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Economic Education Ne'W"sletter

Energy... All In A Day's Work
Did I remember to switch off the
Should I drive to the corner store,
or save energy by walking?
Will there be enough energy this
winter so that our schools and
factories can maintain their usual
Is there enough energy to meet
our needs and, if not, are there any
energy sources that could be used
as practical alternatives?
No doubt these questions are
familiar. Energy is an urgent issue
today. If the industr ies and households in the United States were to
rely only on our dwindling stock
of gas and oil, the economy would
be seriously affected. How? With
less energy to run the machines of
industry, the production of goods
would decrease. In turn, many
energy-intensive household activities would become expensive luxuries. Only in a society where
energy is readily available and
relatively inexpensive can we
keep large homes comfortably
heated and cooled; switch on
time- and effort-saving appliances
for every imaginable household
chore; and have less than 5% of
our population produce all of the
food that the rest of us eat.

Repri nted fr om Currier and Ives

even gasoline possess the energy
req u ired to plow corn fields and
thresh wheat. However, the rates
at which a gasoline-powered engine
can move a plowing machine and
manpower can push a hand plow
differ significantly. Gasoline contains a much higher concentration
of energy than a human being,
which means that a gasolinepowered plow has more potential

for performing useful work than
its man-powered ancestor.
At the beginning of the nineteenth century, a major source of
energy that our great-greatgrandparents had to help them
with their work was the power
provided by their strong backs. In
the early h istory of America, th e
muscle-power derived from human energy powered the crude
plows, scythes, rakes and flails
that transformed an uncultivated
field into a harvest. However, by
present standards, farmers
worked very hard and produced
very little.
In the early agricultural age,
before the advent of the steam engine and commercial agriculture,
the economy consisted ent irely of
independent family units. Farmers
raised their own crops, built their
own shelters and made their own
clothing . At that time, human labor, the most basic of energy resources, produced barely enough
to satisfy the needs of the family.
As time went on and agricultural implements were improved,
the farmer could accomplish more
work with less toil. However,
Continued on page 4

Amer ica now relies on petroleum as it s staple energy source.
The energy from petroleu m mult iplies the quantity of goods and
services that a machine can produce . What if we suddenly discovered that there w as no more fu el?
M ost machines w ould become obsolete and people would h ave to
find other ways of performing
work done by petroleum-fueled
machine s.
Energy is the capacity fo r doing
useful wor k. People, horses and

Federal Reserve Bank of Boston Vol.4, No.3• Sept. 1977
Federal Reserve Bank of St. Louis

The Innovative Classroom

Nine students from South Boston High School, Boston, MA are
learning economics, marketing,
accounting and retailing by selling
rocks. Since July, they have been
operating a push cart business at
Boston's Quincy Market, selling

Grade level code: Capital letters (E- J-H-C)after
each item indicate grade levels fo r which the materials are mos/ approp riate: E-elemen lary school,
]- junior high school, H-high school, C-college.

Fed Points (J-H), 6 pages, is a brief,
illustrated description of the Federal Reserve System and the Federal Reserve Bank of Boston. It
discusses the structure of the System, services to banks and the
Federal government, and how the
Fed influences the money supply.
Available in multiple copies from
the Bank and Public Information
Center, Federal Reserve Bank of
Boston, Boston, MA 02106 or call:
(617) 426-7100 X656 .
Federal Reserve Bank of St. Louis

"Stone-a-mals" - painted rocks
decorated as ornaments and
The project is a joint effort of
South Boston High School, the
Federal Reserve Bank of Boston
and the Educational Collaborative
for Greater Boston, Inc . (EDCO) .
The students divide their time
between operating and maintaining
the cart, and attending classes
focusing on the problems of establishing and maintaining a business .
In addition to the marketing, product development, economics, accounting and business planning,
they are studying the city - the
problems and forces affecting those
who live there.
Classes began last spring . Kevin
Bell, the project director, introduced three items - an African
mask, a conch shell, and a package
of Vita-Bath . The class then discussed some basic marketing concepts - why do the products sell
and to whom do they appeal.
The class material is directly
related to business. Students are
anxious to understand the information to avoid making mistakes
which would cost them money in the form of profit sharing .
Another economic concept (besides profits) that is becoming a

reality to the group is competition
- competition with the numerous
stores and other carts, and competition among the student operators
themselves. The market attracts
crowds of tourists and workers
from downtown businesses, and
the variety of items vying for the
buyers' dollars is extensive.
To make sure they get their
share of business, the students
have been studying advertising
and product display. And to make
sure everything is properly recorded, they are learning accounting.
They are studying the concept
of capital. What is it? Why does a
business need it? Where does a
business get its capital? This has
led to a study of debt and financing . (The project received its
working capital from a state vocational education grant.)
They have learned how even
the weather affects the economy
- watching their'sales rise and fall
with the summer weather.
The operation will continue
through the school year. So if you
and your class are in Boston this
year, stop by Quincy Market to
see that "rocks really do pay."

