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The peacetime Congress had to grapple with large issues, especially the national debt and the the huge western territories between the settled Atlantic seacoast and the Mississippi River.
The peacetime Congress had to grapple with large issues, especially the national debt and the the huge western territories between the settled Atlantic seacoast and the Mississippi River.
===National debt===
===National debt===
During the war Congress printed paper money called "continentals" that soon became worthless--indeed, any worthless thing was said to be "not worth a continental."
[[File:Dollar1776.jpg|thumb|1776 Continental currency|190px]]
By the end of the war the national government had foreign debts of $8 million (mostly to French and Dutch bankers), and debts to Americans amounting to $42 million. Annual interest payments were $2.5 million. The Congress had no taxing powers, and the states were reluctant to give it money. It printed paper but the bills--called "continentals" --became worthless because of inflation. It borrowed more from Europe. The best solution was to sell land.
By the end of the war the national government had foreign debts of $8 million (mostly to French and Dutch bankers), and debts to Americans amounting to $42 million. Annual interest payments were $2.5 million. The Congress had no taxing powers, and the states were reluctant to give it money. It printed paper but the bills--called "continentals" --became worthless because of inflation. It borrowed more from Europe. The best solution was to sell land.
===Western lands===
===Western lands===
[[File:Nw-territory2.jpg|thumb}220px|left]] Sales of western lands could provide the national government with needed revenue without asking he states, while also facilitating western settlement. The challenge was to get the land from the states. In 1776 seven states had overlapping and conflicting claims to western lands that were based on old royal grants and charters. Virginia had the largest claim, which included the present states of Kentucky and West Virginia, and parts of Ohio, Indiana and Illinois. Cutting across Virginia's northwestern claims were the claims of Massachusetts, Connecticut, and New York. South of Virginia were the claims of North Carolina (claiming Tennessee) and South Carolina and Georgia, which claimed the lands between their western boundaries and the Mississippi. The ownership of such vast areas by a few states aroused jealousy and ill-feeling among the six smaller states that had no western lands. Maryland refused to ratify the Articles until the landowning states surrendered their claims to the new government.
[[File:Nw-territory2.jpg|thumb}220px|left]] Sales of western lands could provide the national government with needed revenue without asking he states, while also facilitating western settlement. The challenge was to get the land from the states. In 1776 seven states had overlapping and conflicting claims to western lands that were based on old royal grants and charters. Virginia had the largest claim, which included the present states of Kentucky and West Virginia, and parts of Ohio, Indiana and Illinois. Cutting across Virginia's northwestern claims were the claims of Massachusetts, Connecticut, and New York. South of Virginia were the claims of North Carolina (claiming Tennessee) and South Carolina and Georgia, which claimed the lands between their western boundaries and the Mississippi. The ownership of such vast areas by a few states aroused jealousy and ill-feeling among the six smaller states that had no western lands. Maryland refused to ratify the Articles until the landowning states surrendered their claims to the new government.