Articles of Confederation

             In creating a loose confederation of independent states, the Articles of Confederation gave limited powers to a central government known as Congress. Under the Articles of Confederation, the Congress was prohibited to collect taxes and had no control over foreign commerce. Since Congress could only request financial support from the states instead of demanding taxes, the area that lay northwest of the Ohio River, east of the Mississippi River, and south of the Great Lakes replaced taxes. The Land Ordinance of 1785 provided these western lands, commonly known as the Old Northwest, be sold and that the proceeds should be used to help pay off the national debt. It established that the settlement of a town would be six square miles, each of which would be split into thirty-six sections of one square mile each. The sixteenth section for each township was reserved to be sold for the benefit of public schools, setting a model for the public education system in the United States. This land was larger than all of the established states put together, so by selling the land, the weak new government received money that it would not find in any other way. The charting of the vast western public domain was one way the government under the Articles of Confederation was admirable.
             With guidance from the Articles of Confederation, each independent states was given the right to regulate their own currency, therefore each state issued its own money. Evidently, without the knowledge of comparison of each dollar, there was a financial collapse and paper money was considered worthless. This lead to one of the worst depressions the colonists ever witnessed. The depression set the foundation for a major rebellion known as Shays's rebellion. The rebellion demonstrated the problems with the state and national governments under the Articles of Confederation. As a result, people were beginning to doubt republicism and the Articles of Confederation.