In his speech on July 4, 1787, Dr. Benjamin Rush, signer of the Declaration of Independence and member of the Constitutional Convention, made the following statement: “The American War is over; but this is far from being the case with the American Revolution.” He was in part referring to the event known as Shay’s Rebellion, a desperate and dramatic action that highlighted the shortcomings of the Articles of Confederation.
Daniel Shay had served honorably as a captain in the Continental Army, and at the close of the war, returned to his life as a farmer in Massachusetts. Or tried to. In 1786, the unsettled economic conditions throughout the new nation forced great hardship on many of the citizens, and provided them little recourse (Links to an external site.) to address the problems. There was paper money in circulation, but it was not backed by “hard currency,” that is gold or silver, so paper currency was rarely accepted at face value. This caused inflation of prices.
For example, a pound of tea would cost 100 Continental dollars, or about one dollar in silver. So, payment on the heavy land taxes instituted by the states to try to pay off the war debts were only accepted in gold or silver, which most farmers and property owners didn’t have. In addition to the heavy taxes on their land, citizens were faced with high legal costs, and complained of the excessive salaries of state officials. War veterans like Shays had expected payment for their military service from the government, but because of the Articles of Confederation, the government had to request funds to pay its debt from the states. Response from the states was minimal and slow. Debts for Shays, other veterans, and poor farmers piled up. In hoping to avoid losing their farms, many turned to wealthy merchants for loans. When farmers were unable to pay these private loans, their farms were seized and auctioned (Links to an external site.) off to pay the outstanding debts.