Time Warp Continued - Gibbons V. Ogden
A continuation of our last
post:
The idea of Federal regulation of the Erie Canal was partially underlying the
answer to Liz
Covart’s Time Warp question
during a recent Ben Franklin’s
World podcast with Janice Fontanella, Schoharie Crossing
State Historic Site Manager. This
thought has crept up a few times when speaking with people, in particular those
that are just as interested in the railroads as they may be in canals. A recent talk by Craig Williams at the Schenectady County Historical Society
operated Mabee Farm in Rotterdam, NY hit on this partially as well - when a
member of the audience asked a question about the tolls operated on the canal
verses funds from the railroads in terms of passenger and freight cargo.
While a simple answer may be that in the early Republic, the
concepts of government regulation were still seen as tyrannical and the finer
nuances of authority and power were developing, we must remember that we have
the advantage – if we want to think of it that way – of viewing those matters
in hindsight and having the perspective of the era in which we live today.
Those inquiries have recalled the case of Gibbons V.
Ogden (1824) and the constitutional questions of commerce regulation that
it grappled with. Those questions
combined with the issue of a states right to apply its own regulatory authority
present themselves in this early Supreme
Court case. Below is posted an essay
on that court case as it pertains to the aspects of Article I Section 8 of the
U.S. Constitution as well as how it began the ever evolving development of
federal regulation of commerce throughout the country.
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Gibbons V. Ogden
22 US (9 Wheat) 1 (1824)
For
centuries navigation on waterways has been vital to the welfare of
societies. Through such exploration,
trade and access peoples have generated a network on which reliance and
dependability is essential. During the
early era of the new republic of the United States, transporting goods, as well
as people secured the success of the nation by developing a reliable economy
and dissemination of knowledge as well as culture. In the years that have ensued, progressive
actions following expansionism across the continent have both been fueled by
such use of waterways, technology and economics. The advent of new technology has brought with
it the need for examining how the intercourse between people may be to the
benefit or welfare of the populous. A
case brought before the United Supreme Court in 1824 provides an example of how
a new republic grappled with this in the perspective of commerce
regulation. Gibbons
Vs. Ogden established a foundational precedent
that has been utilized by the Federal government to expand its authority to
regulate such intercourse in order to foster economic growth or administer
legislative decree.
The
case itself hinged on several factors, most notable of which is found in
Article I, Section VIII of the U.S.
Constitution.
These “enumerated powers” given to Congress provided for it “To Regulate
Commerce with foreign Nations, and among the several States, and with the
Indian Tribes” (Harper 27-29). But in order to understand where that clause
applies, one must gain background on navigation of the era, the new reaches of
technology as well as the business and political elements involved.
 |
| Robert R. Livingston Jr. |
In
the decades that followed the American Revolution, migration of people, ideas
and culture shifted into high gear.
Travel of those people and knowledge, much like goods and produce,
relied on navigable waterways. The area
around New York City provided an astonishing hub for such
travel either north up the Hudson River, south along New Jersey and beyond, as
well as into the open sea to global markets.
By 1798, wealthy landowner and political figure Robert
R. Livingston Jr. maintained a monopoly over the waters
of New York and in 1807 he along with the man credited with steamboat
invention, Robert
Fulton created a partnership (Cox
641). Steamboat travel increased and the journey
from Manhattan to Albany, that once took days by sails that depended on
prevailing winds and water current, could be accomplished in thirty-six
hours. This would be improved upon so
that one could arrive in less than twenty-four (Adams 747).
 |
| Robert Fulton |
The
business venture was successful on the Hudson River and was able to secure monopoly
rights to navigation on that waterway from the New York State legislature. As steamboat travel was recognized as
profitable, competitors – particularly business man Aaron
Ogden – crept in.
Ogden was a “lawyer, statesman, and former governor of New Jersey” and
was attempting to gain footing in steamboat traffic. Faced with repeated New York Court
injunctions against him and his competing business – gained by the well
connected Livingston and Fulton – Ogden eventually bought into their venture as
he purchased business operators from their company (Cox
641).
 |
| Ogden |
 |
| Gibbons |
This
created a Constitutional debate. As
previously mentioned, Article
I, Section VII of the Constitution provides authority
of power to Congress to regulate commerce.
