This house that could not stand

OCC: The PoD in this TL takes place during the Philadelphia Convention. This is my first real attempt at a non-ASB TL so please don't be to harsh but critisize it so that I may get better.


This house that could not stand
 
 
“Those who took it upon themselves to rectify the inadequacies of the Articles of Confederation should have known that they were doomed to failure. One can not create a vastly powerful central authority with out guaranteeing the people the rights that are born to them. It was a fantasy to believe otherwise of this I am a firm believer.”
George Manson on the failure of the Philadelphia Convention. 1787
 
If I could have voted aye rather than nay I would have, but morally I was incapable of such a thing. A government in which states such as Rhode Island have equal representation as Georgia or Virginia is in itself wrong and can not be just.”
Abraham Williams 1787
 

September 18th, 1787 [1]
George Washington walked out of the rather ill smelling Philadelphia building a saddened and slightly bitter man. The Convention had failed and the Articles of Confederation would remain intact. It was a blow to a man who had wished to bring his country together. He would return to his home and to his wife. As he climbed into the carriage that would take him to a hotel where he would stay until morning he turned back and with a slight tear in his eye uttered a statement that would go down in history. “I shall not cry over the petty acts of man but I shall shed a tear for this house that could not stand, and for the America we shall never be.”

[1] the Convention ended one day later than OTL
 
OCC: The PoD in this TL takes place during the Philadelphia Convention. This is my first real attempt at a non-ASB TL so please don't be to harsh but critisize it so that I may get better.


This house that could not stand


 
 
“Those who took it upon themselves to rectify the inadequacies of the Articles of Confederation should have known that they were doomed to failure. One can not create a vastly powerful central authority with out guaranteeing the people the rights that are born to them. It was a fantasy to believe otherwise of this I am a firm believer.”
George Manson on the failure of the Philadelphia Convention. 1787
 
If I could have voted aye rather than nay I would have, but morally I was incapable of such a thing. A government in which states such as Rhode Island have equal representation as Georgia or Virginia is in itself wrong and can not be just.”
Abraham Williams 1787
 

September 18th, 1787 [1]
George Washington walked out of the rather ill smelling Philadelphia building a saddened and slightly bitter man. The Convention had failed and the Articles of Confederation would remain intact. It was a blow to a man who had wished to bring his country together. He would return to his home and to his wife. As he climbed into the carriage that would take him to a hotel where he would stay until morning he turned back and with a slight tear in his eye uttered a statement that would go down in history. “I shall not cry over the petty acts of man but I shall shed a tear for this house that could not stand, and for the America we shall never be.”

[1] the Convention ended one day later than OTL


With the Articles of Confederation still intact the States of America continued along the same lines they had been following. States like Maryland continued to deflate their money by producing less of it in order to pay of their war debts quickly and easily, while other states tried producing as much as possible causing inflation to sky rocket. Little had changed, the states still stood “unified” in common defense (though there was no continental army to speak of and some states gave more to this common defense then others ), but they continued to slowly grow apart. In 1788 a second attempt at a constitutional convention was held. After the failure of the first convention several states did not even send representation, this second convention failed just as the first had. In February of 1789 continued border disagreements between Maryland, Pennsylvania, and Virginia persist as the three states dispute ownership of the counties east of their existing borders. As tensions in America rise, across the Atlantic on July 14th, 1789 the French revolution begins.
Prise_de_la_Bastille.jpg
 
Deflation made their money worth more allowing the states to pay off war debts fast with smaller amounts of legal tender.
??? But if they owe $1M, and that is worth more, then they have more to pay off.

Nations loved inflation as $1M debt could be paid in $, DM whatever that were worth less (or worthless).

The only time that inflation hurts your debt repayment is if the debts are external - specifically if they are in external currency. So if Maryland's debts were to Britain in British pounds, then deflation might help. But given that the ARW debts were almost all internal (to soldiers for service, to merchants for supplies, etc), that doesn't hold.
 
I thought that by 1787 Maryland, Delaware, and Rhodes Island had payed off most of their debt, by lowering their tariffs, so traders would use their ports in favor of their larger neighbors.
Most of the others state's debt had been bought by speculators for 5 cents or less on the Dollar. and most states were buying up the debt for ~5 cents.
When Hamilton pushed thru the agreement to buy the War debt for full value, Hamilton and his Friends made a killing in the Bond market.

By the time of the Convention, Congress had passed and the States ratified the NW Ordinance, formalizing their giving up their western claims.
?So how are the settlers in the new territories going to take the breakup?
 
??? But if they owe $1M, and that is worth more, then they have more to pay off.

Nations loved inflation as $1M debt could be paid in $, DM whatever that were worth less (or worthless).

The only time that inflation hurts your debt repayment is if the debts are external - specifically if they are in external currency. So if Maryland's debts were to Britain in British pounds, then deflation might help. But given that the ARW debts were almost all internal (to soldiers for service, to merchants for supplies, etc), that doesn't hold.

Problem is, that doesn't hold. If you make an agreement to recompense, say, soldiers with a set pension and such and then all you do is hand them fistfuls of newly-printed notes, what happens is those notes become worthless and the people you are trying to repay your debts to complain, saying that your loans are no longer of value to them and they want compensation to an equivalent material value. Did Germany repay its debts in 1929 when its economy crashed so badly that it was printing 10 trillion Deutschmark notes and employers paid staff with literal wheelbarrow loads of cash? History suggests not, all that happened was that no-one accepted their currency anymore. The same would happen here. Soldiers offered a massively inflated currency as repayment would simply shove it back in their government's faces.
 
Problem is, that doesn't hold. If you make an agreement to recompense, say, soldiers with a set pension and such and then all you do is hand them fistfuls of newly-printed notes, what happens is those notes become worthless and the people you are trying to repay your debts to complain, saying that your loans are no longer of value to them and they want compensation to an equivalent material value. Did Germany repay its debts in 1929 when its economy crashed so badly that it was printing 10 trillion Deutschmark notes and employers paid staff with literal wheelbarrow loads of cash? History suggests not, all that happened was that no-one accepted their currency anymore. The same would happen here. Soldiers offered a massively inflated currency as repayment would simply shove it back in their government's faces.

Where do you think "Not worth a Continental" came from? This exact sort of thing.
 
Top