In the 1923 case Davis, Director General of Railroads, as Agent of the United States v. Corona Coal Company, the U.S. Supreme Court ruled on a dispute involving coal supply contracts during World War I. The federal government had taken control of railroads and entered into agreements with coal companies to ensure adequate fuel supplies for wartime transportation needs. When peace was declared, some coal companies argued that their contracts were automatically terminated while others believed they should be compensated for losses incurred due to price changes after war's end. The court held that these contracts did not terminate automatically upon cessation of hostilities but continued until formally ended by mutual agreement or action under contract terms; however, it also found that compensation claims based on post-war price changes were invalid because such risks are inherent in business operations and could have been anticipated when entering into these agreements.

In the dissenting opinion for Davis, Director General of Railroads, as Agent of the United States v. Corona Coal Company (1923), Justice McReynolds disagreed with the majority's decision that a claim against a railroad company could be considered as one against the United States government due to its control over railroads during World War I. He argued that this interpretation was an extension beyond what Congress intended when it passed legislation allowing such suits. According to him, only claims directly resulting from governmental actions should be treated as claims against the U.S., not those arising from operations under private management before federal control began or after it ended. He also contended that if every suit involving property in possession of any agent of U.S., no matter how acquired or held, is deemed one against U.S., then there would be serious implications on jurisdiction and procedure which were never contemplated by Congress.