In the case of Ray Consolidated Copper Company v. United States, 1924, the Supreme Court ruled in favor of the U.S government. The dispute arose over a tax assessment on copper ore mined by Ray Consolidated Copper Company during World War I. The company argued that it should be taxed based on its profits after deducting mining and smelting costs, while the government contended that taxes should be levied before these deductions were made. The court sided with the government's interpretation of Section 38 of Part II Revenue Act (1918), stating that gross income from property meant total production without any deduction for cost or expense incurred to produce such product.

In the dissenting opinion for Ray Consolidated Copper Company v. United States, the justice argued that the majority's interpretation of Section 234(a) of the Revenue Act was incorrect. The justice believed that this section did not allow for a deduction from gross income for amounts paid as compensation to employees in excess of reasonable salaries or wages. Instead, it should be interpreted as allowing deductions only when such payments are made wholly and exclusively for business purposes. Furthermore, he disagreed with how much weight was given to evidence provided by government experts regarding what constituted 'reasonable' compensation in this case; arguing instead that more consideration should have been given to industry standards and practices at the time. He also expressed concern about potential misuse or manipulation of tax laws if corporations were allowed excessive leeway in determining their own salary structures without adequate oversight or regulation.