The Anarchy of Our Commerce

When James Madison warned, in 1786, of the "unhappy effect of a continuance of the present anarchy of our commerce," he was describing the lingering consequences of an American economy that had been wrecked by the War for Independence. Trading networks had been interrupted, if not destroyed; farms and plantations neglected; public credit disappeared; and an explosion of paper currencies printed by each of the states tossed what financial markets there were into a condition of marked confusion. In a number of states, farmers and small planters closed courts to prevent debt and tax collection, while indebted farmers in western Massachusetts chose to outright revolt in Shays' Rebellion in 1786.

Alexander Hamilton and Robert Morris, however, had answers to the problems. Their plans to fund a national debt and create a national bank, for instance, formed the backbone of a new American financial system that would not only put the country on a firm financial footing for the first time, but would also fuel political disputes well into the next century.

Browse Content By Theme