A More Perfect Union
The Articles of Confederation gave the Congress the power to conduct foreign affairs, maintain armed forces, borrow money, and issue currency.
Congress did not have the power to regulate trade, force citizens to join the army, or impose taxes. If Congress needed to raise money or troops, it had to ask the states Disputes over western lands delayed ratification of the Articles. By the 1780s, seven of the original states laid claim to areas west of the Appalachians. Maryland refused to approve the Articles until New York, Virginia, and other states abandoned their land claims and ceded, or gave up, such territory to the national government. Under the Confederation government, Americans negotiated a peace treaty with Britain and expanded the country’s foreign trade. Congress could not exchange or trade in the bills for gold or silver. The public began to doubt the money was worth anything. In 1779 it took 40 continentals to buy a single Spanish silver dollar. By 1781, a person needed 146 continentals to buy that Spanish coin.
In the 1780s, the Continental Congress faced a large debt. During the Revolutionary War, Congress had borrowed money from American citizens and foreign governments. It still owed Revolutionary soldiers pay for their military service. Without the power to tax, the Confederation could not easily raise money to pay its debts. It could not force the states to pay. In fact, the states provided less than half of the money the federal government asked them to contribute. In 1781 Morris had proposed a 5 percent tax on imported goods to help pay the national debt. The plan required a change to the Articles of Confederation. |
In 1785 the Confederation Congress passed an ordinance, or law, that set up a process to survey and sell the lands north of the Ohio River. The new law divided this large area into townships 6 miles long and 6 miles wide. These townships were to be further divided into 36 sections of 640 acres . The government would sell each section at public auction, or sale, for at least a dollar an acre.
The Ordinance of 1785 and the Northwest Ordinance aimed to encourage settlement in the Northwest Territory. In time it became clear that people needed even more help. In 1800 Congress passed the Land Act. The act made it possible for people to pay for land a little at a time. Under the terms of this law, a person was required to buy at least 320 acres of land at a price of $2 per acre. The buyer could pay half of the money at the time of purchase and the rest in four yearly payments. The Confederation government had financial issues., paper bills the Continental Congress had printed during the war, did not hold value. By 1781, the currency had depreciated. Economic troubles hit farmers hard. Unable to sell their goods, they could not pay their taxes and debts. This led state officials to seize farmers' lands and throw them in jail.
Slavery continued to spread south of Pennsylvania. The plantation system depended on enslaved labor, and many white Southerners feared their economy could not survive without it. As a solution to this dispute, delegates agreed to what was called the Three-Fifths Compromise. As part of this compromise, every five enslaved persons would count as three persons in the state's population total. This population total would be the basis for setting taxes and determining representation in Congress. Most Northern states had already banned the slave trade The federal government gained wide-ranging powers to tax, regulate trade, control the currency. |