The Critical Period

(adapted from Our United States (Laidlaw Brothers: 1964)



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The Duty of Governments. As you know, the Declaration of Independence proclaims that all men have certain rights. Among these are the rights to life,  liberty, and the pursuit of happiness. To say so is all well and good, but you know, from your own experience, that in any social situation the rights of an individual may be ignored if they are not protected and respected.

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To ensure that these rights are protected is one of the major purposes of government in a democratic society. Governments do this by passing laws and by making sure that these laws are obeyed.

The Continental Congress passed many laws, but had no real power to enforce these laws. As a result of this weakness, there was great confusion in the United States in the days following the American Revolution. It is the purpose of this activity to explain the reason for this confusion and to show how a new set of rules for government was needed.


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Thirteen Independent States. When the American Revolution began, there was no United States of America. There were instead thirteen separate colonies, each with its own colonial government. When these colonies declared their independence on July 4, 1776, a step toward the establishment of the United States had been taken, but there was, as yet, no unified nation. Read again from that declaration: "We, therefore, the representatives of the United States of America, in general Congress assembled, ... solemnly publish and declare, That these united colonies are, and of right ought to be, free and independent states."

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By that declaration, the thirteen colonies became thirteen independent little countries, each with its own laws and ruling body. The Continental Congress acted as general agent for the thirteen independent states. These states realized that in order to win a war they would have to work together under some central authority. So, while the war lasted, they supported Congress. But had these states given Congress more support and paid their share of the costs of the war, the war might have ended sooner.

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The Articles of Confederation. Shortly after the Declaration of Independence was signed, the Second Continental Congress took steps to provide the new country with its first real national government. A committee drew up a plan of union called the Articles of Confederation. Articles, in this case, were statements of how the states would be joined in a union or confederation. Congressmen talked over the plan, made many changes, and adopted it in 1777. Then the plan was sent to the state legislatures for ratification (or approval). Ratification, by some states, was delayed because of disputes over western lands.

Seven states claimed western lands. These states were Massachusetts, Connecticut, North and South Carolina, Georgia, Virginia, and New York. During the Revolution, George Rogers Clark had seized the Northwest Territory for Virginia.

The Articles Are Ratified. The other six states had no western claims. They argued that the western lands should become national property. Maryland led this argument, and refused to ratify the Articles until assured that these western lands would be used for the common good. Maryland was satisfied when New York gave up its claim, and other states seemed willing to do so. Thus, on March 1, 1781, a few months before the Revolution ended, the American states were legally joined into one union, the United States of America. The Articles of Confederation became the law of the land and remained so until 1789. The Second Continental Congress gave place to the Confederation Congress.

Many Americans were afraid that a strong central government might take away their liberties and interfere with local affairs. After all, it was opposition to a strong central government, represented by the king and Parliament, that led to the Revolution. Congressmen knew this, and so provided for a loose union of states in which real power remained in the hands of these states. Because of this, however, the Confederation Congress could never provide really effective government.

The Powers of Congress. Under the Articles of Confederation, Congress was not a lawmaking body so much as it was an advisory council whose advice the individual states could accept or reject. Its powers were:

A Lack of Unity. With little actual power the Confederation Congress had a difficult time in making a lasting peace and in holding the states together. When peace did come, the limited spirit of unity which had held the states together in war almost disappeared. Each state acted like a little nation, independent of the others, and eager to run its own affairs. The understanding and feeling that the thirteen states were then one nation had not yet come to all the people and their leaders.

This was in part due to the fact that during the war each state had thrown out the English governor and set up a new state government. Each state had then revised those laws by which its people would be governed. Unfortunately, only about one fifth of the people owned enough property to vote; some were disqualified on religious grounds. The voters chose a governor and a legislature. Other officials were elected, or were appointed by elected officials.

The Articles Are Weak. The lack of unity was also in part due to the weakness of the central government under the Articles of Confederation. The new nation was faced with many trying problems which the Confederation Congress could not solve quickly because it could not deal directly with individual people and situations.

  1. It had no power to enforce treaties made with other nations.

  2. It could not raise money by taxation.

  3. It did not have the sole power to coin money, for each state also kept that right.

  4. It could not regulate trade between the states.

  5. It could not call out troops to enforce law and order.

  6. It had no federal executive, or

  7. federal courts.

Trouble over Treaties. The inability of the Confederation Congress to act was seen as soon as it tried to deal with foreign countries. You recall that one clause in the Treaty of Paris provided that the Congress should instruct the states to treat the former loyalists fairly and to help them recover any property taken from them. Congress tried to do this, but with little success.

Inasmuch as the Confederation Congress was not able to carry out its promises made
in treaties, foreign countries were not anxious to enter into agreements with the United States. They felt, and rightly so, that there was no sense in entering into agreement with a country whose government had no power to carry out its treaties.

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Money Problems. Congress, under the Articles of Confederation, was sometimes called "the penniless government." It could ask the states for money, but it could not force the states to contribute a single penny. As a result, the Confederation Congress could not collect enough money to pay the bills of government.

