INFERENCES
DERIVED FROM THE THEORY

continued

Essay On Money X

As a Medium of Commerce;
With Remarks on the Advantages and Disadvantages
of Paper Admitted into General Circulation.

by John Witherspoon

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Summing Up

I will now sum up, in single propositions, the substance of what has been asserted, and I hope sufficiently proved, in the preceding discourse.

1. It ought not to be imputed to accident or caprice, that gold, silver, and copper, formerly were and the two first continue to be, the medium of commerce; but to their inherent value, joined with other properties, that fit them for circulation. Therefore, all the speculations, formed upon a contrary supposition, are inconclusive and absurd.

2. Gold and silver are far from being in too small quantity at present for the purpose of a circulating medium, in the commercial nations. The last of them, vis. silver, seems rather to be in too great quantity, so as to become inconvenient for transportation.

3. The people of every nation will get the quantity of these precious metals, that they are entitled to by their industry, and no more. If by any accident, as plunder in war, of borrowing from other nations, or even finding it in mines, they get more, they will not be able to keep it. It will, in a short time find its level. Laws against exporting the coin will not prevent this. Laws of this kind, though they are still in force in some nations, supposed to be wise, yet are in themselves ridiculous. If you import more than you export, you must pat the balance or give up the trade.

4. The quantity of gold and silver at any time in a nation, is no evi-dence of national wealth, unless you take into consideration the way in which it came there, and the probability of its continuing.

5. No paper of any kind is, properly speaking, money. It ought never to be made a legal tender. It ought not to be forced upon any body, because it cannot be forced upon every body.

6. Gold and silver, fairly acquired, and likely to continue, are real national, as well as personal wealth. If twice as much paper circulates with them, though in full credit, particular persons may be rich by possessing it, but the nation in general is not.

7. The cry of the scarcity of money, is generally putting the effect for the cause. No business can be done, say some, because money is scarce. It may be said with more truth, money is scarce, because little business is done. Yet their influence, like that of many other causes and effects is reciprocal.(59.1)

8. It is however possible, that paper obligations may so far facilitate commerce, and extend credit, as by the additional industry, that they excite to overbalance the injury which they do in other respects. Yet even the good itself may be overdone. Too much money may be emitted even upon loan, but to emit money any other way than upon loan, is to do all evil and no good.

9. The executive quantity of paper emitted by the different states of America, will probably be a loss to the whole. They cannot however take advantage of one another in that way. That state which emits most will lose most, and vice versa.

10. I can see no way in which it can do good but one, which is, to deter other nations from trusting us, and thereby lessen our importations; and I sincerely wish, that in that way, it may prove in some degree a remedy for its own evils.

11. Those who refuse doubtful paper, and thereby disgrace it, or prevent its circulation, are not enemies, but friends to their country.

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Conclusion

To draw to a conclusion, it is probable that those who perceive, which it will be easy to do, that the author of this tract is not a merchant or trader by profession, will be ready to say, what has this gentleman to do with such a subject? Why should he write upon what he has no practical knowledge of, money and commerce?

To these I answer, that I have written, not as a merchant, but as a scholar. I profess to derive my opinions from the best civilians of this and the last age, and from the history of all ages, joined with a pretty considerable experience and attention to the effects of political causes, within the sphere of my own observation.

It is not even too much to say, that one of the mercantile profession, unless his views were very enlarged indeed, is not so proper to handle a general subject of this kind as some others. His attention is usually confined to the business, and to that branch of that business in which he is employed. In that his discernment will be clear, and he will find out, if possible, where he can buy cheapest and sell dearest, but as to the theory of commerce, of the great subject of national interest or connection, he can have no advantage at all over a person given to study and reflection, who has some acquaintance with public life. With these remarks, by way of apology, and having no interest in the matter but what is common to every citizen, I freely commit the whole to the judgment of the impartial public.

finis.

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---

Biographical Note

JOHN WITHERSPOON (1723-1794)

John Witherspoon was a distinguished Presbyterian divine, who signed the Declaration of Independence. He was born in the parish of Yester, near Edinburgh, Scotland. His father was a clergyman of the Church of Scotland, respected for his piety and learning. On his mother's side he traced an unbroken line of ministerial ancestry for more than two hundred years to the great Reformer, John Knox. Witherspoon accepted Christ at a very early age, and pursued his preparatory studies in the public school at Haddington. He there soon showed remarkable powers; graduated at the University of Edinburgh. In his studies he stood "unrivalled for perspicuity of style, logical accuracy of thought, taste in sacred criticism.

