In the 1930 case of Merchants Warehouse Co. v. United States, the U.S Supreme Court ruled on a dispute involving tariffs and warehouse storage fees. The Merchants Warehouse Company had stored imported goods in their bonded warehouses before they were cleared through customs. They argued that these goods should not be subject to tariff duties as they were still technically "in transit." However, the government contended that once goods are placed into storage, even if it is prior to clearing customs, they are no longer considered "in transit" and thus become liable for tariff duties. The court sided with the government's interpretation of what constitutes an item being 'in transit.' It held that when imported merchandise was removed from a vessel and deposited in a warehouse under bond pending payment of import duties (even though intended for immediate exportation), such merchandise ceased to be 'in transit,' became mingled with mass of property within country, and was subject to duty.

In the dissenting opinion for Merchants Warehouse Co. v. United States, Justice Stone argued that the Interstate Commerce Commission (ICC) did not have authority to regulate rates charged by a private warehouse company storing goods in transit across state lines. He contended that such regulation was beyond ICC's jurisdiction as it extended into areas of purely local and intrastate commerce, which should be governed by state law rather than federal law. Furthermore, he disagreed with the majority's interpretation of "transportation" under the Interstate Commerce Act to include warehousing services provided by an independent entity separate from carriers subject to ICC regulation. According to him, this broad interpretation could potentially lead to unwarranted expansion of federal regulatory power over various aspects of commerce traditionally controlled by states.