United States History Student Edition

Debts and Taxes During the Revolutionary period, the Continental Congress faced a number of financial difficulties. In 1779, it took 40 continentals to buy a single Spanish silver dollar. By 1781, a person needed 146 continentals to buy that Spanish coin. The Continental Congress had also borrowed money from citizens and foreign governments during the war. Under the Articles, the government still owed those debts. It even owed Revolutionary soldiers pay for their military service. But without the power to tax, the Confederation Congress could not easily raise money. Facing a collapse of the country’s finances, Congress created a department of finance, led by Philadelphia merchant Robert Morris, in 1781. Morris proposed a 5 percent tax on imported goods to help pay the national debt. This plan required a change to the Articles of Confederation. Twelve states approved the plan, but Rhode Island opposed it. Under the Articles, the single “no” vote was enough to block the plan. A second effort in 1783 also failed to win approval by all the states. The financial crisis grew worse. Relations With Britain and Spain Trouble with foreign governments also revealed the weaknesses of the American government. For example, American merchants complained that the British were blocking Americans from trading in the West Indies and other British markets. In the Treaty of Paris of 1783, Britain had promised to withdraw from the lands east of the Mississippi River. British troops, however, continued to occupy several forts in the Great Lakes region. In 1785, Congress sent John Adams to London to discuss these problems. The British were concerned about promises made in the Treaty of Paris. They claimed that Americans had agreed to pay for property taken from Loyalists during the Revolutionary War. Congress wanted the states to pay the Loyalists, but the states refused and Congress could do nothing about it. The United States had even greater problems with Spain. This European power, which controlled Florida as well as lands west of the Mississippi River, wanted to stop American expansion into its territory. To do this, Spain closed the lower Mississippi River to American shipping in 1784. Two years later, American diplomats reached a new trade agreement with Spain. Representatives from the Southern states, however, blocked the

During the early years of the republic, John Adams served as an ambassador to Great Britain. Adams was unable to convince the British to honor their promises made in the Treaty of Paris of 1783.

agreement because it did not include the right to use the Mississippi River. The weakness of the Confederation and its inability to deal with problems worried many leaders, including George Washington. Americans began to agree that the country needed a stronger government. 7 CHECK FOR UNDERSTANDING Summarizing What were the weaknesses of the Confederation government? LESSON ACTIVITIES 1. Argumentative Writing Imagine that you are a delegate to the Second Continental Congress. Congress is debating whether or not to allow the central government to impose taxes. Take a stand on this issue, and write a short essay defending your position. Give specific reasons for your opinion. 2. Analyzing Main Ideas Work with a partner to develop six to ten questions and answers about the policies for western lands that were created under the Articles of Confederation. When you are finished, join with another pair of students and take turns presenting and answering the questions you developed.

The Picture Art Collection/Alamy Stock Photo

176