Gibbons v. Ogden, Law, and Society in the Early Republic

5: Interstate Competition

CHAPTER 5 Interstate Competition Beset on All Sides T , the profits of the North River Company continued to soar, and Fulton tenaciously pursued his dream of a steamboat franchise on the Mississippi River. Two new adversaries, however, quickly emerged to contest the New York monopoly—former New Jersey governor Aaron Ogden and former planter and Savannah mayor Thomas Gibbons. Both men were members of Robert R. Livingston’s generation, successful colonial elites who had weathered the American Revolution (albeit on different sides) and brought a lifetime of business and political experience to bear in pursuing their steamboat interests. Gibbons and Ogden would prove themselves experts at creating steamboat companies, engaging in price wars and aggressive advertising, and defending their interests in court. Although they were initially partners, personal and familial differences would drive them to rivalry. Their private quarrels would later become publicly intertwined with their reputations and economic interests . And eventually, both men would risk their entire fortunes to destroy one another in state and federal court. In doing so, they would put the complicated matter of interstate steamboat commerce before the U.S. Supreme Court.  Despite the victory Fulton achieved over the Albanians, his legal status remained precarious. In April , he declared, “If the nation could respect the labours of mind and do justice to them as is done to the labours of every Vulgar pair of hands we might become as rich as some cotton planter or merchant.”₁ But the trade embargoes of the Jefferson and Madison administrations and the economic disruptions caused by the War of  had created new opportunities for domestic trade. Shipbuilders, captains, and sailors laid off by the decline of overseas business also provided a cheap source of labor for local steamboat companies. Putting aside his misgivings about the state of property law, Fulton aggressively expanded his business interests.² To accommodate public demand, he rebuilt the Car of Neptune and added the Richmond and Washington to his New York fleet. Fulton and his wife’s brother-in-law, William Cutting, also secured a charter from the Common Council of New York to create a new corporation, the Fulton Steam Boat Company. The partners were required to have at least two steam ferries to provide service between lower Manhattan and Brooklyn. Fulton immediately launched the steam ferries York, Jersey, and Nassau to link New York City to New Jersey and Brooklyn and the oceangoing Fulton to carry passengers between New York City and New Haven, Connecticut. Fulton housed these boats at new dock facilities on the corner of Courtland and Washington streets in New York City.³ His boats revolutionized travel throughout the Hudson Valley, New York Harbor, and Long Island Sound. In , Fulton and Livingston earned $,, most of which went to the construction of more vessels.⁴ Fulton also solidified his Mississippi River interests. In June , he sold off corporate stock originally promised to Edward Livingston, offering his associate a monopoly on the Red River in compensation.₅ Throughout  and , Fulton also made repeated attempts to contact Nicholas Roosevelt, his agent in Pittsburgh who was under orders to construct more steamboats for the Ohio and Mississippi rivers. Receiving no reply, Fulton wrote to Benjamin Henry Latrobe, accusing Roosevelt of embezzlement. The architect defended his son-in-law but secretly warned Roosevelt that Fulton and Livingston’s “confidence has been entirely lost, and never can be restored.”₆ Aware of Roosevelt’s spending habits, Fulton appointed his wife’s uncle and Chancellor Livingston’s second cousin, John Livingston, as agent for the Ohio Steam Boat Navigation Company.⁷ Livingston journeyed to Pittsburgh and seized the New Orleans and company offices from Roosevelt. Not content with Roosevelt’s declaration of bankruptcy, Fulton offered his former partner’s position to Latrobe as a final insult. To appear magnanimous and to keep Roosevelt silent, Fulton negotiated a settlement that involved offer-  Gibbons v. Ogden, Law and Society ing Lydia Roosevelt and her children one-third of the profits made from the New Orleans. However, he warned Latrobe that if Nicholas Roosevelt “made difficulties he will compel a scrutiny which I fear will end in his dishonor and ruin.”⁸ Ambition eventually trumped family loyalty, as Latrobe accepted Fulton’s offer in January . In the meantime, however, Latrobe had to sort out the jumble of paperwork left by Roosevelt. Latrobe arrived in Pittsburgh in late fall  only to find...