Trouble on Two Fronts

Trouble on Two Fronts

Objective: I will be able to explain how financial problems and disputes with Spain and Britain revealed serious weaknesses of the Confederation government.

Trouble on Two Fronts

The Confederation government did not have enough power to deal with the country's financial problems and issues with other nations. 

Financial Problems

By 1781, the money printed during the Revolutionary War depreciated, or fell in value, so far that it was almost worthless. Unable to collect taxes, the Continental Congress and the states printed their own paper money. No gold or silver backed up these bills, so they had no real value.

Multiple Choice

What does depreciate mean?

• to rise in value

• to keep the same value

• to fall in value

Financial Problems

As more Continental dollars, or "Continentals," flowed into circulation, people realized that Congress could not redeem these bills for gold or silver. The public lost confidence in the money, and the value of the bills plummeted. Between 1779 and 179l, the number of Continental dollars required to buy one Spanish silver dollar rose from 40 to 146. "Not worth a Continental" became a common saying. At the same time, the price of food and other goods soared. In Boston and some other areas, high prices led to food riots.

Multiple Choice

The name used for Continental Dollars.

• Euros

• Franks

• Yens

• Continentals

Financial Problems

The war for independence left the Continental Congress with a large debt. Congress had borrowed money from American citizens and foreign governments during the war. It still owed the Revolutionary soldiers their pay for their military service. Lacking the power to tax, the Confederation could not pay its debts. The Continental Congress requested funds from the states, but they were not required to contribute. The amount that was collected from the states amounted to only a small portion of the total money needed to pay off the debt.

Multiple Select

The Continental Congress was unable to pay its debts or pay the soldiers.

• True

• False

Robert Morris

In 1781, faced with a total collapse of the country's finances, Congress created a department of finance led by Philadelphia merchant Robert Morris. While serving in Congress, Morris had proposed a 5 percent tax on imported goods to help pay the national debt.

Robert Morris

The plan required that the Articles of Confederation be changed to give Congress the power to levy the tax. Although 12 states approved the plan, Rhode Island's opposition killed it. A second effort in 1783 also failed to win unanimous approval by the states, and the financial crisis continued to worsen.

Multiple Select

Robert Morris proposed a plan to put a 5% tax on imported goods.

• False

• True

Multiple Choice

Morris's Plan passed, because every state voted for it.

• False, not every state voted for it

• True, every state voted for it.

Problems with Britain

The weaknesses of the new American government became more evident as the United States encountered problems with other countries. In the Treaty of Paris of 1783, Britain promised to withdraw from the lands east of the Mississippi River. British troops, however, continued to occupy several strategic forts in the Great Lakes region.

Problems With Britain

British trade policy caused other problems. American merchants complained that the British were keeping Americans out of the West Indies and other profitable British markets. In 1785 Congress sent John Adams to London to discuss these difficulties. The British, however, were not willing to talk. They pointed to the failure of the United States to honor its promises made in the Treaty of Paris. The British claimed that Americans had agreed lo pay Loyalists for the property taken from them during the Revolutionary War. The Congress had, in fact, recommended that the states pay the Loyalists. However, the states refused, and Congress could not require them to pay. 

Multiple Select

Check ALL the problems the United States was having with Britain.

• Violation of fishing rights

• British Forts in Great Lake areas

• States refused to pay Loyalists for property taken in Revolutionary War

• Britain didn't want Americans to speak English

Problems With Spain

If American relations with Great Britain were poor, affairs with Spain were worse. Spain, which controlled Florida as well as lands west of the Mississippi River, was anxious to stop American expansion into its territory. As a result, Spain closed the lower Mississippi River to American shipping in 1784. Western settlers no longer had access to the Mississippi River, for trade.

Problems With Spain

In 1786 American diplomats reached an agreement with Spain. Representatives from the Southern states, however, blocked the agreement because it did not include the right to use the Mississippi River. The weakness of the Confederation and its inability to deal with problems worried many leaders, including George Washington. Americans began to agree that the country needed a stronger government.

Multiple Choice

Why did representatives from southern states block an agreement with Spain in 1786?

• Spain denied access to the Hudson River

• Spain denied Access to the Rio Grande River

• Spain allowed access to the Mississippi River

• Spain denied access to the Mississippi River

Open Ended

Exit Ticket: Why did the United States still have problems with Britain & Spain after the American Revolution?