This “wide ranging Commerce Clause, allow[s] Congress to regulate
trade…among the states,” however, defining “commerce” and “among the states”
generated differing opinions. The intent
of the clause was to ensure that States would not develop tariffs or other
barriers to trade in fostering separate economies and allow for the “free flow
of goods” between States as well as to global markets. In this clause, Federal regulations supersede
State legislation and Congress has since utilized their enumerated right to its
authority over the economy through laws impacting “business across state
borders” (Harper 27-29).
 |
| North River Steam Boat Ad - 1807 |
In
the New York Court case between Gibbons and Ogden in 1820 the court ruled
against Gibbons. In his opinion
statement, the Chief Justice of the New York Court James Kent declared that the
Federal license only provided that Gibbons vessels were American and therefore
no infringement was made against New York control of commerce. Gibbons then appealed to the New York State
Court for the Correction of Errors in 1820 and to the United
States Supreme Court in 1821 (Cox 641).
The Supreme Court took
up the case in 1824. Senator
Daniel Webster from Massachusetts and Attorney General
William Wirt represented Thomas Gibbons.
They argued on the grounds that the United States Constitutions’
commerce clause gave authority to Congress to regulate commerce and trade
between the states – therefore the license as an instrument of that government
overruled New York State’s legislation and licensing of the monopoly. Gibbons license was obtained as part of the Federal Coasting
Act of 1793 and regulation of such navigation was
required as necessary by Congress to ensure no disputes occurred between local
and/or state governments over authority of regulation or taxation.
Aaron Ogden was
represented by former New York State Attorney’s Thomas Oakley and Thomas Emmet,
whom “insisted that both Congress and the States shared concurrent power over
interstate commerce” and that the State of New York retained exclusive right of
authority over the waterways within its borders. In asserting that right, the State had the
power to regulate monopolies that did not interfere with Federal statutes (Cox
641).
The
United States Supreme Court handed down their unanimous (6-0) ruling on March 2nd,
1824 with the opinion that a State cannot assert exclusive rights over
navigable waters and that “any matter that affects interstate commerce is
within the power of Congress” (Vile 3);
More so, Chief
Justice John Marshall “stated that the New York State steamboat monopoly
grant was
unconstitutional” and that Congress had sole authority to
regulate. Justice William Johnson concurred
in his statement that the United States Constitutions’ commerce clause was
sufficient to “invalidate the Fulton-Livingston monopoly” (Cox
641)
and thereby “nullified New York’s grant” (Lewis 740).
 |
| Chief Justice John Marshall |
In
the ruling, Marshall galvanizes further the understanding of the enumerated
powers given to Congress in Article I, Section VIII. Going further, he expounded on the fact that
“commerce is more than traffic.” Additionally
that regulatory powers do not terminate at State borders and jurisdiction is
provided to the Federal government even within the States boundaries as Federal
law – even when in conflict with State laws – is “supreme” (Vile
3). Regarding this case however, the fact that a
Federal license overrode a State license was upheld, but it also left open the
option moving forward for future State regulations within the scope of their
own powers (Cox 641).
Marshall,
in his ruling opinion, not only set out the courts judgment but also examined
the understanding of commerce and the interpretation of the Constitution. In that ruling, he stated that the case was
brought before the court as it was thought that the State Court ruling was
“erroneous” and “repugnant to the Constitution and laws of the United States.” In response to this, it is cited that
Congress not only has the power to regulate commerce but also “to that which
authorizes Congress to promote the progress of science and useful arts” (Marshall)
– further evidence that the idea of regulating navigation was more encompassing
than just the materials or profit aboard vessels.
Arguments
in the case insisted that the states “were sovereign” from each other but in
Marshall’s opinion the court – and Congress – clearly utilize that in “league
into a government” that they entered into and participate in the United States
government. They are in fact then, not
separate entities. Their union in the
Federal system means they must adhere to the “enumeration of powers expressly
granted by the people to their government” and if that is denied, the
government may be deemed invalid and “crippled.” It is at this point that the opinion
expresses in terms of “understanding” views on strict constructionism and the
interpretation of the Constitution; Something that continues as political
debate even to this day in America.
