The Banton v. Belt Line Railway Corp case in 1924 revolved around the issue of whether a state could regulate fares for an intrastate passenger railway that was part of an interstate system. The New York District Attorney, George L. Banton, argued that the State had the right to set rates for such railways under its police powers and sought to enforce a five-cent fare on the New Haven Railroad's Belt Line despite it being financially unviable for the company. However, Belt Line Railway Corporation contended this violated their rights under both federal commerce laws and Fourteenth Amendment due process protections against arbitrary state action. The Supreme Court sided with Belt Line Railway Corp., ruling that while states do have broad regulatory powers over local matters affecting public health or safety, they cannot use these powers in ways which directly burden or obstruct interstate commerce without Congressional approval - even if only indirectly impacting it as with intrastate segments of larger systems like railroads. Furthermore, they found setting rates below cost can constitute confiscation violating due process rights unless justified by extraordinary circumstances not present here.

In the dissenting opinion for Banton v. Belt Line Railway Corp., Justice Oliver Wendell Holmes Jr. argued that the majority's decision was a departure from established principles of constitutional law and an unwarranted interference with state power to regulate local affairs. He contended that New York State had the right to set rates for street railways operating within its borders, even if those rates might be considered unreasonably low by some standards. According to Holmes, it was not up to the Supreme Court or any federal court to second-guess such decisions unless they clearly violated constitutional protections against confiscation of property without due process of law. In his view, there was no evidence in this case that setting lower fares would deprive Belt Line Railway Corp.'s owners of their property without fair compensation.