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-~~"!II!' .

L,:::~v Economic Education Ne,wsletter



MAR 2 4 1975

Rediscovering the Art of Barter
Would you like to trade maple
syrup for a sterling silver platter?
Marbles for magazines? Or acorns
for coral? If you follow
"swappers" columns like the one
published in Yankee magazine,
you may know all about "barter"
already. And you're not alone.
More and more people today when cash is scarce - seem to be
rediscovering the art of barter.
Barter is simply the exchange
of goods and services without the
use of money.
Barter is often thought of in
terms of u·ade by primitive man
- before money was invented or in terms of early American history when cash was in short
Neighbors in early America exchanged labor to raise a house or
clear a field or harvest crops. Often fresh products which could be
produced at home like butter and
eggs were brought to the country
store to trade for goods which
couldn't be manufactured at home
- like spices, cloth and tools.
The country store owner in turn
could take the fresh produce to
the city with him to trade for
many of the imported goods
which he sold in his store.
School teachers and ministers
in early America often received at
least partial payment for their services in the form of wood for their
fireplaces, food or lodging. Local
tavern owners furnished wine for
church services as their share in
an assessment for the church.
But there were problems with
this system of barter. Fresh
products didn 't stay fresh long, so
one needed an immediate market.

In addition, you had to find someone who was willing to take what
you had to trade and who had
what you wanted. Cash, it was
discovered, served trade much better than barter did.
Cash could be saved until you
needed to spend it. It would be acceptable to everyone, and items
could be valued in terms of the
cash. When a reliable cash supply
became available, people eagerly
turned from barter to a cash
But barter seems to be making
a comeback - now especially
when people find they have to
stretch their paychecks further to
pay nsmg pnces.
One Michigan car dealer used
barter to stimulate business from
people who did not have enough
cash for a car. He advertised that
he would consider anything. And
he got everything - jewelry, TV
sets, a 1947 airplane, freezers,
sheep, cows, chickens and two
leases on oil wells which were being drilled in Michigan - each as
a u·ade-in for a car. Barter helped
business. (P.S. His oil wells came
In fact, when you trade in an
old car as partial payment for a
new car, you are engaging m a
form of barter. And there are
many other instances of barter being used every day.
When movers advertise ,
"Pianos hauled away free," what
they are trading is their labor for
your piano. Advertisements
abound for swapping homes for
various seasons, and several companies exist for the sole purpose
of arranging salutary home swaps.
An apartment superintendant

may swap his labor for a rent-free
apartment. Babysitters may exchange their labor for room and
Kids - and adults - for years
have bartered baseball cards to acquire full teams and all of their
favorite players.
Professional sports teams engage in trading the contracts of
the players themselves. Or the
teams may u·ade one player in exchange for first choice in the annual draft of players.
In rural communities today, the
exchange of labor and material
among neighbors is common as
people help each other with various projects whether it be
plowing a field or tearing down a
In recent years, barter has also
been reported as playing a larger
part in international trade. Coffee
beans, machine tools, tobacco and
nuclear power stations may be
parts of deals for desired commodi ties, often with specialized
brokers bringing clients together
from around the world.
When cash is in short supplyor when uading commodities is
easier than using a variety of
national currencies- barter can be
effectively used to spur trade.
In fact, the more you think
about it, maybe barter plays a part
in your life. Have you ever traded
half a bologna sandwich for two
cookies when you are "brown
bagging it?" Or traded doing the
dishes for taking out the garbage?
If so, there may be more barter in
your life than you realized. Could
you get through a whole day
without using money - only barter? What do you think?

Federal Reserve Bank of Boston U>l.2, No.1 •March 1975
Federal Reserve Bank of St. Louis

Nevv England Update
Councils and Centers for Economic Education

An economic education conference
ti tied, "Exploring Alternatives to
the Principles Course,"' is scheduled for April 4-5 at the University of Hartford and is being
sponsored by the Connecticut
Joint Council and the Rhode Island Council on Economic Education, in conjunction with the
Joint Council on Economic Education. The conference will include speakers and panel discussions on alternative approaches
to the teaching of the basic college
economics course. " How Worthwhile Are Experiments to Improve
Teachers? " will be the topic for
Friday night's main speaker, Dr.
Arthur L. Welsh, director of the
Joint Council's college and university program. Further details
about the conference may be obtained from the Connecticut Joint
Council on Economic Education,
Box U-32, University of Con_necticut, Storrs 06268.

