After the Constitution was ratified in 1788, the new United States government assumed ownership of the vast Northwest Territory that had been ceded to the pre-constitutional confederation by states with (real or potential) claims to the land. Further cessions from states were expected, and various founding-era figures hoped to acquire additional territory ranging from Canada to Cuba. The Northwest Ordinance of 1787 promised that the Northwest Territory would eventually be formed into states, and Article VI, Clause 1, of the Constitution (guaranteeing the "engagements" of the government) carried that promise forward after ratification. Still, some provision needed to be made for the governance of this federally-held territory until states were formed--and provision made as well for the governance of any later-acquired federal territory. Accordingly, the Constitution gave Congress "power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States..."

As with the Enclave Clause (Article I, Section 8, Clause 17), which gives Congress the power of "exclusive legislation" over both the nation's capital and federal lands acquired from and within states, the Territories Clause appears to be a plenary grant of power to Congress to govern territory as a general government, without having to trace each act of legislation to an enumeration of power beyond the Territories Clause itself. On this understanding, Congress can pass a general criminal code, regulate the private law of torts and contracts, provide for rules of marriage and descent, and behave within territories as could any state government within its own jurisdiction. this view emerges naturally from the text, which places territories in the same phrase as, and gives Congress the same power over, "other property," such as inkwells and wagons (see Property Clause). It was surely the view of the clause's author, Gouverneur Morris, who explained in 1803, "I always thought that when we should acquire Canada and Louisiana, it would be proper to govern them as provinces and allow them no voice in our councils. In wording the third section of the fourth article, I went as far as circumstances would permit to establish the exclusion." And it is the view that has prevailed in the case law, where the Supreme Court has repeatedly declared that Congress has "general and plenary" power over federal territory. Late Corp. of the Church of Jesus Christ of Latter-day Saints v. United States (1890).

To be sure, at various times, the Court has sought to ground federal power to govern territories in sources other than the Territories Clause, such as the treaty power or general notions of sovereignty. See sere v. Pitot (1810). Others, including Gouverneur Morris and the plurality in Dred Scott v. Sandford (1857), have occasionally argued that the Territories Clause applies only to territory held at the time of ratification, essentially reading the clause to say "territory...belonging to the Untied States [as of June 21, 1788]." With all due respect tot he authority of the Territories Clause (and all due disrespect to the author of the plurality opinion in Dred Scott), it is textually very difficult to limit the Territories Clause to territory held at the time of ratification. As Albert Gallatin pointed out in 1803, this would also limit the clause to "other property" held at the time of ratification, as the constitutional power over "territory" and "other property" is identical. The Territories Clause applies to after-acquired territory as surely as it applies to after-acquired inkwells and wagons. In any event, little has turned on these disputes, as the claimed scope of the power of territorial governance has not seemed to vary significantly with the claimed source. As the Court noted in National Bank v. County of Yankton in 1880, "There have been some differences of opinion as to the particular clause of the Constitution from which the power [to govern territory] is derived, but that it exists has always been conceded."

The broad consensus that Congress can rule federal territory as a general government has not prevented the Territories Clause from becoming among the most contentious sentences in the Constitution. Debates about territorial governance have been at the heart of disputes as heated and violent as the Civil Ware and the debates over imperialism at the outset of the twentieth century.

The Territories Clause is a self-contained grant of power, in the sense that it gives (or confirms in) Congress the powers of a general government over federal territories. But does that mean that the Constitution imposes no limits not territorial legislation? The answer to that question is obviously no; Congress, for example, cannot pass territorial legislation without complying with the formalities of Article I, Section 7, for lawmaking. If that is true, however, one must then ask what other parts of the Constitution might also limit the reach of the Territories Clause.

The simple answer would be that all parts of the Constitution that impose general limitations on the scope and form of federal power, other than the principle of enumerated congressional powers, would apply to action involving federal territories as surely as they apply to other federal action. That simple answer, however, while it might well e correct as a matter of original meaning, has never been the law, and it is emphatically not the law today.

From the founding onward, Congress has entrusted the inhabitants of federal territories with as much power of self-governance as has seemed prudent at the time, as a matter of democratic theory and to lay the groundwork for statehood (or nationhood if the territory eventually assumed independence), primarily by authorizing elected territorial legislatures with broad authority. If the Constitution's general separation-of-powers principles apply to territorial governance, this arrangement seems to violate even the weakest form of the non delegation doctrine by creating autonomous lawmaking bodies that act with no "intelligible principle" to guide them. See Note on Separation of Powers courts have nonetheless repeatedly and consistently upheld (albeit with little reasoning) territorial legislatures against such challenges. See, e.g., District of Columbia v. John R. Thompson Co. (1953); Cincinnati Soap Co. v. United States (1937).

