102 FRANKLIN'S PLAN OF CONFEDERATION. CHAPTER XX. 1777-1778. ARTICLES OF CONFEDERATION AND FINANCES. Franklin's plan of confederation between the colonies Debates upon it in Congress - Need of confederation evident Articles finally adopted for recommendation to States-Circular letter of Congress—Its adoption by the States Loans authorized - Depreciation of currency - Attempt to regulate prices - Loyalists' property sold - Returns meagre - Cause of high prices.- Appendix to Chapter XX- Articles of Con federation. Meanwhile Congress had taken a step of the highest importance. It had long since become plainly evident that some form of confederation between the States was necessary; and immediately after declaring independence, Congress took the matter under consideration. As early as July 12, 1775, Franklin had introduced in Congress a sketch of some articles of confederation between the colonies which he thought ought to be adopted. "His plan was perfectly simple; it proposed little more than to make the existing state of things perpetual; each colony to retain its internal independence, but to confide to a Congress, annually elected, its external affairs, particularly the measures of resistance to ministerial oppression. The supreme executive authority of the confederacy, he proposed, should be vested in a council of twelve, elected by the Congress. All the British colonies, including Ireland, Canada, the West Indies, Bermuda, Nova Scotia, Florida, and the thirteen already represented, should be invited to join. The Union was to last until Great Britain should cease to oppress, and make restitution for past injuries; failing which, it should endure forever. This Plan of Union, it appears, was referred to a Committee, and it may have been discussed by the House. It was not acted upon; the. time was not ripe for it, and the conservative members were aware that the very idea of a union of the colonies was, of all things, the most abominable in the eyes of George III., whom the House had just humbly petitioned." * June 7, 1776, a committee consisting of one member from each colony was appointed to prepare a plan of confederation and report it to Congress. On July 12, eight days after the Declaration of Independence, this committee reported, and the scheme they proposed was debated in Committee of the Whole almost daily until August 20, when a new draft was reported. Nothing was done at this On * Parton, Life of Franklin, vol. ii., p. 86. See the Secret Journals of Congress, vol. i., pp. 290-315; Jefferson's Works, vol. i., pp. 26-35; John Adams, Works, vol. ii., pp. 492-502, vol. iii., p. 61 et seq.; Curtis, Constitutional History, vol. ARTICLES OF CONFEDERATION ADOPTED. time, however, and the entire matter was dropped, not being taken up again until April of the following year (1777). To agree upon any set form by which the colonies could operate together was difficult, chiefly because of the variety of interests involved and the tenacious regard for State rights and State sovereignty entertained by the various colonies.* Nevertheless, it was plain that something must be done, for under the present conditions Congress had no powers or rights for carrying out its resolves, except in so far as the States themselves chose to recognize them. Congress could not efficiently discharge the duties expected of it, and interest in its affairs was gradually declining, so that if something were not done immediately, it would soon become a negligible quantity in the affairs of the country. Consequently, in October, 1777, after Congress had been compelled to retire to Yorktown, the Articles of Federation were taken under consideration and debated day after day until the middle of November. After i., pp. 36-37; Ford's ed. of Jefferson's Writings, vol. i., p. 38 et seq. * Bancroft, vol. v., pp. 10-15. See also Thorpe, The Story of the Constitution, p. 75 et seq. On the debates, the duties and work of Congress, and State sovereignty in general, see the illuminating chapter on "State Sovereignty and Confederation" in Van Tyne, American Revolu tion, pp. 175-202. See also Morse, John Adams; A. W. Small, The Beginning of American Nationality, in J. H. U. Studies, 8th series, nos. i.-ii.; the Journals of Congress; John Adams, Familiar Letters; Harley, Life of Charles Thomson; Bancroft, vol. v., pp. 199-208; Curtis, Constitutional . 103 the various provisions of the Articles had been scrutinized and discussed from every viewpoint, they were adopted for recommendation to the States,* and the following circular letter was sent out, urging that the various legislatures adopt them: 66 "In Congress, Yorktown, November 17th, 1777. Congress having agreed upon a plan of confederacy for securing the freedom, sovereignty, and independence of the United States, authentic copies are now transmitted for the consideration of the respective legislatures. The business, equally intricate and important, has in its progress been attended with uncommon embarrassments and delay, which the most anxious solicitude and persevering diligence could not prevent. To form a permanent union, accommodated to the opinion and wishes of the delegates of so many states differing in