Colonial Trade

General Background
Early in human history money did not exist in the same form as it does today. Instead of using paper or coin currency, people traded items that had a practical value: food, decorative items, clothing, tools, weapons, etc. In direct trades, each party had to possess what the other party wanted. For example, if one person had food that another person wanted, and he in turn had arrowheads that the food producer desired, they could establish an equitable, direct trade.

The economic term "media of value" is an important concept when examining the issue of economics and bartering. For example, a man might have traded his handcrafted spear for a pile of corn (even though he did not like corn) because he knew that he could then trade the corn to someone for animal skins (which he wanted). This type of trade was a step toward the abstract idea of money; the objects were not valued for themselves, but for what the owner could get for them.

Gradually, particular commodities began to be treated as the standards against which people would determine the value of other items. For example, there might have been a "wampum standard" (analogous to the "gold standard" in modern society). To help people understand this abstraction of value, these early forms of money were practical items; for example, gold could be used either as a medium of exchange or it could be melted into jewelry.

The term "barter" means the exchange of products and/or services without the use of money. This was one of the ways that early colonial economies operated in America. During the 17th and 18th centuries, money was scarce and the colonists relied primarily on bartering using commodities such as beaver pelts, corn, musket balls, nails, tobacco, and deer skins (from which we get our modern slang, "buck," meaning "dollar"). Colonists also used the money of other cultures—the Native Americans’ wampum (beads made from shells) and the coins of foreign countries.

All Education Levels – Barter Day

Introduction
One of the activities that brought the people of different societies together was trade. Money was not used. Wares or goods and services were used. To give students a clearer understanding of trading and bartering, hold a "Barter Day".

All students should bring in some handcrafted or homemade wares to school on the day they are going to barter. These wares should be inexpensive, and made primarily from things already found around the house. Examples of wares students could bring include friendship bracelets, stationery, cookies, candles, bookmarks, ornaments, pressed flowers, artwork and clay beads. Food, drink and candy may also be used on Barter Day. If students decide to purchase materials, a class spending-limit should be established.

Students can bring in as much or as little as they like but they must bring in something in order to participate in the marketplace. Another option is for students to offer services instead of goods. Examples of services offered could include carrying books between classes or standing in the lunch line for another student.

Objectives

  • understand how people organized for the production, distribution, and consumption of goods and services.

Vocabulary

  • barter
  • trade
  • distribution
  • goods
  • services

Activity

Preparation

  1. Students and parents should be given a letter containing the information found in the General Background section of this lesson. This letter should explain the objective of Barter Day and the roles and responsibilities of the students.
  2. On the day that the letter is distributed, there should be a class discussion on the bartering system. At the elementary level, students can find pictures of people trading or bartering. Middle and High School students can research where bartering takes place in today’s economy. A discussion of supply and demand would also be an important preliminary discussion at this level.
  3. Work with students to help them decide what items to bring in for bartering. Conduct a brainstorming session to create a list of items that students might bring to Barter Day. These items are their responsibility to contribute to the exercise.

Activity

  1. Prior to trading, ground rules should be established for this simulation. Review ways of saying "no thank you" that will not hurt people’s feelings. Brainstorm ideas to determine how to offer goods or services. Teach older students about complex trading schemes (e.g., 3-way trades).
  2. Prior to trading, have students display their goods and services, preferably with creative displays. Allow students the opportunity to make a verbal "sales pitch" to the class.
  3. Allow for a 10-minute "period of review" in which students circulate among the products to be bartered. No bartering should take place at this time. During this time, students can decide what items they want and begin to determine a strategy for getting the desired item(s).
  4. Flash the lights in the classroom to signal the beginning of trading. This activity can run for 30-45 minutes.
  5. Flash the lights to signal five more minutes until the end of trading.
  6. Flash the lights a final time and announce the end of trading.
  7. The wrap-up discussion should include the following questions. Students can first write down their answers prior to the discussion.
  • What did you learn about bartering?
  • What would you do differently if you could do this activity again?
  • Describe the best, worst and/or the most creative trade you made.

Extension Activities

  • Write a report regarding bartering in colonial America. The colonists traded lumber, corn, nails, and many other items.
  • Write an essay regarding the use of wampum. The Native Americans used these shells for bartering.
  • Interview some older adults who bartered during the Great Depression of the 1930’s. Ask them what they traded, what they got in return, and how they set up the deals. Write a report about your interview(s).
  • Make a chart with illustrations of some of the earliest types of money: iron, gold, shells, grains, cloth, weapons, fish, tea, beads, diamonds, and fur.
  • Write a fictional story in which you trade a notebook for something else. Set up ten more trades in which you get a better item each time. End your story having bartered your way up to a bright red Porsche sports car or a 70-acre estate with a mansion and servants.
  • Write an essay describing 12 ways in which bartering can improve your teacher’s life.
  • Make up a story about the first barter deal which took place in history.
  • Write a song about bartering. The lyrics can be fun or serious. They can tell about a deal that you want to make.