In establishing the Articles of Confederation the statesmen of the Continental Congress had no intention of creating in any sense a governing body. All that the Congress could do was to decide upon war and peace, make treaties, decide upon a common military establishment, and determine the sums to be contributed to the common treasury. These matters, moreover, called for an affirmative vote of nine States in each case. There was no federal executive or judiciary, nor any provision for enforcing the votes of the Congress. To carry out any single thing committed by the Articles to the Congress, and duly voted, required the {131} positive co-operation of the State legislatures, who were under no other compulsion than their sense of what the situation called for and of what they could afford to do.

Things were, in short, just where the colonists would have been glad to have them before the Revolution—with the objectionable provincial executives removed, all coercive authority in the central government abolished, and the legislatures left to their own absolute discretion. In other words, the average American farmer or trader of the day felt that the Revolution had been fought to get rid of all government but one directly under the control of the individual voters of the States. Typical of such were men like Samuel Adams of Massachusetts and Patrick Henry of Virginia. They had learned their politics in the period before the Revolution, and clung to the old colonial spirit, which regarded normal politics as essentially defensive and anti-governmental.

On the other hand, there were a good many individuals in the country who recognized that the triumph of the colonial ideal was responsible for undeniable disasters. Such men were found, especially, among the army officers and among those who had tried to aid the cause in diplomatic or civil office during the Revolution. Experience made them realize that the practical abolition of all {132} executive authority and the absence of any real central government had been responsible for chronic inefficiency. The financial collapse, the lack of any power on the part of Congress to enforce its laws or resolutions, the visible danger that State legislatures might consult their own convenience in supporting the common enterprises or obligations—all these shortcomings led men like Washington, Hamilton, Madison, Webster, a pamphleteer of New England, to urge even before 1781 that a genuine government should be set up to replace the mere league. Their supporters were, however, few, and confined mainly to those merchants or capitalists who realized the necessity of general laws and a general authority. It is scarcely conceivable that the inherited prejudices of most Americans in favour of local independence could have been overborne had not the Revolution been followed by a series of public distresses, which drove to the side of the strong-government advocates—temporarily, as it proved—a great number of American voters.

When hostilities ended, the people of the United States entered upon a period of economic confusion. In the first place, trade was disorganized, since the old West India markets were lost and the privileges formerly enjoyed under the Navigation Acts were terminated by the separation of the {133} countries. American shippers could not at once discover in French or other ports an equivalent for the former triangular trade. In the second place, British manufacturers and exporters rushed to recover their American market, and promptly put out of competition the American industries which had begun to develop during the war. Specie, plentiful for a few months, now flowed rapidly out of the country, since American merchants were no longer able to buy British goods by drawing on West India credits. At the same time, with the arrival of peace, the State courts resumed their functions, and general liquidation began; while the State legislatures, in the effort to adjust war finances, imposed what were felt to be high taxes. The result was a general complaint of hard times, poverty, and insufficient money. Some States made efforts to retaliate against Great Britain by tariffs and navigation laws, but this only damaged their own ports by driving British Trade to their neighbours'. Congress could afford no help, since it had no power of commercial regulation.

The effect upon the working of the Confederation showed that a majority of Americans had learned nothing from all their experiences, for the State legislatures declined to furnish to the central government any {134} more money than they felt to be convenient, regardless of the fact that without their regular support the United States was certain to become bankrupt. Robert Morris was appointed Financier in 1871, and took energetic steps to introduce order into the mass of loan certificates, foreign loans, certificates of indebtedness, and mountains of paper currency; but one unescapable fact stood in his way, that the States felt under no obligation to pay their quotas of expenses. In spite of his urgent appeals, backed by resolutions of Congress, the government revenues remained too scanty to pay even the interest on the debt. Morris resigned in disgust in 1784; and his successors, a committee of Congress, found themselves able to do nothing more than confess bankruptcy. The people of the States felt too poor to support their federal government, and, what was more, felt no responsibility for its fate.

