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Economic Education Nevvsletter
Banking Nickel by Nickel

Imaginative teachers emerge in
every generation. Consider Alphonso Tarr, a teacher at Lynn
English High School, Lynn, MA.
His innovative programs would
meet the highest standards of educators today, but he was teaching
two generations ago.
In 1914, with the sponsorship
of the Commercial Department, a
student-run savings bank opened
at Lynn English High School. Its
purpose was to provide bookkeeping practice for juniors and seniors
in the Commercial Course. Committed to the belief that high
school prepares its students to
survive in the adult world, Alphonso Tarr saw broader possibilities for the bank. He transformed
the pilot project into a central
activity for teaching self-sufficiency to the entire student body.
Under Tarr's direction, the
Lynn English High School Savings
Bank grew from its initial 221
depositors in 1914 to 1774 depositors at its height in 1927. Total
deposits swelled from $1250 to
over $17,000. Such growth is dramatic in light of the comparatively
low student wages and allowances
of the era. Birthday and Christmas money always helped fill the
coffer, but the bulk of bank funds
came from conscientious saving of
small sums.
By its fourth year of operation,
Lynn English's Bank was a large,
well-organized institution. Students deposited their money at the

At the Teller's Cage 1928

Courtesy, Lynn Public Library; The Red and Gray

teller's cage, located in the rear of
the Bookkeeping Room, before
and after school, or during the 15minute period in the school day
allotted for bank business. Deposits were transferred daily to Lynn
Institution for Savings (now First
East Savings Bank). As deposits
grew, affiliation with Lynn Institution for Savings minimized the
potential security problems of
keeping large amounts of cash on
school property.
At the project's peak, over 300
students were balancing bank
books, writing financial reports, or

collecting funds in each homeroom when the teller's cage was
Alphonso Tarr was, in some
ways, a behaviorist. To him, saving lump sums, no matter how
large, was unimportant compared
to developing the habit of saving
patiently and predictably. He believed saving should become a
ritual as natural as "parting one's
hair a certain way." Although the
bank accepted Christmas and
birthday windfalls, students were
encouraged to save as little as 5¢
at a time, week after week.
Continued on page 3

Federal Reserve Bank of Boston Vol.4, No.4 · Nov. 1977
Federal Reserve Bank of St. Louis

Nevv England Update


The Connecticut Joint Council
on Economic Education is planning its Annual Meeting for December 9 in Middlebury, CT. The
featured speaker will be Dr.
Michael A. MacDowell, new President and Director of the Joint
Council on Economic Education .

In our last issue, we inadvertently left off an economic education center from "Datelines Economic Education." Those interested in workshops and programs at the Stonehill College
Center, in North Easton, MA,
should contact the director, Timothy M. Sullivan . The telephone
number is (617) 238-1081.

The American Economic and
Business Systems course which
was presented this summer at the
University of Connecticut will be
offered in the Stamford area beginning in March 1978.

Congratulations to the new
executive director of the Maine
Council on Economic Education,
Robert J. Mitchell. He is already
busy at work planning several new
programs, including a session on
the air industry in Maine, and a
session on the Lincoln-Dickey
The annual summer workshop,
held at the University of Maine,
Orono, had an exciting new feature. The 31 teachers took a fourday field trip throughout Maine to
examine the types of businesses
and industries that make up the
backbone of the State's economy.
The participants toured a paper
mill, an oceanographic research
center, a logging operation, a shoe
factory, a savings bank, a shipyard, a food wholesaler, and a
textile mill. The trip was sponsored by Great Northern Paper
The Council is planning two
weekend sessions to follow up the
summer workshop. They are also
planning a workshop for "graduates" of past workshops .
During the year the Council
will work to implement a DEEP
program in one or two school
districts .
Federal Reserve Bank of St. Louis

The Rhode Island Center for
Economic Education at Rhode Island College will be offering four
courses this winter: The Real
World of Business as a Medium
for Economic Education, Teaching
Economics in American History,
Teaching Economics in the Classroom K-6, and Consumer Economics .
Anyone interested in the
courses should call the Center at
(401) 456-8037.

