Following the defeat of the British that led to the end of the Revolutionary War, the US Congress looked westward for further expansion of the United States. Under the Articles of Confederation, Congress lacked the power to raise revenue through direct taxation of US inhabitants. Therefore, an immediate goal was to raise money through sale of land in the largely unmapped territory west of the original states that was acquired via the 1783 Treaty of Paris after the war.

Land Ordinance of 1785

The US Congress adopted the Land Ordinance of 1785 to facilitate that sale. The ordinance, a resolution written by Thomas Jefferson, proposed that the states relinquish their claims to all territory west of the Appalachian Mountains, and that the area be divided into new states of the Union. Land west of the Appalachians, north of the Ohio River, and east of the Mississippi River was to be divided into 10 separate states. However, there was no defined mechanism by which the land would become states, or means to how the territories would be governed or settled before they became states. This ordinance provided a system for selling and settling the land.

Northwest Ordinance of 1787 

The Congress of the Confederation enacted the Northwest Ordinance in 1787 to provide for administration of the territories and set rules for admission as a state. On August 7, 1789, the new US Congress affirmed this ordinance with slight modifications under the Constitution. The territory included all land west of Pennsylvania and northwest of the Ohio River, covering all of the modern states of Ohio, Indiana, Illinois, Michigan, Wisconsin, as well as northeastern Minnesota.

The Northwest Ordinance was arguably, other than the Declaration of Independence, the single most important piece of legislation passed in the earlier Continental Congress meetings. It established the precedent by which the federal government would be sovereign and expand westward across North America with the admission of new states, rather than with the expansion of existing states and their established sovereignty under the Articles of Confederation. The prohibition of slavery in the northwest territory had the practical effect of establishing the Ohio River as a boundary between free and slave-holding territories in the region between the Appalachian Mountains and the Mississippi River. This division helped set the stage for national competition over admitting free and slave-holding states to the Union.

United States Land Claims and Cessions, 1782–1802

Illustration of the state cessions that eventually allowed for the creation of the territories north and west of the River Ohio.

Implications of the Ordinances

The Land Ordinance of 1785 established the general practices of land surveying in the west and northwest. It also established the land ownership provisions used throughout the later westward expansion beyond the Mississippi River. The Natural Rights provisions of the Northwest Ordinance also foreshadowed the Bill of Rights, the first 10 amendments to the Constitution. Many of the concepts and guarantees of the Northwest Ordinance were incorporated into the Constitution and Bill of Rights. In the Northwest Territory, various legal and property rights were enshrined and religious tolerance was proclaimed.

The language of the Northwest Ordinance prohibited slavery, but emancipation of slaves already held by settlers in the territory was not included. Efforts in the 1820s by pro-slavery forces to legalize slavery in the territory failed, but an "indentured servant" law allowed some slaveholders to bring slaves under that status; prohibiting their purchase or sale. Southern states voted for the law because they did not want to compete with the territory over tobacco as a commodity crop; it was so labor intensive that it was only grown profitably with slave labor. The balance of the number of free versus slave states was not affected, as most slave states in 1790 were south of the Ohio River.

Many Native Americans in Ohio refused to acknowledge treaties signed after the Revolutionary War that ceded to the United States lands they inhabited north of the Ohio River, on the grounds that they were not parties to those treaties. In a conflict sometimes known as the Northwest Indian War, Blue Jacket of the Shawnees and Little Turtle of the Miamis formed a confederation to stop white expropriation of the territory. After the Native American confederation had killed more than 800 white soldiers in two battles, President George Washington assigned General Anthony Wayne to command a new army, which eventually defeated the confederation and continued the United States' imperial expansion into the territories.