In Chesapeake and Ohio Railroad Company v. Virginia, the Supreme Court of the United States was asked to decide whether the state of Virginia had the right to tax the Chesapeake and Ohio Railroad Company. The railroad company argued that the tax was unconstitutional because it violated the Commerce Clause of the United States Constitution. The Court held that the tax was constitutional because it was a valid exercise of the state's power to tax. The Court reasoned that the tax was not discriminatory and did not interfere with interstate commerce. The Court also held that the tax was not an unconstitutional burden on interstate commerce because it was not excessive or oppressive. The Court concluded that the tax was a valid exercise of the state's power to tax and did not violate the Commerce Clause.

In the case of Chesapeake and Ohio Railroad Company v. Virginia, the Supreme Court was asked to decide whether or not a state could tax property owned by a railroad company that operated in multiple states. The majority opinion held that such taxation was unconstitutional because it would interfere with interstate commerce, which is regulated exclusively by Congress under the Commerce Clause of the Constitution. However, Justice Field dissented from this opinion on two grounds: firstly, he argued that since railroads are private companies they should be subject to taxation just like any other business; secondly, he contended that even if there were some constitutional impediment to taxing them directly then states should still have authority over their operations within their borders through police power regulations. In conclusion, Justice Field believed that while Congress had exclusive control over interstate commerce it did not necessarily follow from this fact alone that individual states were completely powerless when it came to regulating activities occurring within their own boundaries.