The Confederation

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The Confederation

In 1783, the Treaty of Paris brought an official end to the American Revolution (1775–83). Under the terms of this peace agreement, the British gave up a considerable amount of land to America. The new nation stretched from the Atlantic Ocean to the Mississippi River, and from the northern Florida boundary to New France, later known as Canada. The border was not yet well defined due to its remoteness with little settlement. The thirteen American states—once colonies under British control—had established their own form of government. Every state had its own legislature and constitution, and most had a bill of rights protecting basic liberties such as the right to free speech. Optimism ran high: Merchants, manufacturers, large plantation owners, and small farmers looked forward to selling their goods without the burden of British trade restrictions. Many Americans eagerly anticipated moving west to settle the fertile lands beyond the Appalachian Mountains.

The first rush of excitement over independence from Britain quickly gave way to the difficult work of figuring out how to run the fragile experimental government. In 1776, the United States was the only republic in the world. A republic is a country governed by the consent of the people and for the benefit of the people through elected representatives. The Confederation, as the new government was called, faced financial difficulties. In addition to this challenge, it had to deal with issues of trade between the states and foreign countries, and it had to find a way to protect its newly acquired western lands.

The Articles of Confederation, the nation's first constitution, gave the Continental Congress responsibility for running the national government. However, under the Articles, Congress had very limited powers. Congress was put in charge of raising an army and a navy for national defense. It could direct some aspects of foreign affairs, such as appointing ambassadors, waging war, and negotiating treaties. Congress also had sole authority to coin money and to organize and operate a postal system. Congress could not tax Americans, nor could it regulate commerce (the buying and selling of goods) between states or with foreign nations. These two limitations crippled America's national government, and by 1787 it was clear that the nation's first constitution needed fixing. To survive, America would have to have a national government that could deal effectively with problems at home and with foreign powers.

Words to Know

commerce: The buying, selling, or exchange of goods transported between states or foreign countries, conducted on a large scale.

confederation: A loose alliance of governments that share a common purpose.

constitution: A legal document establishing the main principles and structure of a government.

credit: The reputation—good or bad—that a person, company, or country has for paying bills or debts on time.

currency: Coins and paper bills that serve as money.

republic: A country governed by the consent of the people and for the benefit of the people through elected representatives.

A weak national government

The Articles of Confederation, written in 1777 and ratified (adopted) by the states in 1781, set up a new government in America—a confederation, or alliance, of the thirteen states. (Article III describes this alliance as a "firm league of friendship.") At the time the Articles were written, the colonies had just declared but had not yet won their independence from Britain. Americans felt that British governmental control over the colonies was excessive and unfair. Therefore, the writers who drafted the Articles of Confederation carefully avoided giving too much power to the new American government. In fact, they deliberately created a weak national government and gave real power to the states.

From the colonists' point of view, Britain's king, George III (1738–1820; reigned 1760–1820), exercised unreasonable control over the colonies. For example, royal judges in the colonies were appointed and paid by the king, and they often made court decisions that favored Britain's interests. The king also appointed and controlled a royal governor in each colony; these governors regularly disrupted colonial legislatures that were attempting to make laws beneficial to the colonies. Meanwhile, Parliament, the British legislative assembly, passed various laws that required the colonists to pay higher taxes to Britain.

After gaining their independence from Britain, the colonies were determined to make their new government very different from the British system of rule. This is why the Articles of Confederation had no provision for a national executive branch (president), no provision for a national judiciary branch (court system), and no way for the government to tax the people. Furthermore, under the Articles, each state was allowed to make its own foreign trade alliances. Under this system, the national government could not threaten the power of state governments.

Without the power to tax, the national government could not raise enough money to operate efficiently. Congress could merely assign each state its share of funds to support national government activities and hope the states sent the money. In 1782 and 1783, Congress requested a total of $10 million from the states. Robert Morris (1734–1806), the Confederation's first superintendent of finance, reported that the states responded with only 15 percent of that amount. Because of this shortfall, Morris could not pay the country's bills. Various foreign countries and private individuals had loaned the Continental Congress money to fight the war against Britain. In 1783, this war debt was about $35 million, yet Morris had no funds to even begin paying back the debt. Congress had also pledged to pay a considerable sum to soldiers who had served in the Continental Army. Congress had promised to pay every man who served as an officer half pay for life. Further, it promised that every soldier would receive a bonus based on length of service. Congress did not have the money to keep these promises. Instead, it gave the soldiers papers pledging to pay in the future. The government's inability to repay debt resulted in a lack of respect at home and abroad.

