In the 1902 case of Southern Pacific Railroad Company v. United States, the Supreme Court ruled on a dispute involving land grants to railroad companies by Congress. The Southern Pacific Railroad Company claimed that it was entitled to certain lands under an 1866 Act granting lands for railway construction in California and Oregon. However, these lands had been reserved by President Grant's executive order in 1873 for indigenous tribes before they could be surveyed and patented to the company as per the Act’s provisions. The court held that while Congress intended to grant alternate sections of public land along railways' routes, this did not apply if those sections were already legally appropriated or reserved when surveys (to identify which specific tracts would go to whom) took place. Therefore, any reservation made prior to such surveying effectively removed those areas from what might otherwise have been granted by Congress’ act. Consequently, Southern Pacific was not entitled to these disputed parcels because they had been set aside for Native American reservations before being officially identified as part of its potential grant.

In the dissenting opinion for Southern Pacific Railroad Company v. United States, Justice Harlan disagreed with the majority's interpretation of the Act of 1862 and its amendments. He argued that Congress intended to grant lands to railroad companies as an incentive for construction, not as a means of profit through sale or lease. Therefore, he believed that any income derived from these lands should be used solely towards paying off debts incurred during construction until those debts were fully paid off. Furthermore, he contended that if Congress had intended for railroads to use these lands freely after their debt was settled, they would have explicitly stated so in legislation rather than leaving it up to judicial interpretation. In his view, this misinterpretation by the court allowed corporations like Southern Pacific Railroad Company to exploit public resources without returning due benefits back into public coffers.