Economic Downturn�

Weakiness of confederation

With the war over and no strong central government in place the United States suffered from a strong ecnomic downturn. Their were a number of causes of the downturn. The first: A lack of a strong central currency. The Continental Congress had printed paper money to pay for the war. With no gold behind the money and little money being given by the states the paper money became valueless. Individual states began printing money, however it was almost impossible to compare the value of paper money from one state to the other. Finally some states started taxing goods coming into the state from another state. All of this made trade nearly impossible and caused the economy to nearly collapse.

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