The United States needed money to finance the war effort when it declared war on Germany in April 1917. The Civil War had shown that just printing more money will result in inflation and economic problems. William G. McAdoo, Secretary of the Treasury and Chairman of the Federal Reserve, did not want to risk weakening the new US paper currency, which had just been in use since 1914, during World War I. As a result, McAdoo chose to raise one-third of the required funds from taxes and the remaining funds through fundraisers.
McAdoo announced the Liberty Loan Plan to sell Liberty Bonds to support the war on April 28, 1917, barely twenty-two days after the United States entered the war. The strategy was divided into three parts:
Appeal to patriotism in the United States, asking everyone from children to millionaires to cut back on personal spending in order to purchase bonds.
According to McAdoo, “To support our Noble sons who go out to die for us, we must be willing to give up something of personal convenience, something of personal comfort, something of our treasureall, if necessary, and our lives in the bargain.”
The smallest Liberty Bond denomination was $50, which was equal to two weeks’ pay for industrial workers. To make the bonds more accessible to the general public, a savings system was established, allowing anyone to purchase Thrift Stamps for 25 cents each and paste them onto a collection card. The card was traded for a $5 War Savings Stamp, which was fastened to a War Savings Certificate after it had sixteen stamps. A $50 Liberty Bond could be exchanged for ten certificates.
After the armistice, there were four Liberty Loan drives and one Victory Loan drive. Liberty Bonds were acquired by 20 million people by the end of the war. A total of $17 billion was raised through the issuance of Liberty Bonds, with an additional $8.8 billion raised through taxation.
The sale of Liberty Bonds necessitated the use of propaganda posters to promote the sale of the bonds. They instilled in Americans a sense of patriotism by informing them about the causes and probable costs of the conflict. The posters below show a variety of propaganda used by the government to persuade Americans to support the war effort. They’re the outcome of McAdoo’s conviction that “Any major conflict must be accompanied by a public uprising. It’s a crusade, and like all crusades, it’s carried along by a strong current of romanticism.”
In WWI, did they sell war bonds?
During times of war, a war bond is a debt instrument issued by the government as a means of borrowing money to fund defense programs and military endeavors. A war bond is simply a government loan. The War Finance Committee oversaw the sale of war bonds in the United States. War bonds were first issued as Liberty Bonds in 1917 to fund the United States government’s participation in World War I. They were originally known as Defense Bonds. The government raised $21.5 billion dollars for its war operations by selling these bonds.
In WWI, how much did war bonds cost?
In drafting the bond program’s goals, Henry Morgenthau Jr. enlisted the help of Peter Odegard, a political scientist who specialized in propaganda. Treasury began promoting the previously successful baby bonds as “defense bonds” on Odegard’s advice. Three new series of bond notes, Series E, F, and G, would be created, with Series E serving as “defense bonds” for individuals. They were sold for as little as $18.75 and matured in ten years, at which point the bondholder received a $25 payment from the US government. