Unit 1.4 Challenges of the Articles of Confederation

Enduring Understanding: The Constitution emerged from the debate about the weaknesses in the Articles of Confederation as a blueprint for limited government.
Learning Objective: Explain the relationship between key provisions of the Articles of Confederation and the debate over granting the federal government greater power formerly reserved to the states.

The Articles of Confederation went into effect in 1781 as the first system of government for the United States.
Under the Articles, the United States lacked a centralized government.
- The Articles established a union of independent states primarily focused on defense and basic trade.

The Articles stated that "Each state retains its sovereignty, freedom, and independence, and every…right…not…expressly delegated to the United States."
- This suggests that each state operated like a separate country while collaborating for mutual interests.
- A provision even existed allowing Canada to join the Confederation, indicating openness to expansion.

Lack of Revenue Generation
- The Articles did not empower the federal government to collect taxes directly.
- States were responsible for taxation of their citizens and the federal government had to request financial contributions from them.
Ineffective Unified Action
- Unified decision-making required state delegates to convene without a central authority or President to lead.
Debt Post-Revolution
- After the Revolutionary War, the United States faced significant debts, particularly to foreign nations like France.
- American merchants also incurred debts to international creditors.
- Foreign lenders were reluctant to accept state-issued currency, as the value of these currencies lacked consistency (e.g., varying values assigned to currency types).
Demand for Hard Currency
- Creditors demanded repayment in stable, hard currencies such as gold and silver.
- Merchants increased pressure on debtors, particularly poor farmers, to pay their debts with hard currency they could not access.
Economic Pressure on Farmers
- Many farmers, including veterans of the Revolutionary War, were in substantial economic distress.
- Veterans often went unpaid for their service, exacerbating their inability to meet financial obligations.
- Farmers struggled with debts and were unable to secure new loans post-war, being pressured to repay existing debts in hard currency, which was scarce in the post-war economy.

A significant manifestation of the defects in the Articles was demonstrated by Shays’ Rebellion.
- Many farmers faced overwhelming debt, risking imprisonment and land confiscation. They owed taxes due to government struggles during the war while they were serving.
- The Continental Congress had failed to provide promised payments to veterans, leading to increased resentment.
- In response to a government tax increase aimed at alleviating state debts, farmers began to revolt.

Leadership of Daniel Shays
- Daniel Shays, a poor farmer and a Revolutionary War veteran who had not received his compensation, became a central figure in the rebellion.
- He united fellow farmers and veterans to take action against economic injustices.
Targets of the Rebellion
- Rebels targeted courthouses, key sites for debt proceedings, impacting merchants who sought repayment.
- The uprising raised alarm among founding fathers and merchant creditors due to slow governmental responses.
Militia Confrontation
- On January 25, 1787, Shays led his forces to the armory in Springfield, leading to direct confrontation with a militia funded by creditor merchants.
- Although the rebellion was suppressed eventually, it illustrated the critical weaknesses of the Articles of Confederation.

The uprising demonstrated the challenges posed by lacking a central government capable of swift response.
The inability of the government to levy taxes hindered efforts to finance military responses and address grievances effectively, validating calls for reform.

Shays’ Rebellion was pivotal in prompting the Constitutional Convention of 1787.
- Attendees recognized the Articles required significant revision or replacement in favor of a robust central authority.
Advocates proposed a federalist system combining state rights with a powerful national government distinctly led by a singular executive authority.

The Constitution was formulated during the Convention to establish a more potent central government capable of addressing issues such as taxation and governance, paving the way for federalism.

To enact the Constitution, it necessitated a ratification process by the states.
- To persuade ratification, The Federalist Papers were authored by Alexander Hamilton, James Madison, and John Jay.
The Constitution was officially ratified and took effect on March 4, 1789.

Single Branch Governance
- Governance existed solely via the Confederation Congress, where each state received one vote, leading to an equal representation imbalance between large and small states.
- Measures required a passage by 9 out of 13 states, while any amendments needed unanimous consent.
Underfunding of National Government
- The inability to tax resulted in underfunding, rendering the national government incapable of meeting its obligations or securing loans from other nations.
- This led to diminished international trust in the U.S. government’s ability to repay debts.
Inflation and Currency Issues
- The market observed severe inflation, resulting in the national currency being almost valueless.
- The Articles lacked the power to control interstate commerce and taxation over imports, leading states to impose their own taxes, complicating trade.
Militarily Inadequate
- The lack of authority to form a standing army or navy stemmed from fears of tyranny associated with a powerful centralized force; troops were required to be organized by individual states.