Changes

By the end of the war the national government had foreign debts of $8 million (mostly to French and Dutch bankers), and debts to Americans amounting to $42 million.  Annual interest payments were $2.5 million. The Congress had no taxing powers, and the states were reluctant to give it money.  It printed paper but the bills--called "continentals" --became worthless because of inflation.  It borrowed more from Europe. The best solution was to sell land.

By the end of the war the national government had foreign debts of $8 million (mostly to French and Dutch bankers), and debts to Americans amounting to $42 million.  Annual interest payments were $2.5 million. The Congress had no taxing powers, and the states were reluctant to give it money.  It printed paper but the bills--called "continentals" --became worthless because of inflation.  It borrowed more from Europe. The best solution was to sell land.

===Western lands===

===Western lands===

Sales of western lands could provide the national government with needed revenue without asking he states, while also facilitating western settlement.  The challenge was to get the land from the states.  In 1776 seven states had overlapping and conflicting claims to western lands that were based on old royal grants and charters. Virginia had the largest claim, which included the present states of Kentucky and West Virginia, and parts of Ohio, Indiana and Illinois.  Cutting across Virginia's northwestern claims were the claims of Massachusetts, Connecticut, and New York. South of Virginia were the claims of North Carolina (claiming Tennessee) and South Carolina and Georgia, which claimed the lands between their western boundaries and the Mississippi. The ownership of such vast areas by a few states aroused jealousy and ill-feeling among the six smaller states that had no western lands. Maryland refused to ratify the Articles until the landowning states surrendered their claims to the new government.  

[[File:Nw-territory2.jpg|thumb}220px|left]] Sales of western lands could provide the national government with needed revenue without asking he states, while also facilitating western settlement.  The challenge was to get the land from the states.  In 1776 seven states had overlapping and conflicting claims to western lands that were based on old royal grants and charters. Virginia had the largest claim, which included the present states of Kentucky and West Virginia, and parts of Ohio, Indiana and Illinois.  Cutting across Virginia's northwestern claims were the claims of Massachusetts, Connecticut, and New York. South of Virginia were the claims of North Carolina (claiming Tennessee) and South Carolina and Georgia, which claimed the lands between their western boundaries and the Mississippi. The ownership of such vast areas by a few states aroused jealousy and ill-feeling among the six smaller states that had no western lands. Maryland refused to ratify the Articles until the landowning states surrendered their claims to the new government.  

The Continental Congress successfully urged the states to cede their land claims to it and promised that the territory so ceded would be erected into new states having full equality with the old. New York and Virginia ceded their claims in 1781 and 1783.  Virginia ceded its lands in Ohio on condition of being allowed to reserve for itself the Military District between the Scioto and Little Miami rivers to satisfy military grants made during the Revolution. Virginia also retained its land south of the Ohio, which became the state of Kentucky in 1791. In 1785 Massachusetts ceded its claim to a belt of land extending across the present states of Michigan and Wisconsin, and in the following year Connecticut ceded its western lands. Connecticut reserved to itself a tract of 3.8 million acres in northeastern Ohio--called the Western Reserve--a part of which was set aside for the relief of Connecticut sufferers whose property had been destroyed by the British during the Revolution. The remainder was sold to the Connecticut Land Company. South Carolina ceded its narrow strip of land in 1787, and North Carolina transferred its western lands in 1790.  All the land in Kentucky and Tennessee had already been granted to revolutionary war veterans, settlers, and land companies so the national government received no land but only political jurisdiction.   

The Continental Congress successfully urged the states to cede their land claims to it and promised that the territory so ceded would be erected into new states having full equality with the old. New York and Virginia ceded their claims in 1781 and 1783.  Virginia ceded its lands in Ohio on condition of being allowed to reserve for itself the Military District between the Scioto and Little Miami rivers to satisfy military grants made during the Revolution. Virginia also retained its land south of the Ohio, which became the state of Kentucky in 1791. In 1785 Massachusetts ceded its claim to a belt of land extending across the present states of Michigan and Wisconsin, and in the following year Connecticut ceded its western lands. Connecticut reserved to itself a tract of 3.8 million acres in northeastern Ohio--called the Western Reserve--a part of which was set aside for the relief of Connecticut sufferers whose property had been destroyed by the British during the Revolution. The remainder was sold to the Connecticut Land Company. South Carolina ceded its narrow strip of land in 1787, and North Carolina transferred its western lands in 1790.  All the land in Kentucky and Tennessee had already been granted to revolutionary war veterans, settlers, and land companies so the national government received no land but only political jurisdiction.   

These cessions of 222 million acres of western lands gave to the national government a vast public domain in which it owned the land and over which it had governmental jurisdiction.  In 1785 a land ordinance provided a method of selling the lands. In 1787, in response to demands of the Ohio and Scioto land companies, which were negotiating for the purchase of large tracts of land north of the Ohio, the [[Northwest Ordinance]] was adopted to provide a form of government for what came to be known as the "Old Northwest."  The Ordnance, written by [[Thomas Jefferson]], provided for an elaborate survey that created the checkerboard land pattern still in use, and provided that no slavery was allowed there during the territorial stage.<ref> Benjamin Horace Hibbard, ''History of the Public Land Policies'' (1965)</ref>

These cessions of 222 million acres of western lands gave to the national government a vast public domain in which it owned the land and over which it had governmental jurisdiction.  In 1785 a land ordinance provided a method of selling the lands. In 1787, in response to demands of the Ohio and Scioto land companies, which were negotiating for the purchase of large tracts of land north of the Ohio, the [[Northwest Ordinance]] was adopted to provide a form of government for what came to be known as the "Old Northwest."  The Ordnance, written by [[Thomas Jefferson]], provided for an elaborate survey that created the checkerboard land pattern still in use, and provided that no slavery was allowed there during the territorial stage.<ref> Benjamin Horace Hibbard, ''History of the Public Land Policies'' (1965)</ref>

==Further reading==

==Further reading==

see [[Bibliography of the American Revolution]]

see [[Bibliography of the American Revolution]]