The states initially enacted the Articles of Confederation in order to prevent the government from becoming too centralized in their power. Although Congress possessed ample control over the guidance of the country, Congress possessed no power to collect taxes or enforce its laws. In their quest to prevent the government from possessing too much power, a weak central government was created which in turn further depleted the declining economy and conducted poor foreign relations.
Disputes concerning the development of the government arose at this time and brought about a period of economic deflation. New Englanders were in favor of allowing Congress to possess the ability to instill a navigation law in order to possess more control over trade. However, Southerners refused to give up their advantage the obtained from “pitting” American shipping against foreign trade. States in turn created their own closed economic systems. These regulations did more harm than good as their focus was on the prosperity of the state rather than on the nation as a whole. Declining prices for goods resulted. This meant crisis for merchants, but American was unable to protect itself form foreign competition.

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The economic deflation brought about public riots and disorder. High taxes, a large public debt, and a scarcity of currency led to severe deflation as well as descending wages and prices.
Americans attempted to open trade with new countries but only found frustration. Although France offered some promising prospects, Americans found more discouragements than advancement: Americans were not familiar with French markets and possessed few connections there; they also had no long-term credit which was evidently vital to the trade economy at that time.
The new country also faced problems concerning diplomacy. In order to be suitably diplomatic, the nation needed to possess bargaining power. Offering incentives or making ample threats could have improved America’s bargaining tactics.
Unfortunately, at this time the nation had little to offer. The government was not able to enforce commercial treaties, offer concessions, or threaten to withdraw privileges because all of these powers lied within the individual states. This became a large problem as westward expansion brought Spain and America into contact along the Gulf Coast. Spain controlled the mouth of the Mississippi River which was imperative for the Americans to ship supplies to Kentucky. Without a strong act of diplomacy, Americans had to relinquish nearly all of its rights to the river. Without a strong Congress to bargain for rights to the river, negotiations dragged on for three years.
Although it was later disregarded, the Articles of Confederation helped to lay the foundation for the new government of America. It gave our new nation perspective concerning the formation of our government and its principles. Although the Articles of Confederation may not have provided the most effective form of government at this time, they provided the government with guidelines to work off of. As a result of the infectivity of the Articles of Confederation, the government could determine where its weaknesses lay and revise them as necessary.

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