The
opinion also declares that commerce is greater than mere traffic as it is
additionally intercourse between people of ideas, services, goods, ideas and
perhaps more – be that with “nations and parts of nations” and with that
concerns the authority over regulation of navigation. Marshall states that this has always been
understood to be included within the idea of commerce. That providing that
power to be given to the “supreme” government authority in Congress, it asserts
that “American vessels…[will be] navigated by American seamen” and that “no
sort of trade can be carried on between this country and any other to which
this power does not extend” (Marshall). This would be seen as an even greater
extension of Congressional power in the subsequent decades. As defined in broad terms by Marshall,
commerce regulation has opened the door to increased Congressional authority in
regards to laws overseeing interstate systems (Vile 3).
At
the heart of this particular court case is that term, “among” in the Commerce
Clause. Marshall lays out in his opinion
that this is defined as “intermingled” and that any such commerce that exists
within or between states may be viewed as such, regardless or indifferent to
boundaries as each State is in agreement under the Federal system. The concern of dissenters being that any
enterprise with a State – even “completely interior traffic” in some way
constitutes intercourse by that wide definition and therefore commerce that
could be regulated by Congressional authority.
Marshall,
in claiming “the genius” of the Constitution explains that “internal concerns”
that solely concern or effect the state as “completely internal…may be
considered as reserved for the state itself.”
However when commerce includes goods or products of any kind with
distribution or import from foreign nations, it by definition must be under the
jurisdiction of the United States Congress.
Since navigable waterways “penetrate our country” and pass into the
interior sections of states, the right of Congress must be exercised.
That
right may apply equally to all commerce, but in terms of navigation – as in
this case – that “any matter, connected with commerce” may also be regulated
under the same provisions. The States
for that matter may also exercise their powers internally as within their own
jurisdictions if no Federal laws exist that forbids such power, to do so by
Constitutional authority: When in conflict with congressionally legislated or
Constitutional powers, the states “must yield to the law of Congress” (Marshall).
The
ruling did not clarify the issue overall and the debate over “State versus
Federal control of commerce” would continue to be a matter brought before the
Supreme Court. The opinion given in the
ruling for Gibbons v. Ogden (1824)
was upheld in the case of Brown v. Maryland (1827) (Cox
641)
which involved the requirement of foreign goods importers to obtain a Maryland
State license. In a six-to-one ruling,
the Supreme Court ruled that the State could not mandate that licensing as a
regulation on commerce as the Federal authority and control of trade with
foreign nations superseded State regulation of business as per Article I,
Section VIII of the United States Constitution (Vile 3-4). The court placed restrictions on
Congressional authority two years later in its ruling on Wilson v. Blackbird Creek Marsh Co.
(1829) in which it upheld Delaware State law regarding the
allowance of a company to place a dam across navigable waters (Marshall,
Willson, et. al).
In
the three decades following Gibbons v. Ogden (1824),
and under Chief
Justice Roger B. Taney the court shifted to support of State power
regarding “immigration, slavery, alcohol, and unemployment compensation.”
Nonetheless, a sectional divide germinated further. Many Northern newspapers supported the regulations as Southern concerns with the
Federal Congress increasing control of economic devices and the effect on
southern agriculture as well as the ever present issue overall of States’
rights. In the years after, the ruling
has been cited as precedent in the expansion overall of the Federal government
“control of interstate commerce” in other cases of varying means of transport –
such as: Wabash Railway v. Illinois (1886)
and in Swift v. United States (1905) (Cox
641). The
Wabash case continued an increase in the limitation of State rights and
furthered Congressional control of interstate commerce by effectively leading
to the establishment of the Interstate
Commerce Commission as a regulatory body. Railroads were determinate on State laws and
taxation – in its’ ruling the Supreme Court stated,
“…It cannot be too strongly insisted upon that the
right of continuous transportation from one end of the country to the other is
essential in modern times to that freedom of commerce from the restraints which
the State might choose to impose upon it, that the commerce clause was intended
to secure” (Wabash)
The Swift
v. United States case was again based on the Congressional power to
regulate commerce; however in this instance the violation of the Sherman
Anti-Trust Act provided additional leverage in the ruling
that went against a collaboration of “corporations, firms, and individuals”
that were conducting manipulation of livestock markets. The conspiracy violated the law due to “its
effect upon commerce among the States” as “shipments and sales involved were
between citizens of diverse States” (Vile 36). The court decision validated further that Federal
regulation would prevail and these cases as well as others extended the scope
of what oversight Congress had of commerce and industry. Many other decisions ranged from labor and
wage suits to gun control and segregation (Cox 642)
illustrating just how broad and encompassing the concept or understanding of
“commerce” can be applied.
