In Merchants' Bank v. Bergen County, the Supreme Court of the United States was asked to decide whether a state statute that allowed a county to issue bonds to pay for a railroad was constitutional. The statute provided that the bonds were to be secured by a mortgage on the railroad and its property. The bank argued that the statute was unconstitutional because it violated the Contract Clause of the United States Constitution, which prohibits states from passing laws that impair the obligation of contracts. The Supreme Court held that the statute was constitutional. The Court reasoned that the statute did not impair the obligation of any existing contract, but rather created a new contract between the county and the railroad. The Court also noted that the statute did not interfere with the bank's rights, as the bank was not a party to the contract and was not obligated to pay the bonds. The Court concluded that the statute was a valid exercise of the state's power to promote the public welfare and did not violate the Contract Clause. The Court held that the statute was constitutional and the county was allowed to issue the bonds.

Justice Field delivered the dissenting opinion in Merchants' Bank v. Bergen County, arguing that the majority's decision was incorrect and should be reversed. He argued that a state statute which authorized counties to issue bonds for railroad construction did not violate the Contract Clause of the United States Constitution because it did not impair any existing contract between private parties or alter their rights under such contracts. The statute only applied prospectively and therefore could not be said to have impaired any existing contractual obligations. Justice Field further argued that even if there had been an impairment of an existing contract, it would still have been permissible under Article I, Section 10 of the Constitution as long as reasonable compensation was provided by way of damages or otherwise. In this case, he noted that no evidence had been presented showing any actual damage suffered by Merchants' Bank due to passage of the statute in question and thus no violation could be found on those grounds either.