All Commentary
Sunday, October 1, 1972

The Founding of the American Republic: 15. The Critical Period


Dr. Carson recently has joined the faculty of Hillsdale College in Michigan as Chairman of the Department of History. He is a noted lecturer and author, his latest book entitled Throttling the Railroads.

Americans established weak governments after they separated from England. Indeed, the governments were weakest at the points requiring greatest strength, namely, in the conduct of relations with foreign powers and in the executive branch. It is easy to understand and sympathize with their reasons for establishing weak governments. Government, any government, has the potential for tyranny. Its monopoly of the use of force within its jurisdiction tends to make those under it impotent in conflict with it. Men are drawn to it by the opportunity it offers for the exercise of power, and the likelihood of the abuse of power is almost as certain as death and taxes. Why not, then, guard against these potentialities becoming actualities by keeping government weak? Let the power reside mainly in the people, and make those in government come hat in hand frequently asking for what they need. Why not, indeed?

Because, in the first place, the attractiveness of a weak government to the law abiding is based largely on illusion, the illusion that weak is synonymous with limited and restrained. It is not; it is synonymous with impotent, frail, and lacking power to perform allotted functions. Government maintains peace by having the respect of the decent, holding the irrational in awe, and intimidating the lawless. A weak government is more likely to be arbitrary, capricious, and even despotic than a strong one, for the uncertain status of its ability to use force leads to unpredictable usages. It was the weakness of the Congress which set the stage for its inflationary policies. The weakness of state governments resulted in arbitrary practices for raising supplies for the army during the war. A weak government is prone to preying on the weak — those who most need its protection — and this penchant is probably aggravated by popular governments which are continuously seeking popular support. The treatment of Loyalists by the state governments during and after the war is probably a case in point. Above all, weak governments invite challenges to their authority which, when brought forth, result in war or revolution. How critical the situation was in America in the mid-1780′s is and will remain in doubt, but the portent of crisis follows necessarily from the condition of the governments.

That the state governments were weak as well as the Congress is revealed by analysis. Governors were made nearly impotent by their dependence on the legislatures. Legislatures had considerable power of making laws, but they were not charged with executing them. The Congress established by the Articles of Confederation had little power at all. It was charged with major responsibilities, yet it had no independent executive, no courts of its own, nor any direct sources of revenue. Moreover, the members of Congress were made so dependent upon state legislatures for their tenure that they were most reluctant to act.

A Lack of Continuity

The bane of republics is a lack of continuity of government because the government changes hands so often. Each election may bring a new set of rulers. Monarchy does not suffer much from this defect, but it has others which disqualified it for Americans. The constitution-makers of the revolutionary period aggravated the discontinuity attendant upon republics. Not only did constitutions frequently call for annual elections but also there were sometimes limitations on how frequently within a period an individual could serve. Members of Congress had no assurance of continuation from one session to the next or even that they might not be recalled during a session, and were prohibited to serve more than a portion of a given period. It was difficult, in these circumstances, for the governments to have even that continuity which they can have in republics. It is true, of course, that it was virtually impossible for one man to gain much power, but it was equally difficult for him to exercise governmental authority.

Foreign Relations

The greatest weakness of governing power was in conducting relations with foreign countries. The responsibility devolved upon the Congress for carrying on these relations, but that body did not have the power to compel the acceptance of its decisions. It had no courts dependent upon it with authority to act upon the people. There was talk that Congress might use force upon states, but such a measure would have been war. The states had more powerful governments than did the Confederation, but they lacked authority to conduct foreign relations.

By their grants of power to their governments, it is clear that Americans did not sufficiently appreciate the necessity for some government exercising the powers that the British had during the colonial period. A good case could be made that this was true regarding trade restrictions, but the failure to empower a government to deal effectively with foreign nations was like burning down the barn to get rid of the rats if what they opposed was mercantile regulations.

That Congress was almost impotent in dealing with other nations does not have to be concluded from theory alone; history affords examples enough. Nowhere was the weakness clearer than in relations with England. John Adams became minister to the Court of St. James in 1785. He hoped to obtain a commercial treaty with Britain that would open British colonial ports to American ships. But he found the government there unwilling to make any concessions, almost contemptuous of the usefulness of any agreement with the Confederation, and well satisfied with commercial relations as they stood. Instead of being able to make new agreements, Adams found himself occupied with questions surrounding the terms of and compliance with the Treaty of Paris of 1783.

