Gibbons vs. Ogden: Steamboat Monopoly video

Introduction to Gibbons vs Ogden

• In 1787, Philadelphia was the site of both the writing of the U.S. Constitution and the introduction of the steamboat.
• The steamboat transformed travel and trade in the U.S., which previously faced challenges due to poor roads.
• John Fitch invented the first steamboat, named Perseverance.
• The steamboat was the subject of many personal and political battles, including a Supreme Court case.

The Fulton-Livingston Monopoly

• Robert Fulton and Robert Livingston improved the steamboat design in the early 1800s.
• In 1808, New York lawmakers granted them a 20-year monopoly to operate steamboats on the Hudson River.
• Competitors were prohibited by the Fulton-Livingston Monopoly, which resulted in poor service and high prices for the public.

The Conflict Between Ogden and Gibbons

• Aaron Ogden, a former governor of New Jersey and U.S. Senator, capitalized on the Fulton-Livingston Monopoly.
• Thomas Gibbons, a lawyer and former friend of Ogden, obtained a federal coasting license to operate steamboats on the same route.
• Gibbons charged passengers less, defying the monopoly.
• Gibbons argued that New York did not have the right to exclude people from other states and that his federal license allowed him to enter New York waters.
• Ogden sued Gibbons, claiming he was violating his monopoly rights.
• Lower courts sided with Ogden, issuing an injunction against Gibbons

The Supreme Court Case: Gibbons v. Ogden

• In 1824, the case went to the Supreme Court.
• The case attracted national interest because it concerned the regulation of commerce and the novelty of steam power.
• Ogden and Gibbons were primarily motivated by financial interests.
• The Supreme Court's decision would determine the extent of federal government power over economic activity.
• The court turned to the U.S. Constitution, written in the same year the steamboat was introduced.
• New York argued that the 10th Amendment gave them the power to regulate waterways.
• Chief Justice Marshall had to answer 2 questions: What is commerce based on the Commerce Clause and is running a steamship from two ports in differing qualifies as commerce.

The Court's Interpretation of the Commerce Clause

• The first Supreme Court case to directly address the Constitution's Commerce Clause.
• The court needed to determine the range of Congress's power to regulate commerce among the states.
• The court needed to determine the definition of the word commerce and whether or not that definition included navigation.
• Marshall defined commerce as commercial interaction that includes navigation.
• The court had to define "among," which refers to more than one state.
• Marshall ruled that "among" includes commerce that takes place within a state but affects commerce in other states.
• Interstate commerce can take place among the states even if it's in one state.

The Decision and Its Impact

• Marshall stated the congress's power over commerce is total, meaning complete.
• Complete power that acknowledges no limitations other than are prescribed in the Constitution.
• The Court ruled that the New York Monopoly law was in conflict with the Constitution and therefore void.
• Federal law prevails when state and federal laws conflict.
• Gibbons was then free to conduct business on the Hudson River.
• The steamboat industry saw significant growth due to the decision.

Legacy and Modern Relevance

• Monopolies nationwide were abolished, leading to an extraordinary effect on the early American economy.
• Gibbons versus Ogden decision relates to the passage of the new healthcare Act, Social Security Act, Medicare and sending money to your school for improving your education system and helping you buy books.
• The Commerce Clause is used to justify many congressional actions.
• The Supreme Court would soon face cases that profoundly affected individuals, setting the stage for conflicts with the president and a tragic period in American history.