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Background
Summary and Questions
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One of the enduring issues
in American government is the proper balance of power between the national government and
the state governments. This struggle for power was evident from the earliest days of American
government and is the underlying issue in the case of Gibbons v. Ogden.
In 1808, Robert Fulton and
Robert Livingston were granted a monopoly from the New York state government to operate steamboats
on the state's waters. This meant that only their steamboats could operate on the waterways of New
York, including those bodies of water that stretched between states, called interstate waterways.
This monopoly was very important because steamboat traffic, which carried both people and goods,
was very profitable.
Aaron Ogden held a
Fulton-Livingston license to operate steamboats under this monopoly. He operated steamboats
between New Jersey and New York. However, another man named Thomas Gibbons competed with
Aaron Ogden on this same route. Gibbons did not have a Fulton-Livingston license,
but instead had a federal (national) coasting license, granted under a 1793 act of Congress.
Aaron Ogden |
Thomas Gibbons |
Naturally,
Aaron Ogden was upset about this competition because according to New York law,
he should be the only person operating steamboats on this route. Ogden filed a complaint
in the Court of Chancery of New York asking the court to stop Gibbons from operating his boats.
Ogden claimed that the monopoly granted by New York was legal even though he operated on shared,
interstate waters between New Jersey and New York. Ogden's lawyer said that states often passed
laws on issues regarding interstate matters and that states should be able to share power with
the national government on matters concerning interstate commerce or business.
New York's monopoly, therefore, should be upheld.
Gibbons' lawyer disagreed.
He argued that the U.S. Constitution gave the national government, specifically Congress,
the sole power over interstate commerce. Article I, Section 8 of the Constitution states
that Congress has the power "[t]o regulate Commerce with foreign Nations, and among
the several States. . . ." Gibbons' lawyer claimed that if the power over interstate
commerce were shared between the national government and state governments, the result would
be contradictory laws made by both governments that would harm business in the nation as a whole.
The Court of Chancery of
New York found in favor of Ogden and issued an order to restrict Gibbons from operating his boats.
Gibbons appealed the case to the Court of Errors of New York, which affirmed the lower court's
decision. Gibbons appealed the case to the Supreme Court of the United States.
The key question in
this case is who should have power to determine how interstate commerce is conducted:
the state governments, the national government, or both. This was no small matter,
as the nation's economic health was at stake. Before the U.S. Constitution was written,
the states had most of the power to regulate commerce. Often they passed laws that harmed
other states and the economy of the nation as a whole. For instance, many states taxed goods
moving across state borders. Though many people acknowledged that these were destructive
policies, they were reluctant to give too much power over commerce to the national government.
The trick was to find a proper balance.
Chief Justice John Marshall's
decision in this case was a precedent for determining what that balance should be and has far-ranging
effects to this day.
Questions to Consider:
- Under what authority, state or federal, did Ogden operate his steamboats? Gibbons?
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What argument did Ogden use to support his license to operate steamboats? Gibbons?
- Why might New Jersey object
to New York's grant of a monopoly on steamboat operations on its waterways?
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The background information states that Gibbons relied on the Commerce Clause of Article I,
Section 8 of the U.S. Constitution to justify his case. Ogden could have used the Tenth Amendment
of the U.S. Constitution to back up his side of the case.
What does the Tenth Amendment state and how could it be applied to this case?
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This case appears to be a local dispute between two businessmen. However,
the decision in this case is one of the most important in constitutional history.
Please explain.
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