In the Five Per Cent. Discount Case of 1916, the United States Supreme Court ruled on a dispute between railroads and shippers regarding freight rates. The case arose when several railroad companies offered a five percent discount to shippers who paid their bills within a certain period after billing, while charging full rates to those who did not pay promptly. Shippers challenged this practice as discriminatory under the Interstate Commerce Act which prohibited unjust or unreasonable preferences or advantages in favor of any particular person or locality. The court held that such discounts were not inherently unlawful but could be if they resulted in undue discrimination against some customers. It was determined that whether these discounts constituted an unfair preference depended on various factors including whether they reflected actual cost savings for railroads and whether all customers had equal opportunity to benefit from them. However, it was also noted by Justice Hughes that even if there were no undue discrimination, such practices might still violate other provisions of the act prohibiting unjustly preferential charges unless justified by differences in transportation conditions.

In the dissenting opinion for The Five Per Cent. Discount Case, the justice argued that Congress did not intend to allow national banks to charge interest rates higher than those permitted by state laws where they operate. He contended that such an interpretation would result in a system of unequal competition between national and state banks, which was contrary to the intent of Congress when it established a dual banking system. Furthermore, he disagreed with the majority's reliance on previous court decisions as precedent because these cases were decided under different statutory conditions and therefore should not be applied here without careful consideration. In his view, allowing national banks to charge higher interest rates could lead them into speculative ventures rather than sound commercial lending practices - undermining their role in supporting local economies and potentially destabilizing financial markets.