In the 1913 Supreme Court case Stone, Sand and Gravel Company v. United States, the court ruled in favor of the U.S. government regarding a dispute over land ownership rights along a riverbed in Kentucky. The Stone, Sand and Gravel Company claimed that they owned part of this riverbed due to their acquisition of adjacent property from private owners who had previously been granted patents by both Virginia (before it became part of Kentucky) and later by the federal government after statehood was established. However, these patents did not explicitly include any portion of the riverbed itself within their boundaries. The Supreme Court held that under common law principles adopted from England at America's founding - which were still applicable unless changed by Congress - ownership rights to navigable waterways remained with sovereign governments (in this case, first Virginia then later transferred to federal control), rather than passing into private hands through adjacent land grants or sales unless specifically included therein. Therefore, since neither patent issued for these lands expressly conveyed any portion of this navigable waterway’s bed as well as its banks up to high-water mark line; such parts remained public properties under governmental trusteeship for all citizens' use instead being privately owned.

In the dissenting opinion for Stone, Sand and Gravel Company v. United States (1913), Justice Holmes argued that the government's right to regulate commerce should not extend to controlling a company's internal operations or dictating how it conducts its business. He believed that such an interpretation of the Commerce Clause would give Congress too much power over private enterprise, potentially infriting on individual liberties and state rights. Furthermore, he contended that while Congress has authority over interstate commerce, this does not mean it can control all activities related to goods destined for interstate trade. In his view, if a product is manufactured within one state and only later becomes part of interstate commerce when sold across state lines; then federal regulation should apply only from the point at which it enters into trade between states - not before.