Lessons on practical subjects for grammar-school children

Contents

Page

Introduction 7

Suggestions to the Teacher 11

Chap. I. What is Barter ? 13

II. What is Monet? 18

III. How did Paper come to be used in

Place of Coin? 31

IV. How did Paper come to be used in

Place of Coin? (continued) 38

V. What are Greenbacks ? 44

VI. What is Irredeemable Paper Money?

and What are Bluebacks ? . . . . 52 VII. What is Irredeemable Paper Monet ?

(continued) 58

VIII. What are United States Bonds ? . . . 63

IX. What is a Tax ? 71

X. High and Low Taxes 81

XI. High and Low Taxes (continued) ... 86

XII. What is a Corporation ? — Mills ... 92

XIII. What is a Corporation? (continued.) —

Eailroads 98

XIV. What is a Strike? 104

XV. What is a Strike ? (continued) .... 114

XVI. Debt and Saving 121

XVII. Debt and Saving (continued) 129

XVHI. What are Savings Banks? 134

XIX. What are Savings Banks? (continued) . 145

Introduction

TIN" the elementary education which is given in -*■ our public schools, it is necessary that those studies should be chosen which will best fit the majority of children for the practical life into which they must enter. With most children that life begins when they leave the grammar schools, and whatever education they are to have (using the word education in the limited sense of school instruction) they receive while there. Therefore, the determining of the course of studies becomes of great importance.

The question is chiefly one of selection ; and should we not consider whether, in our public schools, the more essential studies are not often sacrificed and crowded out for the less useful ones ? Will the ability to recite by rote the rules of grammar, or to name in order the vegetable and mineral products of Uruguay, help a boy in his daily life as well as a knowledge of some of the more important laws of health ? or

8 INTRODUCTION.

make him as good a citizen as a few sound ideas on government and economic laws ?

In watching some of the phenomena of American politics, it is plainly seen that a great body of our voters — and often of our legislators, too ! — are lamentably ignorant of even the simpler laws underlying the social and financial questions of our age. One well known example of such ignorance is the " Greenback craze " of 1873 and 1874 There would also seem to be in the minds of many people a very vague idea as to the sources of government revenues ; and, resulting from this, an apparent belief that the United States government has absolutely unlimited supplies of money at its command, and that no harm can come to the country at large from a lavish expenditure of this public money. Other misapprehensions of this nature are not far to seek.

It is impossible to suggest a panacea for such evils, and of course long years of experience are the most efficacious teachers on these subjects. But though political economy is a science all the data of which are by no means as yet known, some few of its laws appear to have been sufficiently well established to act as guides in every-day life.

INTRODUCTION. 9

In view of this fact, it has occurred to us, that, if a few of the more practical questions dependent on these laws could be treated in a way simple enough for a child to comprehend, it might be possible to give our school children right ideas at the outset.

If such topics so treated were to be introduced into our public schools, the graduates of such schools, when called upon in after years to vote on social or financial subjects, might not be so wholly unprepared as they now are.

As a first step to this kind of instruction, we have tried to put the following lessons on money, banks, etc.. in a form available for grammar schools, where, as we have said, the school life of the majority of the children ends. It is easily seen that children find it difficult to grasp an abstract idea; we have, therefore, tried to make the whole work as little complicated as possible, emphasizing principles rather than details, and making use of simple language and frequent repetition. For the same reason, we have avoided the complicated history of money by using sometimes purely mythical cases, and have tried to deal only with those principles which seem, as we have said, to have been well established, leaving out dis-

10 INTRODUCTION.

puted points as far as possible. We have purposely left untouched the intricate workings of moneyed corporations, and exchange, — assuming that the United States government always sells its bonds at par, and greatly simplifying the process of paying off the bonds, and also assuming that our corporation sells its stocks and bonds at par, — because we felt that extensive explanations would hopelessly confuse a child's mind, and prevent its retaining any clear ideas whatever on these subjects. A few facts we have tried to emphasize especially; such as, that money follows fixed laws, which cannot be broken with impunity by any government ; that harm is done to all — and most of all to the poor — by extravagance in the use of public money; and that actual evils often attend the contracting of debts.

