\fbecause they perceived an economic benet from the threat the pirates posed to the merchant shipping of other European nations. Until the Revolutionary War, merchant ships from the American Colonies were protested by the British Royal Navy and by the treaties between England and the Barbary States. American shipping lost this protection in 11133, and within the next two years three American ships were captured, one by Morocco and two by Algiers. Morocco soon freed the American crew in exchange for a ransom of $25,t]. The crews held by the Algerians were captive throughout WEB and for some time thereafter. Historical Background The capture of American ships by the Barbary pirates created an eany and important foreign policy crisis for the United States. The US. response to the Barbary crisis was strongly inuenced by two factors, one military and the other nancial. The military consideration was that the US. had no navy. The Continental Navy of the Revolutionary War was disbanded in 11"34, and the navy was not reestablished until 1TQB. During the intervening years, the United States had minimal naval power. Disbanding the Continental Navy was primanly a cost-savings measure. However, there were also important non-nancial arguments for and against the navy. Some Americans wl'io favored reestablishing close ties with England feared that the presence of a US. navy on the high seas would lead to confrontations with the British Navy. Crther Americans, including John Adams, viewed a strong navy as the best national defense against foreign threats. Many Americans preferred the prospect of building a navy over an army due to their general distrust of standing am'iiesthe result of their experience with the British occupation in America during the latter part of the Colonial Era. The nancial factor that influenced the U3. response to the Barbary pirates was that any effective response would require a signicant expense relative to the government's available funds. The U.S. government found itself in a precarious nancial condition in the years immediately following the Revolutionary War. The Continental Congress and individual states borrowed over Murillt] to nance the war, including about capo-(moo from France. From 11"31 to was, the period during which the United States operated under the Articles of Confederation, the federal government did not have the power to tax its citizens, levy tariffs, or regulate commerce. The cost of operating the government during this time was about SEDDHDD annually, not including funding the debt. Some income was generated by the post ofce and from sales of public lands, but the two principal revenue sources available to the govemment were requesting support from the states and issuing paper money. State contributions to the federal government constituted only a small fraction of what was needed, and issuing paper money was an inationary measure that had already been used extensively during the Revolutionary War. The nancial plight of the new nation was sufciently acute that during this period, the government borrowed from foreign sources just to meet the interest obligations on existing foreign debt. The ratication of the Constitution in HEB greatty enhanced the powers of the Federal government, and allowed the new Congress to levy and collect duties and taxes. However, the ability of the new government to actually enact and enforce revenue-generating measures was untested, and evolved over time. In WEE, during the confederation period, and again in HEM, during 1ll'utashington's presidency, popular opposition to taxation led to civil unrest. The first incident, Shays' Rebellion, arose in Massachusetts when the State Legislature levied taxes to pay off the war debt The second incident, the Whiskey Rebellion, occurred in Westem Pennsylvania when the federal government imposed an excise tax on distilled liquor. Also, although the Federal government had more potential resources under the Constitution than under the Articles of Confederation, it soon had more obligations. In 1T9t], under a plan advanced by Secretary of the Treasury Alexander Hamilton, the federal government assumed the remaining war debts that were owed by the individual states. However, despite nancial tribulations at both the state and federal levels, economic conditions in the United States during this period were generally good. A short recession that occurred after the Revolutionary War was followed by a period of economic growth. The strong economy led to increased federal revenues, and that fact, combined with the success of American leaders in keeping the nation out of the growing conict between England and France, enabled the govemment to become current on its obligations under the national debt during Jefferson's administration. The Adamsdcfferson Correspondence In 1?El, John Adams was the leading US. diplomat in London, and Thomas Jefferson was the U5. ambassador to France. A few years earlier, in \"34, the Continental Congress had authorized Adams and