Congress also lacked the power to regulate commerce, or trade—the buying and selling of goods between states and with foreign countries. States alone held the power to make trade agreements with each other and with foreign countries. States charged import duties, or fees, on items brought in from other states. Each state competed for trade by lowering import duties for some states and not for others. This practice created jealousy and poor relations between states. However, Congress did not have the power to enact legislation that might improve the situation.

Postal Service

On August 10, 1753, the British government appointed Benjamin Franklin (1706–1790) as postmaster general of the American colonies. Franklin was an American printer and publisher who owned a newspaper called the Pennsylvania Gazette. As postmaster general, Franklin set up post offices (usually at a merchant's store or a tavern), planned post roads (postal routes), set out milestones by marking distances, and arranged for riders on horseback to carry mail day and night. In 1763, he surveyed 1,600 miles for post roads and post offices, covering an area from Virginia to New England.

Franklin favored American independence and supported the revolutionary cause. For this reason, the British dismissed him from his post in 1774. By that time, Franklin had established post roads from present-day Canada to Georgia. On July 26, 1775, Congress appointed Franklin as the first postmaster general of the American postal service. He was responsible for postal service from Massachusetts to Georgia. During the American Revolution, most of the mail was letters sent from Congress to military fronts. To keep the postal service operating during wartime, the post riders were not required to serve in the military. Franklin served as America's postmaster general until November 7, 1776, when his son-in-law Richard Bache (1737–1811) replaced him.

In 1781, when America adopted the Articles of Confederation as its first constitution, Congress received official authority to establish the U.S. postal system (under Article IX). Ebenezer Hazard (1744–1817) replaced Bache as postmaster general on January 28, 1782, and served until 1789. At his urging, Congress passed an ordinance revising postal laws. The ordinance gave the national government sole authority to carry the mail, restricted censorship of mail to times of war, and allowed post riders to deliver newspapers for reasonable rates. Hazard established new east-west post routes all the way to Pittsburgh, Pennsylvania, a frontier town at that time. In 1785, he hired stagecoach companies to help reduce the workload of his post riders.

The U.S. Constitution, ratified in 1788, gave Congress the power "to establish Post Offices and post Roads." After a series of acts that kept a postal service temporarily in operation, the Act of May 8, 1794, made the department of Post Office a permanent part of the national government. When Congress established Washington, D.C., as the nation's capital in 1800, two horse-drawn wagons moved all the postal department's records and furniture from its main office in Philadelphia to Washington.

Instructions for sending a letter in 1790:

  1. Write very small on a single sheet. (Paper was in short supply.)
  2. Fold over paper and seal with wax. (Envelopes were not used.)
  3. Take letter to postmaster (generally a shopkeeper or tavern owner).
  4. Post rider carries letter over post road to nearest postmaster.
  5. Recipient claims letter and pays postage—6 cents for a single sheet for every 25 miles.

Since Congress could not make trade agreements with foreign countries, America had no power to influence the balance of trade. For example, when Britain closed its markets to American goods after the war, Congress could neither negotiate with Britain nor retaliate by closing U.S. ports to British goods. Each of the thirteen states negotiated its own trade arrangements with each foreign country in whatever way it wished. The multitude of trade agreements resulted in much confusion.

Although the Articles limited the powers of Congress and the national government, the document strengthened the country by upholding the idea of a union of states. The Articles functioned as a stepping-stone to the U.S. Constitution, which established the federal government under which the United States has operated since the document was written in 1789. During and after the American Revolution, Americans were strongly opposed to having a powerful national government. The Articles accordingly gave the states a great deal of power and the national government very little. The document served the nation's needs until the people were ready for the strong national government created by the U.S. Constitution. If the U.S. Constitution had been the plan proposed to the states in 1777, it might never have been approved.

State constitutions

State leaders began to write constitutions setting up their state governments in 1776, immediately after the Declaration of Independence proclaimed America's intention to rid itself of British rule. Most royal governors appointed and paid by the king no longer had any role, and many were run out of town. The out-come of the American Revolution was far from certain, but state leaders were nevertheless planning for an independent future. They wrote constitutions that were not just temporary sets of laws but concrete plans of government that could not easily be altered.

