Final answer:
One problem of the Continental Congress was its inability to tax directly, leading to reliance on insufficient state contributions and resulting in substantial national debt, rapid currency depreciation, and financial instability.
Step-by-step explanation:
One significant problem faced by the Continental Congress was its lack of power to levy taxes directly on the citizens of the United States. This proved to be a major issue as the Congress strived to finance the Revolutionary War efforts. Not having the authority to tax meant that the Congress had to rely on financial requisitions sent to the states, which were already burdened by the costs of their militias. Consequently, the states were unable to meet even half of the Congress's requests for funding, which resulted in a national debt that skyrocketed into the tens of millions by 1784.
The impact of this financial hardship was considerable. The Continental Congress, in an attempt to cover expenses, was forced to print massive amounts of currency, amounting to $200 million during the war, not including additional funds printed by the states or the counterfeit currency circulated by the British to undermine the American economy. As a result, the value of the 'continental' currency depreciated rapidly. Moreover, the Congress also tried alternative methods such as borrowing from foreign nations and domestic patriots through loan certificates. In desperate times, both the British and American armies resorted to confiscating resources from civilians, further exacerbating the financial strains of war.
The issues stemming from a lack of fiscal power manifested even after the establishment of the Articles of Confederation, with Congress struggling to conduct business and maintain the financial credibility of the new nation's government. Congress's inability to compel states to cover their portions of war debt and the failure to institute effective financial measures such as tariffs, due to state vetoes, highlighted the inherent weaknesses in the Articles, eventually contributing to their replacement by the U.S. Constitution.