Question

why would it cause a conflict of interest if both state and national goverments had the inherent powers of coining money, declaring war, or creating laws?

Answer 1

State/National Government would essentially cease to be centralized, and the government would no longer be a federal government but rather a Confederation of loosely aligned states which would fight individually rather than as a collective. The same thing was noted in early Russian history within Russian territories prior to the Mongol Yoke. The territories were weak, loosely associated and not militarily aligned and this led to their destruction at the hands of the Mongols.

Answer 2

Well, first of all, states can of course create laws, and in fact most of the laws written are state laws. State law governs almost all crime, marriage, business, the buying and selling of property, torts (civil offenses), and so forth. The ordinary citizen runs up against Federal law relatively rarely. (Indeed, originally the idea was that Federal law would only apply when actions crossed states lines, e.g. the citizen of one state harmed a citizen from another, or when one of the states itself was an actor, e.g. a state harmed the civil rights of a citizen.)

But the Founders understood that *foreign* policy, meaning how the states interacted with other nations, must be unified, or else it would be possible for foreign nations to intrigue with and split the states from each other, eventually undermining and ruining the independence of America for which they had worked so hard. Hence they specifically removed any power related to relations with foreign nations from the states and put it with the central, Federal, authority, so that the United States would speak with one voice, so to speak.

Whether money is an aspect of foreign relations is tricky. In the days before "fiat" money (money based not on precious metals, but on stated promises to accept it for payment, e.g. Federal Reserve notes) it was generally not seen that way. There was specie money, i.e. gold and silver, sometimes copper, which had an intrinsic value, the value of the metal. In principle it didn't matter who coined it, because the value was measureable by anybody. An ounce of gold is an ounce of gold, and having President Washington's or Earl Scrugg's face stamped on it doesn't change its value. On the other hand, there was "scrip" money, essentially a paper promise to pay (gold or silver) on demand. These were normally issued by private banks, and functioned more or less as checks written "Pay To The Bearer." They were sometimes issued by governments in distress, i.e. during wartime, but held in wide contempt.

The Constitution provides for Congress' ability to coin money, and probably the Founders expected that money coined by the United States would have greater stability and authority. But the Constitution doesn't explicitly take the power away from the states, and certainly the states, or rather private actors within the states, issued scrip money for a long time.

However, with the advent of fiat money, and the deliberate manipulation of its supply to address economic issues -- i.e. the effort to control inflation or interest rates to push or pull the national economy -- in the early 20th century, it became impossible to allow the states or private actors to issue money of any kind, because that would destabilize and ruin the ability of the central bank to control interest rates and inflation. So now you can't. There are those who think this was a mistake, and lay blame for the recent financial crises at the existence of a central bank. (Andrew Jackson thought this way, of course.)