Most state constitutions included a bill of rights guaranteeing liberties that could not be taken away by government. All the state constitutions created weak executive and judicial branches; this meant that state governors and judges would have limited influence. State constitutions reduced the governor's role to running day-to-day administrative operations and gave greater power to their legislatures, which were composed of elected representatives. The representatives stood up for the interests of ordinary Americans—merchants, landowners, and people who were settling in the westernmost parts of their states.

Constitutions varied from state to state. Pennsylvania eliminated the position of governor altogether and had a unicameral (single-house) legislature. Pennsylvania and North Carolina eliminated ownership of property as a requirement to vote. New Jersey's state constitution granted women the right to vote from 1776 to 1807. The constitution of Massachusetts required the approval of the state's voters before it could go into effect. Approved in 1780, the Massachusetts constitution boldly freed slaves and allowed free black men and Native American men to vote.

Writing state constitutions and creating state legislatures gave Americans practice in republicanism, government by consent of the people. State legislatures were the centers of power in the 1780s. The most difficult issues they dealt with were economic ones, especially competition between states and with foreign powers over money and trade.

Money problems

After the American Revolution, almost all Americans experienced money problems. Small farmers, large plantation owners, merchants, shippers, craftsmen, and manufacturers all were affected by the lack of uniform currency (coins and paper bills that serve as money). The new nation was also plagued by trade issues and debts it could not pay. When someone borrows money and does not repay it, he or she has bad credit; as a result, securing further loans is difficult or impossible. After the war, both individual Americans and the United States suffered from bad credit.


Money, other than gold or silver coins, has no value by itself. Its value comes from the amount of goods it can buy. During the American Revolution, Congress printed currency that could be used throughout the colonies. A lot of Continental money was circulating, but with the disruption of war, fewer and fewer goods were available for purchase. Because goods were in short supply, prices increased dramatically. For example, at the start of the war in 1775, a bushel of corn cost about $1; only a few years later, it cost $80. The rapidly rising, out-of-control prices weakened the Continental dollar, making it almost worthless. Americans whose wages were paid in Continental dollars were suddenly unable to make ends meet.

Dismay over the worthlessness of Continental currency spurred states to print their own money and back it with their own reserves of gold and silver. Backing means that the governments printing the money promised that the printed currency could be exchanged for the same value of gold or silver. They continued to do so throughout the 1780s. Thirteen different forms of money were in circulation. Each state's money had a different value system, causing constant confusion and bickering among states. A New Jersey dollar might be worth only 25 cents in New York or 35 cents in the Carolinas. Trade between states was thrown into chaos. For example, a manufacturer from New York might take his goods south and sell them in every state from Pennsylvania to South Carolina. Along the way, he would be paid in the currency of each state. Once he returned home, the various monies in his pocket were worth only a fraction of their original amount. If a tool produced in Massachusetts costing 2 Massachusetts dollars was needed in Virginia, the Virginian might have to pay 10 or 20 Virginia dollars to purchase it. The changing value from state to state made trade difficult.

The currency crisis called out for a solution. Many Americans believed that the United States needed a uniform national currency, backed by the national government, not by individual states. To back currency, the national government needed its own gold and silver, but it had neither. Currency difficulties continued through the 1780s.


Trade refers to the buying or selling of goods between states (domestic trade) and between countries (foreign trade). Under the Articles of Confederation, Congress could not control trade between states or make trade alliances with foreign powers. Instead, state legislatures took charge of trade issues. They imposed trade barriers on other states and charged import duties, fees for goods brought into a state from another state. States constantly competed against each other by raising or lowering duties or giving favorable treatment to one state and not another. Some states also collected export duties, fees on goods moved out of state. For example, Pennsylvania and New York both had excellent seaports and were able to receive many goods. Both then charged steep export duties on goods going to other states. The export duties were taxes on goods shipped to other states that raised the price of goods for those purchasing the goods. As a result, Pennsylvania and New York were profitable markets for merchants in other states, but to continue trade, merchants in those states had to pay high prices for goods from Pennsylvania and New York.

