The Land Ordinance of 1785 was passed on May 20, 1785. It provided for the surveying of the Northwest Territory and Indiana Territory were the first to be surveyed under the new rectangular survey method.
The land was systematically surveyed into square townships, 6 mi (9.7 km) on a side, each divided into thirty-six sections of 1 sq mi (2.6 km2) or 640 acres (260 ha). These sections could then be subdivided for re-sale by settlers and land speculators.
It set up a standardized system whereby settlers could purchase title to land through land offices after the survey was complete. The location of the land was precise. In Central Indiana, that “open” land was called the “New Purchase”.
Because there was no method for Congress to raise revenue by direct taxation at this time, land purchased and won from the Native Americans provided an important revenue stream.