Judges in federal territories do not have the tenure and salary guarantees that Article III, Section 1, requires of federal judges, an anomaly that has been consistently upheld by the courts since 1828. See American Insurance Co. v. 356 Bales of Cotton, Canter (1828). Since the middle of the twentieth century, many federal territories have been allowed to elect their own executive officers, such as governors, in apparent violation of the Appointments Clause (Article II, Section 2, Clause 2), which requires federal officers (and territorial governors rather clearly meet this description) to be appointed by the president, executive department heads, or federal courts. The constitutionality of this arrangement actually remains an open question, and high-ranking U.S. Department of Justice officials on more than one occasion in modern times have expressed doubts about it. And in the early years of the twentieth century, the Supreme Court held that the Constitution's provisions regarding the uniformity of duties and tariffs (Article I, Section 8, Clause 1) throughout the Untied States did not apply to territories. See Downes v. Bidwell (1901). the bottom line is that, for more than two centuries, territorial governance has stood largely, though not quite entirely, outside the Constitution's normal structural rules.

Even larger anomalies plague the question whether protections of individual rights, such as the Bill of Rights, apply to federal governance of territories. This was perhaps the nation's most pressing constitutional question in the first quarter of the twentieth century when, as the United States, became a global empire, the federal government had to decide whether to impose American legal institutions, such as trial by jury, on cultures that were unfamiliar with the practices. In a series of cases over two decades, the Court developed the so-called "doctrine of territorial incorporation" to address this issue The doctrine defies easy description, but in essence it distinguishes territories that are likely candidates for future statehood from those that are not. For the former, all provisions of the Constitution apply of their own force to territorial inhabitants. For the latter, those provisions that are "fundamental"--and the requirements of criminal juries and grand jury indictment have been specifically deemed not to be fundamental in this sense--apply of their own force to territorial inhabitants, while "non-fundamental" constitutional rights apply only if and how Congress chooses to extend them. This doctrine has been universally criticized by scholars, but it has never been overruled, and indeed was cited approvingly by the Court in Boumediene v. Bush (2008), which wrote that this "century-old doctrine informs our analysis in the present matter."

Furthermore, federal equal protection principles have consistently been held to apply differently to inhabitants of territories than to the inhabitants of states. Courts have upheld, for example, race-based employment preferences and restrictions on land sales in territories that would be dubious if imposed in states. See Wabol v. Villacrusis (1992). 

Thus, under current doctrine, the Constitution does not apply to territorial governance in a straightforward, uniform, easily understood fashion.

Even larger conceptual problems lurk in the interplay between congressional and presidential authority over territory. During times of war, American forces will sometimes occupy foreign land. Under international law principles, an occupying force has both the power and duty to govern the occupied territory. Because that occupied territory does not "belong" to the United States, the Territories Clause does not authorize congressional legislation to govern it. Instead, the power to govern occupied territory during wartime stems from the president's "executive power" and role as commander in chief to the military (Article II, Section 2, Clause 1). Territorial governance in that setting is part of, and is limited by, the international laws of war. See Fleming v. Page (1850). (Whether congress could take part in that governance pursuant to its own war powers or the Necessary and Proper Clause or both is unsettled.) If the occupied territory is eventually ceded to the United States by a treaty of peace, as has happened on several occasions then it becomes "territory...belonging to the Untied States," the president's wartime powers of governance seem to end, and congress's power to govern under the Territories Clause seems to begin. But what if Congress does not get around to governing?

This precise sequence of events occurred with respect to California in 1848 following the Mexican-American War. Congress, largely because of gridlock over slavery, did not pass a statute for the governance of California--not even a general statute delegating authority to executive officials. Military officials in California nonetheless et up, with no congressional authorization, a peacetime military government, including customs offices to collect tariffs. In the historically obscure but theoretically important case of Cross v. Harrison (1854), the Supreme Court upheld the constitutionality of a peacetime military government in federal territory. the precedent was extended following the Spanish-American War. See Santiago v. Nogueras (1909). The precise scope of this presidential authority to erect military governments during peacetime has yet to be fully explored.