man. he and his buddies, henry ford and harvey firestone with the poet john burrows, went on nature trips which later got rather heavily covered, so they almost became caricatures. but edison was woven in the fabric of the country. .. neil baldwin, joseph zen mentioned his later in life and chest in money and the financial system in the u.s., they tend to be very, very small off the top certifier consists. the story of intense research you put into the monetary system in the early 1920 was willow still keep all day about the detail in the contact and the people you spoke to, of course in person that story i don't think people know or appreciate what he had to say. it is only interesting of course the very famous people when we stumble across away from these famous people, famous for being very smart, creative, inventive, hard-working genius is 99% perspiration, 1% inspiration. what if i offended that we don't know, we could achieve, i wonder if there's something in it that speaks to us today. something that applies to the 1920s or is there something in it that sheds light on our current situation? the interesting thing about the 20s is all of you will think of the roaring 20s, the s. fitzgerald chronicle life, the growing wealth of the country post-world war i and the liberation and a lot of sense from household treachery with the invention of laborsaving machine to the liberation of people, a lot of the soldiers having gone to europe, come back and staying on the farm figuratively speaking his heart for them to do. but just after the war, the u.s. economy from europe of course is in a shambles. the u.s. economy was facing the equivalent of what today we'd call a fiscal cliff. u.s. government had expanded from 3% to the nation's economy to 25% in the war effort was feeling back. they put into place in media cutbacks that were finished. immediate cutbacks to federal spending on all sorts of projects. the view of the federal government prior to world war i in terms of what their responsibilities to the average person with the national defense, which is a post office and we have to watch the flow of good conservatives, especially goods across the borders because one of the major tax sources were of course interested in goods that went in and out. but after that company pretty much looked after yourself. so if people thought about the federal government terms of an economic engine command the way they would tend to think about their role vis-à-vis the individual or even the state was well, if were a notion, a fur on the portrait the federal government may have a president. there is supposed is an daily life. the federal government was really quite small. the following world war i, the attempt was to return to government, in fact the platform was a return to normalcy. the plan was to return the federal government back to it's almost invisible role in the economy. with the federal government spending eating up that, unemployment which are the word following through 1% and 2% and the work really is federal agencies actually calculating these numbers spelled out-of-state figures, unemployment had fallen to almost zero during the war effort. if 12, 13, 14%. so in today's families say what was the federal government doing? well, they were doing typically with it before, which was nothing. if you're unemployed amnesia set in the far northwest. they were home setbacks issue could do 168. you'd be fully employed for the rest of your life and probably your kid play, find a farm out of the countryside. and there is a lot of lot of land available. but there is a new mover and shaker in the heart of the administration. hoover had chosen to become the secretary of commerce and he convinced harding to strike and unemployment commission brought together a lot of people to show the federal government was happening in the economy. i was the first evidence, even though with large financial crises in the 1870s, and 1970s, that was the first instance of the u.s. federal government even showing any and chest and large-scale unemployment is a federal problem. they usually considered it to be a vocal municipal or state issue. so there are hints of what is going on today with the early 1920 and that recession, the larger session the country went into postwar, something we mess with the warring 25 boroughs, speakeasy view that we have. well, who is happening with prices was that during the war there was a huge inflation. prices virtually doubled from 1916 to 19th line. then there is a large deflation. what that did to the purchase price of a dollar. the purchase price of a dollar is falling. you've taken out a loan when prices are going up coming probably borrowed thinking prices will continue to go up in the stats you sell will be easy to sell and pay back the loan. and subsequently if it turns out the price has befallen them you're having trouble selling your stuff and you got to lower your price valid. it's very hard to pay off that loan and those dollars that are harder to get. so farmers to join the war had rationally brought to expand farms, take on bigger loans, were hit in the early 1920s with deflation. they are defaulting on the votes come what it upside down or underwater on their loans. in the big switch i've examined the phones are going broke. the holiday, going to encrypt. so that helped deepen the recession. and i thought point, for it and not a sinner talking says, i'm just kind of extrapolating from a sincere smart guy. can he do something to help the farmer? that has been added since i make an effort to study this money and try to invent or change the monetary system so that a dollar vote cast what he said the variable lot of money so we can stabilize the purchasing power when people make a deal and 1 dollar is the same deal a few years later in terms of the dollar so that the variable purchasing power of money doesn't create all this problem. at this issue is also tied in with an interesting episode in ford's experience and that is just after the war. the harding administration was trying to get rid of a lot of wartime asset and so they were selling them. one of the assets they were trying to sell was the wilson team on the tennessee river in the muscle shoals area of alabama. and ford made an offer. it was almost completed from it being built to produce ammonium nitrate for munitions. ammonium nitrate is also good for fertilizer. ford offers to build the dam in his famous for developing its electricity from ibm to produce ammonium nitrate for fertilizer for farms. and he took addison down to alabama to view this site and on the way down and