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This article examines the process of state-formation in the new United States republic after 1776 through a case study of the brief-lived state of Franklin (1784–c.1789) and its successor, Tennessee, which achieved statehood in 1796. The article asks why Franklin failed and Tennessee succeeded within such a short time-span and what both tell us about how the new United States and its citizens were working out questions of sovereignty and self-governance after 1776. I argue that westward moving white settlers never rejected the state; they merely wanted to control its formation themselves. However, the violence of white settlers in places like Franklin, focused on dispossessing neighboring Cherokees, contributed to evolving federal policies that backed away from a robust embrace of settler sovereignty as might have been implied by Revolutionary war-era rhetoric. Eastern policymakers, existing “parent” states like North Carolina, and wealthy speculators increasingly argued that western settlement needed to be centrally controlled, leading to the imposition of policies like the Northwest Ordinance. Tennessee was the first territory and state to enter the union under the terms of the Northwest Ordinance, but it controverted the spirit if not the letter of that law, reflecting the fact that white settlers continually asserted their own capacity and right to self-determination.