THE Articles of Confederation, the first Constitution under which the new nation of America operated, was a product of expediency.

Under its terms, each State would have one vote in the new Congress, and the assent of nine would be needed before important decisions could be made.

There could be no amendments without a unanimous vote.

Congress lacked the power to collect taxes or regulate commerce.

The right to issue money was shared with the individual States. It provided for the creation of new States out of the western lands.

This last point furnished the most important wealth-creating initiative under the Articles of Confederation.  

Provision had to be made for land ownership in the West.

Sales could supply the central government with capital, since requisitions on the States would not be honoured.

Under terms of the Land Ordinance of 1785, public lands were to be divided into townships six miles square, containing 36 sections of 640 acres each.

The sections were to be auctioned off to the highest bidders, with a proviso that the minimum price should be one dollar an acre.

As expected, speculators purchased large tracts of land for resale to settlers.

One of the major firms in this business was the Ohio Company of Associates, organised by Manassah Cutler, a member of Congress from Connecticut, who was backed by European bankers and associates from other States.

In time, the Ohio Company took control of more than 1,5 million acres of land.

Through lobbying, manipulations and taking advantage of currency devaluations, Cutler’s group was able to purchase the land at an average price of about eight cents an acre.

The Scioto Company, founded by New York and New England speculators and Congressmen, and backed by Dutch and French bankers, obtained five million acres, while another million acres went to a group headed by New Jersey Congressman John Symmes.

Cutler, Symmes and other speculators recognised the need for orderly government if settlement was to be achieved.

Therefore, they supported plans for a modified version of Thomas Jefferson’s Ordinance of 1784, which was designed to provide steps, which, if followed, allowed territories to become States.

Cutler’s plan would enable a territory to become a State in a three-stage process.

 Since the land companies had no interests in the south-west at the time, and not wanting to complicate matters, the new version was to apply only to the north-west.

This would be crucial for the nation’s future, for in the original Jeffersonian draft was a proposal to ban slavery in the new territories.  Absent the southern territories, this plan, bound to have caused debate, was abandoned.

The North-west Ordinance of 1787 was passed with the support of the speculators and some disappointed Jeffersonians, and it provided the basic pattern for American continental expansion.

As for the north-west, the legislation enabled the States of Ohio, Illinois, Indiana, Michigan and Wisconsin to enter the nation in the next generation.

Even with the sale of western lands, the new nation and the States had financial difficulties.

Repeated currency issues made to finance the Revolution, along with weak banks, resulted in distrust of paper money and a flight to gold and silver, which went either into hiding or was sent overseas.

Several States found it impossible to collect taxes to pay for ongoing expenses; debtors demanded currency inflation and insisted that creditors accept the depreciated paper money as full payment for debts.

The battle lines in this period were not between North and South, farmer and industrialist, but between creditor and debtor.

When foreclosures were attempted in some communities, the debtors rose up and fought the authorities and, for a while, it seemed that a new revolution, based on social and economic factors, was about to erupt.

In a last-ditch effort to prevent violence, several States issued more paper money, insisting as well that it be accepted as legal tender.

This resulted in a rash of lawsuits in which creditors claimed they should not be obliged to accept the paper currency. One of the plaintiffs, a Rhode Island butcher, sued a customer who tried to pay for meat with paper money.

In 1786, the case went to the Rhode Island Supreme Court which decided in favour of the butcher.

For the first time, the courts had declared an act of the legislature unconstitutional, at the same time deciding in favour of creditors.

Formerly timid creditors elsewhere were now emboldened, and in six States, they took power and ended the growing mania for currency inflation.

Naturally, the debtors counter-attacked, and in the summer of 1786, the possibility of outbreaks of violence seemed greater than ever.

Massachusetts underwent several strains in this period. It was not only the home of American radicalism, but its farmers had suffered more than those in other States from the loss of trade with Europe.

Foreclosures had begun in western Massachusetts, and there were more of them there than elsewhere.

The poor debtor-farmers demanded relief from the legislature, but received little attention. When the legislature adjourned in July 1786 without having taken action, protest rallies were organised in several western communities.

By September, the protestors united under the leadership of Captain Daniel Shays, a veteran of the Revolution, who led the hastily organised rebels against the State militia in several engagements.

The Governor, James Bowdoin, was alarmed.  He castigated the debtor-farmers as criminals and sent a reinforced militia under the leadership of General Benjamin Lincoln against Shays’ small force.

Shays and those who followed him were convinced they were fighting for the principles of the Declaration of Independence, while Bowdoin warned that unless Shays was put down, anarchy would follow and destroy the State, and eventually the nation.

 In time, Lincoln crushed Shays’ Rebellion, forcing its leaders to flee and disband the rebels. But before this happened, political and business leaders in all the States were obliged to consider whether governments that permitted such uprisings should not be strengthened or replaced.

Dr Michelina Andreucci is a Zimbabwean-Italian researcher, industrial design consultant and is a published author in her field.  For comments e-mail: linamanucci@gmail.com.