The U.S. Supreme Court case Galveston, Harrisburg and San Antonio Railway Company v. Texas in 1897 revolved around the issue of whether a state could regulate interstate commerce rates without violating the Commerce Clause of the Constitution. The State of Texas had passed a law that set maximum freight rates for railroads within its borders, which was challenged by the railway company as an unconstitutional interference with interstate commerce. However, the Supreme Court upheld Texas's right to regulate these rates under its police powers because they were applied equally to both intrastate and interstate traffic on trains operating solely within Texas boundaries. The court ruled that states have authority over local matters even if they indirectly affect interstate commerce unless Congress has legislated otherwise or there is clear discrimination against out-of-state interests.

In the dissenting opinion for Galveston, Harrisburg and San Antonio Railway Company v. Texas, Justice Harlan argued that the majority's decision was inconsistent with previous rulings of the Court regarding interstate commerce. He contended that a state cannot regulate rates for transportation services extending beyond its borders without interfering with Congress' power to regulate interstate commerce. The justice believed this case involved not merely intrastate business but also an aspect of interstate trade since it concerned through freight transported from points outside Texas to destinations within the state via direct railway lines crossing state boundaries. Therefore, he opined that such regulation by Texas constituted an unlawful intrusion into federal jurisdiction over interstate commerce and should be deemed unconstitutional.