The Northwest Ordinance was enacted by the Confederation Congress of the United States on 13 July 1787....as a way to organize the settlement of lands west of the Appalachian Mountains and, ultimately, add new states to the Union.

Previous land ordinances in 1784 and 1785 had gotten the original states to relinquish their claims to these western territories and had allowed Congress to sell off the land, but these ordinances had failed to mention how the territories were to be governed prior to achieving statehood. To solve this issue, Congress enacted the Northwest Ordinance, which mandated that the Northwest Territory – and all other incorporated territories of the United States – would initially be administered by a federally appointed governor who was empowered to appoint civil servants and make legislation....

...The Northwest Ordinance established that Congress – not state governments or private companies – would be the only authority in control of territories of the United States, which helped to enhance the power of the federal government. The ordinance also organized the lands in question into the nation's first organized, incorporated territory, known as the Northwest Territory....[It] proclaimed that all new states admitted into the Union would enjoy “equal footing with the original States, in all respects whatsoever” (Wood, 122).

...The Northwest Territory comprised of the modern-day states .... Ohio (admitted in 1803), Indiana (1816), Illinois (1818), Michigan (1837), Wisconsin (1848), and Minnesota (1858). 

...[T]he Northwest Ordinance also listed a series of natural rights for the US residents of the territory including religious tolerance, public education, as well as protection of legal and property rights – this coming four years before the Bill of Rights was added to the United States Constitution in 1791. Significantly, Congress also declared that slavery and indentured servitude were prohibited in the Northwest Territory; this was a major victory for abolitionists, who sought to snuff out the institution of slavery by preventing its expansion. The origin of the conflict between 'free states' and 'slave states' that would ultimately lead to the American Civil War can therefore be traced to the Northwest Ordinance.