A Lesson on Currency in America

A Lesson on Currency in America

“Money is money, and paper is paper” - Thomas Paine, apparently quoting a farmer.

What makes a person or a country wealthy?  What gives anything its value?  These are important questions that have troubled economists, historians, and philosophers for generations.  The U.S. is commonly considered to be the wealthiest nation in the world today, at least when articulated through Gross Domestic Product in United States Dollars – but both GDP and USD are modern concepts, which have developed historically.  The American concepts of wealth and money have changed over time.

In high school, where students are required to think critically about the face value of any concept, they ought also to question something as ubiquitous as the dollar – assess what the value of our currency is and examine how forms of currency in America have changed over time.

For homework, students should read what Thomas Paine has to say about paper currency (pages 43-53).  Paine – intelligent, articulate, and not particularly easy to confine to a set ideology – discusses the concept of money with an earnestness that is arguably lacking in modern discourse.  Nevertheless, he is very dismissive of “paper money” and spells out his reasons carefully.

On the other hand, Paine did think that “promissory notes” – such as those issued by the BNA – were acceptable (because, in his own words, that sort of paper note “continually points to the place and person where, and of whom, the money is to be had … and, as it were, unlocks its master’s chest and pays the bearer.”)  Many examples of this sort of currency are held in the Bank of North America Collection at HSP.  Sixty-two examples of those notes are available and digitized for this project. 

It should also be interesting to contrast Paine’s ideas about paper currency with those of his contemporary, Benjamin Franklin.  Franklin was arguably more optimistic about paper currency than Paine.  Throughout his public career and private enterprise, Franklin saw great usefulness in paper currency, and was concerned with issues of liquity and counterfeiting.

Essential Questions

How has social disagreement and collaboration been beneficial to American society?



The students will be able to:

  • analyze the historic development of currency by examining historic currency.
  • use primary and secondary sources to outline the different opinions of Benjamin Franklin and Thomas Paine concerning American currency.

This lesson fulfills Economics Standards as well as History ones detailed on the Unit Plan.

Big Ideas

  • Individuals and business entities participate in the economy in an effort to obtain desired goods and services to satisfy their needs and wants and to accumulate wealth


  • Most traditional, command, and market economic systems have evolved into mixed economies. 
  • An advanced economy such as the United States relies on financial capital, monetary policy, and extensive trade to promote economic expansion.


  • Explain why advanced economic systems are highly dependent on the availability of financial capital, an expanding monetary supply, and free trade to promote continuing economic development.

Other Materials

Primary Sources

From the Bank of North America Collection at the Historical Society of Pennsylvania:

Thomas Paine, Dissertations on Government, the Affairs of the Bank, and Paper-Money

Paper currency examples from HSP's Bank of North America Collection

Secondary Source

Farley Grubb, “Benjamin Franklin and the Birth of a Paper Money Economy," published by the Federal Reserve Bank of Philadelphia and the Library Company of Philadelphia.


Student Worksheet, Currency Analysis

Student Worksheet, Franklin vs. Paine

Suggested Instructional Procedures

  1. Teachers should ask students to reflect on what gives currency its value.
  2. Part I: Teachers should distribute each student a random piece of currency from the Bank of North America's collection of currency, and have the students research that piece of currency via the internet.  They should put their answers into the worksheet, which could be collected and graded.
  3. Part II: For homework, teachers should distribute the Ben Franklin and Thomas Paine readings (either in paper or electronic form) as well as the connected worksheet. Teachers should determine how many sentences/details should be entered into the Venn Diagram.  Students ought to find direct quotes to discuss from the text.
  4. In order to assess how well the students understood these sources, teachers can host a classroom debate:
    1. As a type of informal assessment, teachers should divide the classroom into three groups: Those who mostly support Paine, those who mostly support Franklin, and those who are completely undecided.  
    2. The students will each need to say to the class what it was that persuaded them.  
    3. At the end of this class discussion, whichever side has won the most "converts" to either opinions wins.


Banknote or Promissory note: A piece of paper that is issued from a bank, institution, or individual, promising the payment of a certain amount of money.

Representative Money: A paper certificate that denotes ownership of a specific commodity, such as gold.

Fiat Money: Currency that receives its value due to government regulation.  The modern American dollar -when appearing in paper form - is both a banknote and fiat money.

Hard Money: Considered to be the opposite of “fiat money,” i.e. currency that has its value independent of government decree, often represented in the form of “specie.”

Specie: Generally this word refers to coins, but in many cases the word “specie” specifically refers to coins that are examples of “hard money,” i.e., coins that are made out of valuable materials like gold or silver, which in turn determine the value of the coin itself.

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