This Charter of the Northwest, so well planned by the Congress under the Articles of Confederation, was continued in force by the first Congress under the Constitution in 1789.  The following year its essential provisions, except the ban on slavery, were applied to the territory south of the Ohio, ceded by North Carolina to the national government, and in 1798 to the Mississippi territory, once held by Georgia.  Thus it was settled for all time that “the new colonies were not to be exploited for the benefit of the parent states (any more than for the benefit of England) but were to be autonomous and cooerdinate commonwealths.”  This outcome, bitterly opposed by some Eastern leaders who feared the triumph of Western states over the seaboard, completed the legal steps necessary by way of preparation for the flood of settlers.

=The Land Companies, Speculators, and Western Land Tenure.=—­As in the original settlement of America, so in the opening of the West, great companies and single proprietors of large grants early figured.  In 1787 the Ohio Land Company, a New England concern, acquired a million and a half acres on the Ohio and began operations by planting the town of Marietta.  A professional land speculator, J.C.  Symmes, secured a million acres lower down where the city of Cincinnati was founded.  Other individuals bought up soldiers’ claims and so acquired enormous holdings for speculative purposes.  Indeed, there was such a rush to make fortunes quickly through the rise in land values that Washington was moved to cry out against the “rage for speculating in and forestalling of land on the North West of the Ohio,” protesting that “scarce a valuable spot within any tolerable distance of it is left without a claimant.”  He therefore urged Congress to fix a reasonable price for the land, not “too exorbitant and burdensome for real occupiers, but high enough to discourage monopolizers.”

Congress, however, was not prepared to use the public domain for the sole purpose of developing a body of small freeholders in the West.  It still looked upon the sale of public lands as an important source of revenue with which to pay off the public debt; consequently it thought more of instant income than of ultimate results.  It placed no limit on the amount which could be bought when it fixed the price at $2 an acre in 1796, and it encouraged the professional land operator by making the first installment only twenty cents an acre in addition to the small registration and survey fee.  On such terms a speculator with a few thousand dollars could get possession of an enormous plot of land.  If he was fortunate in disposing of it, he could meet the installments, which were spread over a period of four years, and make a handsome profit for himself.  Even when the credit or installment feature was abolished in 1821 and the price of the land lowered to a cash price of $1.75 an acre, the opportunity for large speculative purchases continued to attract capital to land ventures.