In the United States v. Bowman case of 1922, the U.S. Supreme Court ruled that certain crimes against the United States could be prosecuted even if they were committed outside of its territorial boundaries. The defendants in this case were employees of a steamship company who had defrauded their employer by submitting false claims for supplies allegedly provided to ships at sea, thereby indirectly defrauding the U.S government which was financially backing these operations during World War I. They argued that since their actions took place on international waters and not within any specific jurisdictional territory, they couldn't be held accountable under American law. However, Justice Oliver Wendell Holmes Jr., writing for a unanimous court, rejected this argument stating that some types of offenses are intrinsically harmful to governmental functions and can therefore be punished no matter where they occur.

In the dissenting opinion for United States v. Bowman, Justice James C. McReynolds disagreed with the majority's interpretation of jurisdiction and argued that U.S law should not apply to crimes committed outside of its territory unless explicitly stated by Congress. He contended that the defendants' actions did not violate any laws in their location at sea, thus they could not be prosecuted under U.S law upon returning to American soil. Furthermore, he expressed concern about potential diplomatic issues arising from applying domestic laws extraterritorially without clear legislative intent or international agreement.