In the 1920 case of Director General of Railroads et al. v. The Viscose Company, the U.S Supreme Court was tasked with determining whether or not a railroad company could be held liable for damages caused by a delay in shipment during wartime when it was under federal control. The Viscose Company had contracted with Pennsylvania Railroad to transport goods, but due to delays allegedly caused by mismanagement and inefficiency while under federal control, they suffered significant financial losses and sued for compensation. However, the court ruled in favor of the railroads on grounds that their operation during war time constituted an act of public service which exempted them from liability for such claims unless negligence could be proven beyond reasonable doubt - something which The Viscose Company failed to do.

In the dissenting opinion for Director General of Railroads et al. v. The Viscose Company, Justice McReynolds argued that the majority's decision to uphold a lower court ruling in favor of Viscose was incorrect. He contended that under wartime legislation enacted by Congress, railroads were effectively transformed into government entities and thus should be immune from lawsuits such as this one brought by Viscose over freight rates. According to him, allowing such suits would undermine the purpose of these laws which was to ensure efficient operation of transportation systems during times of national crisis without fear or threat from litigation costs or damages awarded against them. Furthermore, he believed it was not within the purview of courts but rather legislative bodies like Congress to determine whether compensation should be provided in cases where private interests suffered due to governmental actions taken for public good during emergencies.