CASE STUDIES
 PROBLEMS UNDER THE ARTICLES OF CONFEDERATION

#1  SUMMARY of THE PROBLEM

#2 DID THE ARTICLES HELP or HURT THE PROBLEM
 

PAPER MONEY
The problem is, that after the war states had large debts which cause tax rates to increase. Since the farmers had higher taxes, they had to give up their belongings in order to pay off their debt. There was controversy between debtors and creditors because the creditors wanted the money that they lent out, however the debtors could not pay it back.  In 1776, the legislation ruled that paper money was now legal. This allowed citizens to take out loans and ease their financial crisis. Riots occurred due to controversy over the legalization of paper currency.

How did the Articles contribute to the problem? The Articles of Confederation illegalized the use of paper currency, which forced the citizens to use gold and silver which was in short supply after the war. Gold and silver were in short supply because of the war debts and because of importation of European goods.  Each state owed a different amount of money. For example; Pennsylvania owed 22 million and Virginia owed 20 million

THE PIRATES of NORTH AFRICA

Problem: Under British rule, American merchant ships were given protection as the British paid tribute ($100,000 to $1 million annually) to North African pirates. After the start of the Revolutionary War, Britain ceased to pay tribute for American ships and the French couldn't be persuaded to pay the tribute. Following the war, America had neither the financial or military strength to pay off or defeat the pirates. After two American ships were captured in July of 1785, Thomas Jefferson proposed a union of America with European nations against the pirates while John Adams proposed to pay the tribute the pirates were requiring.

How the Articles Contributed: The Articles of Confederation was a weak and ineffective national government. Lacking the ability to tax and power over the individual colonies, there was no way to raise the money that the pirates required in ransom and tribute. Without a unified currency, the states couldn't come together to raise the money. The Articles also lacked the ability to form a strong navy, which could have been used to protect the merchant ships or to defeat the pirates. With problems of taxation and debt, focus was on the troubles in the colonies, most notably the farmers in debt.

 SETTLING THE DEBT  

Problem: Immediately following independence, the American government was in steep debt from the Revolutionary War, owing 34 million to American creditors and 10 million to foreign creditors. In order to keep their credit in the eyes of foreign investors, the early financial advisors needed to impose taxes on the states in order to raise revenue and pay off their foreign debts. In addition to foreign debts, soldiers from the war were demanding prompt payment for their services rendered during the fighting. The first idea to solve the national debt was to amend the Articles of Confederation to allow the government to tax imported goods. However, under the original Articles, the government could not impose taxes, only the states were allowed to.

The Articles of Confederation (1777) did not allow the national government to levy taxes on the states, meaning that there was no way to raise revenue in response to the national debt inherited through wartime activities. Although the original solution to the debt was to impose tariffs on imported goods, Rhode Island did not ratify the plan, and other states followed its lead. Through negotiation and compromise, a new plan was thought of, in which the national debt would be divided up among the states and allow each state legislature to levy taxes on its own to raise revenue and pay off the debt. This plan also included the idea that the taxes would only be effective for twenty five years and the states had the power to appoint the tax collectors in the state. However, New York did not ratify this amendment, showing how the Articles of Confederation lacked the power to unite and stabilize the states into a newly formed national presence in matters of trade, taxes and global economics.

WESTERN LAND CLAIMS

 Originally in the Americas, all the settlers lived on the Eastern coast.  As the population grew, however, Americans began moving westward.  Many of those settlers did not have legal claims to the land that they farmed.  In addition, there were land speculators (people who buy large amounts of land in the hopes that the value of it will soon rise) who claimed that they had bought large amounts of the land from the Native Americans.  Just as there were conflicts between merchants and farmers, patriots and loyalists,  and the North and the South, there was mistrust between the Eastern politicians and congressmen and the Western settlers.  Everyone thought that they owned the western lands, while in reality, no one owned it.  The main problem was that the settlers in the west had no representation or legal rights because there were no clear boundaries as to where the states ended and began. Without representation in a specific state, the settlers had no say in the government. They were without states.

 Rather than contributing to the problems in the West, the Articles of Confederation help the problem.  As a matter of fact, the guidelines which were written for the west under the articles of Confederation accomplished their goal so greatly that they are still in place today.  For the first time, in July of 1787, Congress approved official settlings for the west. 

 The Articles granted liberty and property rights by setting up boundaries for districts, territories, and states.  As population increased, and the land became either a district or a territory, the land was granted more legal representation in the Congress of the United States.  By giving the lands representation, they were obliged to pay taxes.  The Articles also established freedom of religion and protected the interests of the Native Americans.  Trial by Jury was also granted.  Basically, the settlers in the west were now guaranteed the same rights as their eastern countrymen, which was important because it contributed to the unity of the country

 TREATY of PARIS

 Several problems existed with the Treaty of Paris of 1783. The colonists defied the Treaty of Paris in regards to its dealing with loyalists. Through the treaty, loyalists were not to be further persecuted and were to be allowed to seek recovery of their property in state courts. In defiance, state legislatures passed resolutions opposing the return of loyalists to their positions. In New York, loyalists were even denied their right to vote. The treaty also called for the permission of British merchants to collect pre-war debts of former colonists in coin currency. Many of the colonists had already paid their dues in paper currency to their state treasuries and claimed they were free from British debt. Also Virginia law prevented british6 creditors from suing planters. However, in 1786 a compromise was reach6ed. Noneth6eless, Virginia refused to accept the agreement. Under the Treaty of Paris, Britain h6ad agreed to withdraw troops from the Great Lakes region. However, Congress did not have the power to force Britain to withdraw its troops from th6e Great Lakes Region.

 The Articles contributed to the problem by failing to create a strong central government to enforce the conditions of the treaty. Therefore, local governments defied the treaty in as many ways possible. This created a chaotic colonial atmosphere.