The New Nation Faces Challenges Chapter 5, Section 2 The New Nation Faces Challenges

Relations with Other Countries Under the Articles of Confederation, Congress (the federal government) could not force any state to provide soldiers Continental Army disbanded after the conclusion of the Revolutionary War Without an army, the new American government found it difficult to protect its citizens

Trouble with Britain Difficult to enforce international treaties British slow to turn over their forts on the American side of the Great Lakes Americans needed control of the forts in order to protect their newly acquired land and gain access to the fur trade Americans were warned by a British official not to seize the forts by force Told that any attempt to do so would be met with a force of thousands of British soldiers who had settled in Canada after the Revolutionary War

Trade with Britain After the Treaty of Paris, Great Britain closed many of its ports to American ships Britain also placed high tariffs on imports/exports Taxes on imports/exports On rice, tobacco, tar, and oil that were mined in the United States Merchants had to raise prices to cover the cost of the tariffs, causing consumers to pay higher prices for goods

Trade with Spain 1784: Spain closed the lower Mississippi River to United States shipping Western farmers/merchants furious Utilized the Mississippi to send goods to eastern and foreign markets Negotiation attempts with Spain failed because the plan did not receive a majority vote in Congress Spain grew tired of waiting and broke off negotiations Many state leaders began to criticize the national government Began to favor a stronger national government

Impact of Closed Markets Closing of markets in the British West Indies seriously impacted the American Economy American farmers could no longer export their goods to the British West Indies Forced to hire British sailors American exports dropped while British goods flowed freely into the United States

Impact of Closed Markets Unequal trade caused serious economic problems for the new nation Ability of the British to sell their goods in the United States at much lower prices than locally made goods hurt American businesses Confederation Congress could not correct the problem because it did not have the authority either to pass tariffs or to order the states to pass tariffs States could offer little help If one state passed a tariff, Great Britain could simply sell their goods in another state

Impact of Closed Markets States were uncooperative in trade matters Acted only in their own interest rather to improve trade of the whole country Trade issues led to American merchants seeking new markets for their goods China, France, the Netherlands Great Britain still remained America’s most important trading partner

Economic Problems: Trade Among States Confederation Congress had no power to regulate interstate commerce Trade between two or more states States followed their own trade interests Trade laws differed from state to state Difficult for merchants to cross state lines in business

Economic Problems: Inflation After the war, states found it difficult to pay off their war debts and struggled to collect overdue taxes The printing of large amounts of paper money led to inflation Occurs when there are increased prices for goods and services combined with the reduced value of money Money had little to no real value because states did not have the gold or silver reserves to back it up

Economic Problems: Weak Economy Rhode Island Printed large amounts of paper money worth very little Pleased debtors because they could pay back their debts with paper money worth much less than the amount in coinage they had borrowed Upset creditors (people who loan money) Hundreds fled from Rhode Island to avoid being paid back with worthless money Loss of trade with Britain and inflation created a depression Period of low economic activity combined with a rise in unemployment

Shays’s Rebellion Each state handled economic problems different Massachusetts refused to print worthless money Massachusetts tried to pay its war debts by collecting taxes on land

Shays’s Rebellion: Heavy Debt for Farmers Massachusetts tax policy hit farmers hard As landowners, they had to pay the new taxes Had trouble paying their debts Courts began forcing farmers to sell their property Some farmers had to serve terms in debtors’ prison Others had to sell labor

Shays’s Rebellion: Heavy Debt for Farmers Many state governments did not care about poor farmers In some cases, farmers actually owed leaders $

Shays’ Rebellion: Farmers Rebel August 1786: Farmers in 3 western Massachusetts counties revolted Angry citizens closed courts in western Massachusetts Reasoning was simple: with courts shut down, no one’s property could be taken Daniel Shays Poor farmer and Revolutionary War Veteran Led hundreds of men in a forced shut down of the Supreme Court of Massachusetts

Shays’s Rebellion: Farmers Rebel State government ordered the farmers to stop the revolt under threat of capture and death Only made followers more determined Shays’s Rebellion Uprising of farmers to protest high taxes and heavy debt

Shays’s Rebellion: Shays’s Defeat Shays’s forces were defeated by state troops in January 1787 Many rebels in prison by February 1787 14 leaders sentenced to death State freed most of the rebels including Shays’s Knew many citizens agreed with the rebel cause

Calls for Change Shays’s Rebellion showed the weakness of the Confederation government When Massachusetts asked the national government to help put down Shays’s Rebellion, Congress could offer little help More Americans began to call for a stronger central government Need to leaders to be able to protect the people in times of crisis

Calls for Change 1786: Virginia called for a national convention regarding the economic crisis and ways to amend the Articles of Confederation Annapolis, MD Poor attendance Due to poor attendance, leaders such as James Madison and Alexander Hamilton called on all 13 states to send delegates to a Constitutional Convention in Philadelphia set for May 1787 Revise the Articles of Confederation