The McLean v. United States case in 1912 involved the widow of Nathaniel H. McLean, who was seeking to recover duties paid under protest on imported diamonds that were set into jewelry abroad before being brought into the country. The U.S government argued that these items should be taxed as finished jewelry, which attracted a higher duty rate than loose diamonds. Mrs. McLean contended that they should be classified as unset precious stones and therefore subject to lower import taxes. The Supreme Court ruled in favor of the United States, stating that once a diamond is set into an article of jewelry it loses its character as an individual gem and becomes part of a manufactured product - thus subjecting it to higher tax rates applicable for finished goods rather than raw materials or semi-finished products like loose gems.

In the dissenting opinion for McLean v. United States, Justice Holmes disagreed with the majority's decision to uphold a tax on an inheritance that included federal bonds. He argued that such taxation was unconstitutional because it infringed upon the federal government's exclusive power to borrow money under Article I, Section 8 of the Constitution. According to him, allowing states or other entities to tax these bonds would interfere with this power and potentially discourage people from buying them in future. Therefore, he believed that any attempt by Congress to allow such taxation should be struck down as unconstitutional interference with this exclusive authority of borrowing money vested in Federal Government.