• Robert Fulton is famous in American history as the inventor of the steamboat., and his invention played an important part in New York’s rise to commercial preeminence among the states.  Fulton’s invention also gave rise to a series of lawsuits that ultimately helped define the boundary between federal and state control over American commerce.

• John Fitch, who conceived the idea of steam-operated vessels before Fulton and in 1788, in order to encourage him to develop his invention, the New York legislature gave him the exclusive right to operate steamboats in New York waters.  Fitch’s efforts to build a practical steamboat failed and in 1798 the legislature gave the monopoly to Fulton and his political patron Robert Livingston.  Fulton perfected a workable steamboat design in 1808 and started operations on the Hudson River and in New York harbor, but competitors soon appeared both in New York and New Jersey.  Fulton and Livingston offered licenses to the competitors, but several of them argued that New York had no power to control the steamboat trade and that it should be open to all comers.

Key cases:

Livingston v. Van Ingen – New York, 1812 (9 Johns. 507); Gibbons v. Ogden – New York, 1825 (17 Johns. 488), reversed, 22 U.S. 1 (1824); North River Steamboat Co. v. Livingston – New York, 1825 (3 Cowen 182)

• Two of Fulton’s and Livingston’s most determined rivals were James Van Ingen and Aaron Ogden, a former governor of New Jersey who operated steamboats between New York City and New Jersey.  In 1812, New York’s supreme court rejected Van Ingen’s argument that only the federal government could regulate commerce across the bay of New York.  The court concluded that because the bay was within New York, the state could regulate its use even though that might have an indirect effect on interstate commerce which was within Congress’s control. 

• Ogden then obtained a license from Livingston and Fulton to operate steamboats across the bay; but a new rival, Thomas Gibbons, started a rival service and Ogden tried to stop him.  The New York court again rejected the argument (now made by Gibbons) that only the federal government could regulate trade across the bay, but Gibbons appealed to the U.S. Supreme Court, which in 1825 sided with him and held that federal power to regulate interstate commerce was supreme.  The Gibbons case became the constitutional foundation for a flood of federal laws regulating commerce during the 19^th and 20^th centuries. 

• After the U.S. Supreme Court handed down its decision, the New York court reluctantly (by a vote of 22-9) decided in North River to defer to federal authority:  it concluded that federal authority applied to all interstate coasting trade, even if a boat started and ended its trip in New York.