The Schenk case dealt with Schenk encouraging people to avoid the military draft during World War I. He was arrested but argued that his first amendment freedom of speech was violated. After making its way through state and local courts, the case made it all the way to the Supreme Court. However, the court ruled it was NOT protected by the first amendment right of freedom of speech. This is because it caused a clear danger to the US war effort, which could cause the US to lose World War I.
B--when it presents a clear and present danger to society.
This decision came during wartime and Justice Holmes was clear that circumstances determine if speech can be restricted.
Schenck sent pamphlets to drafted soldiers during World War I stating the government should not ask men to kill other men. During war, this speech can be dangerous and therefore restricted. If it was said during peacetime, then there is no danger and Schenck would have been free to express.