The U.S. Supreme Court case Illinois Central Railroad Company v. United States in 1923 revolved around the issue of whether or not a railroad company could claim deductions for federal income tax purposes based on depreciation of its property, specifically its road and equipment. The Illinois Central Railroad Company argued that it should be allowed to make such deductions under the Revenue Act of 1918, which permitted corporations to deduct "a reasonable allowance for the exhaustion, wear and tear" of their properties used in trade or business from gross income when calculating taxable net income. However, the government contended that this provision did not apply to railroads because they were regulated by different laws governing valuation and accounting practices specific to them. The Supreme Court sided with the government's interpretation, ruling that Congress had intended for railroads' allowances for depreciation to be governed by these separate regulations rather than general corporate tax law provisions like those found in the Revenue Act of 1918. Therefore, it held that Illinois Central was not entitled to claim additional depreciation deductions beyond what was already accounted for under these special rules applicable only to railroads.

In the dissenting opinion for Illinois Central Railroad Company v. United States, it was argued that the majority's decision to uphold the Interstate Commerce Commission's (ICC) order requiring railroads to install automatic train control devices overstepped its authority and violated principles of federalism. The dissent contended that such a mandate should be left up to individual states rather than imposed by a federal agency. They also expressed concern about potential economic implications, arguing that forcing railroads to bear this expense could lead to increased rates for consumers or financial instability for railroad companies themselves. Furthermore, they questioned whether there was sufficient evidence proving these devices would significantly improve safety as claimed by ICC.