The Clermont Steam Boat

Robert R. Livingston

Ogden vs Gibbons

Stevens Family

Odgen vs Gibbons (1824)
Breaking the Fulton-Livingston Monopoly

Steamboats of the Hudson River
The Early Years: 1807 - 1824

The monopolistic grants by New York States to Robert Fulton and Robert R. Livingston did much to delay the introduction of steamboats. The Legislature of the State of New York passed a law in 1798 giving to Chancellor Livingston the exclusive privilege of "navigating all boats that might be propelled by steam, on all waters within the territory, or jurisdiction of the State, for the term of twenty years." The act allowed Fulton and Livingston to seize any steamboat run by others without their license, and to collect a penalty for every trip made.

The New York monopolistic grants created new and unforeseen questions about the relationship between the states and the role of the Federal Government in regulating commerce among the states.  Since New Jersey shared the Hudson River with New York, New Jersey felt New York unjustly claimed an exclusive jurisdiction over the Hudson River.

New Jersey passed laws protecting its citizen’s rights to use steamboats on the Hudson River, and New York passed laws providing for more stringent enforcement of the Fulton-Livingston monopoly and making it more difficult for New Jersey citizens to operate steamboats.  Fulton and Livingston kept suing and obtaining injunctions against anyone working a steamboat without their license.

Finally, in 1820, the New Jersey Legislature passed an act providing that if any of its citizens should be

“enjoined or restrained by any writ of injunction, or order by the Court of Chancery of the State of New York, by virtue, or under color of any act of the Legislature of that State, from navigating any boat or vessel moved by steam or fire, belonging in part, or in whole, to him, on the waters between the ancient shores of the State of New Jersey and New York, the plaintiff or plaintiffs in such writ or order shall be liable to the person or persons aggrieved for all damages, expenses and charges occasioned thereby, to be recovered with triple costs. . .”

A situation was created where two sovereign States had passed laws in direct conflict, and it was not until the United States Supreme Court settled the dispute that the river and bay was opened to steamboats.

This was an extremely important Supreme Court decision, and it involved some of the great names in American history including John Marshall, Daniel Webster and Cornelius Vanderbilt. At this time, the Supreme Court commanded little respect, but through a series of important decisions, John Marshall, the fourth chief justice of the Supreme Court, raised the court’s importance equal to that of the executive and legislative branches of the federal government. 

The decision in this case, known as Odgen v Gibbons (1824), helped to define the boundaries of power between the states and the federal government and the power of the federal government over interstate commerce. Odgen v Gibbons was one of the landmark cases establishing the authority of the federal government under the federal Constitution.

Cornelius Vanderbilit 1794-1877 Born on Staten Island in 1794. By age 16, Vanderbilt was operating ferry sloops in New York harbor. He received a government contract to ferry supplies to the New York harbor forts during the war of 1812. In 1818, he entered the steamboat business in the employ of Thomas Gibbons, eventually starting his own steamboat companies. By the age of 40, he was an extremely wealthy man with a fleet of over 100 steamboats. His business interests included a shipping route to the California gold fields and railroads. He controlled the New York Central railroad and linked Chicago with New York by rail. Vanderbilt built New York Grand Central Terminal in New York City during the panic of 1873. His philanthropic activities included contributing $1 million to establish Vanderbilt University. Upon his death, he was the richest man in the United States.

Odgen v Gibbons Supreme Court Decision — 1824
The names of Gibbons and Ogden are misleading and don’t reflect the importance of parties to this dispute.  This case involved the State of New Jersey verses the State of New York and Cornelius Vanderbilt verses the Fulton-Livingston monopoly.  It was the cause célèbre of its day, not only for the people of the two States being interested, but for the whole country, which was taking sides for or against the monopoly. There was talk of an interstate war. Indeed, a clash of authority had taken place.

Cornelius Vanderbilt was operating steam-powered ferryboats between New York and New Jersey without a license from the Fulton-Livingston interests.  Aaron Ogden held the Fulton-Livingston license for this privilege. This was the dispute that was taken to the Supreme Court.

