The document summarizes how the US government dealt with the issue of slavery in new territories acquired from Mexico following the Mexican-American War. It discusses the Wilmot Proviso which banned slavery in these territories, the concept of popular sovereignty which let settlers decide, and the formation of the Free Soil Party. It also outlines California gaining statehood as a free state, the Fugitive Slave Act which required Northerners to return escaped slaves, and tensions growing between slave and free states.