The debate over the expansion of slavery into the territories was significant for both the northerners and the southerners. For both sides, the expansion of slavery would impact political power at the federal level. If slavery would not be allowed in the territories, when new states would enter the Union, they would then eventually become free states. This would give the free states more senators that would be against slavery. This would make it easier to adopt anti-slavery laws and policies. If slavery existed in the territories, then it would be possible for more slave states to eventually join the Union. This would give the slaves states more power in the Senate, making it easier to adopt laws and policies that would help slavery continue to exist in the United States.

Another factor that made the expansion of slavery an important issue was the impact that the expansion of slavery or lack of the expansion of slavery would have in each region. If slavery would not be allowed to exist in the territories, southern farmers would have been negatively impacted. The southern farmers wanted to grow more cotton, and the new territories provided land that was suitable for growing cotton. If the southern farmers couldn’t use slaves, then they might have lost opportunities to increase their profits. Northern businesses also wanted to expand to the new territories. If slavery was allowed in these territories, it might have been harder for these businesses to expand to these territories. This could have limited profits of these northern businesses.

For both sections, this issue was an emotional/psychological/political one.  For both sections (though more for the North) it was also an economic issue.

Both sections were very interested in this issue because they wanted to be able to feel that their side was getting its way.  They wanted to feel that the federal government worked for them.  Therefore, they wanted their system to spread into the territories so that they could feel that America was a country that was solidly behind their system.  In this way, they were after the intangible benefit of feeling that their side was on top.

But both sides were also interested in the issue for economic reasons.  This was particularly true of the North.  Both sides wanted the chance to be able to move West and find more opportunity.  If the "wrong" system were set up in the territories, they would find themselves cut off from this opportunity.  

In this way, there were tangible and intangible reasons for caring about this issue.

Why was slavery in the territories crucial for both Northerners and Southerners?

The ultimate significance of slavery being the defining issue for both North and South was to demonstrate in the new nation how democratic negotiation can do very little to offset intense convictions.  The significance of slavery being the defining issue for both sides was to demonstrate how there can be little negotiation on issues where passionate convictions reign supreme.  The new nation had defined itself on being able to negotiate away any problem.  Land acquisition, immigration influxes, issues between state and federal governments were all able to minimized through negotiation.  In this, there was a certain comfort in being able to bargain away any problem that arose.  The issue of slavery became significant because it shows how there really was to be no negotiation for the issue that defined Southern life as Northern opposition to it began to define its own being.  The reality that emerged was that negotiation in this realm was impossible, and while there were attempts such as the Missouri Compromise and the Compromises of 1850 and with popular sovereignty, the fundamental truth that both sides could not escape was that there are conviction- based issues that cannot be negotiated without some level of conflict being the result.  This becomes the significance of the issue of slavery for both North and South in leading to the Civil War.