In the case of Massachusetts and Southern Construction Company v. Cane Creek Township, 1894, the U.S Supreme Court was tasked with determining whether a tax levied by Cane Creek Township on bonds issued by it to aid in constructing a railroad violated any provision of the Constitution. The court held that no such violation occurred. The township had issued bonds as part of an agreement with the construction company to build a railroad through its territory. However, after completion, they imposed taxes on these same bonds which were now owned by bondholders (including Massachusetts and Southern Construction Company). The plaintiffs argued this amounted to impairing contractual obligations contrary to Article I Section 10 Clause 1 ("Contract Clause") of the US Constitution but their argument was rejected by Justice Brewer who delivered opinion for unanimous court stating that taxation did not interfere with contract rights or obligations; rather it is an inherent sovereign power necessary for government functioning and survival.

The dissenting opinion in the Massachusetts and Southern Construction Company v. Cane Creek Township case argued that the majority's decision was inconsistent with previous rulings of the court regarding taxation on railroad property. The dissenters believed that railroads should be taxed based on their value as a whole, rather than having each individual piece of property assessed separately for tax purposes. They contended this approach would lead to unfair and disproportionate taxation, especially when considering properties located within different jurisdictions or townships. Furthermore, they expressed concern over potential complications arising from determining which specific pieces of property contributed most significantly to a railroad’s overall value — an issue not addressed by the majority ruling. In essence, they felt that taxing each parcel individually could result in certain parts being undervalued while others were overvalued, leading to inconsistencies and inequities in how taxes were levied against these companies.