Enforcement of Treaties

The British reproached the United States through Adams with not complying with the terms of the treaty. The treaty required Congress to recommend to the states that the rights of Loyalists be restored. (This had been a concession by the United States, since the British were not committed to nor did they make reparations for damages done by their armies or Loyalists in the United States.) Congress did, indeed, make such a recommendation to the states, but some of the states were more inclined to further retaliation, and none of them was favorably disposed to full restitution for Loyalists. Technically, Congress had complied with the terms of the treaty, but the failure of the states to heed their recommendation pointed up the weakness of the Confederation. The treaty also specified that the states would not hamper or impede the collection of debts by British citizens. One history says: “There is no doubt that this article was violated both in letter and spirit. Virginia, where the debts were heaviest…, led the way in passing laws hampering the recovery of British debts.”¹ Congress was, of course, powerless to do anything about the state recalcitrance.

American compliance with the treaty was made the more pressing, because the British used it as an excuse for failure to comply in the Old Northwest. They had several military posts on the American side of the Great Lakes. Contrary to the treaty provisions, they did not evacuate them; instead, a secret order to hold them indefinitely went out in 1784. Though the posts themselves were peripheral, they provided bases for the British to exercise influence on Indians in American territory and for carrying on a lucrative fur trade.2 This increased the difficulty of making white settlements in the area and, thus, of the sale of lands by the Confederation.

Difficulties with Spain

Difficulties with Spain were, if anything, more pressing than those with Britain. Trading privileges were not at issue, for Spain had opened up her most important colonial ports to America. The major issues were the location of the boundaries between the United States and Spanish territory to the south and west, and navigation and use of the Mississippi and ports on it. The difficulty arose out of differences in claims and designs on the old Southwest between the United States and Spain. Spain had lately reacquired Florida, which included at that time a West Florida extending all the way to the Mississippi. Spain continued its historic claim to the vast territory west of the Mississippi. These territories gave Spain control over the gateway to the Gulf of Mexico. The fact that Britain had ceded territory to the United States did not greatly impress the Spanish, particularly when these same British were clinging to their own posts to the north in defiance of the treaty.

In 1784, Spain concluded treaties with Indians within the territory of the United States. Moreover, Spain held onto a military post at Natchez which had been acquired during the war but which was now within the treaty territory of the United States. Spain also made private agreements with Americans for the use of the Mississippi ports and was working to undermine the allegiance of those west of the Appalachians to the United States. It was the position of both Britain and the United States that navigation of the Mississippi River was free to all, but Spain did not recognize this position. Nor would Spain grant the right of deposit of goods in New Orleans — a right essential to the effective use of the Mississippi —to the United States.

The Mississippi and Trade

Of course, the use of the Mississippi was an absolute requirement for the commercial development of the trans-Allegheny region of America. The expense of transporting freight from the west to the east overland was prohibitive; only lightweight cargo of very high value could even be considered worth transporting in this fashion. Even so, settlers poured into this area in increasing number in the 1780′s from the older states despite the fact that, as matters stood, they must either switch their allegiance to Spain or be denied the opportunity of developing the country. John Jay conducted negotiations over a considerable period with the Spanish diplomat, Diego de Gardoqui, but the United States had little to offer and the Spanish little to fear from the continuation of the deadlock. Jay saw little hope for settling the dispute favorably to the United States by negotiation and was entirely unenthusiastic about a recourse to arms. “For,” he said in 1786, “unblessed with an efficient government, destitute of funds, and without publick credit, either at home or abroad, we should be obliged to wait in patience for better days, or plunge into an unpopular and dangerous war with very little prospect of terminating it by a peace, either advantageous or glorious.”3

Barbary Pirates

Not all the difficulties of the Confederation were with European countries; those people commonly called the Barbary Pirates along the African coast of the Mediterranean disrupted trade in a particularly distressing way.