We feel that the subjects treated are equally important to boys and girls, — perhaps more important to girls, because they have less practical experience to guide them in their lives, and in money matters are more liable to lose their savings by ignorant investments.

Well aware of the imperfections in our work, we hope that, should it fail in its object, it may at least serve as a suggestion, to some one better fitted, to carry out the idea.

SUGGESTIONS TO THE TEACHER

'T*HE following lessons on matters concerning every- ■*■ day life are designed for the older children of our grammar schools. Not wishing to burden them with another separate study, we have tried to combine our work with that of composition writing, (which already forms a part of school instruction,) intending that the different topics shall be taken as subjects for that exercise. As a rule, the lessons will probably not be intelligible to children under twelve, and, in any case, it will be necessary to proceed very slowly and carefully in giving them to the advanced classes.

Our plan is as follows : — Let the first chapter be read to the children slowly, and with any additional explanation, or illustration, of the subject that may occur to the teacher. The teacher may then ask the questions 1 given at the end of the chapter, or may test the children's understanding of what has been read in any way that commends itself.

It is suggested that on the following composition day the children shall hand in abstracts of the lesson. The

1 The questions are all numbered, and in the text the corresponding number is affixed to the paragraph containing the answer.

12 SUGGESTIONS TO THE TEACHER.

best of these may "be read before the class, and the scholars asked to criticise them. If the subject appear to be fully understood, the teacher may go on to the next lesson ; if not, it would be well to read the first one again, and question the children ; and if it seems desirable, they might write again on the same subject.

But it is not thought best to have them learn the lessons by heart, as what is learned mechanically is generally soonest forgotten.

Thus let each lesson be treated in turn, with such reviews as may be necessary to make the children retain the main points clearly in their minds.

It is further suggested, that, whenever it is possible, the teacher should illustrate the lesson by facts and statistics of local interest, thus giving the exercise something of the force and value of an object lesson. Town reports and almanacs may be useful for this purpose.

If any of the scholars- show a special aptitude for or interest in such studies, they should be directed by the teacher to more advanced and thorough treatises on these subjects. 1

1 Any such boy or girl should be put in communication with the Society for Political Education. Circulars can be obtained from its publishers, Messrs. G. P. Putnam's Sons, 27 West 23d St., New York ; Jansen, McClurg, & Co., 119 State St., Chicago ; W. B. Clarke & Carruth, 340 Washington St., Boston.

LESSONS ON PRACTICAL SUBJECTS.

CHAPTEE I.

WHAT IS BARTER ?

TN" all civilized countries people are so aecus- ■*■ tomed to the use of gold and silver money, that they seldom stop to think that there was once a time when these precious metals were not used in buying and selling.

We will try to give you some idea of how people managed to get along without money in those old days, — how they first felt the want of it, and how at last gold and silver came to be used for that purpose.

In the earliest ages of the world every man 1 hunted and fished for himself, made his own weapons and such clothing as he used, and did not buy or sell anything. But if one man had 2 collected more bear-skins than he needed and wanted some venison, he looked about for some other man who had more venison than he needed, and then the first man exchanged his extra bear-skins for the other man's venison.

3 This process of exchanging goods is called barter. It is the simplest kind of trade, and is still the only way of doing business among some savage tribes. Very likely some of the boys present have exchanged, or as they would say " swopped," knives for fish-hooks, tops, or marbles. This is really bartering, and it is the way in which our ancestors did all their business centuries ago.

4 But by and by there came to be more people in the world, and they used more kinds of things. It was not always easy to find two persons who wanted each other's goods. Tor

5 instance : " A tailor has only clothes to sell. If he wanted a loaf of bread, and barter still prevailed, he would have to offer a baker some article of clothing — a coat, for instance — in exchange for bread. But probably the baker would have all the coats he needed. He might say he wanted a stove. Then the tailor would have to find a stove-maker who was willing to exchange a stove for a coat, get a stove in this way, and then give the baker the stove for the bread. If he could find no such stove-maker, he would have to hunt for another baker. He

WHAT IS BARTER? 15

might starve before he could find any person having bread to sell who wanted a coat." 1 Though there were no such things as stoves in the days of which we speak, there were other things which could be bartered; and you can easily see that people were sometimes put to a great deal of trouble in trying to exchange the things they did not need for others which they did need. They began to wish for some one 6 thing which everybody would be willing to take in exchange for his goods, — knowing that he could exchange it again for anything that he wanted.