habits, produce, commerce, and internal police, was found to be a work which nothing but time and reflection, conspiring with a disposition to conciliate, could mature and accomplish. "Hardly is it to be expected that any plan, in the variety of provisions essential to our union, should exactly correspond with the maxims and political views of every particular state. Let it be remarked that, after the most careful inquiry and the fullest information, this is proposed as the best which could be adapted to the circumstances of all, and as that alone which affords any tolorable prospect of general satisfaction. "Permit us, then, earnestly to recommend these articles to the immediate and dispassionate attention of the legislatures of the respective states. Let them be candidly reviewed under a sense of the difficulty of combining in one general system the various sentiments and interests of a continent divided into so many sovereign and independent communities, under a conviction of the absolute necessity of uniting all our counsels and all our strength to maintain and defend our common liberties; let them be examined with a liberality becoming brethren and fellow-citizens surrounded by the same imminent dangers, contending for the same illustrious prize, and deeply interested in History, vol. i., pp. 78-79. See also Justice Story, Commentaries on the Constitution, vol. i., p. 162 et seq. (5th ed., 1891). See Appendix at the end of the present chapter. 104 ARTICLES RATIFIED BY THE STATES. being forever bound and connected together by ties the most intimate and indissoluble; and, finally, let them be adjusted with the temper and magnanimity of wise and patriotic legislators, who, while they are concerned for the prosperity of their more immediate circle, and capable of rising superior to local attachments when they may be incompatible with the safety, happiness, and glory of the general confederacy. "We have reason to regret the time which has elapsed in preparing this plan for consideration; with additional solicitude, we look forward to that which must be necessarily spent before it can be ratified. Every motive loudly calls upon us to hasten its conclusion. "More than any other consideration, it will confound our foreign enemies, defeat the flagitious practices of the disaffected, strengthen and confirm our friends, support our public credit, restore the value of our money, enable us to maintain our fleets and armies, and add weight and respect to our counsels at home and to our treaties abroad. "In short, this salutary measure can no longer be deferred. It seems essential to our very existence as a free people, and without it, we may soon be constrained to bid adieu to independence, to liberty, and to safety-blessings which, from the justice of our cause, and the favor of our Almighty Creator visibly manifested in our protection, we have reason to expect, if, in an humble dependence on his divine providence, we strenuously exert the means which are placed in our power. "To conclude, if the legislature of any state shall not be assembled, Congress recommend to the executive authority to convene it without delay; and to each respective legislature, it is recommended to invest its delegates with competent laws ultimately, in the name and behalf of the state, to subscribe Articles of Confederation and Perpetual Union of the United States; and to attend Congress for that purpose on or before the tenth day of March next [1778]." * The Articles were then adopted by the various State legislatures. For some time the smaller States, such as Rhode Island,* Delaware, Maryland, and New Jersey, hesitated to adopt them, principally because the question as to whom the western territory of the United States belonged was not yet settled. Finally, however, this question was settled to the satisfaction of all concerned as will be explained later, chiefly through the obstinate course of Maryland, which State refused to ratify the Articles until the western claims had been Iceded to the Confederation. All the States had ratified the Articles by March 1, 1781. The condition of the finances at this time was a subject for most earnest deliberation. Early in the year, $10,000,000 of new .bills had been authorized and $2,000,000 were added in August. Anxious to maintain a surplus in the treasury without further issues, Congress had pressed the subject of loans, and in order to induce lenders to bring forth money, had offered to pay the interest on all money advanced before March, 1778, in bills drawn on their commissioners in France. This inducement, however, availed little, and in November, 1777, it became necessary to authorize $1,000,000 in Continental bills, and in December $1,000,000 more, thus making the total amount issued up to the end of the year $34,000,000. Meanwhile the depreciation had become alarming, the bills which in the early part of the year had been See Bates, Rhode Island in the Formation of the Union, pp. 67-71. CONDITION OF THE FINANCES. nearly at par, now sinking to three or four for one.* Congress therefore looked abroad for aid, instructing their commissioners in France and Spain to exert their utmost endeavors to obtain loans.