The Economic Education Council
of Massachusetts is under the
guidance of a new executive director this year. Thomas Curtin, for-

merly deputy commissioner of the
Massachusetts Department of Education , retired from that post at
the end of last year and assumed
his new duties as executive director of the Council. He replaced
Edward McMillan who is teaching
marketing at Bunker Hill Community College.

Economic Education, as an issue
by issue examination of real life
problems, needs to be incorporated into all subject areas, not
just into social studies. That was
the conclusion of the subcommittee on economic education
in a report submitted to the Massachusetts Citizenship Project Coordinating Committee. This committee, initiated by the
Massachusetts Department of Education, will recommend a citizenship education program to the
Department of Education. Eliot I.
Snider, vice chairman of the trustees of the Economic Education
Council of Massachusetts was
chairman of the subcommittee.

Teachers enrolled in the in-service
economics course at the Center for
Economic Education at Sa lem
State College will participate in a
curriculum resources workshop
April 9 at Salem State. Guest
speaker will be Thomas Curtin,
executive director of the Economic
Education Council of


Teachers attending the Boston Fed's Economic Education Workshop role-play
bankers as staff member Mary Zaki observes. (See article on page 4.)
Federal Reserve Bank of St. Louis

The New Hampshire Council on
Economic Education is planning
a statewide economic education
conference, May 15, at the Merri mack Valley Regional High
H from 3School , Penacook,
8: 15 p.m. Keynote speaker will be
Dr. Kenneth Sheldon, director of
the Center for Economic Education at Boston University. The
conference will include section
meetings dealing with economics,
personal development, and career
education .

A special meeting of the New
Hampshire Council on Economic
Education took place at Kearsarge
Regional High School, February
13, to observe the use of WOWEE
(World of Work Economic Education) materials in the classroom.
A discussion led by Robert
Wilkins, director of career education for School Union 43, followed the classroom observation.
R eaders are invited to use The Ledger as a
forum to share news about their experien ces in economic education. Write:
Mary Jan e Co y le , Editor , The Ledger,
Publi c Services, Federal Reserve Bank of
Boston , 30 Pearl Street, Boston 02106 or
call: (617) 426-7100 X462.

Grade level code: Capital letters (E-J-H-C)
aft e r each it em indicate grade leve ls for
wh ich the materials are most appropriate:
£-elementary school, ]-junior high school,
H-hig h school, C-college.

The Curious History of Money,
(J-H), 16mm, 20 minutes, an animated cartoon with a narrator
who describes the basic evolution
of money starting with barter and
including gold, gold coins, goldsmiths becoming bankers, bills of
exchange, book-entry money and
charge cards. The fi lm, distributed
by Barclays Bank I nternational
Ltd. draws examples from English
history but still provides a good
basis for explanation and discussion of "money" in the American classroom. To borrow the
film without charge, write: Ms.
Jose T. Croll, Administration
Dept., Barclays Bank International
Ltd., Pan Am Building, NYC
10017. Give alternate dates.

If We're So Good ... Why Aren't We
Better? (J-H-C), 16mm film which
uses an exhibit at the Museum of
History and Technology of the
Smithsonian Institution in Washington, D.C. to explain the concept of productivity and, more significantly, to raise questions about
produCLivity and its consequences.
The film can serve as a stimulating taking-off point for discussions and independent student

MULTI-MEDIA Continued
research. An excellent teacher's
handbook outlines the film and
suggests uses in the social studies
and humanities curriculum. The
handbook contains meaty suggestions for discussion and review
questions and student group activities. One section probes the
effects of productivity in this way:

