4th Grade Colonial Money Activity

Introduction:

The fact that there was no gold or silver on the Eastern seaboard of North America and that England had tight controls on the export of money forced the English colonists to come up with substitutes for money. So tobacco and other valuable commodities (such as furs, particularly beaver pelts.) were used because they had a ready market - merchants would take them in trade for other items (problem; tobacco deteriorates over time and is subject to large fluctuations in value depending on the size of the crop in each year). Nails were used because there were few blacksmiths in the early colonial period (17th century), so most nails were imported, making them very valuable - Maryland had a law that required that the nails be recovered from any house that was to be demolished.

By 1690, the colonists had hit on the idea of using paper money. (Background: Paper money invented by the Chinese as early as the 8th century. The first European use of paper money was in Sweden during the 1660s.) Massachusetts issued paper money for the first time in 1690 to pay for its part in the French and Indian Wars. The other colonies soon began issuing paper as well. By the time of the revolution all of the colonies were issuing paper money, as was the Continental Congress.

Materials:

Beige construction paper (Used to produce two-sided copies of the sample notes)
Pens (quill pens preferably, with brown or black ink)
Various rubber stamps (preferably with patriotic images, but also stamps of lions, horses, eagles, and other animals used in heraldry)
Ink pads - black, red or brown
Printable images of a sampling of colonial notes - $1/3 Continental note front, $1/3 Continental note back, $1/3 note front with images and signatures blanked out, $1/3 note back with images and signatures blanked out.

Set-up:

Have a table with photographs of various colonial coins, paper money, and commodity money (wampum, nails, furs, tobacco, etc.), along with the supplies. I did this activity with 4-5 kids at a time, 25 minutes per session. This activity would work nicely with an activity on colonial products where the kids could buy things with the money they create.

Concepts:

What is money?
Why would anyone use paper for money?
How does paper money become valuable?
What are the elements of design in paper money that help to ensure its value?

Background Content:

Introduce the activity by asking the question "What is money?" The presumption is that the kids will have had a little background in the colonial period, but that is not necessary. The photographs can form a starting point for the discussion. The key points are:

1. All of the photographs represent money of some sort.
2. 'Real' money for the colonists was gold or silver coinage. Anything else was just a substitute. (Why - gold and silver are easy to work, easily transportable as coins, relatively rare (but not too rare), and do not rust or fall apart.)
3. The English colonists had no source for gold or silver (this can be introduced with a question - "Why did English colonists first come to the New World?" - to find gold and silver) - instead, they had to start producing commodities for trade - tobacco was the first big 'money' crop (to the point where the early colonists nearly starved, as everyone was growing tobacco instead of food...)
4. For paper money to be accepted as 'real' it needs to have certain things - a promise from some authority (government or a private person or bank that other people trust) that the paper note is worth something (for the colonial period this would be gold or silver coins - preferably Spanish silver dollars (pieces of eight), the signature or signatures of officials guaranteeing the promise to pay (without a signature the notes were worthless), a numbering system for the notes so that officials could keep track of how many were issued (many early paper money systems created serious economic hardship, including the American paper money of the Revolution - the problem was that it was very easy to print up huge numbers of notes beyond what the government could actually pay out in gold or silver - once this process was recognized by the public, people would begin to discount the notes or refuse to take them altogether because they could not be sure of getting the full face value for them, and some sort of anti-counterfeiting system - in the case of colonial notes, silversmiths were used to create the ornate borders to make counterfeiting more difficult (Paul Revere was involved in producing paper money), different color inks were sometimes used, as well as special designs such as 'nature' prints (Benjamin Franklin invented a method for reproducing an image of a leaf on colonial notes - a very effective anti-counterfeiting device. One of the photographs includes a note printed by Benjamin Franklin and his partner David Hall).

Activity:

Each child gets a certain number of notes - they can sign them, number them and put designs in the empty spaces on the front and back (with the rubber stamps), and they can write their names in as the printers of the money.

Possible discussion questions:

Which founding fathers were involved in producing colonial money?
(Benjamin Franklin, Paul Revere)

Can you find a founding father's name on one of the photographed notes?
(B. Franklin)

Why does the sample note (to be used by the kids) have 1/3rd of a dollar as its denomination? (This leads to a discussion of colonial money - the colonists used the Spanish system as well as the English. The Spanish dollar was made up of 8 reales (the piece of eight) - it and its fractions (for example, the quarter, or 2 real coin) were the most common coins used in the colonies. The English system of pounds, shillings, and pence (pennies) was also used in which 1 pound was equal to 20 shillings and one shilling was equal to 12 pence. The conversion rate of dollars to pounds was 4s6p(4 shillings 6 pence or 54 pence) to the dollar. This means that 1/3rd of a dollar is equal to 1 shilling, 6 pence (or 18 pence) - which explains the unusual denomination. The Continental Congress chose to use dollars as an expression of their independence from England.)