Trade with foreign countries proved equally difficult. After the war, Britain closed its markets and the markets of the British West Indies to American goods. This was a blow to American farmers, manufacturers, and shippers of raw materials such as wood; they had always relied on selling their goods in British markets and being paid in stable British currency. Exports, goods shipped out of American ports, decreased dramatically. Businesses failed and farmers fell deeply in debt because they had nowhere to sell their goods. Making matters worse, Britain shipped its surplus goods that had piled up during the war into American ports. The British sold these goods at prices far below the prices of similar American-made products. The United States could not protect itself in this situation—for example, by restricting British goods from entering America—because Congress had no power to dictate trade policies.

Although Congress could not make any foreign trade agreements, new markets gradually opened up. The markets included France, the Netherlands, Dutch East Indies, French West Indies, and northern Africa. However, any U.S. ship that entered the Mediterranean Sea ran the risk of attack by the Barbary Coast pirates. An encouraging event for foreign trade occurred in 1784 when the American ship Empress of China, loaded with cotton and fur, sailed out of Philadelphia for China. This sailing opened a U.S.-China trading route that would become highly profitable in the 1800s.

Bad credit

The U.S. national government, the state governments, and individual Americans owed much of their debt to foreign governments and foreign private investors. The national and state governments both had borrowed money to finance the war against Britain. Unable to pay back these war debts, they lost respect in the world. With bad credit, they had no prospect of borrowing more money.

Large plantation owners had borrowed from individual foreign investors to buy land and supplies. Since the plantation owners could no longer sell their tobacco, rice, wheat, and indigo (a blue dye) to British markets, they had no income to repay the loans—and therefore no hope of future loans. Likewise, small farmers had borrowed money from wealthy American merchants and landowners during the war and could not repay the debt. The lenders threatened to take the small farmers' land unless the debts were paid.

By 1785, the western portions of the states were having serious economic difficulties. Almost all Americans who lived west of the Atlantic coastal areas were small property owners who farmed for a living. As colonial farmers, they had earned a good income, but after the colonies won their independence from Britain, the British refused to purchase American crops. Suddenly U.S. farmers had a much smaller market for their goods. Farmers in the Northern states were especially hard hit. They had supplied food to the South when the war disrupted food production there, but after the war ended, Southerners no longer needed to buy food from the North.

Having nowhere to sell their products, many farmers fell deeper into debt. Some of them were veterans of the war and had been promised payments for their service by the national government. They had been planning to use this money to repay those who had given them loans for land, tools, and seed. But the national government did not fulfill its promise, and the payments never came. To make matters worse, states were increasing property taxes to pay off state war debts. Faced with paying higher property taxes, farmers had even less hope of paying off their debts. And if they could not pay their debts, they risked losing their land and going to jail.

For struggling farmers in Massachusetts, the situation became extreme. Wealthy Boston merchants who had loaned them money went to the state courts to begin foreclosure proceedings. Foreclosure is a legal way to take back property and sell it to repay the money loaned on it. Desperate to keep their land, the farmers in Massachusetts and other states asked state legislatures to issue more paper money, to lower property taxes, and to pass "stay laws" that would at least temporarily halt court action on foreclosures. They tried to reason with and influence the state courts that were hearing foreclosure cases. While some states heeded the farmers' requests, Massachusetts did not. Its legislature was dominated by wealthy merchants who had loaned money to the farmers and who now demanded payment of those debts.

Shays's Rebellion

In August 1786, Massachusetts farmers took matters into their own hands. Dressed in their old Continental Army uniforms, armed with pitchforks, boards, and old muskets, they began marching across Massachusetts. In September, five hundred to six hundred farmers marched into Springfield courtrooms in western Massachusetts. They were led by Captain Daniel Shays (c. 1747–1825), a veteran of the American Revolution who had seen action at Bunker Hill and the Battle of Saratoga. Shays had returned home from the war around 1780 to await payment for his military service—payment that never came. Like the other farmers, he was deeply in debt. Massachusetts governor James Bowdoin (1726–1790) demanded that the mob of farmers leave. When they refused, he called in a special state militia of forty-four hundred men to disband the protesters.

