The Origins of Money and Banking

Lesson Objectives Describe the main characteristics of money and explain why it is important for money to have these characteristics Explain the idea of a bartering system and compare its advantages and disadvantages Describe the evolution of coins and paper money Describe the evolution of banking and its role within the finance industry

Key Vocabulary Barter Commodity Money Credit Money Fiat Money Money Paper money Representative money Wampum

What is Money??? Money is something we take for granted, and although we use it every day we seldom think about what it is—only what it does The goal of the lesson’s activities is to explore the origins and development of banking and related financial services and that to do so, you will begin with an investigation of money

Characteristics of Money We will now talk about everyone’s favorite subject…money Please list some characteristics of money on a sheet of paper or on the computer Now share your list with a partner Now let us create a class list of the characteristics of money

Characteristics of Money We will be focusing on the following four characteristics of money, which have been culturally identified as important. Money is durable: it lasts a long time Money is divisible: it can be divided into smaller units Money is portable: it can easily be carried Money is generally acceptable: people will accept it as money

Characteristics of Money

A World Without Money Overall, what is the purpose of money? If, without warning, you learned that in exactly one hour you would and everyone else would lose access to all their money, what would you do?

A World Without Money How could you meet your basic needs in a world without money? What needs could be met in this new environment? Which needs couldn’t be met?

Let’s Barter What would you be willing to trade for this item? Why? As with all things there is no consensus to how much this item is worth when bartering How can you decide how much something is worth when bartering?

History of Bartering Clam shells Tobacco Jewelry Knives Rice Rocks Bread Silver Chocolate Coffee Salt Animal skins Grain Silk Cows Sheep Corn Copper Fish Which of these items were used at one time or another as a form of money?

History of Bartering ALL of the items were once used as a form of money Bartering is the exchange of goods and services without the use of money. Now assess each item using the characteristics of money durable, divisible, portable, and generally accepted

History of Bartering Based on the characteristics which items would best be described as a form of money?

Let’s Barter Form groups of 4-6 people Each student will receive a role card and MUST fulfill the trade on your card Download- Role Cards: Trade Restrictions You will have 5 minutes to complete your trades to acquire the goods that you need You may NOT trade outside of your group

Let’s Barter What difficulties did you encounter in trying to make the exchanges? Could there have been an easier way to conduct the exchanges in their trades? Reflection on bartering Was it a frustrating or enjoyable experience?

The History of Money Money first evolved from the bartering system Download- Anticipation Guide: The History of Money Read each statement, agree or disagree and write a sentence as to why After the presentation you will be able to see if your answers are correct.

The History of Money Presentation Download- Note-Taking Guide: Timeline This will assist you in your note taking during the presentation After the presentation, form groups and discuss what your filled out in your timeline

The History of Money Refer back to the Anticipation Guide: The History of Money Were you all correct or were you surprised by some of the answers?

Origins of Money You are about to create a timeline that will represent the six or seven of the most important aspects of the history of money Download- Assignment: Timeline Download- Example: Timeline Download- Assessment Criteria: Timeline

Origins of Money How does this example meet the requirements for the assignment? What would you improve if this example was a draft you created?

Timeline Project Okay now that your timelines are complete please place them around the room so each group can view them Download- Worksheet: Self-Evaluation and Reflection Complete individually

The Origins of Banking Download- Reading: The Origins of Banking Read the first page of the reading Now at your tables read only one section of the reading which will be assigned Read the entire section individually Ask any questions they have about the reading Summarize the section

The Origins of Banking Now after your section is complete move to a group that has not read your section Summarize your section for the new group With all new groups members each summarizing their section

The Origins of Banking Answer the following questions and turn into classpress. Three important facts that they learned from the lesson Two things that they found interesting about the reading and/or the lesson One question that they had after the reading and/or lesson

Enrichment Even though we now live in a world where there is paper currency, bartering is still prevalent. In fact, craigslist.org has a whole category for bartering For example, 100 paperback mysteries for a computer hard drive or dental work needed in exchange for house cleaning Create their own craigslist posting where you think of a want that you have and a good or service that you can offer to create a trade.

Enrichment Write an essay containing basic information about the origins of banking, using the background information you have on the earliest banks Address such topics as why we as a society needed a bank and how early banks met people’s needs Include personal observations about today’s banking practices and how they connect to early banking practices.

Cross-Curricular Integration Language Arts: Throughout history, successful entrepreneurs have decided to start a bank Write biographies on famous businessmen and businesswomen who have started banks (Ernest Woodruff, Alexander Hamilton, etc.).