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The Trumpet Sounds Again
WASHINGTON AFTER THE REVOLUTION: II
April 1969 | Volume 20, Issue 3
∗ Washington had long been concerned about the inability of Congress to act for the common good. In March of 1785, because of his interest in a series of canals that would link the Potomac and Ohio rivers, a conference had been held at Mount Vernon between commissioners from Virginia and Maryland to decide the many complicated matters involved in the common use of the Potomac waters. In ratifying the commissioners’ report, which called for delegates from Maryland and Virginia to meet annually, the Maryland legislature decided to invite Delaware and Pennsylvania to the next conference. At the same time, Virginia proposed a meeting of all the states “to consider how far a uniform system in their commercial regulations may be necessary to their common interest.” This led to the Annapolis Convention.
But by far the most serious problems under the Confederation were monetary. Having no mints or stocks of rare metals of her own, America had always been dependent on foreign coins for hard money—“specie.” At the end of the war there had been, as a result of the spending in America by the English and French armies, more specie available than at any other time in the history of the continent. However, there also existed a long-frustrated hunger for European goods. Specie flowed back across the ocean for luxuries; when money began to run out, American merchants bought on credit. The market became glutted, and bust followed boom. What specie did cross the ocean to America was instantly drawn abroad again to pay foreign debts. Practically no currency remained to serve the transaction of local business.
The shortage of money called the fiscal tune. It was particularly hard on debtors. Farmers in newly opened areas, who had borrowed to buy land and tools, often found it impossible, however hard they worked, to raise cash to meet their obligations. Taxes also became extremely difficult to pay. Honest as well as dishonest men lost their farms or were even jailed for debt. The natural reaction was a political protest, which often swung the pendulum too far the other way, wreaking as much injustice on creditors as the debtors had previously suffered.
The various state governments, dominated by directly elected legislatures, soon brought back into existence one of the curses of the War for Independence: paper money. By 1786, seven of the thirteen states had adopted some kind of paper currency.
Washington’s strongest conviction in the realm of finance was a horror of paper money born of his Revolutionary experiences. During the war, inflation had made it impossible to supply the army, had bankrupted the officers, and had brought great wealth to speculators. Furthermore, Washington’s own estate had grievously suffered, since many had paid off their debts to him with worthless paper while he had felt it dishonest and beneath his station similarly to take advantage of his own creditors. During April, 1786, Washington wrote: My opinion is that there is more wickedness than ignorance in the conduct of the States. … and until the curtain is withdrawn, and the private views and selfish principles upon which these men act, are exposed to public notice, I have litde hope of amendment without another convulsion.
The basic problem, so Washington and almost all his correspondents believed, was the irresponsibility of the state legislatures. They swayed like saplings to any breeze, and the prevailing wind seemed to be toward what the eighteenth century called “levelling”—taking away from the established and giving what was expropriated to the poor. Those who were being trampled on could not be expected to submit tamely. Thus the potential political fissure between conservatives and radicals, haves and have-nots, which Washington had spent so much of his energies during the war trying to keep closed, once more threatened to open wide. He had, as the war ended, stamped out a possible military insurrection of the right. Was the nation now endangered by a political insurrection of the left?
Washington and his friends believed that the best preventative of such a fissure and its possible consequence, a civil war, was a stronger federal government that would clip the wings of local demagogues, bring unity where there was chaos, and establish a solid economic base for the nation. The expedient nearest at hand was the convention at Annapolis called for September, 1786, to which all the states had been invited for a discussion of the improvement of commerce.
The Annapolis Convention presented no personal problems to Washington, since no effort was made to make him abandon his retirement and place his prestige behind the meeting as one of Virginia’s delegates. He was indeed too powerful a trump card for the advocates of union to risk on so doubtful a venture.