Transportation Company v. Chicago is a United States Supreme Court case that was decided in 1878. The case involved a dispute between the Chicago and Northwestern Railway Company and the City of Chicago. The railway company had been granted a franchise by the city to operate a railway line within the city limits. The city then passed an ordinance that required the railway company to pay a fee for the privilege of operating within the city limits. The railway company argued that the ordinance was unconstitutional because it violated the contract clause of the United States Constitution. The Supreme Court held that the ordinance was unconstitutional because it violated the contract clause. The Court reasoned that the contract clause prohibits states from passing laws that impair the obligation of contracts. The Court found that the ordinance impaired the obligation of the contract between the railway company and the city because it imposed a fee on the railway company that was not part of the original contract. The Court held that the ordinance was unconstitutional and that the railway company was not required to pay the fee.

In Transportation Company v. Chicago, the Supreme Court was asked to decide whether a state could impose a tax on an interstate transportation company for its activities within the state. The majority opinion held that such taxes were constitutional and did not violate the Commerce Clause of the U.S Constitution because they applied equally to all companies regardless of their origin or destination. Justice Field dissented from this decision, arguing that it violated both due process and equal protection clauses of the Fourteenth Amendment as well as principles established in prior cases regarding taxation by states on interstate commerce. He argued that since these taxes only applied to those engaged in interstate commerce, they created an unequal burden between domestic and foreign businesses operating within Illinois which would be unconstitutional under existing law. Furthermore, he argued that if allowed to stand this ruling would lead other states down a slippery slope where each one imposed different rules on out-of-state businesses leading ultimately to chaos in commercial relations among them