At last, cattle came to be used for this pur- 7 pose ; for at one time these animals were the most useful and valuable possessions of a people. They gave men hides for tents and cloth- 8 ing, meat to eat, and milk to drink. They could be moved from place to place with care and time, and would last for some years. A man's wealth was then reckoned in cattle ; for instance, instead of saying, " He is rich, he is worth ten thousand dollars, " they said, " He is rich, he owns a thousand cattle." People 9 were willing to exchange their goods for what

1 Primer of Political Economy, by A. B. Mason and J. J. Lalor, page 52.

was worth so much, and in this way cattle came to be used as a help in making exchanges. At this time, if a man had bear-skins he was not obliged to wait until he could find a man who wanted to part with his venison, and at the

10 same time wished a bear-skin, but he could sell his skins at once for cattle, and then could sell his cattle for venison. The owner of the venison might not want bear-skins, but he would be

11 quite willing to take cattle in payment for his venison, knowing that he could readily exchange his cattle for any article he did want.

We have said that people felt the need of some one thing, which everybody would be willing to take in exchange for his goods. Suppose

12 they had settled on gravel or earth as this one article, and had said, " If a man wants to exchange a coat for a pair of shoes, let him take a bushel of gravel for the coat, and then exchange the gravel for the shoes." You can easily see that this would be absurd ; for men would not be willing to exchange their coats and shoes for something of so little value as a bag of gravel. Would any boy present exchange a four-bladed knife for a handful of pebbles ? It is clear, then, that people must

13 have something in exchange for their goods,

WHAT IS BARTER? 17

that is worth more to them than the article they wish to sell.

As cattle were the most useful and valuable articles they owned, they used them as their means of exckange ; and by using a means of exchange, or, as people say, a "medium of exchange," a great deal of time and trouble is saved.

Questions on Chapter I.

1. How did men live in the early ages ?

2. How did they manage to get articles they wanted, if they had no money to buy them with ?

3. What is barter ?

4. As there came to be more people in the world, what trouble arose in bartering ?

5. Who can tell about the tailor who had clothes to exchange ?

6. What did people begin to wish for, in making their bargains 1

7. What means of exchange did they use at last ?

8. Why did they take cattle ?

9. Why was every one ready to exchange his goods for cattle 1

10. How did they then make their exchanges ?

11. Why was it easier to make exchanges by means of cattle ?

12. Why would not gravel have answered as well as cattle ?

13. What do people always want in exchange for their goods ?

Chapter II. What Is Money?

TN the first chapter, we have seen how people ■*■ felt the need of having some one article to use as a medium of exchange for their goods, and how they came to use cattle for this purpose. We will now show what difficulties arose from the use of this medium.

Although the use of cattle as a medium of exchange was more convenient than the plan of barter, as time went on new difficulties came up. Cattle were liable to be sick, or killed by accident. It was troublesome to drive them long distances, and not easy to make small purchases with them.

For instance, a man with plenty of cattle wished a few fishhooks. But an ox was worth hundreds of fishhooks. It would not do to cut a piece off the ox, for that would injure the whole animal ; nor would it be worth while to

WHAT IS MOSEY? 19

kill him, and give a little of the meat for the fishhooks. For if the owner of the ox only wished to bny fishhooks, the rest of the meat might spoil before he could eat it up, and the ox be wasted. So unless the man was willing to take a whole ox- worth of fishhooks, he must have something else besides cattle for money ; that is, he must give something else in exchange for the half-dozen fishhooks which he wanted.

So men found that they needed a medium 3 of exchange, which could be divided without making it worth less, and also something that was not so easily injured as cattle. Then they said: "We need for a medium of exchange 4 something that is useful and valuable, and that every one will be willing to take in exchange for his goods ; something not easily injured, and that will last a long time ; something that is easy to carry about ; something that can be easily divided without harming it, so that we can buy things of small value with it, as well as things of great value."

Cattle are valuable, but they cannot be di- 5 videcl without being killed; and they cannot easily be moved long distances. Pebbles, though durable and easily carried about, are of little value ; therefore they would not be useful as a medium of exchange. Food of various kinds is most valuable. Some kinds of food (apples, for example) can be easily carried about, and be readily divided ; but they would soon spoil.