† In addition, the scheme for regulating prices by law also proved a failure, and a convention of delegates from New England and New York, which had met at Springfield in July to adopt measures for the defence of Rhode Island and for an attack on Newport, recommended that the acts regulating prices be repealed. It was urged that laws be enacted as substitutes prohibiting the accumulation of stocks in the hands of merchants and speculators. The convention suggested also the redemption of all State issues, and the levying of taxes for the support of the war. Upon receiving the proceedings of this convention, Congress acknowledged that the issues of paper were excessive and urged the several States to raise $5,000,000 by taxation for the use of the Continental treasury during the ensuing year.‡ Congress recommended also that the States refrain from issuing more bills of credit; that they redeem those already issued; and that in future the State expenses be met by taxes levied within the year. It was proposed, too, that early in the *Early in 1777, Pennsylvania by law recognized the depreciation to the extent of 33% per cent. Phillips, American Paper Currency, vol. i., p. 33. Hildreth, vol. iii., p. 227. Bancroft, vol. v., p. 291. 105 next year three committees should meet (one for the eight northern States, another for Maryland, Virginia, and North Carolina, and the third for South Carolina and Georgia) for the purpose of fixing a new scale of prices, which would be enforced by the several State legislatures, the Continental commissaries being allowed to seize goods at those prices when those who held superfluous stocks refused to sell them.* Congress further recommended that all property belonging to persons" who had forfeited the right to the protection of their several states" be sold and that the proceeds be invested in loan-office certificates. Several of the States followed this advice, but the financial returns were meagre and the loans operated chiefly to enrich speculators and to allow some to gratify their desire for personal vengeance. The condition of the army also compelled Congress to recommend that acts be passed authorizing the seizure of all woolens, blankets, stockings, shoes, hats, and all stock and provisions that were for sale, for which receipts were to be given, and to inflict penalties upon all persons who refused to allow such seizure. In order to prevent any from procuring enormous gains," it was recommended that the number of retail traders be limited and that these be bonded for the proper observance of 66 Hildreth, vol. iii., pp. 227-228; Bancroft, vol. V., p. 291. 106 CAUSES FOR HIGH PRICES. paper money, and the scarcity of manufactured goods, particularly blankets and clothing, due to the interruption of commerce and the non-arrival of expected goods from France. The Continental treasury had been depleted by the sum of about $25,000,000, in specie value, which was larger by $5,000,000 than the total for the two preceding years. The States had made large advances in paper money, and otherwise, which more than balanced the outgo from the Continental treasury, but these advances burdened the States with heavy debts, and they were unable to continue them. APPENDIX TO CHAPTER XX. ARTICLES OF CONFEDERATION. To all whom these presents shall come, we, the undersigned, delegates of the states affixed to our names send greeting. WHEREAS, the delegates of the United States of America in Congress assembled, did, on the fifteenth day of November, in the year of our Lord one thousand seven hundred and seventyseven, and in the second year of the independence of America, agree to certain Articles of Confedera tion and perpetual Union between the States of New Hampshire, Massachusetts Bay, Rhode Island and Providence Plantations, Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland, Virginia, North Carolina, South Carolina, and Georgia, in the words following, viz. : Articles of Confederation and perpetual Union between the States of New Hampshire, Massachusetts Bay, Rhode Island and Providence Plantations, Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland, Virginia, North Carolina, South Carolina and Georgia. ARTICLE 1. The style of this confederacy shall be, "The United States of America." ARTICLE 2. Each state retains its sovereignty, freedom, and independence, and every power, jurisdiction, and right, which is not by this Confederation expressly delegated to the United States in Congress assembled. ARTICLE 3. The said states hereby severally enter into a firm league of friendship with each * Hildreth, vol. iii., pp. 229-230. See also Oberholtzer, Life of Morris, pp. 48-51. other, for their common defence, the security of their liberties, and their mutual and general welfare; binding themselves to assist each other against all force offered to, or attacks made upon them, or any of them, on account of religion, sovereignty, trade, or any other pretence what ever. ARTICLE 4. The better to secure and perpetuate mutual friendship, and intercourse among the people of the different states in this Union, the free inhabitants of each of these states, paupers, vagabonds, and fugitives from justice, excepted, shall |