The first party divisions in Indiana were not along the line of national questions, but on local issues that aroused considerable feeling and gave rise to factions as well as parties. Conspicuous among these issues were the question permitting slavery and the division of territory, the latter being more or less linked with the first. Knox County developed a dominating pro-slavery group with Harrison as its recognized head, and this was reinforced by the pro-slavery element in the Illinois country. Clark County and the eastern side of the territory were largely anti-slavery, with Jonathan Jennings as its most conspicuous champion. This division existed until the formation of the State Constitution fixed the status of the question in favor of anti-slavery. In 1805 one hundred and five anti-slavery residents of the Whitewater region signed a memorial to Congress petitioning that their section be annexed to Ohio, the reason directly given being that while they were in easy communication with the state they were separated from the Indiana seat of government by a wilderness that for many years would likely be unoccupied by any other than Indians. As these petitioners, were mainly, anti-slavery Quakers and entirely out of harmony with the party in power in Vincennes it is likely that the unexpressed reasons were the strongest.

Again, in the same year, another petition asked that a latitudinal division of the territory be made and that the lands already purchased form the Indians, extending from the Miami to the Mississippi be made into a state. This would give Vincennes the central and logical position for the permanent capital, and was all to its advantage, and it was opposed by the Illinois residents who objected vigorously to the Vincennes domination. One source of dissension was the question of entering the second grade of government, the argument against which was additional expenses and increased taxes without commensurate benefit; the Harrison party came to be regarded with odium as "aristocrats," and, in short, the territory with its internal animosities and factions was anything but a harmonious social unit.