The creation of the United States as an independent nation coincided with a period of rapid population and territorial expansion. One of the first challenges that faced the 13 existing states was how to manage the vast expanse of territory to their West. Individual states still laid claim to some of this land, but during the 1780s and 90s much of this was ceded to the Continental Congress and the federal government. The former laid down guidelines for future policy when it declared the Northwest Ordinance on July 13 1787.

The Northwest Ordinance organized the territory that eventually became the states of Wisconsin, Michigan, Illinois, Indiana and Ohio. It established a process for statehood: first, a governor would be appointed by Congress to manage a territory; when the adult free male population reached 5,000, the territory could elect an assembly to work alongside the Governor; finally, when that number reached 60,000, the territory could design a state constitution and apply to Congress for statehood. This organization proved highly effective, limited future disagreements, and made it plain that these newer polities were to be given an equal status to the original 13 states.

A number of laws and principles that would be fundamental to the future of America were also laid down in this act. Freedom of speech and religion, the right of habeas corpus, and the right of trial by jury were all declared for the first time in a United States' government document. The longest lasting impact came from Article 6, which prohibited slavery in the new territories. Not only did this set a precedent for future debates over slavery in the West, it also drew a clear geographical dividing line between one region north of the Ohio River committed to free labor, and another to its south that was dependent on slavery.