Farmers' Loan and Trust Company v. Galesburg was a Supreme Court case decided in 1895. The case involved a dispute between the Farmers' Loan and Trust Company and the City of Galesburg, Illinois. The Farmers' Loan and Trust Company had issued bonds to the City of Galesburg in order to finance the construction of a waterworks system. The City of Galesburg had failed to make payments on the bonds, and the Farmers' Loan and Trust Company sued the City of Galesburg for the unpaid debt. The Supreme Court ruled in favor of the Farmers' Loan and Trust Company, finding that the City of Galesburg had violated its contract with the Farmers' Loan and Trust Company by failing to make payments on the bonds. The Court held that the City of Galesburg was liable for the unpaid debt and ordered the City to pay the Farmers' Loan and Trust Company the full amount of the bonds. The decision in Farmers' Loan and Trust Company v. Galesburg established the principle that a municipality is liable for its contractual obligations and must pay its debts in full. The case also established the principle that a municipality cannot avoid its contractual obligations by claiming that it is unable to pay its debts. This decision has been cited in numerous subsequent cases involving municipal debt and contractual obligations.

In the dissenting opinion of Farmers' Loan and Trust Company v. Galesburg, Justice Harlan argued that the majority's decision was an unconstitutional exercise of power by Congress. He believed that Congress had no authority to pass a law which would allow them to tax state bonds in order to fund internal improvements within states, as this infringed upon states’ rights under the Tenth Amendment. Furthermore, he argued that if such taxation were allowed it could lead to further federal encroachment on state sovereignty and ultimately undermine our system of dual sovereignty between federal and state governments. In conclusion, Justice Harlan maintained his belief that any attempt by Congress to impose taxes on state bonds should be declared unconstitutional as it is not authorized by either Article I or IV of the Constitution.