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The Northwest Ordinance became law on July 13, 1787, as an act of the Congress under the Articles of Confederation. These ordinances created the United States Northwest Territory, putting the territories west of the Appalachian Mountains, north of the Ohio River, and east of the Mississippi River, under the control of the Federal government. States with large territorial claims granted under British royal charters, such as Connecticut and Virginia, relinquished them, as they overlapped with the new territory. The Ordinance required that the territories set up governments with popularly-elected legislatures and with court systems to be appointed by the legislature. The governor of any territory was required to live in the territory and own at least 1,000 acres of property. The right of habeas corpus was written into the charter, as was freedom of religious worship and bans on excessive fines and cruel and unusual punishment. Many of these concepts were later incorporated in the U.S. Constitution and the Bill of Rights.
Under the ordinance, 5000 settlers were required to have a legislature. 60000 were required to gain admission into the league as a state.
The Ordinance also provided for means by which these territories could enter the Union as states. Significantly, the Ordinance barred slavery in these territories.