In the case of Veix v. Sixth Ward Building & Loan Association of Newark, 1939, the U.S. Supreme Court was tasked with determining whether a New Jersey statute that allowed building and loan associations to reduce their withdrawal liability during times of financial hardship violated contract clause rights. The plaintiff, Mr. Veix, argued that his contractual right to withdraw his shares at their full value was infringed upon when the association reduced its withdrawal liability due to economic difficulties as permitted by state law. The court ruled in favor of Sixth Ward Building & Loan Association stating that there had been no violation because such contracts were subject to existing laws and any future amendments or alterations made in good faith for legitimate public purposes - including those aimed at addressing widespread economic distress like the Great Depression which was ongoing at this time period. Therefore, it held that states could modify private contracts if they deemed it necessary for societal welfare without violating constitutional protections against impairing contractual obligations.

In the dissenting opinion for Veix v. Sixth Ward Building & Loan Association of Newark, Justice McReynolds disagreed with the majority's decision to uphold a New Jersey statute that allowed building and loan associations to reduce their contractual obligations due to economic hardship. He argued that this law violated the Contract Clause of the U.S Constitution which prohibits states from passing laws impairing contract obligations. According to him, allowing such legislation would set a dangerous precedent where contracts could be altered or nullified by legislative action whenever it was deemed expedient or necessary under prevailing conditions. This, he believed, undermined legal certainty and stability in commercial transactions which are essential for economic growth and prosperity.