Chapter 5 Section 1

1. Chapter 5 Section 1 Creating a Constitution

2. 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.

3. 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.

4. 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.

5. 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.