The major failure of this government was the lack of power to tax the states and so, the congress did not have any money to pay off the huge National Debt and to handle economic issues of the country. Even when, the congress tried to get the states agree for a tax on imports, Rhode Island rejected it because they thought that it would be difficult to pay the taxes and also they felt that they should not grant Congress, a power to tax. Also, the Congress failed to pay the army, since they did not have any money and the soldiers were aware of the inability of the congress to carry out their demands. This directly led to the Newburgh Conspiracy- a plan by soldiers' to pretend to take over the government, unless the Congress had the power to tax states. But then, the plan failed because George Washington was against it and all soldiers agreed with him. In spite of the huge National Debt, the Congress did hardly have any money to carry out its duties and wills.
Congress lacked the power to control foreign commerce and there was an unfavorable balance of trade under the government. During the Confederation period, exports to Britain had drastically decreased. This was because the British closed the West Indies market to any American ships and also people in the US were buying more products from the Britain rather than exports. Another obstacle was that Spain closed the New Orleans port for American commerce and also they were claiming their boundary in America's territory . John Jay- Foreign affairs minister under