With war being waged against Great Britain, and the individual states having full autonomy in most

areas of governance, the federal government found it difficult to operate under the Articles of
Confederation.

Perhaps the largest problem was the issue of money. Congress was required to pay for the bulk of the
war for things such as soldiers pay, pension, ammunition, and food. Under the Articles of Confederation
that was ratified in March of 1781, the continental congress could not levy taxes directly to the citizens
but they could tax the states according to the amount of their surveyed land. Congress had been forced
to secure nearly $9 million dollars in loans and grants from foreign countries to finance the revolution.
They had also authorized and printed nearly $200 million in paper continental dollars. The $9 million in
loans from Europe was not nearly enough to secure the amount of continental dollars in circulation
which resulted in its depreciation. At the same time, most of the individual states had begun printing
their own money which was valued at nearly another $200 million. The states refused to raise taxes to
assist congress with the inflation issue of the continental currency and by May 1781 it had been taken
out of circulation.

Another enduring problem for congress was the land issues west of the Appellation Mountain range.
Among the problems were illegal settlers pouring westward and a non standard method of surveying
land. Congress needed to sell land to create revenue, and in 1785 they passed the Land Ordinance to
authorize the survey and sale of the western land as well as established a standardized survey system.
The land they were to survey and sell however, belonged to various Indian tribes. In order to get the
Iroquois and Ohio tribes to cede their land claims, officials took Indian hostages and intimidated them
into signing the treaties. With settlers not waiting to officially purchase newly surveyed land, thousands
of people claimed squatters’ rights illegally. Congress mobilized troops to the North Western areas to
evict the illegal squatters, but they would return, or relocate as soon as the troops departed. This
persistence prompted the establishment of the Northwest Ordinance of 1787. This ordinance authorized
the creation of individual states and allowed for provisions to creating their own government.

References:
Faragher, J., Buhle, M., Czitrom, D., & Armitage, S. (2009). Out of many: A History of the
American People (5th ed.). Upper Saddle River, NJ: Pearson.