ECONOMIC CONDITIONS UNDER THE CONFEDERATION AND THE ADOPTION OF THE CONSTITUTION, 1783-1789
The Outstanding Economic Problems of the Period. The years from 1783 to 1789 under the Confederation are frequently spoken of as the critical period in our history. It was a period during which the great question at issue was whether the particular economic or political interests of the different states and the general spirit of individualism would so undermine the power of the central government that the country would degenerate into a weak and impotent confederacy of independent sovereign states; or whether, through a spirit of cooperation and mutual sacrifice of special interests, furthered by a vision of the greater gain that eventually might accrue to all, they could overcome these disintegrating tendencies and unite in establishing a central government sufficiently strong to promote the general well-being and to command the respect of the world. The importance of the actual outcome for the future economic development of the country can scarcely be exaggerated; yet the issue often appeared to be hanging in the balance. In the final decision economic conditions and forces played a vital part and an understanding of them is thus essential, for it may be said that there is scarcely another such brief period of peace in our history when the interaction of current economic and political conditions was more charged with portentous significance for the future of the country.
On the side of the economic life there were two outstanding problems which mark the period. One was the necessity for readjusting the economic life to more normal peacetime conditions. This problem is a part of the aftermath of any serious and protracted war and must be reckoned among the economic disturbances and losses arising from war. Although it has been said that in the case of the Revolution the nature of the economic organization of the country was such that the disorganization was not so great as it would otherwise have been, it is also to be borne in mind that the economic readjustments necessary after the war were further complicated by the fact that political independence had been attained. Though there is danger of exaggerating the economic effects of political independence, these somewhat increased the difficulties of readjustment. The second problem included (1) the establishment of a form of govern-