Exchange+mediums+in+early+Utah+settlements

**Standard 4.** Students will understand the diverse ways people make a living in Utah.
 * Objective 1.** Explore the components of Utah's economy
 * Indicator c.** Research important segments of the local economy.


 * Lesson: Exchange Mediums in Early Utah Settlements **


 * Vocabulary: **
 * Barter system
 * Fluid
 * Credit
 * Cash


 * Essential Questions:**
 * How does a barter economy function and what are its strengths and limitations?
 * How does a fluid medium of exchange enhance the flow of goods and services?
 * How did early settlements in Utah develop a stable cash economy?
 * What impact does a shift from cash economy to credit economy have on individuals and businesses today?


 * Instructional Activities:**


 * Assign students to bring something worth 1 dollar to trade in class.
 * Explain what a barter economy is and show the students using historical examples or by making an in class trade with a student.
 * All students who have something are allowed to trade items with each other. No money is allowed. I would suggest that no services be allowed, despite the historical inaccuracy, and that each student be allowed only one item totaling 1 dollar. Eventually the trading will stop as students are convinced that they cannot make a better trade. (Some will be happy with their item, others will find no one willing to trade for their item.) At this point allow yourself, or another student, to enter the trading with a 1 dollar bill. There should be several (many) students willing to trade for the cash. Allow the bill to change hands as many times as it will. Throw 2-3 more students with cash into the trading and see if it will stimulate more trading.
 * Have a class discussion about the effects of a fluid medium of exchange (cash), and why it stimulates the economy. (Ease of handling, definite value, extended lifespan, universal value, etc.)
 * Two examples of the effects (negative as well as positive) of a barter economy were shared by William Palmer in the Utah Historical Quarterly.
 * "Use of postage stamps on mail was not obligatory until 1855. Postage charges were collected on delivery, and they must be paid in cash. A letter to my father from his mother in Wales lay in the post office for six weeks before he could get the $.75 in actual money to redeem it. When a California train came in with a broken wagon, father, the blacksmith, did the repairs and received in payment a $5.00 bill. He went straight for his letter but the postmaster could not change his money. Father could leave the $5.00 and take his letter, his change to be collected when the postmaster could get it, or, the postmaster would hold the letter until father could change his money. Father left the $5.00 and took his letter. After many weeks he accepted a merchandise order on the Deseret Iron Company Store for the $4.25 that was due him. The incident tells a graphic story of the scarcity of money in early Utah. It also tells in large measure why there were no real stores." Palmer, William R. Utah Historical Quarterly, Vol. 31, p.36-50 (Utah State Historical Society, 1963) [Excerpt from page 37]
 * (In 1867,) "California was a rich market for dairy supplies and all other foods. The gold diggers were hungry, and they had money to buy foods that Iron County had to spare. Ebenezer Hanks loaded his wagon in Parowan with butter, cheese, boxes of eggs, ground cereals, and such other things as he could carry. In Sacramento he sold the merchandise at high prices. He had taken three yoke of oxen with him. In California he found that oxen were high priced while horses and mules were cheap. In Utah these values were reversed. He traded his three yoke of cattle for six span of horses and mules. Then he bought another wagon and two loads of goods which he and his son brought back to Parowan. The McGuffy stock of $2,000.00 was part of the Hanks cargo. Back in Utah Hanks traded his twelve horses for twenty-four cattle, hired a man, and loaded his wagons with dairy and farm products. He sold his merchandise again in Sacramento and traded his cattle once more for horses, two for one. Hanks made these trips once a year and in three years became Iron County's richest man. He was worth $4,000.00. The coming of the railroad in 1869 killed his business, and Hanks made no more trips. His merchandise was making a fine community contribution, but his big money came from his livestock trading." Palmer, William R. Utah Historical Quarterly, Vol. 31, p.36-50 (Utah State Historical Society, 1963) [Excerpt from page 38]
 * Have a discussion about how cash might be introduced into the early settlements of the west and how it might be backed up (gold bank deposits, gold dust, local store credit, ZCMI). Show examples of early coinage and currency and discuss how effective this might have been. What were the limitations as well as the affordances?
 * You might choose to briefly discuss how the introductions of checks, and then credit cards, have had a significant impact on our economy and the exchange of goods and services. What backs up the value of the dollar today? Would we ever return to the barter system in America, or in local areas? How would that affect the students and their families?


 * Assessment:**
 * Give the students a marble, a paperclip, or some other small object and for homework have them trade that item with whoever they can find. Students have to circulate through at least 5 different people and five different items. Have them do a short reflection on what they were able to accomplish through bartering as a homework assignment.


 * Materials / Resources for Teachers:**
 * ZCMI and other cooperatives are covered on pages 176-177 of __The Utah Journey__.
 * Palmer, William R. Utah Historical Quarterly, Vol. 31, p.36-50 (Utah State Historical Society, 1963)
 * Images of coins and currency
 * Marbles, paperclips, or other small objects.


 * Materials / Resources for Students:**
 * Whatever object they choose to bring for the Instructional Activity.