 |
Tuesday May 10th [1842]
|
The
decision in Gibbons v. Ogden (1824)
was vitally important for New York State.
With the monopoly broken, an increase in business ventures and
entrepreneurs came at a pivotal moment in history as steamboat companies and
merchants as well as farmers and manufacturers could gain from “unrestricted
trade” (Cox
641)
– just in time for the completion of the Erie Canal. A result in the increased competition was a
steady decrease in transportation costs just as New York City entered a golden
era becoming the global shipping and financial hub. After the U.S. Supreme Court nullified New
York’s licensing law, the decade of the 1840’s saw over one hundred steamboat
companies operating in the State. That,
along with other waterway and boat improvements meant the trip from Manhattan
to Albany could be made in approximately ten hours and cost relatively little (Adams
747).
American distrust of corporate charters and specially granted licensing by the
State now seemed prevailing, as in such cases as Gibbons v. Ogden and later rulings the sentiment provided was that
citizens “had a legitimate interest in promoting transportation and prosperity”
which Federal regulation could provide in a widespread and reaching manner by
its power under the Constitution (Foner 322).
During the
twentieth-century and into the twenty-first, the debate has continued as to the
Congressional role of regulation on business.
Each divisive side expounds on the welfare of the economic system as
well as making use of Constitutional interpretations and Supreme Court
rulings. As Gibbons v. Ogden may remain a foundational case supporting the
right of the Federal government to regulate commerce, the shift in political
ideology as well as technological advances may factor into future
outcomes. The Supreme Court in 1824
understood this and perhaps that is why Chief Justice Marshall outlined their
understanding of how the Constitution should be considered in such cases. Regardless, it is obvious that the Court and
Congress have increased the power vested into it by Article I, Section VIII in
terms of regulating commerce.
References:
Adams, Arthur G.. The Encyclopedia of New York State. Ed. Peter
Eisenstadt. 1st ed. Syracuse, NY: Syracuse
UP, 2005, pp.747. Print.
Cox, Thomas. The Encyclopedia of New York State. Ed. Peter
Eisenstadt. 1st ed. Syracuse, NY: Syracuse UP,
2005, pp.641-642. Print.
Foner, Eric. Give Me Liberty!: An American History. New York: W.W.
Norton, 2009. Print.
Harper, Timothy. The Complete Idiot's Guide to
the U.S. Constitution. Indianapolis, IN: Alpha, 2007. Print.
Lewis, Tom. The Encyclopedia of New York State. Ed. Peter
Eisenstadt. 1st ed. Syracuse, NY: Syracuse UP, 2005, pp.740. Print.
Marshall, John. "Gibbons v. Ogden John
Marshall 1824." Gibbons v. Ogden. Ed. Steve Hanna. CARRIE, A Full-Text Electronic Library;
European University Institute, Italy, 1995. Web. 07 Feb. 2015. AMDOCS: DOCUMENTS FOR THE STUDY
OF AMERICAN HISTORY
Vile, John R. Essential Supreme Court Decisions:
Summaries of Leading Cases in U.S. Constitutional Law. Lanham, MD:
Rowman & Littlefield, 2014. Print.
"Wabash, St. Louis & Pacific Railway Company v.
Illinois 118 U.S. 557 (1886)." Justia Law. Web. 08 Feb. 2015.
<https://supreme.justia.com/cases/federal/us/118/557/case.html>.
“WILLSON AND OTHERS v. The Black Bird Creek Marsh Company,
27 US 245 - Supreme Court 1829.” Google
Scholar. 2015. Web. 07 Feb. 2015. http://scholar.google.com/scholar_case?case=9453582131092714732
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