[mvpel]

Why does the Constitution specify that no state shall make any thing but gold or silver coin tender in payment of debts?

[Carry_Okie]

At the time gold and silver were the preferred store of value and unit of account and thus designated as a medium of exchange; i.e., legal tender. They didn't have a demand for gold as a contact material in electronics, nor for silver for photography. These demands alter the VALUE of gold and silver, do they not? Were substitutes found for gold and silver for industrial uses, would their VALUE fall? Are gold and silver then a stable store of value?

There is no such thing as a perfect currency. Indeed perfect distribution of information, zero transaction cost, and fluidity in all markets would theoretically eliminate the need for money entirely because all goods would be equally fungible.

[Deuce]

Why does the Constitution specify that no state shall make any thing but gold or silver coin tender in payment of debts?

Article 1, section 8, Clause 5: Congress shall have the power to coin money and regulate the value thereof;

Article 1, Section 10, Clause 1: No state shall emit bills of credit (i,e, paper money, even if redeemable in gold or silver) or make anything but gold or silver coin a payment for a debt;

The Coinage Act of 1792, which explicitly defines the dollar as 371 1/4 grains of silver, was the act which instituted the obligation mentioned in Article 1, section 8, clause 5 above.

Since none of these provisions has been amended or appealed, not only is the Federal Reserve an economic catastrophe but unconstitutional as well.