In the 1945 case of Glass City Bank v. United States, the Supreme Court ruled on a dispute involving tax law and banking regulations. The Glass City Bank had purchased federal bonds during World War II that were exempt from state and local taxation but not from federal taxes. However, when it came time to pay income tax, the bank claimed these bonds as deductions under Section 22(b)(4) of the Revenue Act of 1938 which allowed for exemptions for interest on government debt obligations. The IRS denied this claim arguing that banks could only deduct such interests if they were included in their gross income first. The court sided with the U.S Government stating that while Congress intended to encourage investment in war bonds by making them attractive through various means including exemption from certain types of taxation, there was no intention to provide double benefits or windfalls by allowing institutions like banks to also use them as deductions against their taxable income without including them in gross income first. This ruling clarified how financial institutions should handle investments in government securities regarding taxation - they must include any interest earned on those securities into their gross incomes before claiming any potential deductions.

In the dissenting opinion for Glass City Bank v. United States, Justice Frankfurter argued that the majority's decision was a departure from established legal principles and an overreach of judicial power. He contended that it is not within the Court's purview to determine whether or not Congress has made a wise economic policy choice in enacting legislation; rather, its role is only to interpret and apply such laws as they exist. In this case, he believed that Congress had clearly intended for banks to bear the risk of loss when accepting fraudulent checks under certain conditions outlined in Federal Reserve regulations. By ruling otherwise, he felt that the majority was effectively rewriting these rules based on their own judgment about what would be fair or equitable - something which he saw as beyond their constitutional authority.