Everyone knows that Thomas Edison was the inventor of the light bulb, but few people are aware that he came up with an idea for a new monetary system. He was dissatisfied with the gold standard (under the National Banking Acts) and also with fiat paper standards. His system is described in a recent review of the book:
In his system, government would create numerous warehouses for commodities that would buy commodities through a one-year repurchase agreement and the issuance of a warehouse certificate. The inflow of cash to farmers via the repurchase agreement would cover 50 percent of the value of the commodities. Commodities ought to be valued at a price based on a 25-year average instead of current market price. The repurchase agreement must be repaid in 12 monthly installments (i.e. farmers are required to repurchase some of their commodities every month over a twelve-month period at the warehouse price). The certificates would be tradable or could be pledged for a loan, and anybody with a certificate could go to the warehouse and claim ownership of some commodities that would be purchased with 50 percent cash and the handing of the certificate.
Edison’s idea was viewed with suspicion and largely ignored. However, it is a good example of the social engineering mentality that was also all too common among “progressive” American economists such as Irving Fisher.