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After the American Revolution, the Articles of Confederation faced significant challenges. British merchants flooded American markets with low-cost goods, exacerbating competition for local merchants and highlighting the lack of a centralized government to regulate trade. States imposed varying taxes on imports, leading to interstate trade barriers. Diplomatically, the federal government struggled to enforce debts or secure territory, resulting in British refusal to withdraw. Economic woes followed, exemplified by Shays’ Rebellion, revealing the urgent need for a stronger national government.
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Chapter 5 Section 1 Creating a Constitution
Articles Fail: • Trade: • Following the war, British merchants flooded American markets with inexpensive goods (Competition for American Merchants). • Problem: No centralized government to regulate trade. • States would not impose the same taxes on imports. British merchants would land their goods at states with lowest taxes. • States set up custom posts on their borders and levied taxes on interstate commerce. • These actions weakened the Articles of Confederation.
Diplomatic Problems: • The Federal Government had no power over the states. • It could not force states to pay their debts or return property to Loyalist who lost their land following the revolution. • Congress had no way of raising money to pay off debt. • Result: British refused to evacuate American soil. • Problem with Spain: Border dispute between Georgia and Spanish Florida. American farmers could not trade in Spanish territory along the Mississippi River.
Economic Crisis: • The U.S. Suffered through a severe recession following the war. • To finance the war, many states issued bonds that were sold to wealthy American citizens. • To pay back the bonds, citizens argued for the states to issue paper money. • Problem: States didn’t have the gold and silver to back the paper currency.
Shays Rebellion: • Occurred in MA in 1786. • MA government decided to raise taxes instead of issuing paper money. • Those who could not afford the taxes lost their property. • 1,200 farmers led by Daniel Shays tried to prevent farm foreclosures by attacking the state arsenal. • Result: MA militia defended the arsenal and killed 4 of Shays men. • Many Americans realized that the Articles had failed and the need for a stronger central government was evident.