• Last updated on November 10, 2022

In supporting the federal license of a steamboat operator who challenged a state monopoly, the U.S. Supreme Court expanded federal control of commerce and laid the basis for many future Court rulings on commerce.

Summary of Event

In order to provide the commercial relations of the United States with a sense of orderliness and uniformity that had been lacking before 1787, the U.S. Constitution empowered Congress to “regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Congress almost immediately took advantage of this power in the field of foreign commerce by providing for the regulation of ships and commerce from foreign countries and by enacting the National Coasting Licensing Act in 1793 National Coasting Licensing Act in 1793 for the licensing of vessels engaged in coastal trade. However, the Constitution was silent as to the meaning and scope of the commerce power. It was left to the Supreme Court, thirty years later, to make the first national pronouncement regarding domestic commerce in the case of Gibbons v. Ogden. Steamboats;and federal law[Federal law] Gibbons v. Ogden (1824) Supreme Court, U.S.;and commerce[Commerce] Constitution, U.S.;commerce clause Gibbons, Thomas Marshall, John [p]Marshall, John;Gibbons v. Ogden Ogden, Aaron New York State;steamboats Congress, U.S.;and trade[Trade] [kw]Gibbons v. Ogden (Mar. 2, 1824) [kw]Ogden, Gibbons v. (Mar. 2, 1824) Steamboats;and federal law[Federal law] Gibbons v. Ogden (1824) Supreme Court, U.S.;and commerce[Commerce] Constitution, U.S.;commerce clause Gibbons, Thomas Marshall, John [p]Marshall, John;Gibbons v. Ogden Ogden, Aaron New York State;steamboats Congress, U.S.;and trade[Trade] [g]United States;Mar. 2, 1824: Gibbons v. Ogden[1290] [c]Laws, acts, and legal history;Mar. 2, 1824: Gibbons v. Ogden[1290] [c]Transportation;Mar. 2, 1824: Gibbons v. Ogden[1290] [c]Trade and commerce;Mar. 2, 1824: Gibbons v. Ogden[1290] Fulton, Robert Johnson, William Kent, James Livingston, Robert R. Webster, Daniel [p]Webster, Daniel;and Gibbons v. Ogden[Gibbons v.Ogden]

The catalyst for this decision was the development of the steamboat as a means of commercial transportation. This was accomplished in August of 1807, when Robert Fulton Fulton, Robert and Robert R. Livingston Livingston, Robert R. made a successful voyage up the Hudson River Hudson River;steamboats on from New York to Albany. In April of 1808, the legislature of the state of New York responded to this success by giving Fulton and Livingston a monopoly to operate steamboats on New York waters for a period not to exceed thirty years. All other steam-powered craft were forbidden from navigating New York streams unless they were licensed by Fulton and Livingston. Any unlicensed vessels that were captured were to be forfeited to the same two men. A similar grant was obtained from the legislature of Orleans Territory in 1811, thus conferring upon Fulton and Livingston control over the two great ports of the United States, New York City and New Orleans. New Orleans;steamboats

New York State chief justice James Kent.

(Library of Congress)

As a practical matter, the commercial potential of steam transportation was too great to be left to the devices of two men. Rival companies soon came into being, and a commercial war reminiscent of the old Confederation era erupted. The state of New Jersey New Jersey;steamboats authorized owners of any boats seized under New York law to capture New York boats in retaliation. Connecticut would not allow Livingston Livingston, Robert R. and Fulton’s Fulton, Robert boats to enter its waters. Georgia, Massachusetts, New Hampshire, Vermont, and Ohio enacted “exclusive privilege” statutes for operators of steamboats on their own waters. Finally, a number of New York citizens defied the state law and operated unlicensed steam vessels up the Hudson River Hudson River;steamboats on . Among these was a man named Thomas Gibbons, who had a license granted under the federal Coasting Licensing Act of 1793 Coasting Licensing Act of 1793 . He was operating in competition with a former partner, Aaron Ogden, who had secured exclusive rights from Livingston and Fulton Fulton, Robert to navigate across the Hudson River between New York and New Jersey.

As early as 1812, the New York Court of Errors and Chief Justice James Kent Kent, James , one of the most prominent U.S. jurists, had issued a permanent injunction against intruders on the Fulton-Livingstone monopoly. Gibbons persisted in the face of this injunction because he had a federal license, and Ogden sought a restraining order in New York Court of Chancery. Kent, who by then was state chancellor, upheld the monopoly once again, reasoning that a federal coasting license merely conferred national character on a vessel and did not license it to trade, especially in waters restricted by state law. In short, there was no conflict between the act of Congress and the actions of New York State, for the power to regulate commerce was a concurrent one, existing on both the federal and state levels. Nevertheless, Gibbons persisted in appealing to the New York Court of Errors, where Kent’s decision was upheld. This set the stage for his final appeal to the U.S. Supreme Court.

