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"Fifty-Four Forty" refers to a line of latitude, an east-west running line marking a north-south boundary. This particular line was the proposed national boundary between the expanding United States's Oregon territory and Canada. During the 1844 presidential campaign, the Democratic Party asserted that the United States could claim all territory in the Oregon Country north to the 54-40 line, or parallel. The British disputed claims north of the 42nd parallel. "Fifty-four Forty or Fight" became the slogan of the expansionists. After the election, Democratic Pres. James Polk eventually led the United States to agree to a compromise boundary at the 49th parallel, where the northern boundary still exists.
This phrase was a slogan for people who wanted to expand the United States far to the north in the Oregon Territory.
According to a treaty that was signed in 1818, the US and Great Britain were to jointly occupy the Oregon Territory, from what is now the southern border of Oregon to the line at 54 degrees 40 minutes North latitude.
In the 1830s and 1840s, Americans started to want to expand. The expansionists wanted the Oregon Territory to belong solely to the US. The slogan you mention was used by the most extreme of the expansionists. The meaning of the slogan was that the US should go to war with Britain unless Britain gave the US the entire Oregon Territory.
This issue ended with the boundary being set at the 49th parallel.
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