In the Pacific Railroad v. United States case of 1894, the Supreme Court ruled on a dispute between the federal government and several railroad companies over who should bear responsibility for repaying bonds issued to fund railway construction during the Civil War era. The railroads argued that they were not liable for repayment because their charters did not explicitly state this obligation. However, the court disagreed with this interpretation. It held that even though there was no explicit requirement in their charters, an implicit contract existed due to legislation passed by Congress at that time which provided funding support through bond issuance for these railways' construction projects. Therefore, it was inferred from these laws that railroads had a duty to repay those funds back to government once they became profitable entities themselves after completion of such infrastructure development works funded by public money through bond sales.

In the dissenting opinion for Pacific Railroad v. United States, 1894, it was argued that the majority's ruling contradicted previous decisions and established principles of law. The dissent contended that Congress did not have the authority to impose a tax on state bonds held by private individuals or corporations under its power to regulate commerce among states. It also disagreed with the majority's interpretation of what constituted "interstate commerce," arguing that this term should only apply to direct commercial transactions between states rather than encompass all activities related to interstate transportation systems such as railroads. Furthermore, it asserted that if Congress could levy taxes on railroad companies' income from state bonds under its power over interstate commerce, then there would be no limit to federal taxation powers which would undermine states' rights and upset balance in our federal system.