In the case of Baltimore & Ohio Railroad Co. et al. v. United States et al., 1937, the U.S Supreme Court ruled in favor of the federal government and against several railroad companies who were challenging a law that allowed for reduced rates on shipments to be used by governmental agencies during times of emergency or war. The railroads argued that this was an unconstitutional taking without just compensation under the Fifth Amendment as it forced them to provide services at below-market rates, essentially amounting to a subsidy from private entities (the railroads) to public ones (the government). However, the court disagreed with their argument stating that Congress has broad powers over interstate commerce and can regulate prices within reason even if it results in losses for businesses involved.

In the dissenting opinion for Baltimore & Ohio Railroad Co. v. United States, Justice McReynolds argued that the Interstate Commerce Commission (ICC) had overstepped its bounds by ordering a reduction in rates without sufficient evidence to justify such action. He contended that the ICC's decision was based on mere speculation and not grounded in substantial facts or data, thus violating due process rights of railroad companies involved. Furthermore, he believed this case represented an unwarranted intrusion into private business affairs by government agencies which could have far-reaching negative implications for economic freedom and individual liberty if left unchecked.