Gibbons v. Ogden and congressional authority over interstate commerce

Interstate Commerce / Gibbons v Ogden

Throughout much of American history, the overall authority of Congress to regulate interstate commerce has largely been accepted as a fundamental power, bestowed upon them in the Commerce Clause of the Constitution. This simply states that, "The Congress shall have the power to regulate commerce with foreign nations, among the several states and among Indian tribes." ("U.S. Constitution -- Article 1 Section 8") However, prior to the Supreme Court case Gibbons v Ogden this overall scope of authority was very ambiguous at best. As the states often viewed, that they have the power to regulate commerce within the state itself and at its borders. This is because there never was a strong central government under the Articles of Confederation to regulated trade / commerce. What happened was the Articles of Confederation loosely committed the states to one another through: friendship, commonality and mutual defense purposes. However, beyond this scope the overall powers of the central government were restricted at best. Over the course of time, this would lead to a number of different issues that would underscore the need for regulation of trade throughout the country. Where, Congress had the power to regulate treaties with foreign countries, yet they had little power to regulate trade among the states. This lack of authority would create an uneven set of standards that would vary from state to state. As a result, various disputes were quickly developing on rivers that border different states. Where, both the states and the federal government would claim to have the authority of regulating trade at its borders. Consequently, many states began to create their own form of currency and began to impose tariffs / trade barriers, in an effort to regulate the overall amount of commerce that is taking place. As the various disputes became more heated, there were calls to scrape the Article of Confederation and create a new document that would give the central government more power, the Constitution. ("The Articles of Confederation") Once ratified the new document would increase the overall authority of the federal government dramatically. Yet, the scope of the different powers afforded to Congress were constantly challenged in the courts, one of the most notable would include: the power to regulate commerce. Where, many states continued to hold on to the belief that they have this power over Congress. At which point, this would lead to the Supreme Court case Gibbons v Ogden, which would have a number of different causes and effects going forward. It is through examining the case itself and how it affected the United States going forward, that will provide the greatest insights as to how much authority Congress has in the regulation of interstate commerce.

Background Gibbons v Ogden

Thomas Gibbons was steamship operator, who had received his license from Congress allowing him to engage in interstate trade, using his different ships. However, the State of New York had passed its own set of laws licensing who could use its waterways for commerce. In this particular case, New York decided to give a monopoly of the use of the waterway to a group of investors led by Robert Fulton. One of the partners in the business was Aaron Ogden. The two different laws would create showdown, between how much power the federal government would have over interstate commerce, in relation to the states. This was brought to the forefront when Gibbons attempted to use the same waterways that the Fulton Ogden group, had been licensed to use by the state. At which point, Gibbons was denied access to the use of the state's waterways; with law enforcement citing the New York State law as the most relevant. Later on, Ogden would file a lawsuit in the Court of Chancery of New York, asking them for an injunction against Gibbons from operating his ships on New York's waterways. At the heart of Ogden's argument's, were that states would often pass laws to regulate commerce within their borders. Therefore, under the Constitution, the states are given an equal amount of power to regulate trade in comparison with the federal government. The Court of Chancery of New York found in favor of Ogden, granting him the injunction against Gibbons using the waterways. At which point, Gibbons would appeal the case to the Court of Errors of New York (which upheld the lower courts decision). This would lead to the Supreme Court hearing arguments in the case. ("Gibbons v. Ogden")

Ruling of the Supreme Court

The Supreme Court ruled in favor of Gibbons. At the heart of the issue, was that commerce was more than just the transportation of goods from one point to another. Instead, it was the free low of ideas, goods and services among different groups. Under the broader definition of trade, this meant that the arguments made by Ogden (mainly the transportation of people was regulating free movement) were irrelevant. This is because the broader definition was allowing for the free flow of people from one place to the next. As a result, Gibbons was providing a service and was helping ensure the free flow of ideas. The licensed that he received from Congress is regulating these principals. Based on this interpretation along with the previous case law decided in McCulloch v Maryland and the Supremacy Clause of the Constitution; New York State does not have the power to regulate trade. Instead, this power is solely reserved for Congress with the court saying, "The power to regulate commerce, so far as it extends, is exclusively vested in Congress, and no part of it can be exercised by a State. State inspection laws, health laws, and laws for regulating the internal commerce of a State, and those which respect turnpike roads, ferries, & c. are not within the power granted to Congress. The laws of N.Y. granting to R.R.L. And R.F. The exclusive right of navigating the waters of that State with steam boats, are in collision with the acts of Congress regulating the coasting trade, which being made in pursuance of the constitution, are supreme, and the state laws must yield to that supremacy, even though enacted in pursuance of powers acknowledged to remain in the States. A license under the acts of Congress for regulating the coasting trade, gives a permission to carry on that trade. The license is not merely intended to confer the national character. The power of regulating commerce extends to navigation carried on by vessels exclusively employed in transporting passengers. The power of regulating commerce extends to vessels propelled by steam or fire, as well as to those navigated by the instrument ability of wind and sails." ("Gibbons v Ogden") As a result, the significance of this decision would give the federal government a larger amount of power in areas of commerce over the states. This would lead to a number of different issues between the states and the federal government over areas power.