In January 1787, Shays returned to Springfield, this time with about two thousand angry farmers. They stormed the Springfield ammunition arsenal. Soldiers guarding the arsenal opened fire, killing four farmers and wounding twenty. Shays and his followers retreated. The militia chased them down, and those who were caught received serious punishment. They lost their rights to vote, hold elective office, and serve as jurors for three years. Fourteen men including Shays were tried in court and sentenced to death, but Massachusetts governor John Hancock (1737–1793) later pardoned them.

Shays's Rebellion sent shock waves throughout the states. Fearing further uprisings, wealthy merchants asked the national government to guarantee military protection, but the government had no money to raise an army to respond to the need.

Other similar disturbances in several states had merchants, wealthy property owners, and other prosperous Americans fearful of losing their fortunes. They feared that the rule of law might have no effect on mob rule and that Congress would not be able to stop this from occurring. Some suspected that British spies were encouraging the uprisings. George Washington (1732–1799) and other American leaders were dismayed by the mob action and thought the nation was falling into crisis. But Thomas Jefferson (1743–1826) saw no reason for concern. He was serving as ambassador to France at the time, so he wrote to his worried friends at home, trying to reassure them. He told them that a little rebellion was good for the government. Jefferson believed that rebellion kept the government in a position of responding to its citizens and called attention to problems that needed fixing.

Foreign affairs humiliation

Meanwhile, the Confederation was receiving no respect from foreign powers, partly because of its bad credit and partly because it was unable to raise funds for building an adequate military force to protect its interests. Having sold its few ships at the close of the war, the Confederation had no navy. The Continental Army consisted of only a few hundred men. It maintained a small group at West Point, New York, and two arms storage facilities at Springfield, Massachusetts, and Pittsburgh, Pennsylvania. Not long after the war was over, it became clear that this tiny army would have to expand.

The Treaty of Paris brought an official end to the American Revolution in 1783. The treaty called for the British to abandon their forts in the Ohio River valley and give the Northwest Territory, land north of the Ohio River and east of the Mississippi, to America. However, the British refused to leave the forts and continued to use them as bases for fur trading, a profitable business. Britain was violating the terms of the treaty, but Congress could not do anything about it. The Continental Army was too small to threaten the British, and Congress could not afford to build a larger military force. The British were well aware of America's military weakness and took advantage of the situation. They gave arms and ammunition to the Native Americans living near the forts so they could fight off Americans who wanted to settle in the area. They also stated that they would not leave the Ohio Valley forts until the Americans repaid the debts they owed them. The Confederation had no money to pay the British, so the British stayed.

Spain also had its way with the Confederation. Spain had never been on good terms with America, and Spanish leaders saw the westward movement of settlers into the Kentucky and Tennessee territories as a threat to Spain's land west of the Mississippi River. To discourage further settlement, Spain closed the New Orleans port at the mouth of the Mississippi River to all American trade. Settlers in the territories had depended on the river to ship their food products around Florida to sell in the eastern states and Europe. They also received supplies up the river. Spain, like Britain, encouraged Native American hostility against settlers. Spain urged settlers to join their country instead of the Confederation. Further, Spain continuously disputed the northern border of Florida. (Spain had retaken Florida from Britain in 1781 during the American Revolution.) Spain claimed land in parts of present-day Georgia, Alabama, and Mississippi and maintained a fort at present-day Natchez, Mississippi. Congress proved powerless to counter any of Spain's claims or actions. With the British occupying the Northwest Territory, and Spain holding control of the Mississippi River and Florida, the United States was largely blocked from future expansion.

America was also being bullied abroad. American merchant ships attempting to carry products such as tobacco and wheat to countries with ports in the Mediterranean Sea fell prey to the Barbary Coast pirates. Active since the 1500s, the pirates were from Libya and Tunisia, on the coast of northern Africa. They seized the unprotected American ships, both cargo and sailors. The pirates demanded money to release the sailors, but the Confederation did not have the funds to set them free.

Unable to answer the insults of Britain and Spain, the Confederation endured continuing humiliation in foreign affairs. Britain, Spain, and France all believed the Confederation was too weak to survive for long. These countries showed disregard for Congress and no inclination to recognize its diplomats. John Jay (1745–1829), the Confederation's first secretary of foreign affairs, was convinced that the only way to end the indignities and gain respect abroad was to greatly strengthen the national government, allow it to collect taxes, and use the tax money to build a bigger military.

