In the case of E.W. Bliss Company v. United States (1919), the U.S Supreme Court ruled in favor of the government, upholding a lower court's decision that E.W. Bliss Company was liable for excess profits tax during World War I under the Revenue Act of 1917 and 1918. The company had argued that it should not be subjected to this tax because its contracts with foreign governments were made before these acts were passed, thus they fell outside their scope. However, Justice Mahlon Pitney delivered an opinion stating that when Congress enacted these laws, it intended them to apply broadly and include all business transactions within their effective dates regardless if contracts predated them or not.

In the dissenting opinion for E.W. Bliss Company v. United States, Justice McReynolds disagreed with the majority's interpretation of a contract between the company and government during World War I. He argued that when interpreting contracts, courts should consider what parties intended at the time they entered into an agreement rather than relying on hindsight to determine their intentions. In this case, he believed that both parties understood and agreed upon a fixed price for manufacturing artillery shells without considering potential changes in labor or material costs due to war conditions. Therefore, he contended that it was wrong for the court to allow additional compensation based on increased production costs after signing of contract as it contradicted original terms agreed by both sides.