In Missouri, Kansas, and Texas Railway Company v. United States, the Supreme Court was asked to decide whether the United States had the right to impose a tax on the railway company for the use of its tracks. The railway company argued that the tax was unconstitutional because it was a direct tax on property, which was prohibited by the Constitution. The Supreme Court disagreed, ruling that the tax was not a direct tax on property, but rather a tax on the privilege of using the tracks. The Court held that the tax was a valid exercise of the government's power to tax, and that it did not violate the Constitution. The Court also held that the tax was not an unconstitutional burden on interstate commerce, as the railway company had argued. The Court's decision was unanimous.

In Missouri, Kansas, and Texas Railway Company v. United States, the Supreme Court was tasked with determining whether or not a railway company had to pay taxes on certain bonds issued by it in 1871. The majority opinion held that the company did have to pay taxes on these bonds because they were considered income under federal law at the time of their issuance. Justice Field dissented from this ruling and argued that since Congress had never imposed such a tax before 1877 when it passed an act specifically imposing taxation upon all railroad companies for any interest received after July 1st of that year, then no such tax could be applied retroactively to cover bonds issued prior to said date. He further argued that if Congress wanted those particular bonds taxed then they should have done so explicitly in their legislation rather than attempting to do so through interpretation of existing laws which would constitute an unconstitutional taking without due process as provided for by the Fifth Amendment.