Northwest Territory. When the Confederation Congress passed the Northwest Ordinance July 13, 1787, it created the Northwest Territory. Territorial boundaries were (a) on the east, the western border of the state of Pennsylvania; (b) on the north, the Great Lakes; (c) on the west, the Mississippi River; and (d) on the south, the Ohio River. The area was also known as the Old Northwest and the Territory North West of the Ohio.
The ordinance outlined the procedures for forming states in the territory. In 1803, Ohio became the first state created in the area, followed by Indiana in 1816, Illinois in 1818, Michigan in 1837 and Wisconsin in 1848. Minnesota, only partially in the territory, became a state in 1858. French fur traders had started exploring the region in the 17th century.
France ceded the territory to Great Britain in the Treaty of Paris of 1763 that ended the French and Indian Wars (1756-1763). The British ceded the area north of the Ohio River and west of the Appalachians to the United States at the end of the American Revolutionary War with the Treaty of Paris of 1783, but the British continued to man some outposts in the region. In the Jay Treaty of 1795, British subjects agreed to leave the Great Lakes region, but that treaty was never fully implemented. The United States' claim to the region was not fully realized until the 1814 Treaty of Ghent, which ended the War of 1812. After 1783, some states (Virginia, Massachusetts, New York, and Connecticut) had competing claims on the territory. Other landlocked states refused to ratify the U. S. Constitution (1787) as long as those states kept their western lands, fearing those states could continue to grow and tip the balance of power in their favor under the proposed system of federal government. As a concession in order to obtain ratification, these states ceded their claims on the territory to the U. S. government -- New York in 1780, Virginia in 1784, Massachusetts and Connecticut in 1785. The majority of the territory because public domain land owned by the U. S. government. Virginia and Connecticut reserved the land in two areas to use as compensation to military veterans. They were the Virginia Military District, in the southern part of Ohio, and the Connecticut Western Reserve, in the northeast corner (Cleveland and vicinity).
(See Land Ordinance of 1785, Northwest Ordinance, Virginia Military District, Miami Purchase and Indiana Territory.)