Empire of Liberty: A Rocky Start

Excerpt from Dr. Victoria Vermaak’s “The Founding Of An Empire”, University of Serrano Press, 2010.

While the Treaty of Paris finally gave the United States peace, and its official independence, it did not settle many of the issues still facing the new country. The governmental structures were in serious doubt. Thousands of loyalists remained in the country and were guaranteed safe passage if they so choose to leave prompting a small exodus back to Britain, or to the remaining British colonies in the Caribbean. Questions over ownership of western land holdings divided the mainland states. The new nation found trade with the mercantilist economies of Europe more difficult and trade was often outright closed, including at the Spanish port of New Orleans at the mouth of Mississippi River for a period of time. The economic setbacks and weakness of American currency created a multitude of problems with debts and credit sparking further rebellion.

To their credit, the founding fathers attacked these issues head on as best they could. Some issues were simply beyond any one person’s control.

A severe economic depression followed the end of the war, caused due to trade issues, western land speculation and unreliable currency. American ambassadors to Britain, France and Spain found it extremely difficult to negotiate commercial deals that did not come with massive tariffs attached. Furthermore, the states refused to give the Congress power to regulate navigation and foreign commerce. Meanwhile, the states were engaged in a race to the bottom that only benefited European trading partners. For example, France, Quebec and the French-speaking Caribbean islands enacted highly lucrative and generous trade terms as Paris attempted to curry favor with states they hoped would soon return to the empire. At the same time, France slapped high tariffs on English-speaking sugar islands and closed its ports entirely to ships from Massachusetts, Rhode Island, Maryland, Virginia and South Carolina. The British played states against each other with great delight. In 1783, a sugar planter from Jamaica could import British goods with a two percent state tariff and ship their crop to London where a 15 percent tariff would be added to the value, and this was the best deal of all the Caribbean sugar islands. In 1784, Jamaica was undercut by Barbados which signed a deal allowing the British free trade rights in Barbadian ports while exports to Britain were still hit with a 14.5 percent tariff. To add salt to the wound, the British “renegotiated” the Jamaican deal to raise the tariff to 20 percent. Quickly, sugar planters in the Caribbean realized that the handful of markets for their crop were outnumbered by the multitude of newly independent states that were all completely reliant on the crop. Similar trade stories played out in the southern mainland regarding tobacco and cotton, and in New England regarding fish and shipping supplies. A humorous example occurred in 1784 when trade envoys from Massachusetts and New Hampshire were undercutting each other in London to sell 200 “mast pines”, the prized vertical trunks of eastern white pine trees that the Royal Navy favored for its ships, when word arrived that a captain had landed in Portsmouth with several barrages loaded with 300 pines. The captain and his crew, as it turned out, had spent the entire summer of 1784 discretely falling and loading pine trunks in the wilderness of Nova Scotia with no one aware of their activities. Royal Navy and customs officials refused to ask questions as the captain offered them the masts they needed, immediately, at a price the Americans could not beat. It is surely no coincidence that in 1785 the New England Revenue Cutter Service began when Nova Scotia, Massachusetts, New Hampshire, Rhode Island and Connecticut pooled resources to create the forerunner to the U.S. Coast Guard.

The countless trade problems paled in comparison to the disaster that was U.S. currency at the time. The Continental Congress had little power to raise revenue and could only request certain amounts from the states with no enforcement mechanisms. In turn, states often sent in far less than the Congress required. A letter sent in 1785 by Treasury Secretary Alexander Hamilton more or less calls out New York, his home state, for failing to send any money to the Congress that year. In fact, there is no record that the Virgin Islands sent any money to Congress from 1783 until the signing of the Constitution. The only solution the Congress had at its disposal was the ability to print money and it ended up printing so much that the value of the Continental Dollar plunged to the point that it was nearly worthless. By 1785, states were printing their own currencies and a good deal of trade, especially in the Caribbean, was occurring via foreign currencies. In the western frontier it was more likely that a family would barter, use local Indian currencies or Spanish Reals than the Continental Dollar.

