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The Northwest Ordinance was passed by the United States Congress on July 13, 1787, was one of the most important laws ever adopted. The ordinance provided for the government of the region north of the Ohio River and west of Pennsylvania, then called the Northwest Territory. It was a model for all territories that later entered the Union as states. These territories formed into five complete states, which are Ohio, Michigan, Indiana, Illinois, Wisconsin and part of Minnesota east of the Mississippi River. The ordinance was largely the work of General Nathan Dane, Rufus King, and Manasseh Cutler.
Under the terms of the ordinance, the territories could achieve equality with older states by passing through three steps leading to full self-government. (1) Congress, which governed the territory, appointed a governor, a secretary and three judges. (2) When the territory, or any division of it, attained an adult male population of 5,000, they could choose a legislature and send to Congress a delegate who could speak but not vote. (3) When the total population reached 60,000, the territory could apply for admission into the Union on terms of full equality with the older states. The ordinance removed the danger of colonial rebellion, because it assured the territories of participation in the national government.
The Northwest Ordinance contained more than a plan of government. It laid the groundwork for social and political democracy in the West. It forbade slavery. This prohibition of slavery strengthened the ranks of antislavery states in the Union. All persons were guaranteed trail by jury and freedom of religious worship. The Ordinance guaranteed fair treatment and just dealings with the Indians, and laid the basis for the support of schools that declared, “means of education shall forever be encouraged.”
The terms of the ordinance were so attractive that pioneers poured into the new territory. In 1788, one of the first groups of settlers founded the town of Marietta, Ohio. Thousands of families followed the first settlers in the westward movement. The territory then formed into the five states—Ohio, Indiana, Illinois, Michigan and Wisconsin including what is now part of Minnesota east of the Mississippi River.
In the earlier history of the Northwest Territory the French first occupied the region had established posts by the early 1700s. Competition between French traders operating from these posts and English trappers from Pennsylvania helped start the French and Indian War (1754-1783). The war ended with the cession of the area to victorious England.
During the Revolutionary War (1775-1783) violent fighting took place in the Northwest between the settlers and the British and their Indian allies. The campaign of George Rogers Clark against British-held posts helped win the territory for the United States. The region was ceded after the war. Before the government could out the region to settlement, it had to deal with the claims of Massachusetts, Connecticut, Virginia, and New York. These states insisted that their colonial charters extended their boundaries into the area. The states ceded their claims to Congress between 1781 and 1785, because Maryland refused to approve the Articles of Confederation until it received assurance that the other states would yield their claims.
The land then became a territory of the United States. Congress, eager for revenue from the sale of lands there, adopted the Ordinance of 1785. This law provided for orderly rectangular surveys into mile-square units called sections. These were sold at auction at a minimum price of $1 an acre. Congress also struggled with the problem of a government for the territory. Thomas Jefferson in 1784 had drafted a plan that would have divided the Northwest Territory into 14 units. These could become states when the population of the smallest state in the Union. The Eastern States rejected this proposal, because they feared that the many Western States would dominate Congress. Instead, Congress adopted the Northwest Ordinance, or Ordinance of 1787. This provide for the division of the region into from three to five states, and the establishment of a membership in the Union.
Settlement began at once. The first arrivals were sent out by a New England speculating group called the Ohio Company. The official name was the Ohio Company of Associates. They founded the town of Marietta at the mouth of the Muskingum River in Ohio. Other interests soon established rival settlements at such villages as Gallipolis and Cincinnati. To the north, colonists clustered about Cleveland in the “Western Reserve” area retained by Connecticut when it ceded its lands to Congress. Arthur St. Clair became the first governor of first territorial government on July 15, 1788.
The population grew slowly at first because of the continual Indian attacks. President George Washington sent three expeditions to fight the Indians, but the first two met with disaster. The territory became more peaceful after General Anthony Wayne defeated the Indians in the Battle of Fallen Timbers in 1794. In 1796, Wayne forced the Treaty of Greenville on the defeated Indians. In this treaty, they ceded most of the lands of southern Ohio and parts of eastern Indiana to the United States. Other land cessions followed during the early 1800s.
As more settlers moved into the region, the Northwest Territory was divided. In 1800, the western part of the region became the Territory of Indiana, with William Henry Harrison as governor. The Michigan Territory was created in 1805, and the Illinois Territory in 1809. Ohio became a state in 1803, Indiana in 1816, Illinois in 1818, Michigan in 1837, and Wisconsin in 1848.
The Ohio Company, or Ohio Company of Associates was organized at the Bunch of Grapes Tavern in Boston on March 1, 1786. Eleven delegates, elected by persons interested in the venture, set up the company. They planned to raise $1,000,000 in $1,000 shares, which was payable in almost worthless Continental paper money. Within a year the company distributed 250 shares. The company appointed Manasseh Cutler, Rufus Putnam, and Samuel Parsons to petition the Continental Congress to sell it a tract beyond the Ohio River. Congress approved, and later passed the Northwest Ordinance of 1787.
At first the Ohio Company contracted to buy 1,500,000 acres at 66-2/3 cents an acre. But because of financial difficulties, these terms were never fully carried out. Congress finally granted title to 750,000 acres of the land that is now part of southeastern Ohio. The agreement provided that 214,285 acres could be bought with army warrants, and that 100,000 acres were to be offered free to settlers. One section of each township was reserved for schools, one for religion, and three sections for future disposal by Congress. This last term was designed to keep land speculators from monopolizing the territory. Two townships of 46,080 aces were set aside “for the support of an institution of higher learning.” This institution was founded at Athens, Ohio, in 1804, and became Ohio University.
The Ohio Company appointed Rufus Putnam as its superintendent. He led an advance party of 47 surveyors, carpenters, boat-builders, blacksmiths, and laborers to lay out a town where the Muskingum and Ohio Rivers joined. The group arrived at the mouth of the Muskingum on April 7, 1788. It founded there the first settlement under the Northwest Ordinance, and named it Marietta in honor of Queen Marie Antoinette of France. The settlers also built a fort called Campus Martius to protect their village. By April 1789, three new settlements had been established. On July 15, Governor Arthur St. Clair established the first capital of the Northwest Territory at Marietta. The Ohio Company completed its land operations by 1797. It divided its assets among the shareholders, but did not go out of business until about 1832.