In 1802 Georgia ceded its western land claims to the federal government, which agreed to settle the issues in the Yazoo Fraud. The cession included all the land then constituting the Mississippi Territory, as well as the land northward to the southern boundary of Tennessee. In 1804 that additional northern area was added to the Mississippi Territory. However, the area south of latitude 31° north still remained part of Spanish-held West Florida. Then, in 1810, United States settlers in West Florida rebelled against Spanish rule and declared their independence. The territory was subsequently annexed by the United States. In 1812 the part of the region west of the Pearl River was made part of the Territory of Orleans (now the state of Louisiana) and the region eastward to the Perdido River became part of the Mississippi Territory.
With that addition, the Mississippi Territory included all the land now in the states of Alabama and Mississippi.
In Fletcher v. Peck (1810), the Supreme Court of the United States declared that, whether or not the Yazoo sale was proper, those later buyers who had bought in good faith from the original grantees were entitled to keep their land. If it was not turned over to them, they were entitled to damages for breach of contract. Thus, in 1814, Congress authorized payment of more than $4 million to the claimants.
In the following years the inhabitants of Mississippi Territory increased the pressure for statehood. Settlers in the Natchez region, which had the heaviest concentration of population and wealth, were the most insistent.
Settlers east of the Pearl River were generally wary of statehood; they feared that the wealthy Natchez interests would control the state government. To accommodate the easterners, Congress in 1817 created the Alabama Territory out of what was formerly the eastern part of the Mississippi Territory. On December 10 of that same year, Mississippi was admitted to the federal Union as the 20th state.
David Holmes, the last territorial governor, was elected the first governor under statehood, and Natchez was designated the state capital. In 1821 the capital was moved temporarily to Columbia pending selection of a site nearer the state’s geographic center. A site was selected on the Pearl River and was named Jackson in honor of the famous general and later president of the United States, Andrew Jackson. The capital was moved there in 1822. "Mississippi" © Emmanuel BUCHOT, Encarta, Wikipedia
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