In the 1922 case Davis, Director General of Railroads, as Agent v. Farmers Co-Operative Equity Company, the U.S. Supreme Court dealt with a dispute over interstate commerce and shipping rates for grain from Oklahoma to Texas. The Farmers Co-operative Equity Company argued that they were being charged unjustly high rates by rail companies controlled by the federal government during World War I under the Federal Control Act. They claimed these charges violated their rights under both state law and the Interstate Commerce Act which sought to prevent unreasonable or discriminatory pricing in transportation services across state lines. The court ruled in favor of Davis (representing railroad interests), stating that while under normal circumstances such rate disputes would fall within jurisdiction of state courts or regulatory bodies like Interstate Commerce Commission (ICC), this was not applicable here due to wartime conditions where railroads were federally controlled entities serving national interest rather than private corporations subject to regular commercial laws and regulations. This decision affirmed federal supremacy over states' rights when it comes to matters involving national security or significant public interest even if it may result in certain economic disadvantages for individual businesses or consumers.

In the dissenting opinion for Davis, Director General of Railroads v. Farmers Co-Operative Equity Company, Justice Holmes disagreed with the majority's interpretation of the Cummins Amendment. He argued that it was not intended to apply to situations where a carrier had already agreed upon rates with a shipper and then later sought to increase them retroactively under government control during wartime conditions. Instead, he believed that this amendment only applied when carriers initially set their rates too low and subsequently wanted an adjustment due to economic hardship or other reasons unrelated to governmental intervention in wartime circumstances. Furthermore, he contended that allowing such retroactive rate increases would undermine contractual stability and fairness between shippers and carriers by permitting unilateral changes after agreements were made based on certain expectations about costs.