The Compromise of 1850 transfers a third of Texas's claimed territory (now parts of Colorado, Kansas, New Mexico, Oklahoma, and Wyoming) to federal control in return for the U.S. federal government assuming $10 million of Texas's pre-annexation debt.
The Compromise of 1850 was a package of five separate bills passed by the United States Congress in September 1850 that defused a political confrontation between slave and free states on the status of territories acquired in the Mexican–American War. It also set Texas's western and northern borders and included provisions addressing fugitive slaves and the slave trade. The compromise was brokered by Whig senator Henry Clay and Democratic senator Stephen A. Douglas, with the support of President Millard Fillmore.
A debate over slavery in the territories had erupted during the Mexican–American War, as many Southerners sought to expand slavery to the newly-acquired lands and many Northerners opposed any such expansion. The debate was further complicated by Texas's claim to all former Mexican territory north and east of the Rio Grande, including areas it had never effectively controlled. These issues prevented the passage of organic acts to create organized territorial governments for the land acquired in the Mexican–American War. In early 1850, Clay proposed a package of eight bills that would settle most of the pressing issues before Congress. Clay's proposal was opposed by President Zachary Taylor, anti-slavery Whigs like William Seward, and pro-slavery Democrats like John C. Calhoun, and congressional debate over the territories continued. The debates over the bill were the most famous in Congressional history, and the divisions devolved into fistfights and drawn guns on the floor of Congress.
After Taylor died and was succeeded by Fillmore, Douglas took the lead in passing Clay's compromise through Congress as five separate bills. Under the compromise, Texas surrendered its claims to present-day New Mexico and other states in return for federal assumption of Texas's public debt. California was admitted as a free state, while the remaining portions of the Mexican Cession were organized into New Mexico Territory and Utah Territory. Under the concept of popular sovereignty, the people of each territory would decide whether or not slavery would be permitted. The compromise also included a more stringent Fugitive Slave Law and banned the slave trade in Washington, D.C. The issue of slavery in the territories would be re-opened by the Kansas–Nebraska Act, but the Compromise of 1850 played a major role in postponing the American Civil War.