One conflict has been over which level of government, state or national should control interstate commerce. Interstate commerce is the buying and selling of goods across state borders. This is different from intrastate commerce, which is the buying and selling of goods within state borders.

An early case in the Supreme Court of the United States, Gibbons v. Ogden, helped to determine who had power over interstate commerce, the states or the national government.

In 1808, Robert Fulton and Robert Livingston had a monopoly to operate steamboats on the waterways of New York state. This meant that only their steamboats could operate on the waterways of New York. This monopoly was given to them by the New York state government. This monopoly was very important because steamboats carried both people and goods and was very profitable.

Aaron Ogden had 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.

The problem was that the waterway between New Jersey and New York was an interstate waterway. The business on this waterway was interstate commerce. The question was who had the right to issue a license to operate boats on this interstate waterway, the state of New York or Congress (the national government)?

Aaron Ogden was upset about the competition and asked the Court of Chancery of New York to stop Gibbons from operating his boats. Ogden said that New York should have control over this interstate waterway.

Gibbons disagreed. He said that the United States Constitution gave the national government, Congress, the only 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 said that if each state made laws regarding interstate commerce, there would be chaos.

The Court of Chancery of New York found in favor of Ogden and ordered Gibbons to stop his boats. Gibbons appealed the case to the Court of Errors of New York, which agreed with the lower court's decision. Gibbons appealed the case to the Supreme Court of the United States.


Questions to Consider

  1. Under what authority, state or federal, did Ogden operate his steamboats? Gibbons?

  2. What argument did Ogden use to support his license to operate steamboats? Gibbons?

  3. Why might New Jersey object to New York's grant of a monopoly on steamboat operations on its waterways?

  4. This case is one of the most important cases in U.S. history. Why is interstate commerce so important to the development of the country and its economy?