How did the federal government raise revenue for services under the Articles of Confederation?

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dbello eNotes educator| Certified Educator

Under the Articles of Confederation it was very difficult for the new federal government to raise the revenue it needed to operate. By definition a confederation is "a loose association of independent states joined together for a common purpose"--in this case independence. Unfortunately, the emphasis of the new government was on separate not-union, which denied the federal government the power to tax or regulate interstate trade (another source of revenue) among the states. Essentially, every time the federal government needed funding it was at the mercy of the individual states, which led to arguments between them. (New York, for example, is larger than Rhode Island, so New York would have to pay more.) Even worse, every state printed its own currency, and the numerical face values differed from state to state. The military was being paid different salaries depending upon location. It was very dangerous for a new nation to have weaknesses along its seaboard because one state might pay more than another. These problems led to drastic actions by the federal government to raise revenue for itself: Shay's Rebellion and The Whiskey Rebellion are proof of that.