In the case of Credits Commutation Company v. United States (1899), the Supreme Court ruled that a contract between the U.S. government and a private company to provide commutation services for military personnel was not enforceable because it violated public policy. The Credits Commutation Company had entered into an agreement with the government to purchase at discounted rates, credits earned by soldiers for travel expenses, which they could then sell back to soldiers at higher rates. However, this arrangement was deemed illegal as it essentially allowed private entities to profit from public funds intended for military personnel's welfare without providing any additional service or value in return. Therefore, when the company sued for breach of contract after payments were stopped by Congress' intervention, their claim was rejected on grounds that such contracts are void ab initio (from inception) due to their violation of public policy.

In the dissenting opinion for Credits Commutation Company v. United States, the justice argued that the government did not have a right to tax income derived from property without apportionment among states based on population. The justice believed this was in violation of Article I, Section 9 of the Constitution which prohibits direct taxes unless they are apportioned according to census data. He also pointed out that there is no constitutional distinction between income derived from labor and income derived from property; thus, if one can be taxed so too should be able to tax other forms of income as well. Furthermore, he contended that it was unfair for corporations and wealthy individuals who derive most of their wealth from investments rather than wages or salaries to avoid paying their fair share in taxes while ordinary wage earners bear a disproportionate burden.