![]() ![]() ![]() Large and unequal government debt existed from state to state. Each state had its own paper currency which appreciated or depreciated against those of other states, increasing uncertainty and therefore inhibiting interstate trade. Some, like Virginia, tried to stimulate their existing agricultural cash crops others, like Connecticut, tried to stimulate industrial development at the expense of agriculture. Prior to ratification of the Constitution, states had their own development policies. The United States and Japan in 1995? No, this situation described the relationship between the states in 1780. ![]() Governments were threatening trade wars with retaliatory tariffs and quotas, belligerents suffered currency devaluations and balance of payments deficits, and everyone threatened legal action. Herbener is Associate Professor of Economics at Washington and Jefferson College and a Senior Fellow of the Ludwig von Mises Institute. ![]()
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