Without revenue, it naturally followed that the Congress of the Confederation accomplished practically nothing. As will be shown later, it could secure no treaties of any importance, since its impotence to enforce them was patent. It managed to disband the remaining troops with great difficulty and only under the danger of mutiny, a danger so great that it took all of {135} Washington's personal influence to prevent an uprising at Newburg in March, 1783. For the rest, its leaders, men often of high ability—Hamilton, Madison, King of Massachusetts, Sherman of Connecticut—found themselves helpless. Naturally they appealed to the States for additional powers and submitted no less than three amendments: first, in 1781, a proposal to permit Congress to levy and collect a five per cent. duty on imports; then, in 1783, a plan by which certain specific duties were to be collected by State officers and turned over to the government; and finally, in 1784, a request that Congress be given power to exclude vessels of nations which would not make commercial treaties. No one of these succeeded, although the first plan failed of unanimous acceptance by one State only. The legislatures recognized the need, but dreaded to give any outside power whatever authority within their respective boundaries. While those who advocated these amendments kept reiterating the positive necessity for some means to avert national disgrace and bankruptcy, their opponents, reverting to the language of 1775, declared it incompatible with "liberty" that any authority other than the State's should be exercised in a State's territory. By 1787, it was clear that any hope of specific amendments was vain. Unanimity from {136} thirteen legislatures was not to be looked for.

On the other hand, where the States chose to act they produced important results. The cessions of western lands, which had been exacted by Maryland as her price for ratifying the Articles, were carried out by New York, Massachusetts, Connecticut, and Virginia until the title to all territory west of Pennsylvania and north of the Ohio was with the Confederation. Then, although nothing in the Articles authorized such action, Congress, in 1787, adopted an Ordinance establishing a plan for settling the new lands. After a period of provincial government, substantially identical with that of the colonies, the region was to be divided into States and admitted into the union, under the terms of an annexed "compact" which prohibited slavery and guaranteed civil rights. But where the States did not co-operate, confusion reigned. Legislatures imposed such tariffs as they saw fit, which led to actual inter-State commercial discriminations between New York and its neighbours. Connecticut and Pennsylvania wrangled over land claims. The inhabitants of the territory west of New Hampshire set up a State government under the name of Vermont, and successfully maintained themselves against the State of New York, {137} which had a legal title to the soil, while the frontier settlers in North Carolina were prevented only by inferior numbers from carrying through a similar secession.

Finally, in the years 1785-7, the number of those who found the unrestrained self-government of the separate States another name for anarchy was enormously increased by a sudden craze for paper money, "tender" laws, and "stay" laws which swept the country. The poorer classes, especially the farmers, denounced the courts as agents of the rich, clamoured for more money to permit the easy payment of obligations, and succeeded in compelling more than half of the States to pass laws hindering the collection of debts and emitting bills of credit, which promptly depreciated. Worse remained. In New Hampshire, armed bands tried to intimidate the legislature; and in Massachusetts the rejection of such laws brought on actual insurrection. Farmers assembled under arms, courts were broken up, and a sharp little civil war, known as Shays' Rebellion, was necessary before the State government could re-establish order.

In these circumstances, a sudden strong reaction against mob rule and untrammelled democracy ran through the country, swinging all men of property and law-abiding habits powerfully in favour of the demand {138} for a new, genuinely authoritative, national government, able to compel peace and good order. So the leaders of the reform party struck; and at a meeting of Annapolis in October, 1786, summoned originally to discuss the problem of navigating the Potomac River, they issued a call for a convention of delegates from all the States to meet at Philadelphia in May, 1787, for the purpose of recommending provisions "intended to render the federal government adequate to the exigencies of the Union." This movement, reversing the current of American history, gained impetus in the winter of 1787. Congress seconded the call; and, after Virginia had shown the way by nominating its foremost men as delegates, the other States fell into line and sent representatives—all but Rhode Island, which was the scene of an orgy of paper-money tyranny, and would take no part in any such meeting.

Of the fifty-five men present at the Philadelphia convention, not more than half-a-dozen were of the old colonial type, which clung to individual State independence as the palladium of liberty. All the others felt that the time had come to lay the most thoroughgoing limitations upon the States, with the express purpose of preventing any future repetition of the existing inter-State wrangles, and especially of the financial {139} abuses of the time; and they were ready to gain this end by entrusting large powers to the central government. They divided sharply, however, on one important point, namely, whether the increased powers were to be exercised by a government similar to the existing one, or by something wholly new and far more centralized; and over this question the convention ran grave danger of breaking up.