Enacted on July 13, 1787, the Northwest Ordinance was a great achievement, and a document Americans should be proud to own. Yet it emerged from a Congress that, under the Articles of Confederation, had not been able to achieve very much. Circumstances in the territories, moreover, were very difficult, and the motives for passing the ordinance among many Members were less than honorable. That shouldn’t change our positive view of the Ordinance, but might instead lead us to think about how petty motives can nonetheless, sometimes, lead to great things.
The greatness of the Ordinance is evident in its text. It provided a free and republican foundation for the governance of the “Northwest” — the territory we now refer to as the “Midwest” and that became the states of Ohio (admitted 1803), Indiana (1816) Illinois (1818), Michigan (1837), Wisconsin (1848), and the eastern part of Minnesota (1858). The Ordinance guaranteed the right to habeas corpus, freedom of religion, trial by jury, equal apportionment in representation, compensation for taking of property for public use, and protections for the rights of Indians. It prohibited slavery or involuntary servitude. It also provided that states admitted from the territory would enjoy equal footing in national government with all other states.
It also reserved some power in Congress over the territory, since Congress appointed the government of the territory, including a Governor, Secretary, and judges. Furthermore, Congress could reject laws enacted by the territorial government. Recall that under the Articles of Confederation, Congress has been powerless to bring intransigent state governments into line. Congress lacked the power to regulate commerce, so states raised tariffs and duties against one another’s goods. Congress lacked the power to impose taxes, and thus could not pay national debts from the Revolutionary War. Without the power to impose a common national currency, fiscal policy was left to localities, many who favored debtors and thus inflationary policies. None of these helped national economic recovery from the brutal losses sustained in the fight for independence.
But congressional control had other consequences. It allowed Congress to deal with land speculators, who has in the preceding years had recruited investors for development of western lands. Members with such economic power (then as now) are susceptible to self-dealing. As historian Walter McDougall observes, “it was an easy matter for Cutler [a principal in a land company] to bribe key congressmen by making them partners… [a]ll he needed to do to claim his wooded empire was arrange for … territories subject to appointed governors.”
In the Ordinance, Congress also retained the power to “the primary disposal of the soil” to bona fide purchasers. That is, land companies paid the national government— not the territory — for grants of land. So Cutler, the land speculator named above, contracted with Congress for about 1.5 million acres of Ohio Country, at a price of $1 million, half due immediately and half due at the completion of a survey of the land. The company never raised the promised funds, incurred extra expenses defending against Indians, and when key principals in the deal went bankrupt, the company failed to meet its end of the contract. Nevertheless, Congress patented (that is, deeded ownership) for much of the land under the agreement, which ultimately became owned by individuals.
The Northwest Ordinance, on the one hand, could be viewed as merely a tool for failed real estate speculation. On the other hand we remember it an important vehicle for expressing and preserving key liberties. That may be because the same week the Ordinance was enacted, another meeting of delegates, in Philadelphia, was debating a replacement to the failed Articles of Confederation in a Constitutional Convention. That Convention grappled with the same questions, and imperfect motives, that faced the drafters of the Northwest Ordinance. With the Ordinance as prologue (and a cautionary tale) it’s therefore no coincidence that our Constitution emerged with a strong yet divided national government better able to protect national interests while preserving individual liberty.
Read The Northwest Ordinance here: https://constitutingamerica.org/?p=3556
Allison R. Hayward is a political and ethics attorney in California
March 15, 2013 – Essay #20