National Archives of the United
States. The National Archives is
the Federal institution that preserves the records of the United
States Government . American history is brought to life in the many
photos, maps, recordings, and documents made available to the public. One can receive a wide variety
of material ranging from Revolutionary War engravings to the tape
recording of the surrender of Japan
aboard the battleship U.S .S. Missouri . For a complete list of
resources and prices write to :
National Archives and Records
Service, General Services Administration, Washington, DC 20408.

about money and banking as well
as the falsehoods of economic
"folk knowledge". Humorous caricatures illustrate the booklet's enlightening explanations. Copies
are available free of charge from
the Bank and Public Information
Center, Federal Reserve Bank of
Boston, Boston, MA 02106 .

I bet you thought that ... (J-H-C)
33 pages by David H. Friedman .

The purpose of this booklet is to
dispel some common economic
myths. Since most of us are bound
to certain misconceptions, Mr.
Friedman discusses the truths


Continued on page 4

Ne1W England Update


Dr. Michael A. MacDowell, Executive Director, Illinois Council
on Economic Education, has been
named President and Director of
the Joint Council on Economic
Education, effective September 1,
1977. He is succeeding Dr. M.L.
Frankel, President and Director
since 1955, who is retiring.

On May 27, 1977 a special tribute was paid to Professor Kenneth
Sheldon, Executive Director of the

The Connecticut Joint Council
on Economic Education, in conjunction with the Hartford Public
Schools, is running a workshop on
the "Economics of Social Issues
Facing America." The secondary
school level seminar is focusing on
a variety of issues - scarcity and
the food supply (Is the price of
food really out of sight?), the energy shortage, and the economy of
Connecticut - to name a few.
The Council is planning to run
several in-service courses this fall.
Anyone interested in attending
one, contact Edward Hamblin, Box
U-32, University of Connecticut,
Storrs, CT 06228. Or call (203)

The Rhode Island Center for
Economic Education at Rhode Island College is offering three
courses this fall: Concepts in Economic Education, Consumer Economics, and Economic History in
the United States .

The Ledger compiles information from

various sources and is published periodically as a public service by the Federal
Reserve Bank of Boston. Inclusion of
news about economic education should
not be construed 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 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, Boston 02106 or by calling

Boston University Center for
Economic Education, on the occasion of his retirement from that
position after twenty-four years
of distinguished service.

The new director for the Boston
University Center for Economic
Education is Professor Anton
"Tony" Lahnston, School of Education.

DatelinesEconomic Education
Many of the economic education centers are planning workshops and
in-service courses for the fall . If you are interested in what the nearest center to you is planning, contact the center at the address or telephone number
listed below.
Connecticut Joint Council on Economic Education, Edward Hamblin, Box
U-32, University of Connecticut, Storrs, CT 06268, (203) 486-2327.
Economic Education Council of Massachusetts, Thomas Curtin, Lincoln
Filene Center, Tufts University, Medford, MA 02155, (617) 628-5000 .
Maine Council on Economic Education, George Cunningham, 22 Coburn
Hall, University of Maine, Orono, ME 04473, (207) 581-7067.
New Hampshire Council on Economic Education, Whittemore School
of Business, University of New Hampshire, Larry Cole, Durham, NH
03824, (603) 862-2771.
Rhode Island Council on Economic Education, John Sapinsley, Rhode Island
College, Providence, RI 02908.
ECON TREK, The Vermont Economic Education Project, Dr. Malcolm Severance, Continuing Education, Mount Grasse, University of Vermont,
Burlington, VT 05401.
Center for Economic Education, American International College, Robert
Hemond, Gordon Morrill, Springfield, MA 01109, (413) 737-5331.
Center for Economic Education, Boston University, Anton Lahnston, School
of Education, 765 Commonwealth Ave ., Boston, MA 02215, (617) 232-0121.
Center for Economic Education, Central Connecticut State College, Ronald
Daigle, Marcus White Hall, Room 117, New Britain, CT 06050, (203)
Center for Economic Education, Salem State College, Henry A. Lucas, Salem,
MA 01970, (617) 745-0556 .
Center for Economic Education, Southeastern Massachusetts University,
Richard Ward, North Dartmouth, MA 02747, (617) 997-9321.
Center for Economic Education, Tufts University, George Watson, Lincoln
Filene Center, Medford, MA 02155, (617) 628-5000.
Center for Economic Education, Worcester State College, Paul O'Neil,
Worcester, MA 01602, (617) 754-6861.
Center for Economic Education, Rhode Island College, Barbara Parker, Providence, RI 02908, (401) 456-8037.