ECON TREK, Vermont's economic education project, is involved in a number of activities.
A curriculum guide, produced
by teachers at their summer workshop, is available . It covers six
teaching units: Origins, Economic
Origins and Futures of Vermont
Towns; Bluecollar Capitalism;
Youth, Jobs, and the Future; Timber: Management of Vermont's
Forest Resource; Energy, Vermont's Fu ture Energy Alternatives; and Governmilk, A Case
Study of Government Involvement in the Dairy Industry.
The guide has a chapter on
skills, teaching strategies, and lists
of resource materials . Each unit
reading for the teacher, an introductory essay and questions,
numerous teaching activities, and
a glossary.


ECON TREK has also developed six films to accompany the
units. All films will be shown on
Vermont's educational television
station . "Bluecollar Capitalism"
will probably be shown on public
television .
Awareness workshops are being
conducted throughout Vermont
to introduce teachers to the materials. In addition, ECON TREK
will be running a session at the
Northeast Social Studies Conference to be held in Boston in
Anyone interested in the materials should call or write: ECON
TREK, Vermont Department of
Education , Montpelier, VT 05602,
or call (802) 828-3111.

Fed Update
We've Moved
The Banking and Public Services Department has moved to
our new office at Federal Reserve
Plaza, 600 Atlantic Avenue, Boston . For those who need to pick up
publications, we are located on the
third floor .
We all have new telephone
numbers as well. To order publications, films or games call Ms.
Vickie Brown 973-3459. To
schedule programs contact Ms.
Debbie Carey 973-3458.

If all goes according to plan, we
hope to start our tour program
shortly after the first of the year.
We will supply more information
in the next issue of The Ledger.

Because of our recent move to
Federal Reserve Plaza, the simulation workshop planned for this
autumn will be postponed until
early spring 1978. An announcement will be mailed to Ledger recipients when plans have been

Banking Nickel by Nickel
To reinforce the habit, Tarr developed a duplicate punch card
system of bookkeeping, one card
for the school bank and one for
the depositor. As each nickel was
deposited, another hole was
punched in the card. Before their
eyes, students saw proof of how
small savings accumulate over
Punch cards simplified bookkeeping for the bankers, who were
expected to maintain accurate records of all transactions, both for
internal use and for Lynn Institution for Savings' records. Because
of Tarr's standards of excellence,
Lynn Institution for Savings accepted the students' records as
official figures for their own use.
When a punch card reflected $1 of
school bank deposits, the student
was credited with $1 in a Lynn
Institution for Savings passbook
account. A fresh punch card replaced the completed one, and the
process was repeated.
On its busiest days in 1926, the
Lynn English Bank accepted close
to $3000 in deposits from over
1400 students. All but a handful of
accounts were active. Speakers
from the school bank visited
homerooms to preach the virtues
of thrift. Through their efforts,
the school bank frequently boasted 100% student participation in
the early months of the school
year. Eventually, the speaking circuit encompassed all Lynn Schools .
During World War I, the Federal Government required school
banks to suspend savings programs, replacing them with Liberty Bond and War Thrift Stamp
sales. Lynn English students purchased $12,000 in Liberty Bonds
and nearly $3000 in War Thrift
Stamps through their school bank.
The student bankers compiled annual reports for the Federal Government of each year's bond and
stamp activities. When the 1918
influenza epidemic put local banks
behind in their work, Lynn English
students were lent out to banks to
help them complete their bond
Federal Reserve Bank of St. Louis

Continued from page 1

and stamp reports on time, a striking display of confidence in the
quality of their work.
As an off shoot of the high regard for the students' ability, the
school bankers were given control
of Lunch Room finances. They
paid suppliers, collected debts and
kept all bookkeeping records for
the Lunch Room.
School banks were popular projects in the 1920s, but few earned
reputations equal to that of Lynn
English's bank. Even when the
school building burned to the
ground in 1924, bank operations
continued without disruption. The
Lynn English project was chosen
as a feature demonstration at the
1928 National Educational Convention held in Boston, and it was
the model for student banks in
schools as far away as Proctor,
Vermont and Breaux Bridge,
Through the 1920s, Alphonso
Tarr taught his business classes,
arranged student internships with
local business firms, and brought
outside lecturers into the high

