On Mar. 1, 1781, the states adopted the Articles of Confederation, putting into operation the first constitution of the United States.
Primarily written by prominent Pennsylvania lawyer John Dickinson, the Articles of Confederation was an attempt to establish a confederated union in the United States. Prior to the Articles of Confederation, the Continental Congress had little power to create actual policy, and most decisions came in the form resolutions. Even still, real political power rested with the American states individually.
While the document was approved by the delegates in 1777, it did not go into effect until 1781 because of a notable holdout. Maryland refused to ratify the Articles as long as Virginia maintained a huge western land claim. When Virginia agreed to a western cession of land that including areas north of the Ohio, which later became the Northwest Territory, Maryland agreed to enter the union and the Articles went into operation.
Under the Articles, each state retained “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.” In the Confederation, the states entered into “a firm league of friendship with each other” for the purposes of “their common defense, the security of their liberties, and their mutual and general welfare.” The framework intended to collectivize foreign policy, commerce, and war for the first time.
The government was funded through a requisition system, wherein requisitions – taxes apportioned by state population – were assigned to the individual states. While some states paid the allocated sums, some states were delinquent or did not pay at all. Because the Articles lacked a real enforcement mechanism, enforcement of the requisitions was entirely up to the state governments.
In addition, there was no regulatory power of trade between the states. During this timeframe, states enacted high measures of protectionism to support domestic manufactures. Some states, such as Pennsylvania and New York, also maintained a substantial economic advantage over others by taxing goods leaving ports of commerce.
The Articles expressly permitted paper money on both a state and national level. During the 1780s, a paper money calamity unfolded in the states. The Continental currency had become worthless and the states passed debtor-friendly paper money laws that inflated the currency and punished creditors. This created widespread economic ruin, as wealth holdings were subjected to the cruelest imaginable tax.
Almost all significant powers of the government under the Confederation – including war, treaties and alliances, coinage, and requisitions – required the approval of nine states. Embracing true federal axioms, each state was represented in Congress by a single vote, regardless of the number of delegates sent to Congress. State quorums required two delegates, and no state could be represented by more than seven members.
By 1787, many were willing to concede that the lack of a law enforcement mechanism, insufficient taxing power, and the nine-state barrier to policy, and the 13-state requirement to amend the constitutional system were facets that required possible adjustment. A convention was called to convene in May, which later became known as the Philadelphia Convention, with the purpose of proposing amendments to the Articles of Confederation.