It was a battle of legal giants. Cornelius Vanderbilt retained Daniel Webster, then at the height of his fame, and the Fulton-Livingston interests retained Mr. Oakley and Mr. Emmett, the latter having been Fulton’s personal counsel and friend for many years.

Daniel Webster in a masterly argument traversed the whole ground of the dispute and contended that the Legislature of New York had passed laws which were unconstitutional, inasmuch as the Federal Constitution had declared “Congress shall have power to regulate commerce with foreign nations, and among the several States and with the Indian tribes.” Mr. Webster argued that New York State had attempted to usurp the specially delegated powers it had given to Congress: That commerce was navigation and that the Federal regulations must apply.

Mr. Oakley, for the monopoly, argued, “That the power given to Congress by the sovereign State of New York was limited, in that all rights not delegated, were reserved. A restraint imposed by the laws of New York on the navigation of the waters of the State was merely an internal regulation of the right to transit or passage from one part of the State to another. It was a regulation which, if even indispensable to public safety, Congress could not make. The power to make it, therefore, must be in the State. The State law was, in fact, only a regulation of the internal trade and right of navigation within the territorial limits of the State. The power to regulate this was exclusively in the State. The State had exercised it in the same manner, both on land and water, and the law was valid although incidentally it might affect the right of intercourse between the States.”

Chief Justice John Marshall’s decision added one more case to the important decisions he rendered in creating the legal foundations making the new and untested federal Constitution a workable and respected law.

The court rejected the authority of New York law that hindered out-of-state commercial steamboats from doing business in its waters.  Justice Marshall’s opinion established national power over interstate commerce, opening the way for easy trade between the states and national economic growth.

John Marshall apologized for the length of his decision. He held that Congress, having been given the power to regulate commerce, was given the power to regulate navigation. It was as expressly granted as if the term navigation had been added to the word commerce already in the Constitution.

“But,” said he, “the power to regulate commerce does not look to the principle by which boats were moved. That power was left to individual discretion.  The act demonstrates the opinion of Congress that steamboats may be enrolled and licensed in common with vessels using sails. They are, of course, entitled to the same privileges and can no more be restrained from navigating waters and entering ports, which are free to such vessels, than if they were wafted on their voyage by the winds instead of being propelled by the agency of fire. The one element may be as legitimately used as the other, for every commercial purpose authorized by the laws of the river, and the act of a State inhibiting the use of either to any vessel, having a license under the act of Congress, comes, we think, in direct collision with that act.”

“The acts of the Legislature of the State of New York, granting to Robert R. Livingston and Robert Fulton the exclusive navigation of all the waters within the jurisdiction of that State, with boats moved by fire or steam, for a term of years, are repugnant to that clause of the constitution of the United States, which authorizes Congress to regulate commerce, so far as the said acts prohibit vessels licensed, according to the laws of the United States, for carrying on the coasting trade, from navigating the said waters by means of fire or steam.”

 This decision was a resounding defeat for the Fulton-Livingston interests, and effectively ended their monopoly.  Anyone was now free to build and operate a steamboat on the Hudson River without interference from the courts. This decision launched a massive effort to put steamboats into service on the river.  In 1819, there were only eight steamboats on the Hudson River. By 1840, there were over one hundred.

Additional Reading

Ogden vs Gibbons Supreme Court Decision
From "The Hudson," by Carl Carmer, Published: New York, Farrar & Rinehart, 1939

How the Great River Monopoly was Broken
From "Old Steamboat Days on the Hudson River," By David Lear Buckman, Published by The Grafton Press, New York, NY, 1907

The End of the Fulton-Livingston Monopoly
From "Steamboat Days," by Fred Erving Dayton (1880 - ), Illustrated by John Wolcott Adams, Published: New York, Frederick A. Stokes, 1925

Ogden vs Gibbons, complete text of the Supreme Court decision