"Productivity must rise: Is this
statement true? Why not? Is it
always good for productivity to
rise? Under what circumstances is
an increase in productivity detrimental to our country or some
segment of our country? For
example, how did the use of the
mechanical cotton picker influence our society? Influence
workers in the South? According
to this film, why must productivity rise in our economic system?
Name at least four ways in which
the rate of productivity affects us.
List three ways to raise productivity. How might Zero Population
Growth affect productivity? Is it
necessarily a good thing for consumers to have an ever-increasing
choice of goods? Why or why not?
Is there an optimum limit to the
range of choices consumers need
or can wisely use? In what ways
can high productivity conserve
limited natural resources? How
does high productivity consume
scarce resources?"•
This film is available as film or
video cassette from the National
Education Association, Customer
Service Section, 1201 16th St.,
N. W., Washington, D.C. 20036.
The charge for renting the film
for three days is $15. Purchase
costs $135.
• © National Education Association. R eprinted with permission.

The Ledger compiles information from
various sources and is published periodically as a public serv ice by the Federal Reserve Bank of Boston. Inclusion
of news about economic education
shou ld not be consnued as an endorsement of specific programs by the
Bank. Material contained herein does
not necessarily reflect the views of the
Federal Reserve Bank of Boston or the
Board of Governors. Copies of this
newsletter and a catalogue of other educationa I publications, films and published research informa tion may be obtained free of charge by writing: Public
Inform ation Center, Federal Reserve
Bank of Boston , 30 Pearl Su·eet, Boston
02106 or by ca lling (617) 426-7I00 X657
Federal Reserve Bank of St. Louis

The Innovative

Science teacher Nancy Nowak won a prize
for her junior high school unit on the economics of pollution.

An eighth grade science teacher
in Providence, Rhode Island integrated economic principles with
the teaching of a unit on ecology
and won $1000 first prize in a
national competition for her
Ms. Nancy Nowak, who teaches
at the Nathan Bishop Middle
School, stressed the economics of
the environment, the costs of polluting compared with the costs of
cleaning up, and the limits of
scarce resources.
The competition was sponsored
by the Joint Council on Economic
Education and the Calvin K. Kazanjian Economics Foundation
and is the twelth annual contest
held. The Center for Economic
Education at Rhode Island College encouraged Ms. Nowak's entry last year through its in-service
course for teachers.
Ms . Nowak's students used
plastic cups as "dumps" and deposited materials such as scraps of
paper, aluminum foil, a leaf and a
piece of bread. Over several weeks,
they noted the relative rates of
decomposition of the materials
and then discussed the costs of a

land fill dump versus an open
The students also played a simulation game called Pollution Solutions. In this game, the students
role-played industrialists who
wished to make money and had to
decide how to handle their pollution problems. Students who
chose to make a substantial investment to treat their garbage
early in the game, fared better in
the long run than students who
tried to avoid making a large investment to treat their pollutants.
These latter students experienced
the costs of pollution, such as
higher taxes and greater employee
sickness in the game, as the disadvantages of their short-term solutions became clear. (The game is
part of a K-9 environmental action series developed by the- Continental Can Company and is
available from Creative Teacher
Inc., Box 5187, Grand Central Station, NYC 10017. The kit for
grades 6-9 includes two filmstrips,
a record, the gatne, Pollution Solutions, and a teacher's manual.
The kit costs $12.50. Workbooks
are 35 cents each.)
Students also had the opportunity to play another game called
The Redwood Controversy. In this
game, students took the roles of
U.S. senators and lobbyists and
debated a law which would set up
a national park. (Cost of this
game for schools is $9.96, and it is
available from Houghton-Mifflin
Co., Pennington-Hopewell Road,
Hopewell, NJ 08525.)
A description of Ms. Nowak's
unit on ecology and economics
will appear in volume 12 of Economic Experiences of Enterprising
Teachers, which will be published
in the Spring and will be available from the Joint Council on
Economic Education, 1212 Avenue
of the Americas, NYC 10036.
(Any elementary, secondary
school or college teacher in the
U.S. may apply for consideration
in this annual awards program.
Each teacher who wishes to enter
must complete a standard form
available from the Joint Council
on Economic Education. Deadline
for entries is July 15.)

