Eco of the Revolution
1. The War’s impact
a. Men left their jobs for war
b. Shortage of money to pay for war supplies
i. French aided
c. Rampant inflation after war
d. Massive debt
i. Had to pay troops
e. Loyalist infrastructure destroyed
f. $9 million in foreign subsidies
g. Congress $200 million in debt in congress dollars (congress printed its own currency)
i. Congress wanted states to pay taxes
h. States printed their own money worth $200 million
i. Robert Morris - superintendant of finance
i. Got congress to charter bank of north America
1. Used money, silver, and gold loaned from France and Holland
ii. Used this to retire congress dollars
iii. Supplied army through private contracts
j. Land ordinance of 1785 – provided for survey and sale of western land
i. Congress sold land for revenue after war
k. Under articles of confederation congress had a lot of power in economy.
i. Est. currency
ii. Raise loans
iii. Maintain army
iv. Regulate trade with natives
v. Final say for state trade disputes
vi. NO POWER TO TAX
SS and SP
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22 comments:
So Morris basically just single-handedly saved America from complete a complete financial inflation apocalypse. Then his championed tariff gets shut down by one measly vote from Rhode Island. Ouch. I would resign too. A little more about the Articles of Confederation too. America goes into this war protesting taxation. When the war is won and a government is established under the Articles, Americans soon find out stronger federal control is needed over the states. Plus the war costs them a lot of money and they cannot survive without strict taxes. Just like the British said a few years ago! What a brilliant reversal!
Although independence is a priceless freedom, and should never be taken for granted, it is important to consider how much it actually did cost. The war for independence largely ravaged the American economy. Massive inflation and large amounts of debt were only a few of the burdens placed upon the United States economy following the Revolutionary War. It leaves you wondering, to those at the time, was it worth the cost? (To some, I'm sure it was, but Loyalists and uninvolved American parties may think otherwise)
I have to agree with RW on this one. The Americans felt it was unfair for them to be taxed because they had never been put int he situatin of debts of controlling a unified nation. They just assumed that the money could be printed and reused, I do not think they took into consideration the fact that they need the actual gold and silver to back it up, which is why the states thought they could get away with printing their own money and handing it in to pay off the war debts, which, however, only depreciated the currency and increased inflation rates. I wonder how, in the end, they ended up being able to pay back all of the war debts to Spain and France and pay back the British loyalists. Where did they get all the gold and silver to back up the loans?
It is a considerably huge amount of money 200 million dollars. Congress should have had some say in taxese I think because otherwise states would not pay off any of the debt they accumulated. And because of this reason British soldiers stay within the states after the war. Britain argues that since the states did not pay their debts back the British, the British don't have to honor the treaty just the same and this causes conflicts.
Wow, it looks like America was about to collapse. People have got to give Morris some credit for saving our butts. Still, it seems like Congress did something stupid by not having the power to tax. How can you keep a nation running smoothly without it? The colonists were all okay with paying taxes. They were just angry that they weren't represented in the place where those taxes were decided. They got representation, it's time for taxation. Though, hopefully, not too much. You do have to keep the people happy.
The colonists are represented when these taxes are decided, however. This is the great difference. That and the fact that it is to aid their own country, not some homeland thousands of mile across the Atlantic. As Caesar Augustus said, "All the world must be taxed". Taxation is an almost universal part of any sovereign nation. The difference is who decides those taxes, to whom the are sent, and what they are being used for.
It will be impossible to pay off the massive debts if the sole revenue for Congress is the selling of land. Taxes would be needed. I can understand why Congress would be afraid to tax its citizens, as the Americans had just finished a war fighting against what they thought were unfair taxes. But it is different if the Americans are paying these taxes to their own, elected government in a free and independent country.
I agree with Richard on the subject of strict taxation--it's amusing and ironic. No wonder why when Congress gave the order to the states to tax the people, the states refused to because it would be a repeat of the Sugar, Stamp, and Townshend Revenue Acts, apparently. It also amuses me how the Americans didn't seem to want to help their country grow after they won the war; they just reap the benefits and protest "unfair" measures to make the country prosper.
Wow! I just love hearing information about one person that can change the lives of many. It is so inspiring! Here, Morris pretty much saved America from an economic disaster. It is crazy how one country could rack up debt that high. It's crazy how our debt is that high!
I agree with Richard on the fact that Robert Morris did save America financialy. If you look at section 1, 'a' through 'h', there is a huge amount of effects that caused this inflation, and he helped with nearly all of them. I also think that it was stupid on Congress's part to not give themselves the right to tax. If they did, there wouldn't have been such a bad problem.
It seems to me that without the help of the French, the Americans would have been in big trouble. A lot of the money for the war seemed to have been given to the Americans by the French, and the French did this because Americans were threatening to join back with Britain. This may have been one of the craftiest and best moves the Americans and Ben Franklin made during the war to help the American cause.
It seems to me that without the help of the French, the Americans would have been in big trouble. A lot of the money for the war seemed to have been given to the Americans by the French, and the French did this because Americans were threatening to join back with Britain. This may have been one of the craftiest and best moves the Americans and Ben Franklin made during the war to help the American cause.
Imagine what the members of the congress must have been thinking. They had just staged one of the most important political movements in the history of man (and they even understood that as it happened), and what happens next? They've successfully voiced their outbursts at taxation and oppressive government and the suppression of a man's freedom; and their new nation is instantly crumbling. There's absolutely no money. Do you tax your way out of it? Will that not defeat the purpose of your entire war? Where do they go from there? This is the truest of tests to discover the leaders.
It looks like after the war not only did America start from nothing, but it was basically hopeless as far as financing goes. Not until Morris basically saved the economy did America have that bright of a future. Who could have guessed that the first constitution in America didn't give the government the power to tax. Why would they do that if they knew they were in massive debt?
The enormous war reparations, closely crippling the american economy, seem to be overwhelming for the US. I don't see how the Articles of Confederation would ever even work in the least bit. why would our countries brilliant forefathers produce such a ineffective establishment of government.
This seemed like a very difficult situation to ge out of. 200 million dollars is a great amount. Morris's plan helped America form entering an even bigger crisis.
The overall issue of inflation after the war occurs throughout history. War seems to always stimulate the economy, but leave it with an unstable superstructure. With so much money floating around for their time, with nothing to back it, there is no reason not to think that it would cause a lot of damage economically.
I feel that the tax situation was highly ironic. The irony is that the colonies broke off from great Britain on the premise that they taxed them without their say. But when there was a say from the states, they still didn't pay the taxes.
I wonder just how much it's worth to act on a principle like independence... A lot, obviously, but hopefully also enough to balance out such a massive war debt. Something like this was bigger than any debt the US has had since (relative to GDP, since we have $12 trillion in absolute debt right now or so). I suppose that since the Congress had no power to tax, debt would be a very big issue.
However, RW, it wasn't about the actual cost of the taxes. Those were quite small. it was the idea of being told what to do with no say. Once it's YOUR government that YOU fought for, and you elect, then it's much much different.
When being in debt to 200 million dollars it does make you wonder if the war was necessary. Yes independence is important but we have to pay the French off, we have to pay the troops, and are debt is enormous. How do we pay it off? We can't tax the colonies according to Congress and our only revenue is land. Lucky for them they had Robert Morris to help them in this situation.
have we ever accumulated that much antional debt after this war or was this the largest amount in history>
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