The Constitution
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The Governors of the two states can negotiate an agreement between them. If this fails and it goes to court, the Supreme Court is the court of original jurisdiction for disagreements between States.
The delegates settled on a federal form of government instead of a system in which power was not divided between state and national government because they believed that it provided for a much stronger national government with a chief executive (the president), courts, and taxing powers.
Disputes between states such as over state boundaries, honoring each others contracts, regulation of interstate water ways water rights and migratory birds, etc. have to decided in federal courts. Any questions over the constitutionality of state laws have to be settled in federal court.
Pinckney's Treaty of 1795 was between the United States and Spain. The treaty allowed Americans to travel freely along the Mississippi river. It also settled any boundary disputes between the United States and Spain.
The Federal government and State governments were arguing about the division of powers over the entire nation. The Federal government pushed for a unified national government, constantly moving toward an expansion of their power. The States argued that they could nullify laws which they didn't agree with. Eventually, the country split in two, with the southern states rallying together to fight the Federal government, as the Confederate States of America. The CSA lost the war, and that pretty much settled the debate. I would say that the debate ended when the Seventeenth Amendment to the Constitution was passed. Since that point in history, the States have had no check on the Federal government via the Senate. If you want an opinion, the Seventeenth Amendment should be repealed.