Even after their ratification, it became almost immediately apparent that the Articles of Confederation were inadequate to meet the demands of the young nation. Although the document declared that it constituted “certain articles of Confederation and perpetual Union between the States,” it did not really constitute a functional national government. The Articles government did not amount to much more than a loose alliance between sovereign states, or, in its own words, “a firm league of friendship with each other.”
A number of specific flaws rendered the Articles government ineffectual at supporting the United States:
Under the Articles of Confederation, states often argued amongst themselves and frequently refused to financially support the national government. The national government was powerless to enforce any of the laws it was able to pass. Individual states began making agreements with foreign governments and imposing tariffs on good imported from other states. Most had their own military, and each state printed its own money. Ultimately, there was no stable economy. The Framers of the Constitution would have to address all of these defects if the Union could be preserved.
When the Articles were drafted, the sovereign states were reluctant to part with many important powers, and especially the powers that related to taxation and commerce. The Confederation Congress had no power to lay and collect taxes on its own behalf. The money that Congress needed to defray its expenses could only “be supplied by the several States, in proportion to the value of all land within each State” (Art. VIII), and so Congress had to request money directly from the states. How each individual state raised those funds was up to the legislature in each state, meaning it was oftentimes not raised at all, or remitted to Congress long after it was due. As a result, Congress faced substantial revenue shortfalls, making it difficult to pay foreign debts, pay Revolutionary War pensions, and fulfilling other basic functions of government.
Furthermore, its powers of regulating commerce were extremely limited, which was especially irksome to the commercial states of New England. States often laid tariffs on goods imported from other states, or entered into legal disputes over the navigation rights on rivers that bordered or passed through more than one state.
How did the U.S. Constitution later address these issues?
In addition to most of the powers given to Congress under the old Articles, Art. I, Sec. 8 adds the “Power To lay and collect Taxes, Duties, Imposts and Excises.” Congress was also given the almost unlimited right “To regulate Commerce with foreign Nations, and among the several States.”