The United States had accumulated $43 million in debt fighting the Revolutionary War. The United States had gained independence, but immediately after the war the new country struggled to figure out its identity, while also trying to figure out how it would repay its debts. While the states fought together against the English during the war, they returned to being sovereign states after the war. The Articles of Confederation failed to establish a national government with any real power, while continuing the status quo of states remaining sovereign entities with the power to tax themselves, control tariffs, and print their own currencies. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay The sovereignty of the states was guaranteed by the Articles of Confederation. This meant that Congress had no authority to impose taxes on the states to collect revenue, which at the time was badly needed to repay debts incurred during the Revolutionary War. As a result, the Continental Congress had to borrow and print money, which led to hyperinflation and dependence on foreign loans to repay war debts. The United States struggled to repay its debts after the war and defaulted on French loans in 1785 and 1787. The Constitution, ratified in 1788, gave the federal government the authority to impose taxes on the states. With the help of James Swan, an American banker who took over French debts and then resold them on US domestic markets, the US government was able to free itself from all foreign debts. In addition to taxing power, states were given the power to control tariffs on interstate commerce. This meant that Massachusetts could impose tariffs on goods imported from neighboring Rhode Island. This only discouraged interstate trade and increased disunity in the newly independent country. Foreign powers such as Great Britain, which the United States had just defeated to gain independence, reaped the benefits of different states' different trade policies. When Massachusetts and New Hampshire closed their ports to British goods, Connecticut opened their ports and took advantage of the cheap British goods. No national trade policy has created conflict between states, and foreign powers have reaped the benefits. No common currency was established by the Articles of Confederation. In 1775, before the Articles of Confederation were created and ratified, the Continental Congress issued paper money called Continentals. Congress had printed too many Continentals during the war and states were printing their own currencies, making Continentals useless. The various state currencies had different values, making interstate trade even more difficult. Benjamin Franklin had printed money for the colonies and was aware of the negative effects of competing currencies on trade between the colonies. For this reason he supported the creation of a common currency and his wish was granted. Article I, Section 8 of the Constitution gave Congress the authority to issue money. Congress passed the Coinage Act in 1792, which established the US dollar as the standard currency of the United States. Please note: this is just an example. Get a custom paper from our expert writers now. Get a Custom Essay The United States teetered on the edge after fighting for and gaining its independence. The country had debts to several foreign powers including France, the Netherlands and Spain. Right away.