forced private rail car, the privately, he discovered what his plan is. and the plan is to pay the government $5 million for the, which is a complete. had the government complete for another $8 million have been financed in with the typical extended financing, with the government would bar the money and repaid over time, but to finance it by issuing cash, currency. i'm not extra $8 million worth would be retired as the electricity generated by the dam generated income, or generated the payment, which would then be used to retire the dollars that were created. this is kind of people is a funny steam, so when ford and madison got out of the rail car and best of the site in alabama, of course there were reporters they are, and they asked at us and what he thought about the whole team. he thought he was smart and the government should sell assets to fort i'm especially ones quickly turned into producing more munitions because that would send a signal to the outside world. hey, if you mess up the u.s., datascope ways of producing massive arms grow quickly. so just the use of the dam and even that was going to fertilizer, other countries could be a could be diverted to munitions, so they would be less likely to possess. so why not have ford do it. and thirdly, at a certain type of financing an interest in the invention of safety. he had his run-ins with the financiers. he needed them because generally speaking when he was developing something he didn't have enough money to develop it commercially. so he had an uneasy alliance with different financiers of different times, but he also thought the new york banks were squeezing the main street banks or the country bangs and thought then that put the squeeze on the farmer and forced the farmer off the land. so it's large banks asking small banks for their money. the smaller banks would ask farmers for their loan. the farmers couldn't repay because prices had tanked and farmers were pushed up the land. wanting to help the farmer, decided to spend time invested in the system. also he gave his highly reported comments was posted by henry hathaway, an economic journalist based in new york city who was widely read, who said that this scheme, before it seemed that edison should know better sound of the greenback has them, highly inflationary and highly impractical and i think edison was a bit chastened by this, so also wanted to do with due diligence and not the way keywords ignorant. from mid-december to late january, ford studied what he called the money complex. whether in the archives is a lot of correspondence between edison where he explains his burning the midnight oil. as a test subject, but i'm going to stick. i'm going to hope the farmer. generally speaking, you know, it's an altruistic urge, but you also get the impression it's easier for a ford or edison to maine's -- maintain sales that they have purchasing power. the farmers struggle is not due to wall street are to speculators coming are the bankers. it is due to a bad system of money. everything eastern man do will be done by the farmer himself if he could. we are all campers by nature. if a system of checks could be worked out and i think he can come in the farmer will get justice. later on come it's the money broker, the private banker that i oppose. they gain power through thick tissues and cause value dipped into gold, gold is a relic of julius caesar and interest as an invention of state. so edison wants to stabilize the purchasing power not by fixing prices up by developing a system, a money system where gold isn't the only anchor for the value of the currency. now he's not alone. during the years the federal reserve act was being debated and pretend, 1910, 11, 12, irving fisher had made quite a name for himself in the search for stable money, had written books on the topic and had devised a scheme of his own. irving fisher was the best-known american economist at the first half of the 20th century and once fisher got wind that edison is working on something, they met a few times and discussed the issue. what is an interesting sidelight there is that they both were interested in vegetarian diets and were very careful with what they ate and i ended up speaking possibly as much on the diet as economics and money. but they sure gave one of his books to edison. edison said i read your book. i think you're wrong in spots and i marked all up, so they were also vitally interested in the currency problem. fischer invited edison to go to congress and present his plan. edison demerit. don't know why. and maybe by that time, which was late 1922, he was kind of finished with the issue. so does this have anything to say to us today? is a totally impractical and how did it go about doing this research? let me take the last one first. he was by that i am trained in a research method, which had rod tam access. and that was to study an issue as much as they could himself, but also turnovers the heavy work to research. and on this issue there wasn't an in-house research team. the battery shot, going to the machine shop, what were they going to tell them? so once he studied and studied and to protect themselves against looking like he was ignorant, you read the sources to justify henry hazlitt, a book about paper money and elation in france. he had lived through the greenback. in south after the civil war. he was now on the train, an up-and-coming businessman, investor and it into the crisis crisis of 1907. so a lot of this is personal knowledge to him. he didn't have to be told, watch out for wild inflationary schemes. so what that means if he knew the dollar had to be back or he felt that it had to be backed by something real. no gold with the backing of the dollar, so we started by learning about the gold standard in the gold system. but dropped it onto that in the modern day as the banking system, retail banks, commercial banks. and then overseeing non-since 1913, really 1914, only has pair six, seven years before as the federal reserve system created to be a bank for banks. yet they really hadn't had time to operate in a non-war. to know how they were going to act or for markets to know how they were going to act. within the structure of the federal reserve itself was the evidence of the long-standing distrust of centralized private power in the new europe bangs or centralized public power in washington d.c. so when the federal reserve was created, it was created as this kind of an attempt to compromise and diffuse power and spread out power across the country. so 12 federal reserve districts are created, each with its own fed reserve headquarters