It was expected that Gibbons’s case would be heard during the 1821 term of the Court, but for technical reasons it was delayed until February, 1824. The oral arguments lasted four and one-half days that, by all accounts, resulted in a great social and political occasion as well as one of the great moments in U.S. constitutional history. Among the distinguished attorneys presenting the case was Daniel Webster Webster, Daniel [p]Webster, Daniel;and Gibbons v. Ogden[Gibbons v. Ogden] , champion of a strong national government and the best-known orator of his time. Webster opened his argument in sweeping terms by contending that the statutes of New York, and by implication all exclusive grants of others states, violated the U.S. Constitution: “The power of Congress to regulate commerce is complete and entire,” he argued. Individual states have no concurrent powers in this area; the federal government’s domain is exclusive. Webster left no doubt that commerce included navigation. Opposing counsel necessarily wished to limit the notion of commerce to traffic or to the buying and selling of commodities, which would not include navigation. The regulation of New York, he contended, was a matter of internal trade and navigation, the province of the states.

The case before the Court, however, dealt with far more than the conflict between New York State law and a federal coasting licensing act. In the weeks immediately preceding and during the argument in Gibbons v. Ogden, Congress was debating whether it had the power to build roads and canals, a debate in which the association of slavery with national control over commerce became apparent. If Congress could legislate over matters of internal commerce, it could easily prohibit the slave trade. Furthermore, Marshall’s earlier decisions, particularly in McCulloch v. Maryland (1819) McCulloch v. Maryland (1819)[MacCulloch v. Maryland (1819)] Marshall, John [p]Marshall, John;McCulloch v. Maryland[MacCulloch v. Maryland] and Cohens v. Virginia(1821) Cohens v. Virginia Marshall, John [p]Marshall, John;Cohens v. Virginia , were under fire in Congress, from the president, and in the press.

In a sense, the forces arguing the two sides of the Gibbons case represented national power and the potential for emancipation (some would add those who supported the protective tariff) on one hand, and, on the other, state sovereignty and the fear of emancipation (with some free trade proponents)—a not altogether logical set of alliances. It was in this context, however, that one month later, on March 2, 1824, John Marshall delivered the decision of the Court.

Typically, the opinion was a broad one, loaded with gratuitous comments or representations, and not typically as nationalistic as expected, or as Webster Webster, Daniel [p]Webster, Daniel;and Gibbons v. Ogden[Gibbons v. Ogden] would have desired. Marshall began by agreeing with Webster’s definition of commerce:

Commerce, undoubtedly, is traffic, but it is something more; it is intercourse. It describes the commercial intercourse between nations, and parts of nations, in all its branches, and is regulated by prescribing rules for carrying on that intercourse. The mind can scarcely conceive a system for regulating commerce between nations, which shall exclude all laws concerning navigation, which shall be silent on the admission of the vessels of the one nation into the ports of the other and be confined to prescribing rules for the conduct of individuals, in the actual employment of buying and selling, or of barter.

What did the Constitution mean when it said that Congress had the power to regulate such commerce among the several states?

The word “among” means intermingled with. A thing which is among others is intermingled with them. Commerce among the States cannot stop at the external boundary line of each State, but may be introduced into the interior.

After having laid the logical groundwork for claiming complete and exclusive federal power to regulate such commerce, which was Webster’s Webster, Daniel [p]Webster, Daniel;and Gibbons v. Ogden[Gibbons v. Ogden] argument, Marshall then retreated, stating:

It is not intended to say that these words comprehend that commerce which is completely internal, which is carried on between man and man in a State, or between different parts of the same State, and which does not extend to or affect other States. . . . Comprehensive as the word “among” is, it may very properly be restricted to that commerce which concerns more States than one. . . .

The federal power over commerce was not exclusive, as Webster maintained, although in this instance, the state law was in violation of the federal coasting act. The one concurring opinion in the case given by Associate Justice William Johnson Johnson, William , ironically a Republican appointed by Thomas Jefferson, was stronger and more nationalistic than Marshall’s. Johnson contended that the power of Congress “must be exclusive; it can reside but in one potentate; and hence, the grant of this power carries with it the whole subject, leaving nothing for the state to act upon.”

For Marshall, if it was clear that the “acts of New York must yield to the Law of Congress,” it was also evident that the “completely internal commerce of a state, then, may be considered as reserved for the state itself.” The nationalist chief justice had unwittingly laid the basis for a multitude of legal perplexities by making a distinction between intrastate and interstate commerce (terms he did not use); and it would fall to less subtle judicial minds to interpret this as meaning commerce that does not cross state lines. Lest anyone misunderstand his position on the general enumerated powers of the Congress and on the theory of strict construction of the Constitution adopted by Ogden’s counsel and by Chancellor Kent Kent, James , Marshall concluded his opinion with these words:

Powerful and ingenious minds, taking, as postulates, that the powers expressly granted to the government of the union are to be contracted, by construction, into the narrowest possible compass, and that the original powers of the states are retained, if any possible construction will retain them, may, by a course of well digested, but refined metaphysical reasoning, founded on these premises, explain away the construction of our country, and leave it a magnificent structure indeed, to look at, but totally unfit for use. They may so entangle and perplex the understanding, as to obscure principles which were before thought quite plain, and induce doubts where, if the mind were to pursue its own course, none would be perceived. In such a case, it is peculiarly necessary to recur to safe and fundamental principles. . . .

