Britain signed the Treaty of Paris with France in February, 1763, ending the Seven Years' War – also called the French and Indian War – which had been fought over disputed territory in the Ohio River valley. The treaty ceded all French territory east of the Mississippi River and some Spanish territory in North America to the British and established British America's western boundary at the Mississippi River.
Britain and France had difficulty coming to a peace agreement to end the Seven Years' War, in large part because Spain was unwilling to acknowledge Britain's conquest of Spanish territory. As part of the agreement that enabled the Treaty of Paris to go forward, France agreed to give up all of the land in North America, ceding all lands east of the Mississippi to England and all lands west of the Mississippi to Spain. In October of the same year, King George III of England issued the Proclamation of 1763, forbidding colonists to settle west of the Appalachian Mountains. This proclamation, which was largely ignored by the colonists, was intended to keep peace with Native Americans by establishing a boundary between British settlement and territory reserved for the Native Americans.
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