In Union Pacific Railway Company v. United States, the Supreme Court was asked to decide whether the Union Pacific Railway Company was liable for the payment of taxes on the value of the land it received from the United States government. The Union Pacific Railway Company had been granted land by the United States government in order to build a transcontinental railroad. The company argued that it should not be liable for taxes on the value of the land because it had not received any money for the land. The Supreme Court held that the Union Pacific Railway Company was liable for the payment of taxes on the value of the land it received from the United States government. The Court reasoned that the company had received a valuable benefit from the government in the form of the land, and that this benefit was subject to taxation. The Court also noted that the company had received a substantial benefit from the government in the form of subsidies and other assistance, and that these benefits should also be subject to taxation. In conclusion, the Supreme Court held that the Union Pacific Railway Company was liable for the payment of taxes on the value of the land it received from the United States government. The Court reasoned that the company had received a valuable benefit from the government in the form of the land, and that this benefit was subject to taxation. The Court also noted that the company had received a substantial benefit from the government in the form of subsidies and other assistance, and that these benefits should also be subject to taxation.

Justice Field wrote the dissenting opinion in Union Pacific Railway Company v. United States, arguing that Congress had no authority to impose a tax on the company's bonds and coupons issued by it prior to 1875. He argued that these obligations were created under an act of Congress which provided for their payment out of certain funds derived from land grants made to aid in constructing the railroad, and thus could not be taxed without impairing or destroying them. Furthermore, he asserted that such taxation would violate both public policy as well as private rights since it was never intended by either party when they entered into this agreement with each other. Finally, Justice Field concluded his dissent by stating that if Congress has power to tax these obligations then there is no limit upon its taxing power over any contract obligation whatsoever; therefore rendering all contracts subject to its will at any time and place where it may choose so exercise its authority.