Final answer:
The Supreme Court case Gibbons v. Ogden in 1824 established that the national government has the authority to regulate interstate commerce. This decision stemmed from a conflict over steamboat ferry operations between New York and New Jersey. Chief Justice Marshall's decision strengthened federal power and set a precedent for federal supremacy over state laws in commercial matters.
Step-by-step explanation:
In 1824, the Supreme Court decided the landmark case Gibbons v. Ogden, which ruled that commerce within the states could also be regulated by the national government. This was a pivotal decision in defining the scope of national power over commerce. At the heart of the case was a dispute over the operation of steamboats between New York and New Jersey. Aaron Ogden held an exclusive license from New York State, while Thomas Gibbons operated under a federal license. The case escalated to the Supreme Court after Gibbons lost in the New York state courts.
Chief Justice John Marshall delivered a two-part ruling that held considerable consequences for the balance of power between state and national governments. The ruling held that the interpretation of interstate commerce included "commercial intercourse" among states, and thus, Congress had the power to regulate navigation. The federal Licensing Act of 1793 was found to be constitutional, and since it regulated coastal commerce, it overrode New York State's monopoly law. This established the precedent that federal law holds supremacy over conflicting state laws in matters of interstate commerce.