[Sidenote: Powers denied to the states.]
[Sidenote: Paper currency.]
The national authority of Congress is further sharply defined by the
express denial of sundry powers to the several states. These we have
already enumerated.[24] There was an especial reason for prohibiting
the states from issuing bills of credit, or making anything but gold
and silver coin a tender in payment of debts. During the years 1785
and 1786 a paper money craze ran through the country; most of the
states issued paper notes, and passed laws obliging their citizens to
receive them in payment of debts. Now a paper dollar is not money, it
is only the government's promise to pay a dollar. As long as you can
send it to the treasury and get a gold dollar in exchange, it is worth
a dollar. It is this exchangeableness that makes it worth a dollar.
When government makes the paper dollar note a "legal tender." i.e.,
when it refuses to give you the gold dollar and makes you take its
note instead, the note soon ceases to be worth a dollar. You would
rather have the gold than the note, for the mere fact that government
refuses to give the gold shows that it is in financial difficulties.
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