Steamboat Days
by: Fred Erving Dayton
Illustrated by: John Wolcott Adams

CHAPTER 3

The End of the Fulton-Livingston Monopoly

The Beginning of Steamboat Commerce
Early Long Island Sound Steamers
The End of the Fulton-Livingston Monopoly

Such rights as Fulton and Livingston held they were willing to share with others upon reasonable terms. They did not demand return for themselves until all operating expenses had been paid and the employed capital had first been compensated. The public temper was against monopoly, and the desire to see it crushed was general. The issue became involved with other far-reaching questions, as State's rights, raised for the first time in the young country.

Fulton died before the fight assumed large proportions. Fitch, too, had died before his claims as a pioneer were advanced. Livingston had carried a firm purpose to the point of obstinacy and contributed to the solidification of resentment. The monopoly remained a menace until 1824, frightening competition and repressing natural ambitions -. to enter the field.

Livingston went to France as United States Minister, and was joined by Joel Barlow, an American business man who afterward became Minister. Barlow brought to France the plans of a small steamer, Polacca, which had been tried successfully upon the Passaic River in 1798 by Nicholas Roosevelt. Fulton lived with Barlow in Paris, and so met Livingston.

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, provided he should, within a twelvemonth, build such a boat, the mean of whose progress should not be less than four miles an hour."

This was a transference of the right previously conferred upon Fitch and which was taken away because he had not met the conditions. In October, 1798, a trial was made of Livingston's boat when a speed of only three miles was realized and the State's offer did not then become effective. Livingston's boat was variously moved on different experimental trips, by upright side paddles, endless-chain paddles, and by two stern wheels that were not upright, but apparently revolved horizontally on the same plane and in opposite directions. Each blade was probably hinged in order that it might fold up when returning.

The grant issued conditionally to Livingston, and the terms of which had not been complied with, was again bestowed by the New York Legislature April 5, 1803, or twenty years from the passage of the law, provided that a boat was run at four miles an hour speed within two years. Fulton was made a joint beneficiary with Livingston. Again it was impossible for the partners to meet the conditions, and the period was again extended to 1807. It was in this year that Clermont was completed and put into service.

The act allowed Fulton and Livingston to seize any steamboat run by others without their license, and to collect a penalty for every trip so made. The legislators who had passed the bill did not take it seriously, believing it to be an idle and whimsical project, unworthy of legislative attention.

When demonstrations had been made by Clermont, Raritan, and Car of Neptune, opposition to the monopoly sprang up, and in 1810 a rival company was formed in Albany to run steamboats on the Hudson River. An effort to stop this competition by injunction was made, but restraining order was denied on the ground that the State statute permitting the monopoly in steam transportation was in conflict with national patent legislation and superseded by it.

Upon appeal to higher court the decision was reversed and Fulton was allowed to prove, by the merits of his case, that rival vessels should be permanently restrained from competitive activity. While Fulton and Livingston had benefited by the New York State legislative acts of 1798, 1799, 1803 and 1807, it was found that there were not sufficient teeth in the laws. The forfeiture of competing boats, and penalties for their use, were asserted without provision for enforcing the decree, except such means as were afforded under ordinary process of law.

Had the monopoly sued a competitor it might be possible for the rival to have prolonged the litigation for years, and to have kept opposition boats in competitive operation meanwhile, even though the decision eventually went against the infringer of the Fulton-Livingston rights. The owners of the monopoly in 1811 secured a fifth law, in which their right to demand forfeiture of any usurping steamboat was reaffirmed in more specific terms. This law compelled the courts to grant injunction whenever Fulton should bring suit for forfeiture, while a further provision made the rival owner liable to a fine of $2,000 and imprisonment for one year for steamboat operation without license.

While this provision was considered air-tight, it could not be held retroactive, and so did not hold against steamboats built previously by the Albany company; nor did the law reach Vermont, a steamboat then running on Lake Champlain. The courts and State Legislature went the extreme limit to restrict the use of steamboats, but the public was aroused and gave its patronage to the opposition line, and advocates of the free and unrestricted use of steamboats freely asserted that Fulton had not invented steamboats and had neither legal nor moral rights to their exclusive employment. The Fulton-Livingston company and its supporters denounced the opposition as rogues, rascals, law breakers and ingrates, and Livingston wrote two pamphlets in support of the monopoly.

The opposition boat to Albany received the largest patronage and a compromise was effected that the dispute might be kept out of the national courts, and the business was thereafter divided with the newcomers.

At first Fulton had no other protection than that granted by the State of New York, and while there was a real need for steamboats upon the waters of other States, and plenty of enterprise to supply the want, fear of costly litigation retarded the general introduction of steamboats.

The application of steam-power to water transportation created new and unforeseen questions of relationship between individual States, as well as between them and the Federal Government. The fact that other States had given similar grants to Fitch was the basis of a widely held belief that persons or companies could properly hold franchises permitting exclusive right to supply steamboat transportation in States bestowing such grants. The courts, in many instances, held like views, though the rivers on which the steamboats traveled traversed more than one State, or served as boundary lines.