In other words, the courts should construe the Constitution and the powers of Congress broadly.

In immediate practical terms, Marshall finally had rendered a popular decision. The steamboat monopoly had come to an end, and state fragmentation of commerce was prevented. Gibbons v. Ogden was the first great antitrust decision given at a time when monopolies were decidedly unpopular. Lost in the public euphoria over the end of “exclusive grants,” save to a few Jeffersonian Republicans, was the fact that Marshall had made the Supreme Court the future arbiter of matters involving congressional power over commerce and intervention into state police and taxing powers. In so doing, he had struck one more blow for a broad view of the Constitution and of national power. Only when steam came to be used for land transportation would the full commercial implications of the Gibbons decision be clear. If, as many maintain, half of the Constitution is the commerce clause (the other half being the due process clause of the Fourteenth Amendment), the Gibbons v. Ogden case has been correctly termed the “emancipation proclamation of American commerce.”

Significance

Chief Justice John Marshall’s opinion in Gibbons v. Ogden provided the starting point for all subsequent interpretations of the Constitution’s commerce clause. Initially, Marshall’s conception was demanded by the needs of a developing nation and an expansive approach to federal authority. The breadth and elastic nature of his definition of commerce, however, justified the extensive commercial enterprises in which the national government has been engaged since, including regulation of new forms of commercial activity brought about by technological changes, inventions, and advances in communications and transportation. During the twentieth century, the commerce power was used to justify various types of economic legislation (interstate and intrastate), including a presidential wage and price freeze under the Economic Stabilization Act of 1970 and noneconomic matters such as civil rights, kidnapping, and pollution control.

Further refinements of the definition of commerce and the types of activities that it encompasses evolved in a series of cases. Since 1937, the commerce clause has been understood to permit congressional regulation of intrastate activities that have a close and substantial relation to interstate commerce, so that their control is essential for protection from burdens and obstruction. In United States v. Lopez United States v. Lopez (1995) (1995), for example, the Supreme Court held that a purely intrastate activity is subject to congressional regulation only if it “substantially affects” interstate commerce. The case dealt with enactment of a 1990 criminal law banning possession of a gun within one thousand feet of a school. According to the Court, such noncommercial enterprise was unrelated to commerce, however broadly it is defined.

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Baxter, Maurice G. The Steamboat Monopoly: “Gibbons v. Ogden,” 1824. New York: Alfred A. Knopf, 1970. A narrative and assessment of the case in which the Supreme Court had its first opportunity to interpret the commerce clause of the Constitution.
  • citation-type="booksimple"

    xlink:type="simple">Faulkner, Robert K. The Jurisprudence of John Marshall. Princeton, N.J.: Princeton University Press, 1968. A comprehensive critique of Marshall’s juridical thought. Places Gibbons v. Ogden in perspective with regard to Marshall’s legal philosophy.
  • citation-type="booksimple"

    xlink:type="simple">Frantz, John P. “The Reemergence of the Commerce Clause as a Limit on Federal Power: United States v. Lopez.” Harvard Journal of Law and Public Policy 19, no. 1 (Fall, 1995): 161-174. A scholarly analysis of the Lopez case within the framework of the commerce clause, discussing its evolution.
  • citation-type="booksimple"

    xlink:type="simple">Lewis, Thomas T., and Richard L. Wilson, eds. Encyclopedia of the U.S. Supreme Court. 3 vols. Pasadena, Calif.: Salem Press, 2001. Comprehensive reference work on the Supreme Court that contains substantial discussions of Gibbons v. Ogden, United States v. Lopez, John Marshall, the commerce clause, and many related subjects.
  • citation-type="booksimple"

    xlink:type="simple">Levinson, Isabel Simone.“Gibbons v. Ogden”: Controlling Trade Between States. Springfield, N.J.: Enslow, 1999. Concise analysis of the Gibbons case and its legal ramifications.
  • citation-type="booksimple"

    xlink:type="simple">Newmyer, R. Kent. John Marshall and the Heroic Age of the Supreme Court. Baton Rouge: Louisiana State University Press, 2001. Examination of Marshall’s legal philosophy, with analyses of many Court decisions.
  • citation-type="booksimple"

    xlink:type="simple">_______. The Supreme Court Under Marshall and Taney. Arlington Heights, Ill.: Harlan Davidson, 1968. Contains detailed information and presents Marshall’s philosophy. Places Gibbons v. Ogden and the commerce power in historical context.
  • citation-type="booksimple"

    xlink:type="simple">Schwartz, Bernard. A History of the Supreme Court. New York: Oxford University Press, 1993. Comprehensive in scope, this scholarly work details the Marshall Court and its influence on U.S. politics and society.
  • citation-type="booksimple"

    xlink:type="simple">Smith, Craig R. Daniel Webster and the Oratory of Civil Religion. Columbia: University of Missouri Press, 2005. Biography focusing on Webster’s legendary rhetorical ability, which he employed in the Gibbons case.

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