In the 1929 case, Board of Railroad Commissioners of North Dakota et al. v. Great Northern Railway Company et al., the U.S Supreme Court ruled in favor of the railway companies, stating that they were not required to provide free transportation for state railroad commissioners and their staff under federal law. The State of North Dakota had enacted a statute requiring railroads operating within its borders to furnish such free transportation upon demand but this was challenged by several railway companies as being contrary to federal laws prohibiting free passes or reduced fare services except for specific categories which did not include public officials. The court held that while states have broad powers over local matters, these do not extend into areas covered by national legislation unless expressly permitted - in this case interstate commerce regulated by Congress through the Interstate Commerce Act.

In the dissenting opinion for the case of Board of Railroad Commissioners of North Dakota v. Great Northern Railway Company, Justice Stone argued that states should retain their power to regulate railroad rates within their borders. He believed that federal control over interstate commerce did not necessarily preclude state regulation in areas where local interests were predominant and there was no direct conflict with federal policy. In this particular case, he felt that North Dakota's attempt to lower intrastate freight rates was a legitimate exercise of its police powers aimed at promoting economic welfare within the state. Furthermore, he disagreed with majority’s view about potential discrimination against interstate commerce due to different rate structures between intra- and inter-state trade; instead asserting such differences could be justified by varying conditions in different regions or markets.