In the case of Gibbons v. Ogden (1824), the U.S. Supreme Court interpreted the commerce clause of the Constitution, leading to two key conclusions:
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States may be subject to federal regulation in matters of commerce. - This emphasizes that while states have some powers, the federal government has the authority to regulate interstate commerce, which restricts states' abilities to fully control commerce that crosses state lines.
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States may regulate commerce within their own borders. - This acknowledges that states have the power to regulate intrastate commerce, meaning commerce that occurs solely within one state, as long as it does not conflict with federal regulations.
These interpretations helped clarify the balance of power between state and federal governments regarding commerce.