At the local level, farmers were struggling. They could not pay off their taxes or support their families. The economic hardship was exacerbated by the lack of commercial banks in the state, so people borrowed from each other in a pyramid of debt and credit.
In 1785, English banking houses heavily involved with American trade began to call in debts as prices went down. American merchants then called in their debts -- a chain reaction that went all the way to the bottom: farmers. The government that collected the farmers taxes was controlled by creditor and commercial interests and would not grant reprieve to the struggling farmers. The farmers petitioned the state government for an extension on their payments and issuing of new paper money to pay debts and taxes. However, the state government was not sympathetic to the farmers.
Frustrated with the inability to pay their taxes and debts, much less support their families, Massachusetts farmers stepped outside the law to solve their problems. Like most rebellions, meetings stressed non-violence, but soon the angry mobs took action. The farmers prevented the county courts from sitting, which were responsible for writs of property foreclosure.
Farmers gathered around an old Revolutionary War veteran, Daniel Shays. He too had fallen on hard times following the war and felt cheated that he wasn't compensated for his time in the Continental Army. Shays led 1,200 men to the federal arsenal at Springfield, attempting a full uprising on January 26, 1787. The state militia, financed by Eastern merchants fearing property damage, swept in and forced the "Shaysites" to retreat.
Though Shays' Rebellion failed, it paved the way for massive
changes in US government. By then, it was understood that the
Articles of Confederation had to be revised. After the American
Revolution, there was a period of "Republican Extremism" that
minimized government control, symbolized by the loose Articles of
Confederation. But with Shays' Rebellion, a group (eventually the
Federalists) formed calling for more governmental control and a new
Shays ' Rebellion was an armed uprising which took place in Massachusetts during 1786 and 1787. Some historians believe "fundamentally altered the course of the United States' history.
Shay's rebellion was an armed uprising in central and western Massachusetts, led by Daniel Shays. It was in protest of high taxes and farm mortgages.