The Long-Term Effects on the United States

Gibbons v Ogden would lead to a number of different debates, as to the overall scope of what the decision would mean about the power that Congress would have over commerce. The initial fear from the case is that this would give the federal government the authority to consolidate all of the states power. Instead, the effects were that it opened up interstate commerce. This was significant, because prior to the ruling many of the different states had their own set of laws that they would impose on matters of commerce. This slowed the free flow of people, goods, services and ideas. As the various regulations and barriers made it far more difficult for one person to travel, much less conduct business in another state. Once this decision was handed down, the steamship industry would see a massive expansion as they were able to travel from one state to the next freely. This would allow for the development of the nations first transportation system, through the various rivers and waterways. Over the course of time, one could argue that the effects of this ruling allowed for the industrialization of America. Where, the free flow of goods and services between the states, would allow the federal government to create a number of different transportations systems (that would help promote commerce). To include: the interstate highway system, the railroad, national utility grids, the internet and the air transportation industry.

However, the overall effects of Gibbons v Ogden can be seen much further than just the way that interstate commerce was developed. Instead, this case would have much more far reaching effects on how the federal government would regulate commerce, business and the role that it would play in the economy. After the Supreme Court decision the federal government began to expand the overall power that it had in relation to the states. Where, it could use its power to regulate commerce, as a way to effectively control the different states. This would empower Congress to pass various laws to regulate commerce and the economy in general. Some good examples would include: the Sherman Anti-Trust Act, the Securities and Exchange Act of 1934, the Federal Reserve Act, the Glass Stegall Act and the Investment Company Act. All of these different laws are significant, because in one way or another the federal government is attempting to control the overall amounts of commerce. For example, the Securities and Exchange Act of 1934 gives the federal government to regulate the nation's stock markets and the financial industry. This was in response to the 1929 stock market crash, where it was determined that one of the reasons why the crash took place was: no regulation of the stock market. To prevent the anything goes type of atmosphere, the federal government began to regulate these markets (because interstate commerce was involved). ("Securities and Exchange Act of 1934") In this particular aspect, this law is directly tied to the Supreme Court case Gibbons v Ogden, because it established the precedent that the federal government has the right to regulate commerce.

Yet, beyond the issue of commerce is the overall amount of power that the federal would have over the states. This is important because since the end of the American Revolution, the scope of powers that the federal government has would constantly be debated. Where, the ratification of the Constitution would be in question, because some of the opponents feared that it would give the federal government to much power over the lives of every day citizens. Many people feared that by giving the federal government this much control; will eventually lead to them seizing power from the states and implementing authoritarian rule (something the British did). As a result, the overall increase in power of the federal government would stoke these fears. Like what was stated previously, Gibbons v Ogden created fear among the general public and pundits that this would lead to a consolidation of federal power. However, the case would signify a shift in American political traditions, as the federal government would continue to play an important part in regulating the states. At the heart of the debate created by Gibbons v Ogden, was to the overall power that the federal government would have, in comparison with the states. Where, since that decision the power of the federal government would greatly expand over nearly 180 years. This is because the case would serve as a precedent that would allow their overall authority in a number of different areas to increase. What happened was, Gibbons v Ogden was a part of a series of Supreme Court cases that would quickly place any kind of power that the states did have in check. This because a number of different issues were constantly being brought to the forefront, in regards to the overall power that the federal government would have in comparison to the states. A good example of this can be seen by Cohen v Virginia, where it was decided before the ruling of Gibbons v Ogden. In this particular situation, the Supreme Court ruled that they have the power to review state court decisions. ("Cohens v Virginia") This is significant because it solidified the courts authority over all of the other parts of the judicial system. To include: finding the actions taken by the courts or state legislatures as unconstitutional. Signaling, the growing amounts of power that the federal government would have over the states.

