This document describes research which examined the principles of reward and punishment applied to certain types of behavior portrayed by characters illustrated in 30 school readers. It was hypothesized that certain portrayed values, which have political connotations, are being transmitted to young people through the indirect method of socialization. Other research has shown that children will mimic behavior which they see being rewarded, and that they will not do things which they see being punished. The material analyzed consisted of the 1973 through 1977 school readers adopted for the state of Indiana for grades one through three. The stories contained seven exhibited forms of behavior: humanitarianism, dependence, dominance, obedience, selfishness, defiance, and individualism. Analysis of consequences of actions in the stories showed that punishments and rewards were consistently given in response to the seven forms of behavior. Thus it was concluded that the readers are transmitting to young people, through the method of rewards and punishment, certain values and modes of behavior which are in most instances consistent with democratic principles. However, one must also consider the simultaneous effects of family, peer groups, and mass media on children's development. (Author/AV)