The case United States of America v. Pacific and Arctic Railway and Navigation Company, et al., 1912 revolved around the interpretation of a federal statute related to transportation rates for goods shipped between U.S. ports via Canadian routes. The defendants were four shipping companies that transported goods from Seattle to Alaska through British Columbia, charging lower rates than if the same route was taken entirely within U.S territory. The government argued this violated an 1887 law requiring equal charges for similar services under similar conditions on all American vessels, regardless of whether they passed through foreign waters or not. However, the Supreme Court ruled in favor of the defendant companies by interpreting "similar conditions" as referring only to domestic transport situations where competition could exist - which wasn't applicable here since there was no direct American route comparable with those passing through Canada. Therefore, it held that these companies weren’t violating any laws by offering cheaper prices for their more efficient routes.

In the dissenting opinion for United States v. Pacific and Arctic Railway and Navigation Company et al., Justice Holmes disagreed with the majority's interpretation of the Interstate Commerce Act, arguing that it did not apply to transportation within Alaska because Alaska was a territory rather than a state at that time. He contended that Congress had intended for "interstate commerce" to refer only to trade between states, not territories. Furthermore, he argued against applying federal law in such an expansive manner without clear legislative intent from Congress. In his view, if Congress wanted federal laws like the Interstate Commerce Act to apply in U.S territories as well as states, they would have explicitly stated so in their legislation.