As you noted, stating that the Covenant of Grace is in some way "conditional" or "conditioned" on faith does not lead to it being (a) meritorious or (b) pactum merit. Indeed that's a non sequitur.
Turretin (the real one) went over this as hyper-Calvinism arose among the Supras/High Calvinists of his period. FT distinguished between faith as a meritorious condition and faith as an instrumental condition. We affirm the latter, not the former. Since the reason people believe is due to effectual calling/regeneration and that is only by way of grace that is applied by the Spirit, which comes a result of the atonement, which was accomplished by the Son in obedience to the Father (notice the Trinitarian relation-a relation the FVists often discuss), it is all of grace, as you say. Ergo, while affirming the latter (instrumental conditionality) we deny the former (that the CoG would be meritorious).
FT drew this distinction of conditions in the face of those who were seeking to collapse the decrees, and thus the conditions, into one, and therefore misconstruing the CoG. By collapsing the decrees, there were questions that arose as to the nature of conditions. In their day, they were asking if the CoG is wholly unconditional or conditional. FT's reply was in essence that it is unconditional with respect to merit (being that it is of grace) yet conditional with respect to instrumentality. Sound like a familiar problem today...?
Gene, there is a strong interconnect between the issue of faith's role as condition or instrument (as well as the nature/basis of the hypothetical merit of Adam and the actual merit of the active obedience of Christ), and the issue of the atonement.
It is interesting to hear Pastor Horne turning as he does in the comments we were discussing (link) to Anselm's "Cur Deus Homo," which is usually thought of as a work on the atonement.
It seems that:
a) He (i.e. Pastor Horne) overlooks the role of sin in necessitating the incarnation. Contrary to Hodge et al., he seems to imagine that it is simply the fact that we are creatures that prevents us from having merit. Thus, he overlooks original sin: both in its effect of imputed guilt and in its effect of total depravity.
b) He also overlooks that Anselm states "Now it is not by any means to be supposed that the good angels were confirmed by the fall of the evil, but by their own merit. For as the good, if they had sinned with the evil, would have been condemned together with them; so the unrighteous, had they remained steadfast with the just, would have been equally confirmed in grace. For if some of them were to be confirmed only by the fall of others, either none would ever be confirmed, or it would be necessary that one should fall, who should be punished for the sake of the confirmation of the others; both of which are absurd." (Cur Deus Homo, Book 1, Chapter XVII) While I do not fully agree with Anselm on this (I do not think confirmation in obedience was according to the merit of obedience, but according to grace) Pastor Horne's appeal to Anselm is clearly erroneous, for Anselm does not build his argument on the theory that creatures qua creatures are unable to obtain merit of any kind.
c) He also overlooks that Anselm states: "So, therefore, when the angel had the power of depriving himself of righteousness, and did not so deprive himself, and had the power of causing himself not to be righteous, and did not so cause himself, he is rightly asserted to have given himself his own righteousness, and to have made himself righteous. In this way, therefore, has he his righteousness from himself, (for a creature can in no other way have it from himself,) and on that account is he to be praised for his righteousness; and he is righteous, not from necessity, but from free will, since that is improperly termed necessity in which there is neither
compulsion nor prohibition." (Cur Deus Homo, Book 2, Chapter X) This, while not using the word "merit," conveys a similar concept. As can be seen from the same chapter, a little further on, when Anselm asks the following penetrating question: "What do you say of God, who cannot sin; (and yet He did not merit this by having had the power of sinning and not sinning) is not He to be praised for His righteousness?"
Likewise, Pastor Horne appears to have the same thing in mind when he argues "Horton, if I recall, is all concerned about protecting Christ’s merit. I don’t see how that can fail to be proper merit without denying the absolute necessity of Christ’s work. There is a history of doing so among some of the Reformed, but I think it is now largely resisted and should be." (source) But in this:
d)He overlooks that the merit of Christ's active obedience in fulfilling the law is pactum merit. It is by the covenant of works that Christ as man deserves life on account of his obedience. That's what makes his death significant. If he did not merit life, he would be dying for himself.
e) He also overlooks that Christ's so-called passive obedience in suffering and dying on the cross can also be viewed pactum merit. It is not pactum merit vis-a-vis the covenant of works, but the covenant of grace. Christ's humiliation is the condition of the covenant of grace (not our faith, as has already been distinguished in the preceding posts on this subject). It should be noted of course, that as Thomas Boston explains:
Secondly, How does the narrow way lead to life ? And,(Thomas Boston, Whole Works of the Late Reverend Thomas Boston, Volume X, p. 376 - 1851 ed.)
