In the case of Massachusetts v. Missouri et al., 1939, the U.S Supreme Court was asked to resolve a dispute between states over inheritance taxes. The controversy arose when Frederick H. Prince, a resident of Massachusetts, died leaving behind substantial property in both Massachusetts and Missouri. Both states sought to levy an inheritance tax on his estate which led to double taxation - something that Prince's executors challenged as unconstitutional. The Supreme Court ruled in favor of Missouri stating that each state has the right under its sovereign powers to tax tangible personal property within its borders regardless if it is also taxed by another state where the decedent resided at death time or not. The court held that there was no constitutional prohibition against such double taxation because each state’s power to tax comes from their sovereignty and does not depend upon recognition by other states. This decision established important precedent for interstate relations regarding taxation rights and responsibilities, affirming individual state sovereignty in matters related with taxing authority.

In the dissenting opinion for Massachusetts v. Missouri et al., Justice McReynolds disagreed with the majority's decision to allow states to tax federal securities held by a decedent at the time of death. He argued that this ruling violated constitutional principles, as it allowed states to interfere with and indirectly tax obligations of the United States government. According to him, such taxation could potentially undermine national credit and disrupt governmental operations. Furthermore, he contended that previous court decisions had established a precedent against state taxation of federal securities in any form or manner whatsoever - whether directly or indirectly - which should have been upheld in this case too.