However, the overall scope of powers of the federal government would continually be tested. Gibbons v Ogden affirmed the power to regulate commerce, yet, there was confusion about how and when such power can be applied. A good example of this can be seen with the Supreme Court case Willson v Black Bird Creek Marsh Company. In this 1829 case, the Black Bird Creek Company was given the power under Delaware law to construct a dam. When one of the citizens tore down this dam, the company filed a lawsuit claiming that they had violated Delaware state law. At the heart of the argument, was if the state had the power to impose laws that were given to Congress. This is despite the fact that Congress had never passed any laws on if the construction of the dam was illegal. The high court ruled in favor of the company, claiming that when there are no federal laws in place, the states have the right to create their own laws. ("Willson v Blackbird Creek Marsh Company") This significant because it shows how the federal government's power is expanding, yet it is limited to a certain extent. Where, there are clearly defined powers and responsibilities of the states. During situations where federal regulation is lacking, the state has the option of creating their own regulations to address these issues.

The Impact of the Gibbons v Ogden into the New Millennium and Beyond

The impact of Gibbons v Ogden has had a major effect on role that the federal government and states have in relation to one another. This is because the decision would allow the federal government to have authority over the states, in matters of commerce. However, beyond this scope, the overall powers of the federal government began to rapidly increase. Where, they would attempt to instill principals of the Constitution, across the entire country. A good example of this can be seen with the issue of slavery, where the Constitution did not specifically outlaw the practice. This would allow for the ideas of equality and freedom to only apply to certain groups of people within society. After slavery was outlawed, the different states attempted to impose their own laws in restricting African-Americans (the Jim Crowe Laws). These were laws that allowed for separate facilities for whites and blacks. Where, they were allowed to stand when ruling of Plessey v Ferguson determined that separate but equal was Constitutional. The problem with this ruling is that it would legally allow discrimination to occur for many decades. As a result, once the Supreme Court ruled in Brown v the Board of Education that racial segregation was unconstitutional; the federal government would begin to destroy these local laws. This can be seen with the passage of the Civil Right Act of 1964, where the federal government would impose quotas and forbid laws that allowed one group of people to legally discriminate against another. (Wolff) ("The Civil Rights Act of 1964 and the EEOC") What all of this shows, is how Gibbons v Ogden was an early test as to how much power the federal government would have in comparison to the states. While the issue of the case is focused mainly on commerce, the overall big picture is how much power the federal government has over the states. As a result of this ruling, it was determined that the federal government has the power over the states in matters of legislation. Where, all federal laws are considered to be superior to any state laws. This power is significant, because it has allowed the federal government to be able to impose the ideas of the Constitution. During times, when the states are refusing to do so or are claiming that this is within their areas of authority. Over the course to time, the effects of the ruling from Gibbons v Ogden, has allowed the federal government to impose its power upon the states. The precedent that was established by this court case would have a major effect upon American history. As the overall role, of how much power the states would have in comparison to the federal government would lead to: a civil war, civil unrest, numerous Supreme Court cases and heated debate (as to the overall extent of this power). To this day, the arguments about how big the federal government should be and how much power it has continues to be hotly debated. An example of this can be seen with the recent health care debate, where one side is claiming that the federal government must regulate the industry more to control spiraling costs. While opponents claim, that such powers are beyond what is granted to them in the Constitution. In many ways, the issue of federal vs. state power can be tied directly to Gibbons v. Ogden.

Clearly, Gibbons v Ogden was a significant Supreme Court case that would have far reaching effects on the overall scope of power, which the federal government has in comparison with the states. This is because prior to the ruling, many states would often pass their own law that would regulate trade, the economy and other activities (that occur within the state or its borders). In many ways, these conflicting laws would reduce the overall amount of interstate commerce. Where, merchants and those people traveling between the different states would have to deal with a host of issues ranging from: taxes / tariffs to the free movement of people. Once the decision was handed down, it would greatly expand the power of the federal government in a number of different areas. This is because the case would establish a legal precedent, as to how much power the federal government would have in the area of interstate commerce. The way that this would expand the power of the federal government is: by establishing a precedent as to what powers the state and federal government would have in relation to one another. Over the course of time, this debate would increase the overall powers that the federal government would have over the states. However, there were limitations as to how much authority the federal government would have over state governments. This is important, because it underscores the heart of the debate that continues to rage to this day, as to how much power and how big the federal government should be. In many ways, one can directly tie the power given to Congress over commerce, as a signal that the federal government's power was continuing to increase. It is through examining Gibbons v Ogden in this light; that will provide the greatest insights as to the overall role that the federal government has in comparison with the states. Where, this issue will continue to be grappled with well into the future.