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Gibbons V. Ogden Decision: Fair Or Unfair Essay, Research Paper
The decision in the Gibbons v. Ogden case is, in my opinion, a very just
and fair one. Many believe it to be the first anti- trust decision in U.S.
history. The economic results cannot be over-estimated, a different
decision could have resulted in completely different circumstances than with
which we are accustomed to today. The free flow of commerce, which we
seem to almost take for granted in modern economics and business, may have
never been a possibility without decisions such as this. Monopolies did not
allow for equal division of business and therefore was unjust. If all men are
created equal they should be given equal opportunities. The New York
Livingston-Fulton monopoly clearly subjected any potential competition to
harsh conditions that would make it impossible for them to keep up in their
business. Travel by steamboat was much faster than any other means in the
time of this case and to give complete control to only one partnership was
unfair. Under the constitution Congress has the right to regulate commerce.
Although the monopoly was a form of internal state trade regulation it
directly impacted on inter-state trade after a number of states passed laws
to come back at the New York monopoly. Therefore, Congress had the right
to intervene and end the monopoly.
To completely understand the impact of the Gibbons-Ogden decision
it is necessary to understand the situation surrounding it. In 1798 Robert R.
Livingston secured an exclusive twenty year grant from the New York
legislature. By the terms of this grant he could exclusively navigate by
steam the rivers and other waters of the state, provided that within two
years he should build a boat which would make four miles an hour against the
current of the Hudson River. The legislature had no faith whatsoever in the
project but the decision was still made against the many jeers. The terms
of the grant were not met and it was renewed in 1803, this time to
Livingston and his new partner, Robert Fulton. It was renewed once more in
1807 and finally that August Fulton’s steamboat made its first successful
trip from New York to Albany. The following year the Legislature, fully
aware of the practical significance of Fulton’s achievement, passed a law
stating that for each new boat navigated on New York waters by Fulton and
Livingston that they should be provided with a five year extension to their
monopoly, which may not exceed thirty years. The monopoly was made
further effective by not allowing for the travel of any other steam boats
along New York waters, unless licensed by Fulton and Livingston. Any
unlicensed vessel should be forfeited to them. Naturally this monopoly
worked hardships against on what would be Fulton and Livingston’s
competition. Neighboring states began to pass retaliatory laws against the
New York partners. In other words, as Cushman states on p. 187, “an
achievement of which had seemed destined to enlarge the means of
communication and develop the commerce of the nation appeared to be
embroiling the states in bitter antagonisms and commercial warfare such as
prevailed during the dismal period of the Confederation.”
Ogden and Gibbons had once been partners. They became rivals and
Gibbons began to navigate steamboats between two points in New York
under the authority of a coasting license obtained from the United States
government. Ogden secured a license from Fulton and Livingston. Upon
Ogden’s petition the New York court had enjoined Gibbons from continuing
his business. Chancellor James Kent had wrote the opinion of the court in
this case claiming the whole Hudson River belonged to New York, upholding
the validity of the New York statute establishing the monopoly and
repudiating the idea that there was any conflict involved between federal
and state authority. (Cushman, 187) Gibbons appealed to the Supreme
Court, presenting the first case under the commerce clause of the
constitution-Article I, Section 8 which provides congress with the power to
“regulate Commerce with foreign Nations and among the several States, and
with Indian tribes.” In his decision, Mr. Chief Justice John Marshall held
that the New York monopoly was unconstitutional in that it interfered with
the power of Congress over interstate commerce.
Webster’s argument against the validity of the steamboat monopoly
may be his best ever before the Supreme Court and Marshall’s decision may
have been his only truly popular one. Marshall delivered the opinion of the
court, saying that the laws giving exclusive privilege are repugnant because,
“1st. To that clause in the constitution which authorizes Congress to
2d. To that which authorizes Congress to promote the progress of science
and useful arts…” (Cushman, 188) Marshall’s decision helped to start the
U.S. on the road to the free flow of business.
There is though, as always, another side to this case. The commerce
which Congress may regulate can be taken as the transportation and sale of
commodities. In this case, Gibbon’s coasting license could not protect him
since he was carrying passangers, not goods. The monopoly only requires
that boats, once in New York waters need to be operated by means other
than a steam if not licensed. This law then is only a regulation of internal
state trade, not of commercial inter-state trade, therefore Congress cannot
have regulate since it is not affecting inter-state trade.
I think it was made obvious that this law was affecting inter-state trade.
New Jersey, Connecticut, Ohio, Georgia, Massachusetts, Pennsylvania,
Tennessee, New Hampshire, and Vermont all passed laws as a result from the
Livingston-Fulton monopoly. Congress had the constitutional right to end the
monopoly, “so accustomed are we to the free flow of commerce among the
states that it is hard to conceive how the nations might have developed if
the arguments in favor of the monopoly had prevailed…”(Cushman, 187)
Marshall’s decision demonstrated a clear improvement of the government
under the Constitution, as well as began to set limits against trusts.
America, as a free nation developed from the needs of men to be equal,
should be equal economically too. Monopolies prevented free flow and fair
competition among businesses and was definitely an unconstitutional
characteristic of our nation. In today’s times it is hard to imagine business
life like that, but for our economic system to have made it this far,
decisions like Marshall’s were very necessary. Business, by its nature
consists of competition. Whether or not that competition will be beneficial
or not to the individual depends on many factors, but one of these factors
should not include monopoly laws preventing them to try and outdo rivals in a
fair way. Although some may argue that the intended effect of the
Livingston-Fulton monopoly law itself was internal, it had a impact causing a
total of 9 other states to react by passing laws to counteract it, so it
obviously had a impact on the rest of the nation-direct or indirect-and
needed to be taken care of and Mr. Chief Justice John Marshall took the
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