Mount Vernon Conference and Annapolis Convention

When political discussions took place at taverns, a popular toast was "Cement to the Union!" Debate centered on how to keep states strong but also have a strong central government. But by 1786, cooperation between states had almost vanished. Cooperation during the war had given way to mistrust, jealousy, and conflict. States issued their own currency and squabbled endlessly over its worth. They charged taxes and import duties that hurt each other commercially. They made trade agreements with foreign nations to gain advantages over their neighboring states. Boundaries with neighboring states were under constant dispute. Each state maintained its own militia and used force to maintain order.

The national government was ineffective, unable to help with the states' problems. As early as 1785, congressional sessions were poorly attended. Frequently, votes could not be taken because too few representatives were present. Political leaders preferred to stay close to their state legislatures, where almost all important decisions were made.

In the spring of 1785, Virginians George Washington, James Madison (1751–1836), and Edmund Randolph (1753–1813) called representatives from Virginia and Maryland to a meeting. The purpose of the meeting was to discuss shared commercial use of the lower Potomac River and Chesapeake Bay, fishing and harbor rights, and criminal jurisdiction. These were the most important issues for Virginia and Maryland. Washington invited representatives to meet at his home at Mount Vernon, on the banks of the Potomac. As a popular and well respected former war hero, he hoped his presence would aid negotiations.

The meeting at Mount Vernon was successful, and the two states proposed another meeting, inviting representatives from Pennsylvania and Delaware. Soon calls were made for all states to send representatives. Annapolis, Maryland, was the designated meeting place, but on September 11, 1786, representatives from only five states showed up—Virginia, Delaware, Pennsylvania, New York, and New Jersey. The representatives who attended were strongly in favor of strengthening the national government to help end state controversies.

Alexander Hamilton (1755–1804), a brilliant young lawyer from New York who had served with Washington in wartime, was an influential leader at Annapolis. Hamilton had for several years called for a stronger national government to rein in state squabbling and competition. He believed the national government should be in charge of taxing, regulating commerce, and building an army and navy for national defense. He believed that the United States had to have a strong national government to win the respect of foreign nations.

Hamilton gave the delegates at Annapolis an impressive name: the Commissioners to Remedy Defects of the Federal Government. With the help of Madison, Hamilton convinced the delegates to recommend a meeting of all states to consider changing and strengthening the Articles of Confederation. The delegates called for a general meeting of the states, but at the end of the Annapolis meeting, they had no idea whether the proposed meeting would actually take place.

The decline of the national economy made states more willing to cooperate with each other, and they showed definite interest in holding a meeting to revise the Articles. Seven states promptly authorized delegates for such a meeting: Virginia, New Jersey, Pennsylvania, North Carolina, New Hampshire, Delaware, and Georgia. On February 21, 1787, Congress passed a resolution that put out an official call for the meeting of states. The meeting was scheduled for the second Monday in May 1787, and it was to take place in Philadelphia. Although no one realized it at the time, this meeting was destined to become an important event in U.S. history—an event known as the Constitutional Convention of 1787.

For More Information


Feinberg, Barbara Silberdick. Articles of Confederation: The First Constitution of the United States. Brookfield, CT: Twenty-First Century Books, 2002.

Ferris, Robert G., and James H. Charleton. The Signers of the Constitution. Flagstaff, AZ: Interpretive Publications, 1986. Reprint, 2001.

Richards, Leonard L. Shays's Rebellion: The American Revolution's Final Battle. Philadelphia: University of Pennsylvania Press, 2002.

Wood, Gordon S. The Creation of the American Republic, 1776–1787. Chapel Hill: University of North Carolina Press, 1969. Reprint, 1998.

Web Sites

"Articles of Confederation." The Avalon Project at Yale Law School. (accessed on July 29, 2005).

"Ben's Guide to U.S. Government for Kids." U.S. Government Printing Office. on July 29, 2005).

Independence Hall Association. (accessed on July 29, 2005).

"Our Documents." U.S. National Archives and Records Administration. (accessed on July 29, 2005).

"Postal History." United States Postal Service. on July 29, 2005).

"Shays' Rebellion." Supreme Judicial Court Historical Society (Pennsylvania). (accessed on July 29, 2005).

Whitten, Chris. Founding Fathers Info. on July 29, 2005).

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The Confederation

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