The U.S. Supreme Court case American Hide & Leather Co. v. United States in 1931 revolved around the issue of whether or not a corporation could deduct from its income tax, losses incurred due to debts owed by insolvent debtors that were deemed uncollectible during the taxable year but had been partially recovered in subsequent years. The court ruled against American Hide & Leather Co., stating that under Section 234(a)(4) and (5) of the Revenue Act of 1918, such deductions are only permissible if there is no prospect for recovery at any future time when it was charged off on their books as worthless and deducted from gross income; hence, partial recoveries made later must be included in gross income for those years they were received.

In the dissenting opinion for American Hide & Leather Co. v. United States, Justice Stone argued that the Sherman Act was not violated by the defendants' actions because they did not restrain trade or commerce among states in any significant way. He believed that there was no evidence of a conspiracy to monopolize interstate commerce and therefore, it should not be considered an offense under federal law. Furthermore, he contended that even if there were such a conspiracy, it would still have been lawful unless it involved some form of coercion or predatory practices which were absent in this case. The majority's decision to penalize mere attempts at monopoly without requiring proof of actual harm to competition seemed unjustified according to him as well as inconsistent with previous court rulings on similar matters.