Quote:
“Congress has exercised this power [to establish a national currency] by delegation to the federal reserve system. 12 U.S.C. section 411. Federal reserve notes are legal tender for all debts, including taxes. 31 U.S.C. section 392; Milam v. U.S. 524 F.2d 629 (9th Cir. 1974). The United States Constitution, art. 1, section 10, ‘prohibits the states from declaring legal tender anything other than gold or silver, but does not limit Congress’ power to declare what shall be legal tender for all debts.’ U.S. v. Rifen, 577 F.2d 1111,1112 (8th Cir. 1978). Since Congress has done so, there can be no valid challenge to the legality of federal reserve notes. United States v. Anderson, 584 F.2d 369, 374 (10th Cir. 1978).”
To be fair, if you take Article 1 section 10 at face value you might think that the states would make us all trade coins of metal. But then Congress also has the power explicitly taken away from the states in the same clause, to issue paper money, albeit in a different place. Two sections together define Congress' responsibility to provide legal tender.