Questions about the power of the federal government over the states have been around since the nation's founding. One of the oldest such arguments involves the regulation of commerce. Article I, Section 8 of the U.S. Constitution is known as the commerce clause. This section provides that the federal government is responsible for regulating commerce among the states. At the time the Constitution was drafted, the U.S. was an agrarian economy. Most commerce was conducted locally within states. It was not clearly established what role federal laws would have in day-to-day commercial activity.
The industrial revolution came soon after the nation's founding. As navigation, railroads, and interstate commerce grew, so did the importance of the commerce clause. Steamboats and railroads made interstate commerce much more common. It was inevitable that a clash between state and federal law would occur. The first case to tackle this issue was Gibbons v. Ogden in 1824.
The question asked in Gibbons is: How much power does the commerce clause give Congress? While Gibbons sided in favor of federal power, the question is still being decided in courts today.
The Significance of Gibbons v. Ogden
Gibbons v. Ogden does not appear at first glance to be a case that would have impact after 200 years. It involved New York's attempted regulation of steamboat operations along the coast and the Hudson river in the early 1800s.
There were no laws prohibiting monopolies in the early Republic. In fact, some states, including New York, created state-sanctioned monopolies. One such monopoly New York created was for steamboat operations, a burgeoning trade. Aaron Ogden held a license under this state-created monopoly to operate a steamboat between New York and New Jersey. Thomas Gibbons was a steamboat operator in the same waters under a license granted by Congress. Ogden sued to prevent Gibbons from running steamboats from Elizabeth, New Jersey, to New York City. New York courts sided with Ogden, preventing Gibbons from running commercial steamboats. Gibbons appealed to the Supreme Court.
The question was whether the New York legislature had the authority to grant a monopoly over navigation of its waters, or if the federal government had the power under Article I, Section 8, to regulate navigation.
Gibbons v. Ogden Ruling
The Supreme Court unanimously held that the Congress had the power to regulate navigation under the commerce clause. Congress had previously passed the Coasting Act of 1793. It was that act of Congress under which Ogden was operating his steamboats. Under the supremacy clause, federal laws supersede state laws. Therefore, New York's law (and the lower courts' opinions) were invalid.
As a result of the decision, New York's monopoly on intrastate steamboat operations ended. Gibbons could run commercial steamboat operations under federal law. More importantly, however, Congress was able to regulate commerce like never before. It was an important win for federal power over the states.
Gibbons v. Ogden Summary
The commerce clause holds that Congress shall “regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." To reach its decision, Chief Justice John Marshall analyzed the definitions of the words “commerce," “regulate," and “among the states."
Read narrowly, the commerce clause could regulate goods that cross over state borders only. Read expansively, the commerce clause could regulate a broad swath of commercial activity so long as it would eventually lead to interstate commerce. Chief Justice Marshall read the commerce clause as providing for the latter.
Rather than limit “commerce" to mean only the buying and selling of goods, Chief Justice Marshall read commerce to mean all “commercial intercourse" including navigation. Further, rather than limiting Congress' authority to merely physical goods that cross state borders, Justice Marshall interpreted "Among the States" to mean goods and services that began within state borders. In order for Congress to be able to regulate commerce, it need only cross a state border at some point.
However, Justice Marshall did not completely give control over to Congress. Commercial activity that took place entirely within a state was the sole province of that state.
A Hint of the Debate to Come
While unanimous, Justice William Johnson did write a concurring opinion arguing that the decision did not go far enough in giving power to Congress. According to Justice Johnson, "the power of Congress over navigation" is not "a power incidental to that of regulating commerce; I consider it as the thing itself; inseparable from it as vital motion is from vital existence." Put simply, of course Congress can regulate navigation. In Justice Johnson's view, the framers were clear in giving Congress broad power over commerce. To do otherwise would mean it is less than a sovereign nation.
This more expansive reading hinted at some of the decisions the Supreme Court would take up generations later. For example, the Supreme Court used the commerce clause to uphold New Deal legislation in the 1930s.
How Did Gibbons v. Ogden Strengthen the Federal Government?
The commerce clause has been used to uphold a number of federal laws. This is important because unless a power is given to Congress in the Constitution, it is the province of the states. It was the commerce clause that led the courts to uphold federal prohibitions against segregation in the 20th century, for example, by tying such laws to interstate commerce. In the 21st century, it has allowed Congress to regulate online commerce. It remains one of the most contested provisions of the U.S. Constitution, and the debate started with the 1824 decision in Gibbons v. Ogden.
Recently, however, the Supreme Court has begun to re-examine Congress' power under the commerce clause. For example, in 1995 the Supreme Court held that Congress did not have the power under the commerce clause to make gun possession within 1,000 feet of a school a federal crime, although that particular decision's effect is still unclear.
The image of a steamboat chugging along the Hudson River may seem quaint and antiquated. Similarly, the language and style of the opinion may make the decision seem outdated. Yet the legal issue tackled in Gibbons v. Ogden remains relevant to this day, and questions of federalism still regularly come before the nation's highest court.
You can read the full opinion on FindLaw.