Transcript 5-2 PowerPoint

Chapter 5, Section 2
The New Nation Faces
Challenges
Relations with Other Countries
• Under the Articles of Confederation,
Congress (the federal government) could
not force any state to provide soldiers
– Continental Army disbanded after the
conclusion of the Revolutionary War
– Without an army, the new American
government found it difficult to protect its
citizens
Trouble with Britain
• Difficult to enforce international treaties
– British slow to turn over their forts on the American
side of the Great Lakes
• Americans needed control of the forts in order to protect their
newly acquired land and gain access to the fur trade
• Americans were warned by a British official not
to seize the forts by force
– Told that any attempt to do so would be met with a
force of thousands of British soldiers who had settled
in Canada after the Revolutionary War
Trade with Britain
• After the Treaty of Paris, Great Britain
closed many of its ports to American ships
• Britain also placed high tariffs on
imports/exports
– Taxes on imports/exports
– On rice, tobacco, tar, and oil that were mined
in the United States
– Merchants had to raise prices to cover the
cost of the tariffs, causing consumers to pay
higher prices for goods
Trade with Spain
• 1784: Spain closed the lower Mississippi River
to United States shipping
– Western farmers/merchants furious
• Utilized the Mississippi to send goods to eastern and foreign
markets
– Negotiation attempts with Spain failed because the
plan did not receive a majority vote in Congress
• Spain grew tired of waiting and broke off negotiations
• Many state leaders began to criticize the
national government
– Began to favor a stronger national government
Impact of Closed Markets
• Closing of markets in the British West
Indies seriously impacted the American
Economy
– American farmers could no longer export their
goods to the British West Indies
– Forced to hire British sailors
• American exports dropped while British goods
flowed freely into the United States
Impact of Closed Markets
• Unequal trade caused serious economic
problems for the new nation
– Ability of the British to sell their goods in the United
States at much lower prices than locally made goods
hurt American businesses
• Confederation Congress could not correct the
problem because it did not have the authority
either to pass tariffs or to order the states to
pass tariffs
• States could offer little help
– If one state passed a tariff, Great Britain could simply
sell their goods in another state
Impact of Closed Markets
• States were uncooperative in trade
matters
– Acted only in their own interest rather to
improve trade of the whole country
• Trade issues led to American merchants
seeking new markets for their goods
– China, France, the Netherlands
• Great Britain still remained America’s most
important trading partner
Economic Problems: Trade Among
States
• Confederation Congress had no power to
regulate interstate commerce
– Trade between two or more states
• States followed their own trade interests
• Trade laws differed from state to state
• Difficult for merchants to cross state lines
in business
Economic Problems: Inflation
• After the war, states found it difficult to pay off
their war debts and struggled to collect overdue
taxes
• The printing of large amounts of paper money
led to inflation
– Occurs when there are increased prices for goods
and services combined with the reduced value of
money
– Money had little to no real value because states did
not have the gold or silver reserves to back it up
Economic Problems: Weak
Economy
• Rhode Island
– Printed large amounts of paper money worth very
little
• Pleased debtors because they could pay back their debts
with paper money worth much less than the amount in
coinage they had borrowed
• Upset creditors (people who loan money)
– Hundreds fled from Rhode Island to avoid being paid back with
worthless money
• Loss of trade with Britain and inflation created a
depression
– Period of low economic activity combined with a rise
in unemployment
Shays’s Rebellion
• Each state handled economic problems
different
• Massachusetts refused to print worthless
money
– Massachusetts tried to pay its war debts by
collecting taxes on land
Shays’s Rebellion: Heavy Debt for
Farmers
• Massachusetts tax policy hit farmers hard
– As landowners, they had to pay the new taxes
– Had trouble paying their debts
• Courts began forcing farmers to sell their
property
– Some farmers had to serve terms in debtors’
prison
– Others had to sell labor
Shays’s Rebellion: Heavy Debt for
Farmers
• Many state governments did not care
about poor farmers
• In some cases, farmers actually owed
leaders $
Shays’ Rebellion: Farmers Rebel
• August 1786: Farmers in 3 western
Massachusetts counties revolted
– Angry citizens closed courts in western
Massachusetts
– Reasoning was simple: with courts shut down, no
one’s property could be taken
• Daniel Shays
– Poor farmer and Revolutionary War Veteran
– Led hundreds of men in a forced shut down of the
Supreme Court of Massachusetts
Shays’s Rebellion: Farmers Rebel
• State government ordered the farmers to
stop the revolt under threat of capture and
death
– Only made followers more determined
• Shays’s Rebellion
– Uprising of farmers to protest high taxes and
heavy debt
Shays’s Rebellion: Shays’s Defeat
• Shays’s forces were defeated by state
troops in January 1787
– Many rebels in prison by February 1787
– 14 leaders sentenced to death
• State freed most of the rebels including
Shays’s
– Knew many citizens agreed with the rebel
cause
Calls for Change
• Shays’s Rebellion showed the weakness
of the Confederation government
– When Massachusetts asked the national
government to help put down Shays’s
Rebellion, Congress could offer little help
• More Americans began to call for a
stronger central government
– Need to leaders to be able to protect the
people in times of crisis
Calls for Change
• 1786: Virginia called for a national convention
regarding the economic crisis and ways to
amend the Articles of Confederation
– Annapolis, MD
– Poor attendance
• Due to poor attendance, leaders such as James
Madison and Alexander Hamilton called on all
13 states to send delegates to a Constitutional
Convention in Philadelphia set for May 1787
– Revise the Articles of Confederation