CHAPTER 6Making War and Republican Governments, 1776–1789 X179in Philadelphia, arguing that its notes would stabilize the inflated Continental cur-rency. Morris also created a central bureaucracy that paid army expenses, apportioned war costs among the states, and assumed responsibility for the Confederation’s debts. He hoped that the existence of a “national” debt would prompt Congress to enact an import duty to pay it off. However, Rhode Island and New York rejected Morris’s pro-posal for a tax of 5 percent on imports. His state had opposed British duties, New York’s representative declared, and it would not accept them from Congress. To raise revenue, Congress looked to the sale of western lands. In 1783, it asserted that the re-cently signed Treaty of Paris had extinguished the Indians’ land rights and made them the property of the United States.Settlers had already moved to the frontier. In 1784, the residents in what is now eastern Tennessee organized a new state, called it “Franklin,” and sought admission to the Confederation. To preserve its authority over the West, Congress refused to recog-nize Franklin and gave Virginia control over the region. Subsequently, Congress cre-ated the Southwest Territory, the future states of Alabama and Mississippi, on lands ceded by North Carolina and Georgia. Because these cessions carried the stipulation that “no regulation. . . shall tend to emancipate slaves,” the states that eventually formed in the Southwest Territory (and the entire region south of the Ohio River) al-lowed slavery.However, the Confederation Congress banned slavery north of the Ohio River.