US BEGINNINGS 1781 - 1800
I. The Early US Government
A. The Second Continental Congress which met in the Spring of 1775 actually served as the US government until the constitution was completed (1789).

  1. Following the end of the fighting and recognition of the US by Britain, the major problem facing congress was to form a workable government.
  2. Once independent, they were outside the commercial protection of the British, many of whose ports, especially in the Caribbean, were now closed to American shipping.
    a. Britain no longer paid a bounty for Carolinian indigo which disappeared as a crop.
    American crops were now frozen out of the British West Indies
    b. The export of horses, cattle, hogs, poultry, beans, potatoes, flour, rice, oats was stopped unless sent on "British built ships owned by His Majesty's subjects;"
    c. Cured meats, fish, and dairy products were also excluded from the West Indies;
    d. As a result of the closing of these markets, surplus crops of farmers in MA, the CN and Hudson Valleys and Eastern PA piled up, causing farm prices to fall.
  3. The Continental Congress had foreseen this problem and had taken steps to correct it.
    a. New trade routes were sought while the Revolutionary war was being fought
    (1) New routes to the Far East were found;
    (2) Trade with China and Asia proved to be very profitable and of long duration
    b. Americans were encouraged during the war to develop their own manufacturing goods, to lessen US dependence on British goods.
    c. The need for some kind of national economic regulation was underscored because different states charged different tariffs.
    d. A common currency was needed, a problem magnified by the economic depression following the Revolutionary war among farmers who were land rich but cash poor
    e. Robert Morris's Bank of America was to issue bank notes as currency.

B. Articles of Confederation

  1. Background
    a. At the time of the Declaration of Independence, it was decided to write a framework for central government.
    b. John Dickinson 's committee formed a government to do what Britain's government had done for the colonies, establishing Congressional authority and a permanent union without appearing as oppressive to the states or the people as Britain's had.
    c. Within one year the Articles of Confederation were finished and ratified in 1781.
  2. Features
    a. The national government was weakened and not given the authority it needed.
    b. Because it was believed that power corrupts, the executive was little more than a figurehead, with no real power, and there was no judicial branch.
    c. Although Congress was given broad powers, it was denied the same powers that the people had denied to Parliament:
    (1) Congress could not tax - funds were contributed to the national government only through the appropriations of state legislatures, based on requests by congress proportionally according to population.
    (2) Changes could be made only through unanimous consent - every state had to ratify an amendment or the document could not be changed;
    (3) Every state was equal to the other and each received one vote in Congress.
    (4) Frequent elections were to be held annually - no one elected delegate could serve for more than three years, but could return after three years.
  3. What Congress could do
    a. Set quotas for men and money which could be asked for from the states;
    b. select an executive from members of Congress;
    c. make commercial and other Treaties (as with France 1778 and with Britain 1783);
    d. conduct war and foreign affairs, including negotiation with Indians;
    e. manage public lands in the west, limit state boundaries, and admit new states;
    f. borrow money, sell war bonds, regulate coinage and provide a currency base.
  4. State powers
    a. State governments, assumed to be the most powerful, had many powers that the national government had -- right to issue bills of credit, borrow and mint money, deal with foreign governments and engage in war (with congress's consent)
    b. Only states could tax citizens, and legislate regarding family affairs and indebted-ness and the making of contracts
    c. The states also feared giving too much power to one man.
    d. Citizens also strongly desired written constitutions throughout the 1770s - 80s.
    (1) During the Revolution, 11 of 13 states wrote constitutions (CN and RI kept their colonial charters of 1662-63)
    (2) These constitutions were the work of revolutionary conventions or congresses (except MA which used a constitutional convention (1779) and a ratification process involving its citizens).

