the quartet orchestrating the second american revolution 1783 1789.pdf

Meanwhile pierce butler of south carolina regarded

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Meanwhile, Pierce Butler of South Carolina regarded Vermont’s petition for statehood as a power play by the New England states to enhance their influence in the Congress, a malevolent move by the “Northern Interest” contrary to the “Southern Interest…by which the sectional balance will be quite destroyed.” If the Confederation Congress was intended to function as a political platform where all the states came together to address their common interests, the Vermont question seemed uniquely designed to expose their mutual jealousies and suspicions. Vermont statehood was held hostage to these state and sectional hostilities for the duration of the confederation. 7 But the most serious problems facing the not-so-united states, more ominous than all the others put together, was the ballooning debt. Under the Continental Congress the main source of revenue was the printing press, meaning that Congress mass-produced paper money in the form of dollars, called continentals. It also issued what it called certificates, which were promissory notes given to merchants and farmers as payment for food and clothing needed by the Continental Army. In short, apart from French loans, the entire fiscal policy of the Continental Congress was based on a massive hoax, which resembled what today would be called a Ponzi scheme. 8 There was nothing to back the continentals and certificates because the annual requests for money from the states, called requisitions, had become laughably plaintive pleas that the state legislatures, with debts of their own to pay, simply ignored. In 1781, for example, the Congress requested $3 million from the states and received $39,138 in return. A standing joke within Congress was that the “binding Requisitions are as binding as Religion is upon the Consciences of wicked Men.” 9 Unable to coerce the states to pay their annual tax bill, since coercion smacked of Parliament’s infamous Stamp Act, which had started all the trouble, in 1780 the Congress proposed what was called an impost as an alternative source of revenue. The impost placed a 5 percent duty on all imports—in effect an indirect tax, or perhaps a tax by another name. But once again the ghosts of the American Revolution haunted the conversation, since the impost was a domestic version of the Townshend Acts (1767), which the colonists had opposed as an overly clever way to tax them without their consent. For obvious reasons,
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the impost was controversial, and when the Articles went into effect, no vote on it had yet been taken. Because the Articles contained a clause prohibiting the Congress from raising revenue, passage of the impost required the equivalent of a constitutional amendment, which meant unanimous approval of all the states, a near impossibility.
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