There was at this time, however, a substance much prized by everybody, and this was iron. Let us see if it had the qualities to make it a good medium of exchange. It was valuable, and the most useful of metals. It was rare : not to be picked up like pebbles, but got by hard work. Iron could be easily divided without injuring its value ; therefore it was better than cattle to use for a medium of exchange. While there was so little of it in the world, each piece had a great value, and therefore not much was needed to make large purchases ; enough could be easily carried about to-buy all a man wanted ; while it could be so much divided that he could buy things of small value as well as things of great value with it. Lastly, it would keep far better than anything that had been used before.

So men took iron for their medium of exchange, and made it into pieces of a certain size and weight. Then, instead of saying, " This horse is worth twenty bear-skins, or three 8 head of cattle," they now said, " This horse is worth twenty-five pieces of iron ; this goat, ten pieces ; that tent, fifteen." And now, if a man owning goats wanted a tent, he sold a couple of them for twenty pieces of iron, and bought his tent for fifteen pieces, keeping the extra five pieces for anything he might wish. Thus men could now measure the value of their property by pieces of iron of a certain size and weight.

Formerly, when a man said his fine horse 9 cost him six head of cattle, you could not tell whether they were fat cattle or lean, whether they were healthy or diseased, young or old. One ox might be worth twice as much as another, or an ox that to-day was valuable would fifteen years hence be old and useless. But iron was an almost unchanging measure of the io value of all other articles. The iron pieces were all of the same size, and one piece was worth as much as another, and one piece was as good to-day as a year ago. So when a man said his horse cost him one hundred pieces of iron, people knew just how valuable the horse was.

As years went by, however, more iron was discovered, and thus it became plenty ; and because it was plenty and easier to get, peo-

11 pie did not value it so much, and would not exchange a bear-skin for the same number of iron pieces as before, but demanded more ; until, as iron grew very plenty, so many pieces had to be given in exchange for a single article, that people had to carry about a great deal of iron to make their purchases. Such quantities

12 of iron were too bulky and troublesome to use every day in buying and selling. One bad

13 quality it had always had : it rusted, and so wore out, not quickly as cattle grow old, but by degrees.

Then men said, "What must we have for money ? no one wants to exchange his goods for this heavy iron, which is so troublesome to carry about in large quantities; and small quantities of it will buy nothing of value ; besides, it rusts. It is as useful as ever, but

14 we must have something that is not so easily got, and a small amount of which will buy a great deal, because it is rare."

People were glad to have iron ; for they had learned to make it into pots and kettles, swords and spears, so that it was even more useful than before. But when they had to take such quantities of it to make their exchanges with, it lost one of the qualities which, you remember, made iron a good medium of exchange ; namely, that it should be something easy to carry about.

They tried copper and perhaps other metals, but at last they decided on gold and silver.

These metals were useful in some ways, and 15 they were much valued for ornaments. They were not easily injured, like cattle, and could be readily carried about ; they could be divided into small pieces without injuring their value, and their value did not change from day to day, but was always about the same ; they did not rust, like iron; they were very rare, and men had to work a long time in the mines before they could get even a small pile of gold. Silver was not so rare as gold, but in those days it was very precious and hard to get, and there were only a few places where it was known that either of these metals could be found.

For a time, gold-dust, or lumps of silver and 16 gold, were used to exchange for food or clothing ; but it was very inconvenient to have to stop to weigh out gold or silver for each purchase that was made ; besides, people did not always give fair weight.

To save all this trouble, the gold and silver

17 were made into pieces of different sizes, which represented different values ; and all the pieces of the same value were of the same size and weight. These pieces were stamped to show how much gold or silver was in each, and were called coins; and the coining gradually came to be done by the government, in a place called

18 the mint. We now call these coins money. 1

And so it was that gold and silver came to

19 be used as a measure of the value of all other articles, and as a medium of exchange.

