MC 111 Lecture Notes - Lecture 13: Economic Collapse, Fixed Capital, Allocution
13 Dec 2016
School
Department
Course
Professor
Lecture
The intractable difficulties of politics
➢ Economic collapse of the 1780s
- British shut off trade on high seas, forbid access to Caribbean markets
- Farm production plummets –price ½ to 1/3 of prewar level
- Economy overall contracts as estimated 41% between 1774-1790 (almost same as
great depression)
- War required huge loans and the us debt was 54 million
- Only source of state income were taxes and tariffs (not on imports)
➢ Available tools for dealing with crisis:
- Articles of confederations
- United states congress
- Treaty among sovereign nations
➢ Too much freedom?
- People not inclined of have big government
- Congress 1781-1789 deliberately weak
- No fixed capital
- Congress faced trouble assembling a quorum
- National debt converted to state bonds
- Set up protectionist trade barriers on state borders
- Hodgepodge of conflicting laws passed and repeated
- Right to make species
➢ Result:
- inflation- congress had the power to take on debt but could not tax- relied on ill-
defined contributions by states.
Alexander Hamilton
- sered as Washigto’s aide-de-camp from 1777-1781
- not close (20 years younger) but had close working relationship- saw the battles with
the congress up close
- head of the Annapolis (1786)
- principal in constitutional convention
- strog federalist or atioalist
- strong economy makes state strong
- argued all war debt should be a national debt
- later became first secretary of the treasury.
➢ Federalist paper #23- We need energy
→Purpose of the government
- Common defense of numbers
- Preservation of peace (internal and externa;)
- Regulation of commerce
- Superintendence of foreign
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Document Summary
British shut off trade on high seas, forbid access to caribbean markets. Farm production plummets price to 1/3 of prewar level. Economy overall contracts as estimated 41% between 1774-1790 (almost same as great depression) War required huge loans and the us debt was 54 million. Only source of state income were taxes and tariffs (not on imports) People not inclined of have big government. Set up protectionist trade barriers on state borders. Hodgepodge of conflicting laws passed and repeated. Result: inflation- congress had the power to take on debt but could not tax- relied on ill- defined contributions by states. Alexander hamilton ser(cid:448)ed as washi(cid:374)gto(cid:374)"s aide-de-camp from 1777-1781. Not close (20 years younger) but had close working relationship- saw the battles with the congress up close. Argued all war debt should be a national debt stro(cid:374)g (cid:862)federalist(cid:863) or (cid:862)(cid:374)atio(cid:374)alist(cid:863) strong economy makes state strong later became first secretary of the treasury.
