New York and Massachusetts both claimed the same land for different reasons: New York based its claim on various treaties that it concluded with Indian tribes, whereas Massachusetts invoked its colonial charter, which described its boundaries as extending westward to the Pacific Ocean.
[1][2] New York and Massachusetts agreed to divide the rights in question with a treaty signed December 16.
The compact also provided that Massachusetts could sell or assign its preemptive rights.
[1] On April 1, 1788,[1] Massachusetts sold its rights to the entire six million acres (24,000 km2) to Oliver Phelps and Nathaniel Gorham for $1,000,000,[2] payable in three equal annual installments, and payable in specie or in certain Massachusetts securities then trading at about 20 cents on the dollar, the money used to repay some of the state's debt from the Revolutionary War.
[citation needed] Similar western boundary issues involving these and other states were resolved by the Northwest Ordinance passed by the Congress of the Confederation in July 1787.