All those intellectual qualities and accomplishments, in later years, conspired to make him one of the great men of the age and of the world." He was licensed to preach in 1743; ordained as minister of the popular parish of Beith, in the west of Scotland, 1745. In 1757 he accepted a call to the Low Church in Paisley where he continued till 1768.

That year the College of New Jersey elected him president, and inaugurated Dr. Witherspoon at a meeting of the trustees, August 17, 1768. The fame of his talents and learning had preceded him, so he brought to the college a large accession of students. He also greatly increased its funds, by traveling from Georgia to New England to obtain subscriptions for his money-troubled institution. (God used this means to acquaint Dr. Witherspoon with the people of the colonies.) Indeed, few men could combine more vital qualifications for the presidency of a literary institution --"talents, extensive attainments, commanding personal appearance, and an admirable faculty for governing young men, and exciting in them a noble emulation to excel in their studies."

He introduced many important improvements in the system of education. The most significant of these was the method of teaching by lecture, which seems before to have been unknown to American colleges. He even delivered lectures on four different subjects! These were Eloquence and Composition, Taste and Criticism, Moral Philosophy, Chronology and History, and Divinity. He also gave most important service to the college by increasing its library. Witherspoon also introduced the study of the Hebrew and French. During this period Dr. Witherspoon taught the young James Madison and other Framers of the Constitution. It was he who was chiefly instrumental in getting the first orrery (model of the solar system) construction by the celebrated Rittenhouse. Besides being president, he was pastor of the church in Princeton during the whole period of his presidency.

Witherspoon was soon to enter upon a new sphere of duty. The citizens of New Jersey elected him in 1776, as a delegate to the General Congress from 1776 to 1782. In practical business talent and devotion to public affairs he was second to none in that body. He served on the Board of War and the Committee of Finance. During this time he wrote his Essay on Money. It may well have influenced Madison and others to support the ingenious hard money clause that Roger Sherman moved to be inserted into the Constituton (according to Madison's Notes of the Convention).

Dr. Witherspoon wrote many of the most important state papers of the day. With all his civil responsibility, he never laid aside his ministerial character during the whole period. He wished it understood that he was "a minister of God," in a sacred as well as in a civil sense. When he retired from the national councils, he went to his country place near Princeton, N.J. Two years before, he had partially given up his duties as president of the college. His son-in-law, Dr. Samuel Stanhope Smith, the vice-president, took over the operation of the institute. This gave him the assurance that the college was well administrated. He died November 15, 1794.

Dr. Witherspoon was undoubtedly one of the ablest, as well as one of the most extensive writers of his time. He published Ecclesiastical Characteristics; or, The Arcana of the Church Policy, (Glasgow, 1753, 8vo.; 3d.ed.1754; at least five edits.). This work was aimed at certain principles and practices which then prevailed extensively in the Church of Scotland. By its acknowledged ability, and particularly by the keenness of its satire, it produced a great sensation and acquired immense popularity. His Essay on the Connection between the Doctrine of Justification by the Imputed righteousness of Christ and Holiness of Life, etc. (Edinb. 1756, 12mo.) was often re-published. Rev. John Newton stated, "This work has always been regarded as one of the most able Calvinistic expositions of that doctrine in any language. I hope you approve Mr. Witherspoon's books. I think his Treatise on Regeneration is the best I have seen upon the subject." John Witherspoon wrote political papers and sermons so profusely that his works cover dozens of volumes published in three countries. Rev. J.W. Alexander in the Princeton Address said "The name of Dr. Witherspoon stands high on both continents.

No man thinks of Witherspoon as a Briton, but as an American of the Americans: as the counsellor of Morris, the correspondent of Washington, the rival of Franklin in his sagacity, and of Reed in his resolution." He was one of the boldest in that Declaration of Independence, and one of the most revered in the debates of the Congress. Most of the above material from The Rev. J. L.Sooy, A.M. John Witherspoon, Cyclopedia of Biblical, Theological, and Ecclesiastical Literature v.10 p.1026-1027

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