C. Problems with Ratification of the Articles of Conferation

  1. The debate over western territory delayed final ratification of the Articles until 1781.
    a. Smaller states before agreeing to ratification demanded that the larger states cede their western lands to the national congress.
    b. Virginia claimed territory including KY, OH, IN, IL, MI and WI.
    c. Seven states had no western claims - NH, NJ, RI, CN, PA, DELA, MD
  2. Twelve states had agree by December 1778, but Maryland refused.
  3. Only when Virginia agreed to allow Congress to control western lands, thereby ceding its claims to western territory to the national congress, did Maryland agree (1781).

II. US Government Under the Articles of Confederation
A. Weaknesses Of the Articles of Confederation

  1. Amendments required a unanimous consent, so not one amendment was ever ratified.
    a. The proposal of a 5% duty on imports was defeated by Rhode Island in 1781;
    b. A second import duty proposed in 1783 was vetoed when NY placed so many conditions on it that the other states would not agree to them.
    c. Attempts to create a Federal court of seven judges (August 1786), give Congress power over foreign and domestic commerce and strengthen the federal requisition system to ensure payment of state quotas were so strongly opposed by some states that the matters were never submitted to the states.
  2. Agriculture
    a. Farmers suffered during the war, having fences and buildings destroyed and crops burned, dikes in the Carolinas were neglected or destroyed by troops, the frontier line was pushed back because of Indian raids, and the labor supply was depleted because of runaway slaves, encouraged by the British;
    b. After the war, farmers lost the payment of bounties for certain crops like indigo and markets closed within the British empire, so that surplus crops drove prices down.
    c. Western settlers (esp. Kentucky and Tennessee) needed salt, guns, powder, shot, farm implements, cloth, notions and small luxuries, which must be purchased in Europe or Asia;
    d. Because the overland route (Appalachian MTS) by pack mule was too costly, wes-tern settlers sailed goods down the Mississippi and its tributaries to New Orleans, for shipment to the Caribbean or the East coast.
    e. According to the Treaty of 1763, Spain controlled the mouth of the Mississippi and was reluctant to allow Americans to use New Orleans.
  3. Commerce
    a. Americans lost markets within the British empire after independence.
    b. Although markets opened in the Far East, and trade increased with France, Dutch West Indies and the Dutch after 1778, the new markets did not offset lost British markets
    c. The per capita American exports were lower in 1790 than in 1775.
  4. Industry
    a. American manufacturers fared well during the war, but after the peace, consumers went on a spending spree, leaving manufacturers with few customers;
    b. Some states used tariffs to protect local industry but importing merchants opposed it
    c. States exempted goods exported from other states, making the system ineffective.
  5. Creditors and Debtors
    a. Because Congress could not tax, it stopped paying interest and principle on its national debt which caused the value of government securities to drop sharply;
    b. Because British goods were snapped up immediately after 1783, merchants sent the remaining gold and silver overseas to purchase additional goods.
    c. The absence of cash caused prices to fall sharply, creating demand for some type of paper currency
    d. Although many states had issued currency, it was not legal tender and did not have to be accepted by creditors.
  6. Finance
    a. Congress raised revenue by assigning revenue quotas to the states who then had the responsibility of raising funds, but because of their own expenses states were reluctant and funds came in slowly
    (1) Such lack of commercial powers by the central government hampered American efforts at obtaining commercial treaties with foreign nations.
    (2) Congress unsuccessfully appealed in 1784 to the individual states for a 15-yr. grant of power to regulate foreign commerce.
    (3) James Monroe (January 1785) tried to amend the 9th article which forbade Congress from entering into any treaty of commerce which would deprive any state of its individual right to impose duties, but no action was taken.
    b. Congress offered large blocks of Western lands to speculators (such as a group of Boston merchants that bought 1.5 million acres for $1 million);
    b. Congress also borrowed money from overseas, but this source soon dried up as foreign bankers were reluctant to keep lending without a means of repayment;
    c. Congress was unable to pay veterans promised bonuses or back pay and many army officers believed that they were entitled to half pay for life.
  7. Congress
    a. Because Congress feared that the army would attack them, they fled Philadelphia and wandered from town to town, seeking a secure place to conduct business;
    b. This sense of frustration at the lack of real authority led to high absenteeism among Congressmen, making it difficult to raise a quorum.
    c. Congress met in Trenton (November 1784) and voted to meet in New York city temporarily until a federal city was ready on the banks of the Delaware.
  8. Foreign Affairs
    a. France remained friendly and honored its trade privileges;
    b. Britain was antagonistic to the new government as were many smaller nations and did not evacuate their forts in the Ohio Valley as agreed in the Treaty of 1783 (although the US was not compensating Loyalists for lost property);
    c. US citizens were not paying their pre-war debts to British merchants as agreed in the Treaty of 1783, and the Congress was powerless to force compliance;
    d. When Spain refused to let US ships into Latin American ports, the US gave up the right to deposit goods in New Orleans in exchange for some concessions in Latin America, a 25-year agreement, pleasing eastern merchants but angering westerners;
    e. North African Barbary States (Morocco, Algiers, Tunis, Tripoli) had extracted ransoms and bribes from European nations who either paid or protected their ships in the Mediterranean, but US shipping, having depended on the British navy and unable to pay bribery payments, were constantly harassed by Barbary Coast pirates

