Why did the Articles fail?

The Articles of Confederation failed because they made the federal government too weak to perform basic national functions, leaving the country struggling to pay its debts, regulate commerce, defend its borders, or maintain order. The first failure was fiscal. Congress had no power to levy taxes; it could only requisition funds from the states, and the states paid only a small fraction of what was requested. By the mid 1780s the United States had defaulted on interest payments owed to French and Dutch creditors and to American Revolutionary War veterans, and Continental currency had become worthless. The phrase "not worth a Continental" entered the language as a synonym for valueless.

The second failure was commercial. Congress could not regulate interstate or foreign trade. States imposed conflicting tariffs on goods crossing their borders, New York taxed firewood from Connecticut and farm produce from New Jersey, and southern states retaliated against northern shipping. Britain restricted American trade with the British West Indies, knowing the United States could not respond as a unified body.

The third failure was military and diplomatic. Britain refused to evacuate forts in the Northwest Territory along the Great Lakes despite the Treaty of Paris of 1783, citing American failures to compensate Loyalists and pay prewar debts. Spain closed the Mississippi River to American navigation in 1784, throttling western commerce. Barbary pirates seized American ships in the Mediterranean and Congress lacked funds to pay tribute or build a navy.

The fourth failure was domestic. Shays's Rebellion in western Massachusetts from August 1786 to February 1787, an uprising of indebted farmers led by Revolutionary War veteran Daniel Shays, alarmed Founders by demonstrating that Congress could not assist a state suffering internal disorder. George Washington wrote that the rebellion showed there was a melancholy proof that mankind, when left to themselves, are unfit for their own government.

The fifth failure was structural. Most ordinary legislation required nine of the 13 states to consent, and amendments required unanimity. New York vetoed a 1781 amendment to grant Congress the power to levy a five percent import duty, and Rhode Island vetoed a similar attempt in 1782, killing critical reforms. The Annapolis Convention of September 1786, called to discuss commercial regulation, attracted only five states and adjourned with a recommendation from Alexander Hamilton that a fuller convention meet in Philadelphia in May 1787. That gathering became the Constitutional Convention, which scrapped the Articles in favor of the present Constitution.