1. The United States of America under the Articles of Confederation and Perpetual Union (Nov. 15, 1777)
All government powers not “expressly delegated” to Congress belonged to the states
Congress could borrow and coin money, conduct foreign affairs, set Indian policy, settle disputes between states.
Congress could not require money from states
Congress expected the states to help pay war debts
States having more land were better able to help pay the debt than those with less land

2. Shays’ Rebellion
An economic depression (1785) hurt farmers and forced them to pay debts with gold and silver, not pigs, wheat, or corn
Massachusetts raised land taxes to pay war debts
Debtor courts seized the lands of indebted farmers
Daniel Shays led outraged farmers to shut down the courts and stop property auctions
1200 farmers set out to take guns from the army
4,000 militia defended the arsenal, Shays’ men lost
Shays’ Rebellion raised doubts about the governments’ ability to handle civil unrest

3. The United States of America under the Articles of Confederation and Perpetual Union (Weaknesses)
All states required to ratify (approve) the Articles for them to officially take effect
Amendments (changes) required all 13 states in favor
New laws required 9 of the 13 in favor
Each state had ONE vote regardless of population
Could not tax people directly to pay war debts
Continentals (federal money) were worthless by not being backed by gold and silver
Could not regulate foreign trade, allowing cheap foreign goods to flood the markets and hurt American business

4. The United States of America under the Articles of Confederation and Perpetual Union
Land Ordinance of 1785
marked off land into townships of 640 acres tracts
Tracts were sold for cash, at least $1 per acre
One tract reserved for establishment of a school
Four tracts reserved for Revolutionary War veterans
Northwest Ordinance (1787) (OH, IN, IL, MI, WI)
Established a system for governing the NW Territory
Outline the steps to achieve statehood
Guaranteed civil rights and banned slavery
Required escaped slaves to be returned