Several Moslem principalities, or whatever they should be called, had long preyed on shipping in the Mediterranean. Countries who wished to avoid their depredations were expected to pay bribes. Once the Americans cut themselves loose from British protection, they were exposed to these pirates. Algeria went to war with the United States, or so rumor had it, seized two American ships, and enslaved their crews. The enslaved Americans “were forced to carry timber and rocks on long hauls over rough mountainous roads.”4 Congress offered to ransom the sailors, but the amount they could and did offer was too small. A “diplomat” from another principality approached the United States with the proposition that the harassment of shipping would cease if tribute in sufficient amount were paid. As things stood, however, the United States could neither afford to pay tribute nor assemble the necessary force to suppress the pirates.5

Financial Problems

Many of the troubles of the Confederation can be traced to financial difficulties. These were frequently tied in and contributed to the ineffectiveness in dealing with foreign nations. A country that had repudiated its currency at the outset and whose diplomats had to go cup in hand, as it were, to other nations seeking funds was hardly in a good bargaining position. There were, of course, domestic as well as foreign consequences of the financial shambles of the Confederation.

The methods used to finance the war had left not only a debt (despite the repudiation of the currency) but also a legacy of consequences which many do not ascribe to the inflation. Inflation through the year of 1780 was followed by a drastic deflation. There is no mystery about the cause of the deflation; when the tender laws were removed the Continental paper ceased to circulate as money. Much the same thing happened to the paper money that had been issued by the states during the war. Specie replaced the paper as currency, but there was much less of it than there had been of the other. Prices then had to be adjusted downward to make trade feasible in the new currency. The supply of currency was further depleted when trade with Britain was resumed, for the United States had an unfavorable balance. Americans still showed a marked preference for British goods and large quantities of them were imported, but the British did not buy goods of nearly the same value from Americans. There had long been an imbalance between the two, but it was worse now because the British would not allow Americans to make up the difference by carrying goods to British possessions. “The result was that within a year or two after the war,… there was a dearth of both paper money and hard money.”8

Consequences of Inflation

A drastic deflation produces, or is, what is most commonly called a depression. The deflation itself can be correctly described as a healthy corrective to the inflation that preceded it, a return to sound values from the grotesquely inflated situation that disrupted the market. Depressions, on the other hand, are universally deplored, at least in our time. Nor is this so strange, for although prices can be adjusted to the monetary situation, the same can hardly be accomplished regarding obligations contracted during the inflation. Prices fall, money is hard to acquire, yet debts remain to be paid. As an historian writing about these times said: “Hard is the lot of one who, burdened with taxes and debts and destitute of cash, is beset by falling prices of the things he makes and sells.”7

Historians differ as to the extent, depth, and impact of the depression of the 1780′s. Some hold that it deepened and worsened in the latter part of the decade.8 One historian, at least, cites considerable evidence that economic conditions were greatly improving after 1785.° For example Benjamin Franklin wrote in 1786: “America never was in higher prosperity, her produce abundant and bearing a good price, her working people all employed and well paid, and all property in lands and houses of more than treble the value it bore before the war; and our commerce being no longer the monopoly of British merchants, we are furnished with all the foreign commodities we need, at much more reasonable rates than heretofore.”10 George Washington wrote in a similar vein in 1787: “In the old states, which were the theatres of hostility, it is wonderful to see how soon the ravages of war are repaired. Houses are rebuilt, fields enclosed, stocks of cattle which were destroyed are replaced, and many a desolated territory assumes again the cheerful appearance of cultivation.”¹¹

Suffering Debtors

The truth seems to be that some people were in distress, and some were prosperous. That is not an earthshaking conclusion, because much the same can be said at any time. But those not doing well at this time were frequently hurt in one way or another by the legacy from the war. Those who had gone into debt to buy real property on long terms during the inflation were undoubtedly often hard put to pay off in the much scarcer money that was now being used. For example, in Worcester County in Massachusetts, there were over 2,000 suits taken to court for recovery of debt in one year.” Americans had not only to adjust to a reduced money supply but also to a new trading situation after the break from England. To many, the new situation provided new opportunities, but others tried to cling to and make a go of the old relations (particularly was this true of trade with England). The states were generally deeply in debt from the war, and some of them attempted to begin to retire their obligations by levying taxes. This could be particularly hard on those who owed debts for their land and had to pay high property taxes as well.

These things are relevant to a mounting crisis in the United States because they were the occasion for pressures on the governments to do something about them. Some of the functions people were accustomed to have government perform were either not being performed or were irregularly performed. Americans had not only a legacy of mercantilism but also of monetary manipulations. Debts, taxes, and trade regulations plagued the new governments. There was not even a standard currency throughout the United States.