We will point out to you still another advantage in using gold and silver. They were valued not in one country alone, but in all

20 countries where they existed ; and you can easily see how it would help in making exchanges of goods to have the same article used for a medium of exchange all over the civilized world. For example, suppose one

21 country used rare shells as a medium of exchange, and another one used bright-colored feathers. Yet the natives of the first country might not care for feathers in exchange for

1 Let some child look out the derivation of money.

their goods, and those in the second country might consider shells as rubbish, and refuse them in exchange for their goods. In this case, the people of these countries would have the same trouble in making their exchanges, that the tailor did who wanted a loaf of bread in exchange for a coat. Now, if both countries used gold, the people of each would readily receive it in exchange for their goods, because it would be equally valued in both, and could be used in making their purchases at home.

We have tried to make you see why gold and silver are the best metals to use for a medium of exchange, and so, when we speak of their great value, we mean that they are valuable principally because of this use. On account of their beautiful colors, and capacity for taking a high polish, gold and silver are also valued for ornament, and they are used for many other purposes.

Still, in most of the useful arts we could more easily spare gold and silver than iron and 22 steel. If all the silver spoons and gold breastpins were swept into the sea, we could still live quite as well, and eat with iron or steel spoons, and use iron breastpins. But suppose all our iron and steel were swept into the sea. Then we could only plough with wooden ploughs; we could hardly cut trees to make the wooden ploughs. We could not have spades, axes, or carpenter's tools, because silver and gold alone are too soft metals for such uses ; besides, they are too scarce, and we have not gold and silver enough in the world to have ploughs and axes made from them, even if they were the best metals for those purposes.

23 We are right to prize gold and silver as a medium of exchange, or money, because, as we have shown you, they are the best articles that have yet been found for this purpose, and save great inconvenience. You will easily see, however, from what we have said, that their chief value is as a medium of exchange. If you were in some spot where there was nothing to exchange, for instance, on a desert island, which

24 would help best to keep you alive, — three bags of gold ; or a bag of potatoes, a bag of corn, and a good iron spade ?

When we think of these things carefully, we shall find that the articles we need most are those which we value most, — all, in fact, that we need to warm, feed, and clothe ourselves with ; such as corn, meat, wood, coal, leather, etc. And, as we have explained before, it is because of the inconvenience of carrying these things about to exchange for one another, that men have agreed that gold and silver shall be carried about instead, and used as money in buying and selling.

Now let us see, once more, if gold and silver have all the necessary qualities for a measure of values and a medium of exchange, or money.

1st. They are useful for various purposes. 25 2d. They are rare, and cannot be obtained without labor, and therefore people are willing to take them in exchange for their goods. 3d. They are durable, that is, they last a long time. 4th. Their value changes little from year to year. 5th. They can be easily divided without lessening the value of each part ; for a pound of gold is worth just as much made into dollars as it would be in one lump ; and a twenty-dollar gold piece is worth just as much as twenty one-dollar gold pieces. 6th. They are also valued all over the civilized world as a medium of exchange. 7th. They can be easily carried about.

To sum up all in a few words : u As people first used cattle and other valuable things to help them in making exchanges of goods, so now exchanges are made by means of gold and silver money." As "lengths are measured by 26 inches, feet, yards, etc.; weights, by ounces, pounds, etc. ; time, by minutes, hours, days, and years ; " so " values are measured by money. 27 Money, therefore, may be defined as a medium of exchange and a measure of value. " l

Just now, 1884, so much silver has been discovered that it is not as good a measure of values as it was. It is getting to be, like iron, too cumbersome to carry about and use, so that perhaps by and by we shall use only gold for our measure. But this is a question to be thought and talked about in the years to come.

Questions on Chapter II.

1. Why did not people keep on using cattle as a means of exchange 1

2. What was the trouble in buying things of small value with cattle 1

3. What other qualities, then, must their means of exchange have?

4. Name the qualities that men found were needed for a good medium of exchange.

5. Give the good and bad qualities, as mediums of exchange, of cattle ; of pebbles ; of apples.

6. What did people take in place of cattle for their measure of values ?

1 Primer of Political Economy, page 53.

7. What did they do to the iron, to make it more convenient to use as a medium of exchange ?

8. When iron was thus divided, how did people measure the value of things %

9. Give another reason why cattle proved an unsatisfactory measure of value.

10. Why were the iron pieces a better measure ?

11. What effect did the discovery of more iron have on the buying and selling ?