The U.S. Supreme Court case City of Newark, et al. v. Central Railroad Company of New Jersey, et al., 1924 revolved around a dispute between the city and the railroad company over property taxes. The city claimed that certain properties owned by the railroad were taxable while the railroad argued they were exempt due to their use for public purposes under an 1838 statute in New Jersey law which granted tax exemption to real estate used for such purposes by railroads or canal companies. The court ruled in favor of the Central Railroad Company stating that these properties did indeed qualify as being used for public purposes and therefore should be exempt from taxation under state law.

In the dissenting opinion for City of Newark v. Central Railroad Company of New Jersey, Justice Holmes argued that the city's right to tax should not be limited by a previous agreement made between the railroad company and state legislature. He believed that such an agreement could not bind future legislatures or cities from imposing taxes as they saw fit in response to changing circumstances. The justice asserted that it was unreasonable for any corporation to expect perpetual immunity from taxation based on past agreements, especially when those corporations were using public resources like land and infrastructure. In his view, this case represented an overreach by courts into legislative matters; he maintained it was inappropriate for judges to interfere with a city's power to levy taxes unless there was clear violation of constitutional rights involved.