1st. NEG. Not by way of merit, proper or improper. Proper merit is what arises from the intrinsic worth of the thing done, fully proportioned to the reward. Such is the merit of Christ's obedience and death. But no such merit can be in our works ; for there is no proportion between our obedience and eternal life, whatever the papists pretend; Rom. viii. 18; 2 Cor. iv. 17; and whatever they be, they are due from us to God; Rom. viii. 12; Luke xvii. 10. Improper merit is what arises from paction ensuring such a reward on such a work as the condition thereof; so that the work being performed, the reward becomes a debt. So Adam's perfect obedience would have been meritorious, namely by paction. But no such merit is in our works. Legal protestants advance this, though they do not call it merit, while they pretend that God has promised eternal life on condition of our obedience; thinking it enough to free them from the doctrine of merit, that they do not pretend to an intrinsic worth in the works, proportioned to the reward. But what more do they yield in this, than innocent Adam behoved to have yielded, had he perfected his obedience? Do they not hereby confound the two covenants? for all the difference remains only in degrees, which do not alter the kind. The scripture rejects this as well as the other;
Rom. iv. 4, and vi. 23. Paul would not lippen to it; Phil. iii. 9.
Thus, we acknowledge that Christ's death, as the God-man, was (because of the dignity of his person) of infinite intrinsic merit, although we likewise acknowledge that such merit would have been completely without applicable value, if God had not condescended (as legislator) to permit substitution of the offender in the punishment of sin. In contrast, the dignity of a mere image of God is much less demanding only life for life (Genesis 9:6 Whoso sheddeth man's blood, by man shall his blood be shed: for in the image of God made he man.).
f) Indeed, he overlooks the interconnection between the covenant of works and the covenant of grace. The only way that the death of an innocent man can be pleasing to God is upon the two-fold bases that (a) the innocent man's death is being offered on behalf of someone else and (b) that the someone else is guilty.
g) He overlooks the general impossibility of anyone meriting anything from God in the strict sense. To assert that anyone can merit (in the strict sense) anything from God would seem to be a denial of the impassivity of God. If someone will argue from Christ's deity that impassivity is not implicated, we may likewise note that Christ did all things whatsoever he did in obedience to the will of the Father, which likewise prevents them from being acts of strict merit (though we may note that they were still deserving of glory).
At the end of the day, it is Horne who overlooks why God had to become man: the covenant of works (the law) had to be fulfilled, and so did the covenant of grace. By the merit obtained under the covenant of works, and the substitution permitted under the covenant of grace, Christ merited life for those for whom he died.
It was necessary because Christ's righteousness is the only pure righteousness acceptable to God under the covenants. No other righteousness will do: not the righteousness of the Apostles, of the prophets, or of the greatly blessed and highly favored mother of our Lord - for they were all sinners, both by virtue of Adam's sin (as it is written, Romans 5:19 "For as by one man's disobedience many were made sinners, so by the obedience of one shall many be made righteous.") and their own sin (as it is written, Romans 3:23 "For all have sinned, and come short of the glory of God;"). Only Christ's righteousness can save, and it can and does save completely. God graciously accepts Christ's sacrifice on behalf of those for whom it is offered by Christ. Thus, justice is satisfied while mercy is shown.
Praise be to our Loving God,
P.S. Perhaps it would of interest to some of my readers to provide a part of a poem by Ralph Erskine:
The law of works we introduce,
As if old merit were in use,
When man could life by doing won,
Ev'n though the work by grace were done.
Old Adam in his innocence
Deriv'd his power of doing hence —
As all he could was wholly due;
So all the working strength he knew,
No merit but of paction could
Of men or angels e'er be told;
The God-man only was so high
To merit by condignity.
Were life now promis'd to our act,
Or to our works by paction tack'd ;
Though God should his assistance grant,
Tis still a doing covenant.
Though Heav'n its helping grace should yield,
Yet merit's still upon the field;
We cast the name, yet still 'tis found
Disclaim'd but with a verbal sound.
If one should borrow tools from you.
That he some famous work might do;
When once his work is well prepar'd,
He sure deserves his due reward:
Yea, justly may he claim his due,
Although he borrow'd tools from you:
Ev'n thus the borrow'd strength of grace
Can't hinder merit to take place.
From whence soe'er we borrow pow'rs,
If life depend on works of ours;
Or if we make the gospel thus
In any sort depend on us;
We give the law the gospel-place,
Rewards of debt the room of grace;
We mix Heav'ns treasure with our trash,
And magnify corrupted flesh.
Gospel Sonnets, pp. 301-02 (1870 ed.), Ralph Erskine