Northwest Territory – Territory owned by the United States west of Pennsylvania which included today’s States of Illinois, Indiana, Michigan, Ohio, Wisconsin, and a part of Minnesota. The Northwest Territory was a part of vast territories west of the Appalachian Mountains originally claimed by Massachusetts, Connecticut, New York, Virginia, North Carolina, South Carolina, and Georgia which were all tied to royal charters, except for New York’s claim. “Landless states,” led by Maryland, demanded that some States should not have the opportunity to be so vast in size, especially since land had been offered to some enlistees during the Revolutionary War as payment for their service, and the generosity of some States may not be dependable when it came to the fulfillment of these promises. An amendment to the Articles of Confederation, offered by Maryland, had not been accepted by the other States and Maryland, New Jersey and Delaware held out ratifying the document until the “western lands” issue had been resolved. The “landless states” called for the “landed states” to offer their western territories to the United States by cession. Ratification of the Articles of Confederation was also being urged by the French who were willing to offer military supplies, ships and soldiers once the Patriots completed their union through the ratification of the Articles. Thomas Jefferson, in particular, urged Virginia to create colonies out of its western lands, free and independent of its control. Virginia was also encouraged to cede the property to the United States since a reduction in size would also reduce its financial quota apportioned to it by Congress, which later in the Constitution became a form of income tax paid by the States to the federal government based on percentage of population as determined by a census. The “landed states” agreed to cede the land to the United States so that they may be divided into States during a future time as determined by Congress, with the northern portion of those western lands becoming known as the Northwest Territory. As a part of the agreement, New York, Massachusetts, and New Hampshire also relinquished their claims on the land known as Vermont. The information regarding these agreements partially come from, and are primarily available in, the motion found in the Journals of the Continental Congress, XVII, 808.
“Motion Regarding the Western Lands, [6 September] 1780,” Founders Online, National Archives, https://founders.archives.gov/documents/Madison/01-02-02-0051. [Original source: The Papers of James Madison, vol. 2, 20 March 1780 – 23 February 1781, ed. William T. Hutchinson and William M. E. Rachal. Chicago: The University of Chicago Press, 1962, pp. 72–78.]