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Gibbons was the first case in which the Supreme Court of the US held that Congress had the power to regulate commerce among the states via the Interstate Commerce Clause (Article I, Section 8, Clause 3). Until this case, Congress hadn't exercised its constitutional power to regulate interstate commerce.

Most states had established laws regulating commerce under the Articles of Confederation, which preceded the US Constitution. Under the Articles of Confederation, the US government had little power to intervene or influence state laws; the Constitution elevated the authority of the United States over the states in many areas, emphasizing national supremacy over state sovereignty. The States resisted this intrusion by arguing they retained sovereign rights to control their own territory under the Tenth Amendment and that they hadn't ceded this right when the Constitution was ratified.

The net effect of conflicting state laws was restriction of trade and travel between the states, representing an inconvenience to travelers and inhibiting national economic growth. Gibbons v. Ogden has been called "the emancipation proclamation of American commerce" for its support of capitalism and a free market economy.

This principle is explicated in Marshall's opinion in Gibbons v. Ogden:

"In argument, however, it has been contended, that if a law passed by a State, in the exercise of its acknowledged sovereignty, comes into conflict with a law passed by Congress in pursuance of the Constitution, they affect the subject, and each other, like equal opposing powers. But the framers of our Constitution foresaw this state of things, and provided for it, by declaring the supremacy not only of itself, but of the laws made in pursuance of it. The nullity of an act, inconsistent with the Constitution, is produced by the declaration, that the Constitution is the supreme law. The appropriate application of that part of the clause which confers the same supremacy on laws and treaties, is to such acts of the State legislatures as do not transcend their powers, but though enacted in the execution of acknowledged State powers, interfere with, or are contrary to the laws of Congress, made in pursuance of the Constitution, or some treaty made under the authority of the United States. In every such case, the act of Congress, or the treaty, is supreme; and the law of the State, though enacted in the exercise of powers not controverted, must yield to it."

The decision in this case represented a tidal shift of power between the states and federal government, dictated by the Article VI Supremacy Clause, as did many of the Court's decisions during Marshall's tenure. Although the concept of nationalism is often decried, in this instance federal supremacy was necessary to national economic growth.

Case Citation:

Gibbons v. Ogden, 22 US 1 (1824)

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