Category: Frankie Bow

Professor Emeritus David Hammes was born in Minneapolis, Minnesota, and has lived and worked in California, Canada, Australia, and most recently, Hawaii. His recent retirement from teaching has allowed him to spend time with his wife, Kathy, and his two sons, Mark and Steven. He enjoys reading, writing, and ultramarathoning at distances up to 50 miles.

David took time out of his punishing marathon schedule to discuss Harvesting Gold: Thomas Edison’s Experiment to Re-invent American Money. 

Q: Briefly, what is Harvesting Gold about? What is the significance of the title?

A:  The title refers to Thomas Edison’s idea to ‘democratize’ the American monetary system. He recommended that the Federal Reserve buy and store farmer’s crops and pay them with money (Federal Reserve notes). He thought this would give farmers power and access to money in the same way that the Federal Reserve bought gold and paid for it with money.Following World War One, the world economy—including America’s—went into a steep economic recession.   After a rapid price inflation during the war, there was a dramatic price deflation. Borrowers faced the difficulty of repaying loans when their jobs were imperiled—the unemployment rate was about 20%–and the real value of their loans rose precipitously.Stimulated by Henry Ford, Thomas Edison turned his inventive mind to solving the nation’s economic woes.  In late 1921 and early 1922 he devoted himself to researching and inventing a new monetary system for the US. One he hoped would provide Americans with a currency of stable purchasing power. He wanted farmers to have access to the Federal Reserve in the same way that the moneyed interests on Wall Street—“the money brokers” he called them–did.

Q: I understand that it was a single question from a student that got you started on the research that led to Harvesting Gold. Tell us about that!

A:  The question was “Why are there two Federal Reserve District banks in Missouri when many larger states don’t have even one?” To answer that I sat in the archives of the Federal Reserve System in Washington, D.C., for a week and also spent time in the National Archives in College Park, Maryland, reading through hundreds of pages of old documents.That led to the Rare Book and Manuscript Library at Columbia University in New York City, where, in researches through hundreds more pages of old documents from the economist who helped write the Federal Reserve Act of 1913, a colleague and I discovered correspondence with Thomas Edison.

As far as the original question, St. Louis was awarded a bank based on the city being a large financial center and part of the old national banking system; Kansas City, MO was awarded a bank because it was the eastern terminus for many western-region train companies, thus easier for western-based bankers to get to in pre-flight days.  As a result of several large floods, the train companies had banded together in 1909 to build a new Union Terminal in Kansas, MO. If the Terminal had been built on the Kansas side, there is a very good chance that the bank would be in Kansas City, KS. I wrote this up and published it in 2001, but the Edison correspondence was so intriguing that we continued to pursue it.

That led to the Edison Archives in West Orange, New Jersey, which provided hundreds of pages more of letters and documents and his plan to change the US monetary system.All of this material helped make the book what it is. Surprisingly, many of the economic issues then are similar to today’s issues. So, a reader can learn a fair bit about today’s monetary challenges by reading how Edison learned about money and the changes he proposed.

Q: Edison vs. Tesla: Comments? 

A: Edison referred to Tesla as “Our Parisian”, somewhat sarcastically. The two had different research styles and Tesla did not stay long with Edison. Tesla was driven more by a theory-to-experiments approach whereas Edison was more of a brute-force experimenter, characterized by his saying: “I have not failed, I have just found 10,000 ways that won’t work.”

Q: Coming from academic publishing, what was different or surprising about your experience with this book?

A: Academic publishing in economics is about theoretical novelty or working with new and larger data sets. One’s publications have to impress specialists in the field through a double-blind peer review process. Trying to please multiple referees, submitting numerous revisions, means that it can take five years—or more—for a paper to get published from first submission to print.
My intent with this book was to tell a story about the forgotten depression of the early 1920s, the character, persistence, and humaneness of Thomas Edison, and explain a bit about money then and now. There is nothing particularly theoretically novel, nor is it a data-driven empirical study of the era. I did not wish to take years trying to convince the economics profession that this was interesting and important.

So, I chose an end-run around the search for an agent and publisher deciding early on to self publish through the platforms provided by Amazon.com. Richard Mahler, an old friend from high school, who has published numerous books, some with highly respected academic presses, handled the publishing. He designed, edited and did the preparatory work. He made the book conform to all the various formats necessary for the various platforms: e-versions on iPad, Kindle, computers, etc.; print version, etc. Richard now offers his services to others at Relham.com

Q: How have your family and colleagues reacted to the book?