Fifth graders learn to earn, spend, and budget in Exchange City

''Better than Disneyland!'' ''A paradise.'' ''Best place I've ever been.'' What in the world is drawing such rave reviews from Kansas City fifth graders? The focus of all that enthusiasm is not an amusement park or even a resort by the sea. It is a financial minitown with a strictly educational mission. Called Exchange City, it is housed in an old warehouse here and comes complete with stores, a City Hall, a radio station, and a ''grass'' plaza flanked by cardboard trees.

Fifth graders, at an age where they are often spending and earning their own money for the first time, eagerly await the day their class gets to run the town for a day.

The experience chalked up so far in the three years since Exchange City was started by a $100,000 grant from the Hallmark Educational Foundation seems to offer tangible proof that learning really can be fun.

''Write it out for $4 - checks only,'' yells an excited Shelly Moore to a customer in Jimerson's Jewelry Shop. A fifth grader at the Chinn School and one of 12,000 students who rate a day in Exchange City each year, Shelly is cranking out colorful buttons with the help of a small stamping machine. Her shop has just announced a special sale on the radio and customers are lining up.

One impression a visitor gets here is that everyone in Exchange City is in a hurry - whether the task at hand is munching on popcorn bought at the snack bar or writing a check for a pair of plastic space goggles from the gift shop. Reasons are several. Shop owners who have taken out bank loans in the morning are expected - with the help of their salaried clerks and bookkeepers and through occasional advertising - to pay off the loans with interest by day's end.

Each student is assigned a job, and salaries are paid in installments, just before each of three 15-minute breaks. To make the system work, all employees are urged to spend what they earn. To broaden their shopping experience, they must pay by check in some stores and in cash in others. This day goes so fast that the owner of the video game and computer shop has to resort to discounts and contests to attract his share of customers.

Some products are donated by supporting companies, but many items are made by students themselves.

Both the newspaper and the radio station carry ads. Chris Degan, who has the most coveted job in town this day as the RNR Rock Station's disc jockey, explains that his station also charges 50 cents for each record request. ''The hardest part of my job is the announcing,'' he says.

For added authenticity, the City Hall, which draws most of its income from taxes and fines, employs a mayor, city manager, policeman, judge, and environmental officer.

Judge Tim Grossman, whose bright red hair contrasts sharply with his black to-the-feet judicial robes, explains that he has had a busy day imposing fines on residents arrested by the police officer. Each group of fifth graders establishes its own laws - just as it picks its own shop names and prices - but some rules such as no pushing, no yelling, and no gum-chewing remain standard at the request of the management.

''We thought we might have discipline problems,'' says program director Ellen Pittman. ''Occasionally someone has to spend time with the receptionist, but the police officer can usually take care of it. If you spend most of your salary on fines, you can't buy much.''

Tim Grossman, who has received $5.50 in three installments and spent it all, notes proudly that the city government has already paid off its loans and that he even received a $5 raise. ''This is fun and you learn a lot,'' he says.

At the end of the day each store tallies its expenses and income. At a closing ceremony on the town plaza, First National Piggy Bank president Erin Smith hands out awards to the many stores that managed to pay back their loans. But he harbors no dreams about a banking career. ''No, thank you,'' he says. ''It's very hard work to make everything balance.''

The hope in this project, which carries a waiting list and includes a summer day camp for students who cannot get enough of it, is that students will become more aware of how their action as producers and consumers influences the economy. They learn that the checks they write may look like paper but must have money behind them and that they have limited resources to cover unlimited demands.

To anyone stopping in, all this may look like a one-day crash course. But for weeks before they come, students have talked about supply and demand, calculated interest on loans, and practiced writing checks. And follow-up discussion both in class and at home with the parents who work as program volunteers is encouraged.

Ms. Pitmann says parents tell her there is a greater appreciation of family financial problems as a result of Exchange City and that objective testing by the Midwest Research Institute shows that many points made are getting through. And in the next few months a traveling replica of the city will be packed into moving vans and set up for students in Leavenworth and Lawrence, Kan.

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