district bank, which is owned technically by his private commercial banks and then aboard public interest served by a board in washington d.c., today the board of governors to oversee the system and to harmonize its operation. in the early days the individual federal reserve district thanks for looking to the board to harmonize their interests. they could act somewhat autonomously and has even made iran twice in a battle within the fad to bring more power from the federal reserve district thanks to the board in d.c. but that's a different story, a later story. a lot of this information told very where in history, but the federal reserve from alan not dirt to many others. so the federal reserve is a relatively new institution and the reserve district banks are finding their way. the new europe bank is shocking for position itself. more power because of where it's located. that ran counter to what the framers of the federal reserve act were hoping for, but reality being what it is with the financial markets of new york. now back to edison. he starts layering it, looking at it, realizing it's very complicated in understanding the ticket into practical support for major change, he's not going to be able to cast federal dollars. using cold and gold that money is a mistake, but he also realizes he's got all of the business and all the international business community running uncle. you can't just have to wake up one day and say regime change coming in now, we're going to something different. so his attempt is to draft on a plan to help farmers to stabilize their income and hope that through time it grows evolutionary and becomes kind of pushes gold out. so rather than throw pulled overboard, he is going to grab onto other commodities in order to help those producers in the same way the government implicitly helped the gold producer. euro gold miner you can pull out the government admits, have it ventured into coins. the farmer goes to the ground, called the cops come to burn it to the government and go home with money. i identified 36 props and recommended that the government build warehouse says starting with 12 to 14 across the country at the farmers could bring their crops to and receive an upfront payment of the crowd saw you determined by an average of his 25 -- average it is pervasive the last 25 years. and was even equity certificate of ownership, so the farmers put in a thousand bushels of an average price of dollar. i'd be would be a thousand dollars. a farmer now can go pay off his or her the. the farmers got something for searching. if the price of wheat goes up, the wheat from the warehouse, so it on the open market and make the difference. it makes the money cost as well. so edison devices a plan that says i to am i going to bounce this off quite risen every search team? there's a questionnaire, insurance company owners, federal reserve officials and economists, including william scott at the them. kemmer at princeton, sprague at harvard. these are pretty well known called money.reset their day. patterson at pennsylvania. and of course kind of sending them. so you want them to take a look and say my right or wrong? this is going to fly or is it a flop? >> these folks open up the envelopes same ascot is 2026 questionnaires sent out in early february of 1921. could you take a look at it? answered the questions and send the answers back. you get some polite inclinations of a few people. he doesn't hear from some others. they remember the questionnaire i sent you. it's fairly expensive answers to many people. it's fairly expensive answers to many people. it's fairly expensive answers to many people pretty good cross-section of bankers and businessmen and the economies. after the letters saying, and being fairly rude and impolite, edison writes, this is scott as wisconsin. edison price to the president at the university and says, you know, the guy basically called me senile. maybe i don't understand money but i'm trying to, believe me, i'm not past it. i'm not seeing. scott writes that very humble apology. that hits the newspapers, cause this kind of a statewide upset. there are very many supporters of scott. trina gets a letter saying forget those guys, this academics never know what they're talking about. now edison starts getting these answers back. he hasn't really outlined his scheme totally to his experts. he's just kind of thrown different parts of questions out there, but variable to kind of infer what the basics of the plan are. with that creates sound money to farmers could bring their crops to the warehouse to get immediate payment. that would be pretty inflationary. it would have a couple of problems. number one, you don't know how many crops might show up at your warehouse. this kind of ischemic injuries a lot of crops. they might even go across the border. secondly, in any lasting fashion it takes money out of circulation and puts money into circulation when you don't. it was actually kind of exacerbate cycles, not moderate them. thirdly, it would lead to political manipulation. by those 36? could and might crop be put on? pineapples weren't on. why couldn't we have might crop on? or is it conceivable doctors who say we have services, not crops, but why couldn't you put more crop on? so the fairways before the gold manipulation would cause more inflation and the cost of building and maintaining warehouse is interest-free storage to the farmers. so at us and got a lot of negative, and from the people he considered to be the professionals and spoke with fisher, spoke with regard farouk who would today be called a technical analyst were chartist, statisticians market oriented. he predicted the 1929 crash. of course that was later on. so in the end, there was a lot of support for edison's planned, but edison said, you know, support was for the gold standard, the people said it's not perfect, but it's what we know, what is god and what we've had. edison wrote to a few people, subsequently said it better get back to my day job. i spent a couple months intensively at this. i better get back to what i do well. you said you'd wait in 30 years time my scheme will look much more attractive. economists from john maynard keynes to friedrich hayek to john nash of all the pros some sort of commodity backed money. it certainly opens the the purview that addison was that just kooky guy stumbling around in the dark, but with his inventive genius he may have had something to say about trying to stabilize, perhaps it's not price is, just it less farmers income. of the federal government ultimately ended up doing a and so his lobbying effo