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American History Lecture Three (view source)
Revision as of 19:44, August 28, 2008
, 19:44, August 28, 2008→Problems with the Articles of Confederation
The weakness of the government under the Articles of Confederation was overwhelming displayed in America's languishing foreign policy.
The weakness of the government under the Articles of Confederation was overwhelming displayed in America's languishing foreign policy.
From the beginning, the Confederation had financial troubles, and its attempts to correct its deficiencies only made its problems worse. It attempts to gain money were uniformly unsound. Congress borrowed money from foreign countries, made paper currency, and sold undeveloped western lands. None of these tactics were effective.
After the war, America had more that 35 million dollars in debt, and that number only continued to grow. The money from the sale of western land was paltry. I could have paid only one fourth of the government's current expenses! Taxes and requests for money from the states were to no effect. The state governments were having financial difficulties of their own.
So Congress turned to paper money, and began to issue it in large amounts. Sudden inflation gave a brief image of prosperity, but as quickly as the money had inflated, it became worthless and was abandoned. People returned to gold and silver coins as currency. Since there was much less of this money than there had been of the printed money, rapid deflation occurred, causing a depression.
Some states tried similar tactics, and Rhode Island tried to force citizens to use its paper money.
None of the paper money worked in the long run, but initially, it seemed like a success. Massachusetts was the only state that did not follow the trend for printed money. This sparked Shays' rebellion.
==The Northwest Ordinance==
==The Northwest Ordinance==