In 1799, the legislature of the Northwest Territory selected William Henry Harrison to represent the territory in the United States House of Representatives. Upon taking his seat, Harrison immediately asked the House to assist in encouraging settlement of the Northwest Territory. On April 15, 1800, the government approved the Harrison Land Act. Under this law, people had the opportunity to buy land in the Northwest Territory directly from the federal government. The purchasers also could use credit to make part of their purchase.
The Harrison Land Act stated that people had to purchase at least 320 acres of land for a minimum of two dollars per acre. At the time of the sale, the purchaser had to provide the government with at least one-half of the price plus administrative costs. This amounted to an initial payment of 330 dollars. The remaining 320 dollars had to be paid in four equal installments. The purchasers made one payment per year, and the loan could not exceed four years. The government would evict any "squatters" if any new people wished to purchase a certain parcel of land. Squatters were people who already lived on the land but who had not purchased it legally. The only exception would be if the squatters had constructed mills on the land. In those cases, the government permitted the squatters to buy the land at two dollars per acre. The Harrison Land Act only applied to land west of the Muskingum River.
The Harrison Land Act greatly enhanced settlement in the Northwest Territory. Thousands of people bought land on credit. Some people purchased too much land and could not make payments when they were due. Many of these people lost their property at the end of four years when the government foreclosed on it.