Bank Directors 1927


school on a regular basis, as well as
directing the bank project. When
Tarr died in 1930, the school bank
lost its key booster. Propelled by
the momentum gained over the
years, the bank kept its windows
open until World War II.
In a quarter-century of school
banking at Lynn English, an impressive legacy was left behind.
The school magazine, The Red and
Gray, chronicled many success stories relating to the banking project.
Crediting their school bank experience as a major influence, many
students chose to pursue careers
in banking. Other students used
their school savings to pay for
their college educations, or to help
their families survive hard financial times. Some invested in business ventures soon after leaving
More significant than tangible
results of the project was its impact on student attitudes. They
learned to be savers. Tarr's emphasis on thrift reflected the priorities of his time, for America in
the early 1900s was a nation of
Continued on page 4

Courtesy, Lynn Public library; Th, Rtd and Gray

reform. The beginning of the
Federal Reserve System was a
bumpy affair that is fascinating
reading. Copies are available, free
of charge, from: Bank and Public
Information Center, Federal Reserve Bank of Boston , Boston, MA
02106 .

Grade level code: Capital lellers (E- ]- H-C)after
each item indicate grade levels for which the materials are most appropriate: £-elementary school,
]-junior high school, H-high school, C-college.

Historical Beginnings ... The
Federal Reserve, by Dr. Roger T.
Johnson (h-C-g), 1977, 64 pages,
illustrated. Historical Beginnings
is a behind-the-headlines account
of the political controversies and
personalities involved in the creation of the Federal Reserve System . Dr. Johnson traces the philosophy of U.S . central banking, as
well as related political dilemmas,
back to Alexander Hamilton's
First Bank of the United States .
Also described are the attempts at
banking reform in the 1800s that
preceded the establishment of a
permanent central bank in the
early 1900s.
The creation of the Federal
Reserve System is a case study
in political strategy-making, a

story peppered with lobbyists,
coalitions and opposition groups.
Historical Beginnings records the
struggle for legislative compromise that characterized passage of
the Federal Reserve Act.
The actions and words of principal characters such as Woodrow
Wilson and William Jennings
Bryan disclose the exhilarating and
tangled process of affecting bank

Banking Nickel by Nickel
industrious optimists. The spirit
of the self-made man echoes
through these words on thrift,
written by Lawrence St. Jean ('20)
for The Red and Gray:
I am a maker of men.
Real men, who know and
appreciate my value.
To them I am the very
Of all that they have or will
Without me they are
engaged in a hopeless
For fortune and happiness,
which are the "all
When they stop me from
working for them,
The castles they have built
crumble and fall,
Because they have no
foundation .
Who am I?
Yes, who am I, that works
Federal Reserve Bank of St. Louis

ECON TREK Curriculum Guide,
(e-J-H), 1977, see New England
Update - Vermont .

Continued from page 3

hard for rich and poor
Twenty-four hours a day
and seven days a week.
Who am I that has made
America so great?
Tarr's bank was the embodiment of its era. Although many
aspects of the project now seem
antiquated, the bank's timeliness
was rooted in Tarr's awareness of
education's impact on lifelong attitudes. Equally notable was his recognition of the role school plays in
preparing students for the wider
environment beyond the insulation of the classroom. These insights are as valid today as they
were in 1914.
Special thanks to Mr. James
Boynton ('27), who brought Alphonso Tarr's project to our attention. Sincere thanks to: Messrs.
Robert Blake, Charles Cain ('29)


and Harry Fuller ('24), of First
East Savings Bank; and to the
Lynn Public Library, for providing
access to The Red and Gray archives,
the primary source of information
for this article .
Deborah Bloomberg
Economic Education
The Ledger compiles information from
va rious sources and is published periodically as a public service by the Federal Reserve Bank of Boston. Inclusion
of news abou t economic education
should not be cons trued as an endorsement of specific programs by th e Bank.
Material co ntai ned 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 catalog of other educational publications, films, and published research
information may be obtained free of
charge by writing: Bank and Public
Information Center, Federal Reserve
Bank of Boston 02106, or by calling
(617) 973-3459.