In the case of William Jameson & Co. v. Morgenthau, Secretary of the Treasury (1938), William Jameson & Co., a whiskey distillery, challenged the constitutionality of a tax imposed by Congress on distilled spirits held in bond for more than eight years. The company argued that this was an unconstitutional taking without due process under the Fifth Amendment because it retroactively taxed products produced and stored before enactment of legislation. However, the Supreme Court upheld Congress's power to impose such taxes as part of its broad authority over taxation policy and rejected claims that it violated due process rights or amounted to an unlawful taking. The court reasoned that businesses dealing with commodities subject to excise taxes do so with awareness their goods may be subjected to changes in tax laws.

In the dissenting opinion for William Jameson & Co. v. Morgenthau, Justice McReynolds argued that the majority's decision to uphold a tax on distilled spirits was unconstitutional and exceeded Congress' power under the Constitution. He believed that this tax was not an excise tax as defined by law but rather a direct tax, which would require apportionment among states according to their population. Furthermore, he contended that this case represented an overreach of federal authority into state matters because it involved taxation of property within individual states - something he felt should be left up to state governments themselves. Finally, Justice McReynolds expressed concern about potential abuses of power if such broad interpretations of Congressional taxing powers were allowed to stand unchallenged.