The U.S. Supreme Court case St. Louis, Iron Mountain & Southern Railway Company v. State of Arkansas in 1915 revolved around the issue of whether a state could impose penalties on railway companies for not providing separate coaches or compartments for black and white passengers within its jurisdiction. The St. Louis, Iron Mountain & Southern Railway Company was fined by the state of Arkansas under a law that required racial segregation on trains but argued this violated their rights under the Commerce Clause and Fourteenth Amendment to operate interstate commerce without undue interference from individual states. However, the Supreme Court upheld Arkansas' right to enforce such laws within its borders as long as they did not interfere with interstate travel or trade directly - i.e., if segregated facilities were provided equally across all races and didn't prevent anyone from traveling between states due to race alone then it wasn't considered an unreasonable burden on commerce according to existing interpretations at that time.

In the dissenting opinion for St. Louis, Iron Mountain & Southern Railway Company v. State of Arkansas, Justice Holmes disagreed with the majority's view that a state could not regulate intrastate rates in such a way as to indirectly affect interstate commerce. He argued that if an action was within the power of a state and did not directly interfere with interstate commerce, it should be allowed even if it had indirect effects on such commerce. He believed this principle applied regardless of whether or not Congress had acted on the matter at hand. Furthermore, he contended that states should have broad powers to regulate their own affairs unless there was clear evidence that federal law preempted them from doing so.