The History of Our Nation's First Central Bank

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The History of Our Nation's First Central Bank

This first lesson focuses on how and why our first bank was started and financed. Students will see the bank in the context of the Revolutionary War and the importance of our founding fathers, while learning important financial literacy concepts such as loans, investing, and deposit/withdrawal.

This lesson aligns with the state standards, Common Core standards and Financial Literacy standards. It is meant as an overview of the basic functions of a bank and its role in the founding of the United States before diving more into financial literacy and currency in the following lessons. Providing students with an understanding of our economic history will help them understand both the functions of a bank and their own personal finances. Activities are included  and can be used in conjunction with any of the lessons within this unit.

Essential Questions

How does continuity and change within the United States history influence your community today?

Objectives

Students will be able to:

  1. Understand the concepts of investing and saving based on the financial literacy standards.
  2. Learn an example of continuity and change in United States history by observing how our first bank influenced the Revolutionary War.

Other Materials

The History of Our Nation's First Central Bank PowerPoint

Investors Board Game:
Directions / Character Page for Students
Money Cards / Event Cards

How to Make Your Own Paper

Primary Sources:

Continental Currency: Fifty Dollars

Continental Currency: Eight Dollars

Continental Currency: Five Dollars

Continental Currency: Three Dollars

Ten Shillings

Suggested Instructional Procedures

  1. Begin with background knowledge on banks and pre-lesson connection questions. The questions should apply to the students' lives today and get them thinking about banks. Depending on the previous knowledge of your class, a questions could include having students write down what they think a bank is and what it does. Have a short discussion and share some answers with the class and explain that the lesson today will be learning how our first bank was started. This lesson is meant as an overview and the instructions can act as a guide based on grade level/competency level of students.
  2. Slide 2: Explain to students that the first bank was started during the Revolutionary War. As a result of this war, the United States gained Independence from Britain, meaning it became its own country rather than colonies of Great Britain. The War was fought between the American Colonies and Great Britain.
    1. To put students in the context of when the War began, tell them it happened over 200 years ago, which is roughly 7-8 “great-grandparents” ago. It is often helpful to show a picture from the time period.   You may use images from the PowerPoint, and explain that photography was not invented yet, so all images are painted.
    2. Focus on the vocabulary words to help set up a context for the students. Explain that without the creation of the bank, we could not have paid the soldiers to fight the war.
  3. Slide 3: The Founding Fathers are often considered the men who signed the Declaration of Independence. It is up to the teacher how much history to cover, but it would be interesting for the students to know a little bit more about Hamilton and Morris.

 For additional content visit history.com for Hamilton and National Constitution Center for Morris.

  1. Slide 4: It is important for students to understand the idea of investing and what it means to make an investment. Also, emphasize that if somebody receives or gives a loan that the money needs to be paid back. (See follow up activity: Investor’s Board Game)
    1. To check for understanding, ask students if this is a loan or an investment.
      1. You give a friend 50 dollars that they will have to pay back.
      2. You give a friend 50 dollars to help them begin a new company of which you will be a part.
  2. Slide 5: This is a brief overview of the use of a bank. Have a quick conversation about how the money looks different from our money today and about what shops are near the bank.
    1. To check for understanding, ask students the following questions:
      1.  If you put a check into your bank account for ten dollar, are you depositing or withdrawing?
      2. If you go to the store and use your credit card to buy a t-shirt, are you depositing or withdrawing?
  3. Slide 6: This is how you create actual paper money. As a science experiment, you can use old newspapers to make your own paper in class.

You can find a simple method using old newspaper here.

  1. Slide 7: If you decide to make your own paper, you can follow these steps to create currency out of it as well. Or you can discuss how Benjamin Franklin was a printer during this time and printed some of the money. Also have students take note of how much the money pictured is worth. Explain that England has a different money system; they used shillings, which no longer exist. There were 20 shillings per pound and 12 pence per shilling. (Very confusing.)
  2. Slide 8: This slide reiterates how the bank helped win the War by financing the soldiers. Use the image to discuss how people dressed then, and ask what they notice that is different from today. For example, why did the Declaration have to be read out loud?
  3. Finish up with a recap of everything that was discussed. Use supplemental activities as needed/appropriate.

Vocabulary

Bank account: A personal place within a bank to deposit money and make withdrawals.

Benjamin Franklin: A major figure in the founding of our nation. He was involved in science, politics, and finance, and helped gain the support of the French during the Revolutionary War.

Charter: A written agreement that says how an organization will be run.

Colonial period: The time in American history when we were ruled by Great Britain.

Colonies: A group of people who settle in a new place but are often still governed by their homeland.

Continental Army: The army George Washington led during the American Revolution.

Currency: Paper or coin money.

Deposit: To put something somewhere, such as putting money in a bank.

Finance:Tto give money for a project.

Founder: A person who invests their time or money to start something new.

Founding Father:  A man who played an important role in the creation of our U.S. government.

Fund: To provide money for something.

Invest: To place your time or money into something you believe is important.

Investor: Somebody who provides money or resources for a specific cause or group.

Loan: Money given temporarily that needs to be repaid.

Mint:  place where coins are made.

Revolutionary War: The war we fought against Great Britain to form The United States of America (1775-1783).

Withdraw: To take something out. Money can be withdrawn from a bank account.