The Northwest Ordinance (formally An Ordinance for the Government of the Territory of the United States, North-West of the River Ohio, and also known as the Freedom Ordinance or "The Ordinance of 1787") was an act of the Congress of the Confederation of the United States. The primary effect of the ordinance was the creation of the Northwest Territory as the first organized territory of the United States out of the region south of the Great Lakes, north and west of the Ohio River, and east of the Mississippi River. On August 7, 1789, the U.S. Congress affirmed the Ordinance with slight modifications under the Constitution.
Arguably the single most important piece of legislation passed by members of the earlier Continental Congresses other than the Declaration of Independence, it established the precedent by which the United States would expand westward across North America by the admission of new states, rather than by the expansion of existing states.
Further, the prohibition of slavery in the territory had the effect of establishing the Ohio River as the boundary between free and slave territory in the region between the Appalachian Mountains and the Mississippi River. This division helped set the stage for the balancing act between free and slave states that was the basis of a critical political question in American politics in the 19th century until the Civil War.