An intriguing, but largely overlooked, feature of American history is the disputes that almost came to blows between states and territories. One of these was the Toledo War between Michigan and Ohio. Due to conflicting State and Federal legislation, the State of Ohio and the Territory of Michigan claimed 486 square miles in what is now the northern border of Ohio with Michigan. The Northwest Ordinance decreed that the boundary line between north and south states in the territory would be the southern extremity of Lake Michigan. At that time Congress had no idea just how far south Lake Michigan extended. The Territory of Michigan claimed what was known as the Toledo Strip based upon the Ordinance while Ohio claimed the land under Ohio state legislation.
The controversy percolated along during the first third of the nineteenth century, until open conflict loomed with the Governors of Michigan and Ohio sending militia units to seize the disputed territory. President Jackson, to avert this civil war, Jackson proposed that the inhabitants of the disputed land be allowed to choose which government they pleased until Congress resolved the issue. This compromise pleased neither side, and Michigan militia seized members of an Ohio survey party at the bloodless battle of Phillips Corner on April 26, 1835.
After much further conflict, mercifully free from deaths or serious injuries, Congress proposed that Ohio get the land, and Michigan be rewarded with statehood and three quarter of the Upper Peninsula. The mineral rich Upper Peninsula was at the time thought to be worthless and the proposal was rejected by a Michigan territorial convention. However, Michigan faced bankruptcy, largely due to maintaining militia for duty in the Toledo War, and Congress was preparing to send a Federal surplus, yep you read that correctly, back to the States. Desperate for the money, a second convention agreed to accept the terms of Congress on December 14. The convention, which had not been called by the Michigan territorial legislation, was unpopular in Michigan and many citizens wanted to repudiate its action. However, Congress, tired of the controversy, swiftly passed legislation admitting Michigan to the Union, granting the disputed land to Ohio and giving three quarters of the Upper Peninsula to Michigan.