Colonial history of the United States Lower Louisiana. This vast tract was first settled at Mobile and Biloxi around 1700, and continued to grow when 7,000 French immigrants founded New Orleans in 1718. Settlement proceeded very slowly; New Orleans became an important port as the gateway to the Mississippi River, but there was little other economic development because the city lacked a prosperous hinterland. In 1763, Louisiana was ceded to Spain around New Orleans and west of the Mississippi River. In the 1780s, the western border of the newly independent United States stretched to the Mississippi River. The United States reached an agreement with Spain for
New France was returned to the king. Louis XV saw no value in Louisiana, and in order to bring about an end to the Seven Years' War, he transferred Louisiana to his cousin Charles III of Spain in 1763. Louisiana remained under the control of Spain until it was demanded to be turned over to France by Napoleon. Although Louisiana was property of France by the Third Treaty of San Ildefonso in 1800, Louisiana continued to be administered by Spain until the Louisiana Purchase in 1803. Following the Louisiana purchase, the population of the subsequently divided territory that contained most of present-day