(617) 426-7100 X656 .
Federal Reserve Bank of St. Louis



Continued from page 1

horses and oxen were needed to
pull the heavier, more efficient
In the mid-nineteenth century,
the switch from man power to animal power as the chief energy
source provided Americans with
more energy for farming. The
extra power derived from work
animals made possible the use of
mechanical equipment for agriculture. Because of this increase in
energy concentration, a greater
amount of useful work could be
accomplished in the same amount
of time. As a result, the farmer
was able to produce much more
than before.
At the Paris Exposition in 1855,
the effectiveness of the new, more
energy-intensive technology was
tested against human labor. It was
discovered that six men using hand
threshers could yield barely more
than a bushel of wheat in an hour
while with the improved machines,
nearly twenty-one bushels were
By the second half of the 1800s,
farmers produced more than
enough to feed their families. As
a consequence, they began organizing to sell their surplus at the
market. By 1860, the American
economy was transformed from a
collection of self-sufficient farming families into an economy
marked by commercial agriculture.
The development of a commercial agricultural economy was
boosted further by the invention
of the steam engine. Furnishing
power for steamboats and trains,
the steam engine, in effect,
brought to America a more extensive and more efficient system of
Federal Reserve Bank of St. Louis

transportation. Better transportation served to link farming communities and helped foster regional trade. By the year 1860, the
rail system spanned the entire
country and carried two thirds of
the total internal trade.
The steam engine representecl
a higher concentration of energy
that could be used for work. The
application of a more powerful energy source had a great impact on
the economy. More efficient, worksaving technology, powered by animals and steam engines, gradually
took over the duties of the selfsufficient farmer. The man-hour
requirements for producing an
acre of wheat were reduced from
75 before 1830 to about 35 in
1860. By the third quarter of the
nineteenth century, the crops in
some regions were so vast that the
entire agricultural labor force
would not have been able to harvest them in season had human
labor not been supplemented by
more energy.
As commercial agriculture matured, the farmer tended to specialize in one particular money
crop and used his proceeds to purchase housewares and farm supplies. A growing demand and
supply for goods and services laid
the foundation for the modern
market system in the United
The evolution of a more energy-intensive system was a major
force underlying a steady improvement in the standard of
living in nineteenth century
America. Advancements in transportation, technology and trade
greatly increased the use of
money as payment for human
labor and for the goods sold. In
turn, people expected to buy an

unprecedented variety and range
of goods and services that were
available on the market.
The agricultural age was pivotal
in the economic history of the
United States. Linking the selfsufficient colonial period of America's past with the Industrial
Revolution, the agricultural age
provided the groundwork for the
harnessing of more concentrated
forms of energy. Setting into motion the technological innovations
inherent in this era, the agricultural age spawned the energyintensive productive system which
was vital to economic development
and growth.
Melissa W. Norton, author of the above
article, was an intern al the Federal Reserve
Bank of Boston, summer 1977. Ms. Norton
is a student al Smith College.

Continued from page 2

Biotherm Energy O-H-C) . This report provides a simple answer to
the energy crisis - the use of
waste wood fiber. The founder of
this theory, Norval Morey, promotes the concepts of "environmental harvesting" of the approximately five billion tons of wood
that go to waste annually. Not
only would the utilization of overmature or dead trees provide the
equivalent of more than eight billion gallons of oil per year but also
it would provide the healthy trees
in the forest with more room for
growth and nourishment. For this
unusual perspective on the energy
problem contact: Morbark Industries Inc., Winn, Michigan 48896.
Energy Research and Development
Administration (H-C). This is a
good source for comprehensive information on current energy concerns as well as on alternative energy technology. Among the many
pamphlets distributed by the
ERDA, Mr. William W. Eaton has
written thorough descriptions of
Solar Energy, Geothermal Energy,
Energy Technology and Energy
Storage. For a title list or for
further information write to:
USERDA - Technical Information Center, P.O. Box 62, Oak
Ridge, Tennessee 37830.

Reprinted from Currier and Ives