Not only did this controversy concern the question of properly protecting inventive genius, but also involved the harmony of Federal and State jurisdictions and affected the whole country in a way not before approached by any other phase of internal relationships. Few leaders of public opinion anticipated the growth of the nation, or the inevitable elimination of State lines in matters involving social and industrial affairs of the country.

The attitude of the people indicates that their perception was more trustworthy than the vision of the leaders. This lack of understanding is evidenced by the opinions of eminent judges who decided, in New York, that a State had power to halt or otherwise regulate all traffic at a State boundary line, no matter whence the traveler came or where he was going. Judge Yates, in an opinion, said: "It never could have been intended (by the Federal Constitution) that the navigable waters within the territory of the respective States should not be subject to their municipal regulations."

Chief Justice Kent, joining the unanimous opinion, declared: "Hudson River is the property of the people of this State, and the Legislature have the same jurisdiction over it that they have over the land, or over any of our public highways, or over the waters of any of our rivers and lakes. They may, in their sound discretion, regulate and control, enlarge or abridge the use of its waters, and they are in the habitual exercise of that sovereign right. . . It is said that a steamboat may become the vehicle of foreign commerce, and it is asked, can then the entry of them into this State, or the use of them within it, be prohibited? I answer, yes, equally as we may prohibit the entry or use of slaves, or of pernicious animals, or an obscene book, or infectious goods, or anything else that the Legislature shall deem to be noxious or inconvenient."

Since New Jersey also abutted the Hudson River for a distance it felt the heavy hand of the New York monopoly, and in 1811 the New Jersey Legislature came to the aid of its citizens, declaring that New York unjustly claimed an exclusive jurisdiction over the waters of that State. It was then that New York passed its further law declaring forfeited any vessel using steam found navigating against the provisions of the previous laws; and a means, by injunction, was provided against removing from the jurisdiction of the State, steamboat property that had been seized.

New Jersey retaliated with new laws passed in 1813 and 1818 to uphold and enforce its statute of 1811; and meanwhile Fulton and Livingston kept suing out injunctions and making it as difficult for New Jersey citizens to run steamboats as for New Yorkers to operate without licenses.

It was in 1820 that efforts were made to break down the Fulton Livingston grant. The endorsement of the bill "Gibbons vs. Ogden" offered no suggestion of the many important propositions of Constitutional Law which immediately came forward, the suit being skillfully handled by Daniel Webster. The result of the suit was to establish the authority of the Federal Government to regulate navigation and other interstate relations.

The opposition's first move was to inspire the New Jersey Legislature to pass 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," etc.

A situation was created where two sovereign States had passed laws in direct conflict. The Fulton-Livingston interests sued out their injunctions against two boats, Bellona and Stoudinger (later known as Mouse-in-the-Mountain), owned by Gibbons and operated as a ferry from the Battery in New York across the bay and Kill von Kull to Elizabethtown, New Jersey.

Thomas Gibbons, owner, was principal in the suit brought by Aaron Ogden in behalf of Fulton and Livingston. Ogden had been Governor of New Jersey, and was the owner of a similar ferry service between New York and Elizabethtown. He had first opposed the monopoly in 1814, in an effort to upset Fulton claims, and himself claiming to be the proprietor of "an ancient and accustomed ferry" and he sought to further strengthen his position by securing a coasting license from the United States Government, and by assignment to himself, from the Fitch heirs, of the original patent granted to Fitch, and all national and State rights of every sort in connection with it.

Having fortified his demand, Ogden presented a statement to the New York Legislature, asserting his right to maintain a steam ferry service for the public accommodation, and his memorial was considered by a committee for the New York Legislature, of which William Duer was chairman. The committee reported that the steamboat had been patented by Fitch; that Fitch or his assignee had all rights to the invention during the life of the patent; that the use of the contrivance afterward fell to the public; and that the exclusive legislation in favor of Fulton and Livingston was unconstitutional and oppressive.

The committee's report was rejected by the New York Senate, and Ogden was denied the privilege he asked. Ogden next brought the matter before the New Jersey Legislature; but here, too, he was defeated; and so powerful were the influences marshaled against him that New Jersey repealed its former measures denying New York steamboats to use New Jersey waters. Beaten at home and in New York, Governor Ogden made peace with the Fulton-Livingston interests, and a compromise was effected, the quarrel being kept out of the courts, and a decision avoided.

Ogden, who had fought and been beaten by the monopoly, was, ten years later, placed in position of complainant for the Fulton interests. He obtained an injunction against Thomas Gibbons' ferry, on the ground that his own rights had been invaded, and the Court of Errors sustained him because the case, in its opinion, presented no conflict between State and national laws and jurisdiction.

The case in New Jersey came before the Supreme Court of the State in 1822 and Chief Justice Kirkpatrick held, after discussing State's rights and constitutional privileges, that New York had attempted to interfere with the ancient shores of New Jersey, and that Gibbons was entitled to damages and triple costs under the enactment of that State. The Chief Justice advised, however, that the question ought to go before the United States Supreme Court, Gibbons appearing as the appellant from the decree of the New York Court.

