1. The United States Under the Articles of Confederation

2. The Articles of Confederation Nov. 1777: Continental Congress adopted the first framework for a federal government The Articles of Confederation and Perpetual Union organized the 13 former colonies into a loose Union under the central authority of Congress

3. Weak Federal Government The Articles deliberately left the central government very weak; states feared that a strong central government would become tyrannical Without a strong federal government, however, creating a “United States” proved difficult

4. How the Government Operated Each state selected 3 – 7 Congressional representatives each (although each state only received one vote in Congress) Once a year those representatives were sent to serve in the capital of Philadelphia The government had no legislative or judicial branches – Congress was the government

5. Powers of Congress The Confederation Congress had the right to declare war, raise an army, and sign treaties with foreign powers; they also served to resolve disputes between states The Confederation Congress could NOT levy taxes or put any restrictions on trade

6. Land = Revenue In order to generate revenue, Congress could only sell unsettled lands west of the Appalachians (which the 13 states had ceded to the central government as part of ratification of the Articles) In order to sell these lands, however, Congress first had to survey and map it and then find settlers interested in buying tracts To encourage settlement, the Congress had to also figure out a way to govern the region

7. The Northwest Ordinance 1787: Congress passed the Northwest Ordinance, which laid out a plan for organizing and governing the Northwest Territory (modern Ohio, Indiana, Illinois, Michigan & Wisconsin, + part of Minnesota)

8. The Northwest Territory At first, Congress appointed a governor and other temporary officials to the Territory Once 5000 adult male citizens had settled in a territory, they could elect a legislature Once population reached 60,000 people, it could apply for full statehood

9. Protected Rights The Ordinance guaranteed freedom of religion, protection of property rights, and trial by jury It also banned slavery, reinforcing a trend of slavery in the South, but not in the North

10. British Trade Restrictions After the Revolution, the British put tight restrictions on trade between their other colonies and the US; they also put strict rules in place for trade between the US and Britain

11. Open Trade In response, Congress negotiated trade treaties with other European states and continued to trade with French colonies in the Caribbean Despite limited trade with the British, US trade grew under the Confederation Congress

12. No Federal Tariffs While few US goods hit British markets, the British were able to flood US markets because Congress was not empowered to levy tariffs (taxes on imports) and the individual states were inconsistent in their policies These cheap British goods hurt American artisans

13. State vs. State To protect their own artisans, individual states began taxing not only British goods, but also goods from each other – New York, for instance, began taxing goods from New Jersey The “United States” were not acting united

14. Terms of the Treaty of Paris In the Treaty of Paris, the US had agreed to allow British lenders to collect the pre-war debts owed them by Americans and to return property which had been confiscated from Loyalists during the war

15. Congressional Weakness Congress, however, could not compel the individual states to honor the terms of the Treaty, so many states simply refused to comply This angered the British, leading them to refuse to give up forts in US territory

16. Trouble With Spain The young US also had conflicts with Spain over the boundary between Florida and Georgia and over access to the Mississippi River through the Spanish port of New Orleans Congress had no leverage to use against Spain – they could not impose trade sanctions – and so, could not resolve the issues

17. War Debts Create Problems Making matters worse, people began trying to cash in bonds (loans) that the states and Continental Congress had taken out during the War With few options available for repaying the bonds, the states began issuing paper money that was not backed by gold or silver to insure its value

18. Inflation The result was inflation – a sudden rise in prices associated with a drop in the value of money Debtors liked the inflation – it made it much easier for them to repay their debts; lenders hated it because they took huge losses on their loans

19. Paper Currency Problems In some states, merchants began refusing to accept the paper money, forcing states to create laws requiring the acceptance of paper money as legal tender for all debts

20. The Rich Start to Panic The paper money issue fed the fears of the rich that “democracy” gave the poor too much say in public policy These fears would be further heightened by reports of “rebellion” by former army officers and poor farmers

21. The Newburgh Conspiracy March 1783: A Group of officers from the Continental Army began to complain against Congress for failing to provide their back pay and pensions There was talk of marching against Congress with force, but the letter of complaint sent out made no specific threats

22. Washington Takes Action Fearing a rebellion by the military, Gen. Washington met with his officers and shamed them into standing down and respecting the civilian authority of Congress Washington pointed out that he had given his life to the country’s service, yet had no regrets

23. Shays’ Rebellion Massachusetts elected to raise taxes to generate the revenue to pay back their bonds, rather than issue paper money Poor farmers in the western part of the state could not afford a tax increase and, since no inflation had occurred, also could not afford to pay back their own debts which put them in danger of foreclosure

24. Shays’ Rebellion August 1776: These farmers banded together, seizing control of several courthouses to stop foreclosure proceedings They were led by a former army officer turned farmer, named Capt. Daniel Shays

25. Shays’ Rebellion In January 1787, Shays and 1200+ farmers moved to seize control of the state arsenal in order to secure weapons for marching on Boston The rebels, however, were repelled by the state militia, with 4 farmers being killed in the brief gun battle After this, the rebellion collapsed

26. A Call for Change Events like Shay’s Rebellion, however, convinced the wealthier Americans that the republic was being endangered by too much power being placed in the hands of the poor As a result, they began calling for a stronger federal government which could be empowered to protect property rights, control inflation, and act against rebellions