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Article 1 section 10 paragraph 1 of the US constitution says

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; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

, yet the the US prints money.

I heard that it is attempted to interpret laws the ways they were meant, especially old laws. To me, it seems obvious that it was meant like this: "There shall be no fiat money legitimized by a government (in the US [As the US constitution only applies within the US.])."

So why can they legally print money?

Basically: If it's illegal for all states to print money, why is it legal for the collection of all states?

Or is it possibly that they wanted to prevent there to be several currencies within the US? But then, what would stop a county or town from establishing its own currency? Before you say something like "A county or town typically was too small for that, back then.": How about a union of counties?

I'd like to know what problem they intended to solve by including the paragraph quoted above in the US constitution.

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So why can they legally print money?

Basically: If it's illegal for all states to print money, why is it legal for the collection of all states?

The United States is expressly authorized by Article I, Section 8 as noted by not store bought dirt, while the prohibition you identify, in Article I, Section 10 applies only to the states as explained by raffamaiden.

Or is it possibly that they wanted to prevent there to be several currencies within the US?

This is precisely why the U.S. Constitution allows the central government to print money, but not state governments. In other words, the Founders envisioned the U.S. as a currency union from the very start. Symbolically, a currency union is a very visible form of national unity and reinforces other provisions of the original U.S. Constitution that make the United States as customs and tariff union and an immigration union.

But then, what would stop a county or town from establishing its own currency? Before you say something like "A county or town typically was too small for that, back then.": How about a union of counties?

For purposes of the U.S. Constitution, the term "State" means states and the local governments created by the state within that state. Constitutionally, for purposes of Article I, Section 10, a county or town is part of a state, and hence, is constitutionally prohibited from issuing fiat money just as a state government is prohibited from doing so. (The meaning of "state" is different for different purposes. This definition does not apply, for example, to the 11th Amendment to the United States Constitution, but does apply for most other purposes.)

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    As a historical note, private banks did actually issue their own notes (bloomberg.com/view/articles/2012-10-19/…). Of course, the value of a note was backed mainly by the bank which issued it, which made its interchange (which is one of the main reasons behind money) difficult. That was not only in the USA, at the time it was standard practice in a lot of countries. – SJuan76 May 27 '17 at 10:43
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    @SJuan An economist's definition of money is much broader than currency and coins and includes all sorts of bank issued rights even today. – ohwilleke May 29 '17 at 15:17
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It means states having a different currency from the federal government and each other. This was actually an issue in America before the constitution. wikipedia

Article 1 section 8 describes congress' powers.

The Congress shall have Power To ...

do may things including:

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

  • Thanks. Can you address the question in my question's second to the paragraph? – UTF-8 May 26 '17 at 18:23
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    About counties? I'd think counties are granted powers by state constitutions, which would make the limit on states apply. – user4460 May 26 '17 at 18:35
  • Businesses are legitimized by states and it's legal for them to legitimize fiat currencies as it's not explicitly illegal for them to do so. Why wouldn't the same apply to counties, which are legitimized by states, too? – UTF-8 May 26 '17 at 18:46
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    @UTF-8 Disney dollars andthe like obviously have a different legal status. States can create similar things, and have done so in the past (through agencies authorized under state laws). One example is the transit tokens that were formerly common on buses and subways. – phoog May 26 '17 at 19:30
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    @notstoreboughtdirt The term "Money" basically means something that has to be accepted by everyone in payment of valid debts (although the exact meaning is more technical than that as you don't actually have a right to pay for any debt in the course of ordinary commerce, in pennies, for example). Disney dollars are only accepted by Disney merchants and Disney cannot compel JC Pennies or a county treasurer in Wisconsin to accept Disney dollars in payment of debts owed. Similarly, transit tokens are only accepted by one vendor and so they aren't "money." – ohwilleke May 26 '17 at 21:11
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I think "State" refers to State (e.g. Texas, Indiana, ...) and NOT to the federal government.

That's why at first the Bill of Rights was effective only against the Federal Government, while the States can violate your rights. Then the 14th Amendment was enacted and now most rights of the Bill of Rights are incorporated against States too. The 14th Amendment talk about State, while the Bill of Rights about Congress ("Congress shall not make any law that ....")

In other words, USA government is not "only" a collection of State

I think they wanted to prevent States having different currencies among them. What prevents them to do so is the Supreme Court: if the State enact a law establishing its own money, the Supreme Court would declare that law unconstitutional due to the constitutional clause you posted

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