It was the cause celebre of its day, the people of the whole country taking sides for and against the monopoly, and the clash of authority almost precipitated an interstate war.

Oakley and Emmett were the monopoly counselors, while Gibbons and his associates retained Daniel Webster, then at the top of his career, as pleader. Every precaution was taken to make the case one of which the Supreme Court would have to take cognizance, the Gibbons boats having secured a license under the act of Congress, 1793, governing vessels employed in coastwise trade, and with which license the injunction orders of New York State courts unwarrantably interfered, as was claimed. The case came to trial February, 1824.

Webster placed before the high court a clear picture of the existing and intolerable conditions. He covered the whole ground of the dispute and contended that the laws passed by the New York Legislature 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 Indian tribes." Webster argued that the State had attempted to usurp the specially delegated powers it had given Congress; that commerce was navigation and that Federal regulations must apply.

"The appellant," argued Webster, "had a perfect right to come from New Jersey to New York in a vessel owned by himself, of the proper legal description and enrolled and licensed according to the law. The Constitution made the law of Congress supreme," he pleaded, "when State laws come into opposition with them."

For the monopoly Oakley argued that the power given to Congress by the sovereign State of New York was limited, in that all rights not delegated were reserved. The State had a right to legislate on all causes of concurrent power, although Congress had acted in the same power and upon the same subject matter. He cited that the State could make counterfeiting of the coin of a foreign country an offense and provide a punishment, as had also Congress, all of which showed that Congress considered the power to punish such offenders as concurrent.

Oakley claimed that 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.

Emmett, associate of Oakley, showed that Massachusetts in 1815 had made a similar grant to J. L. Sullivan for exclusive use of the Connecticut River twenty-eight years after the expiration of his patent, which in 1819 was extended for two years. New Hampshire had given Sullivan a similar grant for the Merrimac in 1816; while Pennsylvania had granted James Barnes such a right from Wilkes-Barre to Tioga Point on the borders of New York State. Georgia had made a similar grant to S. Howard in 1814, for all the waters of that State for steamboats, and in 1817 granted to a company similar right for twenty years. Tennessee had extended a like right for the Tennessee River.

Contending that Congress had no right to regulate the internal commerce of any State, Emmett maintained that none of its regulations could affect so much of the exclusive grant as restrained vessels which were used only within the States, nor could it give to any man permission to carry on any steamboat navigation which in its beginning and ending was entirely within the waters of the State, as between New York and Albany, or on Cayuga Lake, Lake Ontario, and the Niagara and St. Lawrence Rivers to Ogdensburg. The only question, he admitted, was as to navigation between foreign countries or another State and New York.

Emmett's outstanding argument was that if the power of Congress over commerce was exclusive, then it must also have exclusive control over the means of carrying it on, and no State would then be mad enough to expend large sums in canal building, as New York was then engaged, and which were susceptible of being used for intercourse between the States or for foreign commerce, if Congress had the right to regulate the navigation and vessels that were the medium of foreign trade and trade between the States.

The country had not then pushed its way far west, and Emmett counted upon this remoteness when he asserted, "If ever the day should come when representatives from beyond the Rocky Mountains shall sit in the national legislature, if ever a numerous and inland delegation shall wield the exclusive power of making regulations for our foreign commerce, without community of interest or knowledge of our local circumstances, the Union would not stand. It cannot be the ordinance of God or nature that it should stand. It had been said by high authority that the power of Congress to regulate commerce sweeps away the whole subject matter. If so, it makes a wreck of State legislation, leaving only a few standing ruins that mark the extent of the desolation. The position, however, is not correct."

William Wirt of Virginia, Attorney-General of the United States, presented the final arguments in support of Daniel Webster's, that the State law in conflict with powers vested in Congress, and though concurrent, as claimed, was, because of conflict, void. He invited the Court to "interpose its friendly hand and extirpate the seeds of anarchy which New York had sown." He suggested that a war of legislation already commenced might, in the usual course, become a war of blows. The country would then be shaken by civic strife and the republican institutions perish, while the Constitution would fall and the last hope of a nation be gone.

Mr. Chief Justice Marshall handed down his memorable decision, for the length of which he apologized. He had added another important opinion to the number which he had given to establish the legal foundation of the new nation, and to make its new and untested Constitution workable and respected organic law. He held that Congress, in being 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 the opinion, "the power to regulate commerce does not look to the principle by which boats are 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 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 rivers, 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."

In this epochal opinion Mr. Chief Justice Marshall was supported by a concurrent opinion on some additional grounds by Mr. Justice Johnson. The death-knell of the Fulton-Livingston monopoly was rung and the decree which the United States Supreme Court issued declared "the several laws of the State of New York which prohibit vessels, licensed according to the laws of the United States, from navigating the waters of the State of New York, by means of fire or steam, repugnant to the Constitution and void."

Capital which had been timid to embark in steamboat enterprises was available everywhere and the rivers and sounds and lakes became crowded with steamboats which supplied the first important transportation services which the country sorely needed.

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