The problems with currency and trade meant that state debt became a huge problem. Due to the independent nature of the states these debts were often met with varying degrees of urgency. The southern mainland and the Caribbean mostly refused to pay their debts, with local institutions generally relying on the value of cash crops. The above factors generally meant when a state had a favorable trade deal with a European power, that state could make a windfall while its neighbors suffered from economic depression only to see its position undercut the next year while another neighbor experienced the windfall. Mid-Atlantic states and Quebec fared somewhat well through the economic turbulence of the era, though there was significant political infighting over economic issues. New England suffered the worst of the newly independent states with Massachusetts taking the hardest hit. A combination of high taxes, greatly reduced trade, politically sclerotic state legislatures and high debts combined to sow economic chaos across the region. The problem became so severe that a poor farmers rebellion broke out in western Massachusetts in 1786. Daniel Shays, a Revolutionary War veteran who had gone unpaid for his duties, found himself in court for failure to repay his debts after returning home. Finding many men in similar straits, they organized into an open rebellion targeting the state court system and, ultimately, the federal armory in Springfield where they clashed with state militia before scattering. Shays Rebellion, while unsuccessful in furthering the plight of poor farmers, did highlight the woefully inadequate economic situation in the United States, the failure of the Congress to reliably pay its Revolutionary soldiers and even highlighted the need for Vermont to become its own state (the disputed isolated area of New York acted as a haven for many rebellion leaders causing Alexander Hamilton to advocate for a centralized government in the region to “fill the gap”). If nothing else, the Rebellion forced any straggling anti-Federalists to acknowledge serious reform was necessary.

The focus of this reform fell entirely on the Articles of Confederation. The Articles had acted as the governing document of the United States since early in the Revolution but clearly, their usefulness had expired. As conservative historian Ernesto Guevera stated in his 1981 work The Failures And Successes Of The Articles Of Confederation And The Constitution “it was not that the new United States needed a strong centralized government to prosper, it was simply that is needed some centralized government to survive.” With the economy unraveling, the states acting as independent nations, and soldiers and debtors rebellions flaring up across the country, survival was definitely an issue. In the summer of 1786 delegates from several states met at Mann’s Tavern in Annapolis, Maryland, to discuss removing protectionist trade tariffs between the states and increasing economic cooperation to prevent the foreign system gaming that was bleeding the southern states dry. While the Convention failed to produce any real tangible results on its own it did set the stage for what was to come by calling for a broader Constitutional Convention to be held the next year in Philadelphia.

The true impetus for the Constitutional Convention of 1787 came with the Dominica Crisis of 1786. Before the French and Indian War, Dominica, Grenada and St. Vincent were all French possessions before they were turned over to the British. Throughout the Revolutionary War there were vague hopes by some in Paris, and even some French-Caribbean aristocrats, that independence could soon mean a return to the French imperial fold. These hopes never gained a true footing but the Congress was well aware of French efforts to gain favor with former colonies via favorable trade deals. It was also not lost on many neighboring officials that the currency of choice among those islanders was not the Dollar, Pound or Real but rather French livres. The crisis unfolded one evening at the estate house of Charles Boromé outside of the Dominican state capital of Roseau. Boromé, along with 15 other men with French sympathies, met with a French envoy and discussed Parisian interest in re-obtaining the island either politically, via secession after an assembly vote, or via an uprising coordinated with the French military. Thankfully, for the young nation, the envoy made a stop in St. Vincent to meet with a contact before returning to France and misplaced his jacket which contained a letter from Boromé to the King outlining the desire of the island’s population to return to the empire. With national tensions high due to the rebellions cropping up around the country the letter quickly became a scandal that swept north to the Congress.

By May of 1787, the first delegates, led by James Madison of Virginia, began arriving in Philadelphia for the Constitutional Convention. Many states, especially around the Caribbean, and notably Quebec, were planning to abstain from the Convention until the Dominica Crisis helped push their legislatures over the edge.

All of this is not to say the Articles did not have their successes. Guevera highlights governing the war and the organization of western lands as the two main successes of the Articles. While the Congress’ governance of the Revolutionary War was spotty at times, as could be expected from a massive nation attempting to gain independence across multiple theaters against a powerful empire, the Articles did help govern Congress in a successful war effort. The Articles were a crucial part of the implementation of the Declaration of Independence and the Model Treaty, which are masterpieces of American law and diplomacy. After the war, despite all of the chaos that unfolded between the ratification of the Treaty of Paris and the ratification of the Constitution, the Articles were critical to organizing the vast western territories the colonists inherited from Britain. The Land Ordinance of 1785 and Northwest Ordinance created territorial governments, set up protocols for the admission of new states and divided land into well-surveyed useable units in the public domain. The organizations were the polar opposite of European imperial organizations and divisions, which would surely have seen those lands divided among powerful landholders and shareholder companies via royal charters. The Ordinances also saw the voluntary relinquishment of western land claims by eastern states north of the Ohio River to the boundary of the Hudson Bay drainage (which remained wild, isolated and unorganized). This was crucial as it set the stage for the admission of several new states into the union.

For now though, the goal was keeping the union and all of those hopes hinged on a meeting in Philadelphia in 1787.

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