1. Forming a Government, 1777-1791: The New Nation Faces Challenges
United States History 8
Unit 2, Chapter 5, Section 2

2. Main Ideas The United States had difficulties with other nations
Internal economic problems plagues the new nation
Shays’s Rebellion pointed out weaknesses in the Articles of Confederation
Many Americans called for changes in the national government
Problems faced by the young nation made it clear that a new constitution was needed

3. Relations with Other Countries
U.S. had no army after the Treaty of Paris of 1783
Troubles with Britain: British were slow to turn over forts on the U.S. side of the Great Lakes
Trade with Britain: many ports were closed, high tariffs (taxes on imports/exports) were imposed on American merchants, Britain closed ports in the West Indies to American ships
1784: Congress could not work out an agreement with Spain; the lower Mississippi remained blockaded

4. Economic Problems
Confederation Congress did not have power to pass tariffs or order states to pass tariffs, making British goods cheaper, hurting American businesses
Trade among states: Confederation Congress had no authority to regulate interstate commerce
Inflation: states were struggling with war debts and overdue taxes; they printed more money making it worth less
Weak Economy: loss of trade combined with inflation created a depression

5. Shays’s Rebellion
Massachusetts refused to print worthless paper money, instead paid war debts by collecting taxes on land, hitting poor farmer hard.
1786: farmers revolt to protest high taxes and heavy debt known as Shays’s Rebellion, although defeated, many citizens agreed with the rebels and their cause, showing the weakness of the Confederation government

6. Weakness of the Articles of Confederation
Most power held by states
One branch of government
Legislative branch has few powers
No executive branch
No judicial system
No system of checks and balances