Gibbons v. Ogden

Sources

Fulton’s Steamboat. In August 1807 Robert Fulton’s steam-powered ship, the Clermont, traveled up the Hudson River from New York City to Albany in thirty-two hours. Fulton’s success proved that steamships traveling through inland waterways could be an efficient and profitable means of transporting passengers and commodities. Steamboats were faster and more reliable than wind-powered vessels, and their services proved to be far less expensive than hauling goods by wagon over primitive road networks. Political leaders in New York envisioned their state becoming a vital passage for both migration and trade to the West, and they worked aggressively to capitalize on the revolution represented in Fulton’s success. As early as 1800 some enterprising New Yorkers hoped to open a canal through upstate New York, linking the Hudson River to Lake Erie. In 1815 DeWitt Clinton, former mayor of New York City, became the canal’s leading advocate, and in 1817 New York’s legislature agreed to finance the project. The Erie Canal was completed in 1825 at a cost of $7 million. Travel and trade along this and ancillary water routes (many inspired by the Erie project) quickened the movement of people and commerce into the Trans-Appalachian West. Shipping costs between New York City and Lake Erie dropped from one hundred dollars to nine dollars per ton. The western periphery of New York, and thus the Great Lakes, now could be incorporated into the economy of the eastern United States.

State-Sanctioned Monopoly. The great success of the Erie Canal demonstrated the efficacy of governmental efforts to support commerce and migration through the creation of a permanent transportation system. States supported businesses and protected their competitive advantage with regard to other states through other means as well. New York State awarded Fulton and his partner, Robert R. Livingston, the exclusive rights to navigate “all the waters within the jurisdiction of that State, with boats moved by fire or steam.” In other words, Fulton and Livingston received a monopoly. Hoping to make a profit in the shipping business, the steamship operator Aaron Ogden purchased a license from Livingston that allowed his company to operate in New York waters. Thomas Gibbons, owner of a license under the Federal Coasting Act, ran a competing line that ran between New York City and New Jersey. To defend his business against a rival Ogden filed an injunction against Gibbons. In 1820 the New York courts upheld Fulton and Livingston’s monopoly, and by extension Ogden prevailed in his suit. Gibbons appealed his case to the Supreme Court.

Commercial Nationalism. Gibbons v. Ogden reached the U.S. Supreme Court in 1824. The critical issue that emerged was not over the legitimacy of the virtual monopoly New York State awarded to a few businesses but rather whether states could pass such laws, which, in operation, restrained trade. Chief Justice John Marshall, speaking for the Court in a 6-0 decision on 2 March, overturned the act passed by the New York legislature. Taking a nationalist position, Marshall referred to the power that the Constitution gave Congress to regulate interstate commerce. The Court defined trade and commerce broadly and in such a way as to embrace the transportation of people as well as goods. In this light, acts passed by Congress (such as granting navigation rights to commercial ships engaged in coastal trade) superseded state laws, many of which overlapped or conflicted with one another. Marshall was careful to articulate a narrow interpretation and avoided claiming that the federal government had exclusive rights in matters of interstate commerce. In the end the decision discouraged states from pursuing independent policies on trade.

Sources

Lawrence M. Friedman, A History of American Law (New York: Simon & Schuster, 1985);

Charles Sellers, The Market Revolution: Jacksonian America, 1815–1846 (New York: Oxford University Press, 1991) .