This again did nothing to give foreign countries confidence in the new nation. The United States owed more than ten million dollars in war debts to various foreign countries which began to think they would never be repaid. Congress finally asked the states for permission to collect a tariff - a tax on imports, but it could not obtain the required permission of all thirteen.

The financial problems of the Congress were also hampered by a depression that followed the war. This depression, accompanied by a scarcity of money, complicated the financial problems of the Congress and of the state governments.


The Western Territories. Perhaps the greatest success of the Confederation Congress was in dealing with the western territories.  The Treaty of Paris (1783)  - the treaty that formally ended the war and recognized the independence of the United States - gave the United States the land between the Appalachian Mountains and the Mississippi River. The northern half of this area was called the Northwest Territory.

The Land Ordinance of 1785. Americans began moving into the territory. To make their claims, they simply walked into the wilderness and settled on the land they wanted. They did not clearly mark the land to show what areas they claimed, so settlers often argued over land claims

In 1785, Congress came up with a plan to end such arguments. That plan was the Land Ordinance of 1785. Under that plan, government surveyors carefully measured the land. Then they divided it into parts. They wrote a record of the parts. Now when a settler bought a part, there could be no argument about property lines.

The Northwest Ordinance of 1787.  With people settling in the Northwest Territory, Congress faced new questions: How should the territory be governed? How would the territory become new states?

Congress passed a law called the Northwest Ordinance of 1787. That law set up a plan for governing the Northwest Territory.

The Northwest Ordinance divided the Northwest Territory into several smaller territories. Congress sent a governor to run each new territory. When there were 5000 people in a territory, those people could elect a legislature. When there were 60, 000 people in a territory, the, legislature could apply to Congress to become a state.

Settlers in the Northwest Territory had the same rights as other Americans. But slavery was not allowed there.

The Northwest Ordinance worked well. It set up a plan that allowed the new nation to grow.

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Representation but No Taxation. The Articles gave the Confederation Congress no power to levy taxes or to collect duties on goods shipped it} and out of the country. As a result, the Confederation Congress could not collect enough money to pay its daily bills or to pay all of its war debts.

This condition. came about in part because the colonists had just opposed the attempts of a central government (that of Great Britain) to tax them. They were un­willing to give this taxing power to a new central government even though they had created that government. They were more willing that the state legislatures have this power.

The War Debts. The war debts, which were inherited from the Second Continental Congress, were an especially big headache to the Confederation Congress. When very little money came in from the thirteen colonies or from foreign loans, the Second Continental Congress had been forced to raise money for war purposes by borrowing. Most of the borrowing in America was done by one of two methods: (1) by issuing paper money and (2) by issuing certificates of in­debtedness.

Under the first method the Congress issued paper money called continental currency. This was a promise to exchange the paper money later for gold and silver (hard money). To give it value, this paper money was made legal tender. That is, when this money was offered in payment of a bill or debt, it had to be accepted.

With no money coming in from taxes, and little from the colonies, the national treasury soon ran out of cash. Continental currency lost its value. People did not want to accept it as money. Merchants protected themselves by raising prices. The value of the money kept going down until a hundred-dollar bill would not buy a pound of potatoes. To this day the expression "not worth a continental" is used to describe something that has no value at all.

The Second Continental Congress issued almost 250 million dollars' worth of continental currency during the war. In 1780 this Congress redeemed about half of it at two cents on the dollar; that is, paid two cents for each dollar. The rest, for the most part, went unredeemed.

IOU's. Under the second method, certificates of indebtedness (a legal kind of IOU) were issued to pay merchants for war supplies, persons lending hard money to the government, and for servicemen's wages. Unlike the continental paper notes, these IOU's were not legal tender. They were more like bonds. If the holder of an IOU needed cash, he might sell it to a speculator for less than its face value. A speculator expected to hold such IOU's until they were worth more or until they were redeemed and he could make a profit.

State Money. It became difficult to carry on trade between the states because some states issued their own paper money. Like the continentals, state paper money was made legal tender in the state which issued it. But suppose a New York merchant had an opportunity to sell some goods in Rhode Island, a paper money state. How would he feel about being paid with Rhode Island paper money which was of little value in New York?

Times Become Worse. As time passed, even the paper money issued by some states had little value. Gold and silver pieces were about the only things that had buying power, and there were not enough of them to provide for people's needs. Men were brought into court because they could not pay their debts. Some went to prison. Others lost their property because they could not pay their taxes. Yet many of these people had wheelbarrows full of paper money at home. The discontent of ex-soldiers was so great that it led to an armed rebellion in Massachusetts. The uprising, led by Daniel Shays, is known as Shays' Rebellion. It showed the need for better government.


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Demand for a Stronger Government. By 1786 most of the leading Americans were demanding that something be done to make the central government stronger and more effective. That year representatives from five states met in Annapolis to talk about navigation problems. Before this meeting was over, the conference recommended that a general convention of all the states be held at Philadelphia the next summer. Its purpose would be "to take into consideration the situation of the United States and to do what is necessary to amend (change) the Articles of Confederation."


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