I can see how the clause could be read that way, but if you read that clause in the context of the entire document, you'll see that it has a much narrower meani

I can see how the clause could be read that way, but if you read that clause in the context of the entire document, you'll see that it has a much narrower meaning. For example, the contract clause also has a different part that prohibits states from coining money. In article 1, section 8, the constitution grants Congress the power to coin money. Read together, this means that a state can't issue money unless that money is backed by gold or silver. There are some fairly weird edge cases in this rule. State banks can issue bonds, and those bonds can be privately tradeable, which is quite a lot like issuing money. However, according to the cases that Wikipedia cites, that's perfectly legal. It's interesting how much of the Constitution is about creating an economic alliance, as much as a political or military one. Having federal bankruptcy courts, a postal system, banning tariffs on interstate trades, or a copyright system is really about creating a single common market with closely integrated economies. We don't generally think about those aspects of the Constitution, because we're so used to it. Sources: http://www.let.rug.nl/usa/essays/general/a-brief-history-of-central-banking/money-and-the-constitution.php http://www.let.rug.nl/usa/essays/general/a-brief-history-of-... https://en.wikipedia.org/wiki/Contract_Clause#Bills_of_credit https://en.wikipedia.org/wiki/Contract_Clause#Bills_of_credi...