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Gibbons V Ogden Decision Fair Or Unfair

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 h

ad 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


regulate commerce.


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


appropriate actions.

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