<P> The Land Ordinance of 1785 was adopted by the United States Congress of the Confederation on May 20, 1785 . It set up a standardized system whereby settlers could purchase title to farmland in the undeveloped west . Congress at the time did not have the power to raise revenue by direct taxation, so land sales provided an important revenue stream . The Ordinance set up a survey system that eventually covered over three - fourths of the area of the continental United States . </P> <P> The earlier Ordinance of 1784 was a resolution written by Thomas Jefferson (delegate from Virginia) calling for Congress to take action . The land west of the Appalachian Mountains, north of the Ohio River and east of the Mississippi River was to be divided into ten separate states . However, the 1784 resolution did not define the mechanism by which the land would become states, or how the territories would be governed or settled before they became states . The Ordinance of 1785 put the 1784 resolution in operation by providing a mechanism for selling and settling the land, while the Northwest Ordinance of 1787 addressed political needs . </P>

The land ordinance of 1785 first divided land into states. territories. colonies. townships
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