Sec.4.  A state may not “emit bills of credit.” Bills of credit, to a vast amount, were issued by the states during the war, and for some time thereafter.  They were in the nature of promissory notes, issued by the authority of the state, and on the credit of the state, and put in circulation by the continental congress and the states as money.  This paper money, having no funds set apart to redeem it, became almost worthless.  Bank bills issued upon the credit of private individuals, do not come under the prohibition.  It is also held that the prohibition does not apply to the notes or bills of a state bank, drawn on the credit of a particular fund set apart for that purpose.

Sec.5.  No state shall “make any thing but gold and silver coin a tender in payment of debts.” Tender signifies an offer, or to offer.  In law, it is an offer of something in payment of a debt, or the thing itself which is offered in payment.  Some of the states had declared their irredeemable paper money a lawful tender.  But paper money and property of all kinds are continually liable to fluctuation in value, and might subject those who should be compelled to receive it to great inconvenience and loss.  But although no person is obliged to take in payment any thing but coin, bank bills are by common consent taken in the course of business and in payment of debts, because they may be converted into specie by presenting them at the bank by which they are issued.

Sec.6.  Nor may a state “pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts.”  Bills of attainder and ex post laws have been defined and considered. (Chap.  XXXVII, Sec.5.) If these laws are in their nature wrong, the states as well as congress should be prohibited from passing them.  Not less unjust are laws impairing the obligation of contracts.  Laws that should weaken the force of contracts, or that would release men from their obligations, would be contrary to the principles of justice, and destroy all security to the rights of property.

Sec.7.  As bankrupt laws release debtors from the payment of their debts, and consequently impair the obligation of contracts, the question has arisen whether the states have power to pass insolvent or bankrupt laws.  From decisions of the supreme court of the United States, which is the highest judicial authority, it appears, that a state may not pass a bankrupt law discharging a debtor from the obligation of a contract made before such law was passed.  But it was not to be considered a law impairing the obligation of a contract, if it existed before the contract was made; because the parties, who are presumed to know that such law exists, may guard themselves against loss.

Sec.8.  The last thing prohibited in this clause, is, “to grant any title of nobility.”  This is forbidden to the states for the same reason as it is prohibited to congress. (Chap.  XXXVII, Sec.11.)