In the case of Hartsville Oil Mill v. United States, 1925, the Supreme Court ruled in favor of the U.S. government and upheld a tax assessment against Hartsville Oil Mill for undervalued cottonseed oil sales during World War I. The company had sold its product to another entity at below-market prices with an agreement that it would later receive a portion of any profits from resale above a certain price point. However, this arrangement was not disclosed when calculating taxes owed under wartime revenue laws designed to prevent profiteering by capturing excess profits earned as result of war conditions. The court found that these undisclosed agreements effectively allowed companies like Hartsville Oil Mill to evade their full tax liability by artificially lowering reported sale prices while still benefiting financially through subsequent profit-sharing arrangements on resales. Therefore, such transactions were deemed taxable events subject to assessment based on fair market value rather than initial sale price. This decision reinforced the principle that taxation should reflect economic reality and substance over form; taxpayers cannot avoid their obligations simply by structuring transactions in ways that obscure true income or profit levels.

In the dissenting opinion for Hartsville Oil Mill v. United States, Justice McReynolds disagreed with the majority's interpretation of the Lever Act and its application to this case. He argued that Congress did not intend for such a broad interpretation of "necessaries" under Section 4 of the act, which would include cottonseed products like those produced by Hartsville Oil Mill. Instead, he believed that Congress intended to regulate only those commodities essential for military use or civilian sustenance during World War I. Furthermore, he contended that even if cottonseed products were considered necessaries under this law, there was no evidence presented in court showing any attempt by Hartsville Oil Mill to hoard these goods or manipulate their prices unfairly as prohibited by Section 5 of the Lever Act. Therefore, according to Justice McReynolds' dissenting view, neither section applied in this case and thus it should have been dismissed.