The topic of discussion for this Constitution Monday comes from Article I, Section 10, Clause 1: "No State shall … make any Thing but gold and silver Coin a Tender in Payment of Debts…." This provision in the Constitution tells States that Congress has the authority over the national financial system based on gold and silver and that no State can legally authorize anything else.
"When the Congress ruled out paper currency as a medium of exchange, it was trying to guarantee that, from this point on, the American people would have honest money based on precious metal. The states were also restricted so that they would stay on a solid system of honest money based on gold and silver.
"Unfortunately, however, precious metal is a very awkward and cumbersome means of transacting business. The people virtually demand paper money, especially for larger transactions…." (W. Cleon Skousen, The Making of America - The Substance and Meaning of the Constitution, p 497).
"… During the Revolution, the states began issuing paper currencies again, having a somewhat better record in financing the war than Congress had. After 1783, however, specie dried up in a popular rush to purchase imported goods, and the states' currency issues exacerbated the serious depression of 1784. In early 1787,
, which had resisted currency issues, was faced with Shays's Rebellion, whose partisans demanded new currency. In Massachusetts , the Framers were determined to put an end to the practice that they believed had contributed to so much economic and political dislocation. Rhode Island, a major issuer of paper money, refused to send delegates to the Constitutional Convention precisely because it feared monetary reform" (David F. Forte, The Heritage Guide to the Constitution, p 169). Philadelphia