Coinage and Exchange

When the Continental and state currencies were repudiated, people used coins primarily for a medium of exchange. There were few minted in America during this period, so that foreign coins circulated mostly: “English, French, Spanish, and German coins, of various and uncertain value, passed from hand to hand. Beside the ninepences and four-pence-ha’-pennies, there were bits and half-bits, pistareens, picayunes, and fips. Of gold pieces there were the johannes, or joe, the doubloon, the moidore, and pistole, with English and French guineas, carolins, ducats, and chequins.”¹³ In addition to the difficulty of calculating the respective value of each of these coins, there was the complication that coins were frequently worn or clipped. A man who accepted one of the latter at full value might have it discounted when he tried to use it. Americans did not have a medium of exchange; they had media through which exchanges of money for money were almost as precarious as exchanges in goods and were using coins whose sovereigns could not regulate and over whom Americans had no control.

There was hardly any reason, however, for the citizenry to have any confidence in the monetary actions of the Congress, nor, for that matter, of the legislatures of the states. Not only had the Confederation repudiated its currency, but the debts which it still recognized were poorly serviced. The total debt of the United States at the end of the war, foreign and domestic, was about $35,000,000. Far from being retired, it continued to grow. By way of requisitions from the states, Congress received $2,457,987.25 in the period from November 1, 1781 to January 1, 1786. This was barely enough to pay current expenses for the government.” Robert Morris sent along this comment when he resigned as head of the treasury in 1783: “To increase our debts while the prospect of paying them diminishes, does not consist with my ideas of integrity. I must, therefore, quit a situation which becomes utterly insupportable.”’5 Those who succeeded him may have had less integrity than he professed, but they were hardly better supplied with money.

Inadequate Power to Tax

It was commonly held that the greatest deficiencies of Congress under the Confederation were the lack of the power to tax and the inability to regulate trade. There should be no doubt that the lack of the power to tax made the Congress almost impotent to perform the functions allotted to it. As to trade, Congress was almost powerless either to regulate or to prevent the states from doing so. Whether trade needed regulating was debatable, but if it did, a strong case could be made against the states doing it. Indeed, some states undertook to set up tariffs and to discriminate against ships of other lands, particularly those of England. But it was exceedingly difficult for states to set rates which would accomplish even those dubious advantages supposed to follow from them. If the tariffs were too high, in comparison with those of surrounding states, goods might come into the state from ports of entry located in other states. If imported goods were finally consumed in another state from the one imposing the tariff, the state was actually levying taxes on citizens of other states.

State Barriers to Trade

The regulation of trade by the states worked against a common market for all the United States and threatened to turn some states against others. John Fiske described the situation this way: Meanwhile, the different states, with their different tariff and tonnage acts, began to make commercial war upon one another. No sooner had the other three New England states virtually closed their ports to British shipping than Connecticut threw hers wide open, an act which she followed by laying duties upon imports from Massachusetts. Pennsylvania discriminated against Delaware, and New Jersey, pillaged at once by both her greater neighbours, was compared to a cask tapped at both ends.16

Trade discriminations sometimes lead to war. Not only was there the possibility that one American state might go to war against its neighbor but also that discriminations against or by foreign countries might lead some country to go to war against a state. In such a case, the United States would be drawn into the war, for the authority to make war was vested in Congress. To say the least, the situation was anomalous.

It is strange, but true, that the events which finally provoked Americans to do something about the union did not directly involve the Congress and its ineffectiveness. Perhaps it is not so strange on reflection, for Congress rarely did anything. The failure to act may be indictable, but I think it would be hard to get a jury to convict. Congress presented a low silhouette to its critics. True, it repudiated its currency, could not pay its debts, could not force the states to meet their quotas, could not protect its citizens abroad, and did not do most of the things it was authorized to do with much energy. But, then, it seldom gave offense, and people spread over a vast land were more used to opposing government action than seeking it. It is most probable that if some crisis had swept the Congress away it would have gone with a whimper rather than a bang. In our day, we have seen exile governments seeking a country to govern; the United States was an exile country awaiting a government.

