On the Controversy over the Origins of the Chicago Plan for 100% Reserves: Sorry, Frederick Soddy, it was Knight and (Most Probably) Simons!

The idea of 100% reserve requirements against demand deposits received a renewed impetus in recent years. In 1933, a group of University of Chicago economists, led by Frank Knight and Henry Simons, circulated two memoranda that proposed the scheme in what became known as the Chicago Plan of Banking Reform. That same idea had been proposed in 1926 by Frederick Soddy, a Nobel Laureate in chemistry. Soddy claimed precedence, a claim that caught on. I provide evidence showing that Knight, and probably Simons, conceived the idea of 100% reserves prior to the publication of Soddy's 1926 book.

Automated summary

In recent years, there has been growing support for the idea of 100% reserve requirements on demand deposits. This idea was initially proposed in 1933 by a group of economists from the University of Chicago, known as the Chicago Plan of Banking Reform. However, it was later discovered that Nobel Laureate Frederick Soddy had also suggested a similar idea in 1926. Further evidence suggests that Frank Knight and possibly Henry Simons had conceived the idea of 100% reserves prior to Soddy's publication in 1926.