[BlueLancer]

Okay, maybe I'm the one who's confused by this, but the way that I read that section is that it pertains to the States, not the federal government.

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts;

Am I reading that wrong?

[Toddsterpatriot]

Forget it, he's rolling.

[mnehring]

You are reading it correctly, that section was limitations to the States, things they couldn't do that the Fed could. For example, in the same clause, the States can't make treaties with foreign nations, yet other parts of the Constitution does give that power to the Federal branches. This is outlined in Federalist 44, Madison outlined this as a prevention from the States modifying the value of the US currency. At that, Madison was very clear that the issuance of 'paper money' was something they didn't want to grant the States but instead, retain as a centralized piece of federal authority.

Had every State a right to regulate the value of its coin, there might be as many different currencies as States, and thus the intercourse among them would be impeded; retrospective alterations in its value might be made, and thus the citizens of other States be injured, and animosities be kindled among the States themselves. The subjects of foreign powers might suffer from the same cause, and hence the Union be discredited and embroiled by the indiscretion of a single member. No one of these mischiefs is less incident to a power in the States to emit paper money, than to coin gold or silver. The power to make any thing but gold and silver a tender in payment of debts, is withdrawn from the States, on the same principle with that of issuing a paper currency.

[Lurker]

That prohibition is from Article 1, Section 9. The prohibition on Congress issuing paper money is found in Article 1, Section 8.