Trouble in Rhode Island

It was trouble in New England in 1786-87 that aroused fears which prompted men to action. Paper money, taxes, and debts were the occasion of challenges to some state governments. Most states were under pressure to make paper money issues. Seven had done so by 1787 but, as might be expected, there was considerable opposition to such actions Rhode Island not only issued paper money but revived harsh methods to try to make it circulate. Faced with fleeing creditors and merchants abandoning the state, the “legislature passed an act declaring that anyone refusing to take the money at face value would be fined £100 for a first offense and would have to pay a similar fine and lose his rights as a citizen for a second.”17 When the act was challenged, the court declared its opinion that the act was unconstitutional. The judges were called before the legislature, interrogated, and some of them dismissed. Rhode Island’s government was viewed with contempt by many Americans.

Shay’s Rebellion

Rhode Islanders would probably have been left to suffer the disadvantages of their own government or get out — the latter was becoming an attractive option —but it was not easy to take so sanguine a view of events in Massachusetts. There was widespread dissatisfaction with the foreclosures on farms and imprisonment for debts. Some of the discontented wanted a moratorium on the collection of debts and/or paper money to be issued. Taxes were also levied in such a fashion as to arouse resistance to their collection. The discontent may have been agitated by British agents; certainly, money was made available for the discontented to use to take action, though who was behind this was never definitely established.

Overt action came when mobs began preventing courts from sitting. Beginning in early September of 1786, a succession of courts were disrupted and prevented from conducting business by large groups of armed men: at Worcester, at Concord, at Taunton, at Great Barrington, and at Springfield. The legislature did not take the desired action, and a rebel force was organized. The climax of these events came in January of 1787. It is known as Shays’ Rebellion, taking its name from one of its leaders, Daniel Shays. Massachusetts authorized an armed force to put down the rebellion, and the rebel force was dispersed on January 25. New Hampshire was threatened by a rebel force, but the movement was quickly put down by decisive action by Governor John Sullivan who had been a general during the late war.

Constitutional Convention Called

The call for a convention to deal with constitutional matters had been issued prior to these events. It came from some delegates to what was supposed to have been a convention at Annapolis in 1786. The convention was supposed to have dealt with commercial matters, but it lacked a quorum of states, so a call was issued for a more general convention for next year. It did not take Shays’ Rebellion to awaken some Americans to the need for constitutional revision.

Anyone who wanted a government for the United States could see that Congress was not supplying it. “Between October 1, 1785, and January 31, 1786, Congress had a quorum on only ten days, and never were more than seven states represented. Between October 1, 1785, and April 30, 1786, nine states — the minimum required to do any serious business — were represented on only three days.”18 As mobs began to intimidate courts in Massachusetts, one historian notes that “the Congress of the United States had likewise ceased to function.”19 As the riotous events moved to their culmination in early 1787, one state after another elected delegates to the Constitutional Convention. Finally, even Congress acted by recommending to the states that they send delegates. The fear of the rebellion spreading had apparently tipped the scales.

The site of the convention was Philadelphia, the time appointed to convene May 14, 1787, and the object was to contrive a government adequate to the common tasks of the United States.

Next: The Making of the Constitution

 

—FOOTNOTES—

1 Samuel E. Morison and Henry S. Commager, The Growth of the American Republic, I (New York: Oxford University Press, 1942, 3d ed.), 265.

2 See Andrew C. McLaughlin, The Confederation and the Constitution (New York: Collier Books, 1962), pp. 77-78.

3 Ibid., p. 75.

4 Curtis P. Nettels, The Emergence of a National Economy (New York: Holt, Rinehard and Winston, 1962), p. 67.

5 Ibid.

6 Merrill Jensen, The New Nation (New York: Vintage Books, 1950), p. 303.

7 Nettels, op. cit., p. 65.

8 Ibid.

9 Jensen, op. cit., pp. 247-48.

10 Ibid., p. 249.

11 Ibid., p. 250.

12 Ibid., pp. 309-10.

13 John Fiske, The Critical Period of American History (Boston: Houghton Mifflin, 1916), p. 165.

14 McLaughlin, op. cit., pp. 64-65.

15 Ibid.. p. 51.

16 Fiske, op. cit., p. 145.

17 Jensen, op. cit., p. 324.

18 Forrest McDonald, The Formation of the American Republic (Baltimore: Penguin, 1965), p. 140.

19 Ibid., p. 147. 


  • Clarence Carson (1926-2003) was a historian who taught at Eaton College, Grove City College, and Hillsdale College. His primary publication venue was the Foundation for Economic Education. Among his many works is the six-volume A Basic History of the United States.