The U.S. Supreme Court case Reagan v. Farmers' Loan and Trust Company in 1893 revolved around the issue of railroad rates set by a Texas state commission, which were challenged as being unconstitutional due to their alleged confiscatory nature. The Farmers' Loan and Trust Company, along with other plaintiffs who owned bonds secured by mortgages on the railroads affected by these rates, argued that they violated the Fourteenth Amendment's Due Process Clause because they prevented companies from earning a reasonable return on their investments. However, the court ruled against them stating that it was not within its jurisdiction to determine what constituted "reasonable" rates for private businesses; this power rested solely with legislative bodies unless there was clear abuse or violation of constitutional rights involved. Furthermore, it held that while property could be protected under due process laws from arbitrary interference or unjust confiscation through legislation such as rate-setting measures; owners did not have an absolute right to profits without any regulation whatsoever.

In the dissenting opinion for Reagan v. Farmers' Loan and Trust Company, Justice Brewer argued that the court should not interfere with state legislation on economic matters unless it clearly violates constitutional rights. He believed that states have a right to control their own internal commerce, including setting rates for services provided by companies operating within their borders. This includes railroads, which he viewed as public highways created under state authority. Furthermore, he contended that if a company believes its property is being taken without just compensation due to rate regulation laws, it should seek redress in state courts first before appealing to federal courts. In his view, this case represented an overreach of judicial power into legislative territory and threatened the balance of powers between different levels of government.