A Field Trip Is a Field Trip Is an A field trip can become the
stimulus for economic learning if the right questions are asked.
And John Sapinsley, director of
the Center for Economic Education at Rhode Island College,
prepared discussion questions
specifically for each of six business and financial institutions to
which he took elementary school
teachers in an in-service course,
"The Field Trip as a Medium for
Economic Education. "
The class visited General Electric Wiring Devices, a division of
the General Electric Company,
which makes night lights, lamp
sockets, plugs, fuses, and other
small electrical devices; Cranston
Print Works, a 200-year old company in the business of printing
patterns on cloth; Citizens Savings
Bank and Citizens Trust Company; Bonanza Bus Company, an
intercity bus transportation company; the Outlet Company, a very
large chain of retail department
stores; and Nanagansett Elecu'ic
Company, the local public utility.
Prior to th e visits, Sapinsley
discussed with each of the companies' executives "the economic
concepts which I wished to try to
bring out during our trip ...
"Obvious ly scarcity, work,
competition are common to all.
However, there were peculiar concepts which might be developed at
each one. For example, in the case
of General Electric, a unique
opportunity existed to discuss industrial organization, market
structure, demand, methods of distribution - in short, the entire
theory of the firm.
"In the case of the Print Works,
some interesting questions involved how an ancient textile
company managed to survive in
the Northeast when all others had
either failed or moved South, and
the process by which they reached
the decision to invest new capital
into what is, apparently, a dying
industry in the Northeast. There
were, of course, special ramifications with respect to labor,
labor costs, and unions in this
" The banks were fertile fields
for exp loring the whole concept
of money, monetary economics,
banking, the fractional reserve system , etc.
Federal Reserve Bank of St. Louis

"The bus company brought up
the whole range of urban problems to be discussed, most notably
transportation, congestion, and
public finance in the urban sector.
"T h e department store chain
again brought up urban problems, the main location of this
large retailer being located in the
heart of
down town
"The utility (Narragansett Electric] was an opportunity to go

Economics Class?
in to natural monopolies, public
utilities and rate regulation, and
" In every case I urged the managers Lo emphasize the inter-relation of their particular operation and the macro-economy.
The circular flow of income cou ld
be apt ly illustrated: wage paymen ts , lo ca l taxes, state income
taxes, federal income taxes going
into the economy; products going
out; dollar revenue coming in."

Teachers discuss a loan decision during the simulation game, Mr. Banker, at the Economic
Education Workshop at the Boston Fed in November. Staff member Kimberly Wade is
ready to answer questions.

Use Ice Cubes as Money?
" What if you used ice cubes as
money? "
That 's how one high school
teacher who auended an economic
education workshop at the Federal
Rese1ve Bank of Boston suggested
that the topic of "money" be
introduced to a class. Ice doesn ' t
last and certainly isn't accepted
very readi 1y as payment, and so
the characteristics of money can
be elicited in a student discussion
of why ice won't work.
Another teacher suggested
burning $500 - or talking about
doing it - to spark discussion
about why burning the money
wasn't like burning paper - what
made money different. One teacher suggested writing out an IOU
and claiming it was a dollar then discussing with his students
how his personal IO U differed
from a dollar bill.
Stating the opposite of common (and commonly misquoted)

phrases about money was another
method mentioned to start discussion. For exam ple, say "money
is the root of all success" instead
of "money is the root of all evil."
Over 120 teachers and administrators from six New England
sta tes exchanged ideas at the four
econom ic educat ion workshops
h eld in Boston this month and
last ovember. In addition to discussing techniques for economic
ed u catio n , the tea c h e rs h eard
about the Federal Reserve System
and had an opportunity to learn
more about commercial banking
by "being" loan officers in the
Minneapolis Federal R eserve
Bank's new game, ca ll ed Mr.
Space was limited at these
workshops and for teachers who
missed them, add ition a l workshops for elementary teachers and
secondary school teachers are being planned for next fall.