B. Currency Crisis

  1. States Issuing Paper Currency - North Carolina and Rhode Island
    a. The paper currency shortage and its rapid depreciation resulted in a financial crisis when merchants in Rhode Island refused to accept it
    b. Debtors in Rhode Island pressured the legislation to pass the Force Act which forced merchants to accept the paper currency at face value;
    c. In 1787, the Supreme Court ruled (Trevett vs Weeden) the Force Act was not legal.
    Rhode Island began withdrawing its paper currency (1789).
  2. State Attempts to Deal with the Currency Crisis
    a. Eastern merchants were pressured by overseas creditors to pay their debts, which forced the merchants to pressure western farmers to settle their debts.
    b. Some states resorted to a banking scheme, whereby banks loaned money to farmers based on the value of their land, but when farmers tried to use this script as currency, the merchants also were reluctant to accept it as legal tender.
    c. Other states resorted to Stay Laws that delayed debt payments for one or more years.
    d. Where no currency was issued the situation worsened without cash to pay creditors
  3. Daniel Shays's Rebellion In Massachusetts (August - December 1786)
    a. Massachusetts, committed to paying off its Revolutionary debts, had the heaviest state taxes with land bearing about 2/3 of the burden, and also required that every legal transaction be recorded in court (with payment of court costs and legal fees;
    b. Massachusetts farmers, unable to pay their debts, faced foreclosure, having all property, including furniture, seized in order to pay off debts.
    c. Hampshire County's Courthouse (August 1784-86) had about 3,000 debt cases
    d.As the crisis worsened, especially in Western Massachusetts, pressure was put on the legislature to pass some relief measurea as other states had done, but because the upper house was controlled by merchants, such attempts at relief failed;
    e. To prevent more foreclosures, some courts were seized until more favorable legislators could be elected;
    f. One such farmer's protest was led by Daniel Shays (1747-1825), a Continental army officer from Pelham in Hampshire County, who, by mid-1786, with a mob of 1,500, ended court foreclosures by surrounding the Hampshire County courthouse.
    g. After attacking the Springfield arsenal, Governor James Bowdoin called out the state militia
    h. When 600 militiamen approached under Gen William Shepherd , three protesters were killed and the rebels scattered, including Shays who went to Vermont and Canada before settling in New York, dying in Sparta at age 84.
    i. Several rebels were tried and sentenced to death, but Shays and all others were either pardoned or served only short sentences.
  4. Many viewed such rebellions as threats to property rights -- to halt the seizure of property to which creditors had claims was viewed as an attempted violation of those rights

C. Settlement of Western Lands