Final answer:
The Compromise of 1877 was created by the federal government to resolve the dispute between the Republican and Democratic Parties in the election of 1876 by offering southern Democrats control over their own states' fates.
Step-by-step explanation:
The compromise that was created by the federal government to resolve the dispute between the Republican and Democratic Parties in the election of 1876 was the Compromise of 1877. This compromise was reached as a result of the disputed election, in which Republican Party leaders offered southern Democrats a deal. The deal stated that if a special electoral commission found in favor of a Hayes victory, Hayes would withdraw the remaining U.S. troops from three southern states, allowing the collapse of the radical Reconstruction governments and giving southern Democrats control over their own states' fates.