Kidogo's World
This essay may have planted the seed that germinated in the mind of Roger Sherman and became what is known as the "hard money clause" of the Constitution, Article 1, Section 10. In any case, it surely influenced its passage in the Convention.
About the Author
Dr. John Witherspoon (1723-1794), Signer of the Declaration of Independence and educator of James Madison and other founders of our nation, was the author of the well-reasoned Essay on Money, which undoubtedly gave respected support to Roger Sherman's igenious hard money clause in Article I, Section 10, of the Constitution -- that most remarkable remedy that rescued our nation from near oblivion in its infancy. This is "must" reading for anyone who entertains any illusions about government-issue "money," wonderful as "free of interest to the Fed" may sound. (Dr. Witherspoon's impressive credentials are detailed in the Biographical Note at the end.)
(Roger Sherman's own definitive treatise, A Caveat Against Injustice, or An Inquiry into the Evils of a Fluctuating Medium of Exchange, rescued from the obscurity of only two copies in existence and republished by Spencer Judd, can be found in The Treasury, which is bound with Remarkable Remedy.)
The Rev. David Paul is looking for someone to publish Witherspoon's other out of print documents, including sermons and letters. Our thanks to him, for he has graciously offered the Essay on Money to Kidogo's World for your benefit. We thought at first to give you only excerpts, but couldn't bring ourselves to leave anything out. We thought we thoroughly understood the money issue, having studied it for years, but we gained "new" insight from this essay. We have taken the liberty to provide subheads, more modern use of commas, separation of ideas into paragraphs, and an outline, below, to facilitate following his reasoning. The full text follows on subsequent pages. You are welcome to download, but well-formatted hard copy can be obtained at a nominal price. kidogo@ionet.net
Outline
Essay on Money
As a Medium of Commerce;
With Remarks on the Advantages and Disadvantages
of Paper Admitted into General Circulation.by John Witherspoon
* * *
THEORY OF MONEY
Essay on Money I
What gave rise to money, its nature and use
The first necessity: a standard of computation
Some sign or signs must be agreed upon
The nature and meaning of these signs
The sign the nature of a promissory note
Signs facilitate commerce
All mere signs are deficient
Gold and silver, answer all three ends
Qualities money should possess
1 Value
Either necessary or remarkably useful or desirable
Ductility, durability, and other qualities, make gold and silver exceedingly fit for domestic utensils
Eminent contrary opinions and intrinsic value
2 Rarity
3 Portability
4 Divisibility
5 Durability
All united, in gold and silver
Gold, silver, and copper, were the most ancient metals
Use of baser metals
* * *
INFERENCES DERIVED FROM THE THEORY
"Scarcity of Circulating Medium" is Nonsense
Money itself must be a commodity as well as sign and standard
Depreciation because of quantity increase is irregular
Depreciation results from industry and trade, but pernicious when from increased circulating medium not related to industry
Paper money is not money; legal tender is an absurdity
Commerce founded upon Contract
Essential condition of lawful contract is that it be free and mutual
An Attempt to apply authority to that which is not its proper object
Privilege, license, and voluntary engagement
Counter-ProductiveLaws
Tender laws contradict the very first principles of commerce
Paper circulating as a medium of commerce is a promissory note -- not money.
It is the public opinion that must ultimately give them currency
Proper use of paper currency
Over-abundance of gold and silver
Benefits of Paper
Facilitating commerce
Extending credit
Evil done by paper
Evil of doubtful paper
Resolution of the question of paper money
Principles on which it ought to be conducted
Advantages of Bank Paper
Objection Against Banks
A defect in the system
Proposal
Answer to Objection
Summing Up
Conclusion
Biographical Note: John Witherspoon
Continue to Essay on Money I
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Last revised: 10 June 2000.