In 1824, two steamship operators with licenses from New York wanted to block an operator from New Jersey who had a license from New Jersey to operate on the same stretch of the Hudson River. According to the Constitution, how should the dispute be settled? A. New York should rule because its operators had their licenses first. B. New Jersey should pay a fee to New York because that state is bigger. C. The federal government should rule because the problem is between states and related to business. D. The federal government should decide whether New York or New Jersey should rule. E. The operators should work it out because the problem is not related to the state or federal government.

The correct answer is C. The federal government should rule because the problem is between states and related to business.

Explanation:

The question refers to the Gibbons v. Ogden case, in which the state of New York, under state law, gave Livingston and Fulton the exclusive right to use and navigate all waterways in the state. They gave this right back to Ogden, while Gibbons arbitrarily launched a passenger transportation business between New York State and New Jersey, and Ogden sued Gibbons for violating his monopoly.

The case reached the Supreme Court. According to it, Gibbons was running a steamer that traveled between New York and New Jersey. In this regard, it involved the federal government's commercial provisions, as it was a multi-state issue. The Supreme Court's stated that New York's law was invalid because it was clearly contrary to the federal antitrust law that prohibited monopolies, and as steamship operations in the case were multi-state commerce sailing from New York State to New Jersey, they were therefore subject to Congress' commerce rules.