The Freeman 1972 - The Ludwig von Mises Institute

624 THE FREEMAN Octoberwhose sovereigns could not regulateand over whom Americanshad no control.There was hardly any reason,however, for the citizenry to haveany confidence in the monetaryactions of the Congress, nor, forthat matter, of the legislatures ofthe states. Not only had the Confederationrepudiated its currency,but the debts which it stillrecognized were poorly serviced.The total debt of the United Statesat the end of the war, foreign anddomestic, was about $35,000,000.Far from being retired, it continuedto grow. By way of requisitionsfrom the states, Congressreceived $2,457,987.25 in the periodfrom November 1, 1781 to January1, 1786. This was barelyenough to pay current expensesfor the government. 14 Robert Morrissent along this comment whenhe resigned as head of the treasuryin 1783: "To increase ourdebts while the prospect of payingthem diminishes, does not consistwith my ideas of integrity. Imust, therefore, quit a situationwhich becomes utterly insupportable."15Those who succeeded himmay have had less integrity thanhe professed, but they were hardlybetter supplied with money.Inadequate Power to TaxIt was commonly held that thegreatest deficiencies of Congressunder the Confederation were thelack of the power to tax and theinability to regulate trade. Thereshould be no doubt that the lackof the power to tax made theCongress almost impotent to per-. form the functions allotted to it.As to trade, Congress was almostpowerless either to regulate or toprevent the states from doing so.Whether trade needed regulatingwas debatable, but if it did, astrong case could be made againstthe states doing it. Indeed, somestates undertook to set up tariffsand to discriminate against shipsof other lands, particularly thoseof England. But it was exceedinglydifficult for states to set rateswhich would accomplish even thosedubious advantages supposed tofollow from them. If the tariffswere too high, in comparison withthose of surrounding states, goodsmight come into the state fromports of entry located in otherstates. If imported goods werefinally consumed in another statefrom the one imposing the tariff,the state was actually levyingtaxes on citizens of other states.State Barriers to TradeThe regulation of trade by thestates worked against a commonmarket for all the United Statesand threatened to turn some statesagainst others. John Fiske describedthe situation this way: