of 1787

Shay’s Rebellion in Western Massachusetts Poor farmers in western MA were angered over high taxes & prospect of debtors jail Daniel Shays led an uprising & closed debt courts & threatened a federal arsenal

Economic Problems “Nationalists” called for a stronger central gov’t & a constitutional amendment to allow create a 5% import tax & a national bank 12 states agreed, but a group of Rhode Island “Localists” refused & killed the amendment The failure to reform the Articles led Nationalists to consider the Articles hopelessly defective “A national debt if not excessive, will be a national blessing”—Hamilton Led by Alexander Hamilton, James Madison, & Robert Morris

Foreign Policy Problems The Articles proved inadequate to handle interstate & foreign affairs: –When Americans did not repay legitimate war debts, Britain kept troops in the Ohio Valley –Spain refused to recognize the southern U.S. border & closed access to the Mississippi River –Algerian pirates attacked & enslaved American merchants –States argued over river rights Congress & the army were too weak to resist John Jay’s Jay-Gardoqui Treaty was met with regional resistance & was rejected in Congress

The USA in the Confederate Era

“Have We Fought for This?” “Have we fought for this? Was it with these expectations that we launched into a sea of trouble?” —George Washington, 1785