Many veterans of the Revolutionary War, now living in the new society, had never been adequately paid for their service. During the enlistment crisis of 1776, Congress approved additional incentives for men who joined up. Enlistees were promised land and cash, officers were promised half-pay for life – however the nation, or at least its government, was effectively bankrupt after the war. Many soldiers weren’t paid and those that were often received compensation in the form of paper money or ‘bills of promise’ that quickly lost their value (one soldier in New York was given a $70 note, a week later he traded it for $15 of goods). The economic impact of the war was most severely felt by the rural working-classes (many of whom were war veterans as well) who relied on good production, the city markets, market stability and a reliable currency to survive. With the nation heavily in debt to foreign powers and the old trade avenues with Britain temporarily gone, America suffered a period of economic depression through the 1780s. The farmers found that demand and prices for their produce was low, while fluctuating paper currency and falling prices saw their income decline.
Established farmers sought temporary relief by borrowing money from urban creditors; those without land also took out mortgages from these lenders, usually at high prices. These creditors, based in large cities like Boston and New York, lobbied their state assemblies to set up debtors’ courts so that they could deal with borrowers who failed to meet repayments. In the event of non-payment the debtors’ courts could legally insist on full settlement of outstanding loans and, if this wasn’t forthcoming, property could be seized, mortgages foreclosed, even prison terms for debtors could result. As the 1780s unfolded as a time of high debt and unsteady markets, the busy debtors’ courts became hated and feared amongst the struggling farmers. In addition to this, farmers in states like Massachusetts laboured under high levels of taxation. To make matters worse, the property qualification for voting actually increased in Massachusetts. The farmers were more taxed and less represented than they had been in the mid-1760s.
David P. Szatmary, historian
Some farmers believed they had tolerated enough and decided to take action. Daniel Shays was an ex-captain in the Continental Army; he had fought at Lexington, Bunker Hill and Saratoga before resigning in 1780 to settle in western Massachusetts. In August 1786 Shays allegedly had his own property seized by a debtors’ court. He responded by joining in protest with other townsfolk, then in September he led several hundred men on the court at Springfield, Massachusetts, forcing it to adjourn. In January 1787 Shays led another assault, backed by 1200 men, on the federal arsenal at Springfield. This time his band of rebels was repelled and pursued by the state militia, which had been summoned by the Massachusetts assembly. Shays was comprehensively defeated in a short battle at Petersham and fled interstate. Branded a rebel and a traitor, he was sentenced to death in absentia. The anti-taxation radical of the 1760s, Samuel Adams, condemned the Shays’ rebels and called for their execution. The state did not actively pursue Shays, however, and a year later he was pardoned and granted a pension for his war service.
The Shays’ uprising sparked further uprisings in Massachusetts and other states, prompting worried assemblies to pass immediate concessions to the unsettled farmers. Taxes were lowered while laws relating to debtors, repayments and courts were relaxed; in some extreme cases outstanding debts were even cancelled. These events were concerning for two reasons. Firstly, urban creditors believed their property rights were being trampled on by overly-democratic state legislatures. Secondly, the rebellions and uprisings were bringing about changes to state laws and policies… a worrying situation that might stimulate even more rebellions and violent uprisings. To the elites, mob violence and insurrection was threatening social order and political autonomy. This could not continue: the central government had to be strengthened to improve economic conditions, protect property rights and deal with potential unrest like Shays’ Rebellion. The last great phase of the revolution was about to begin.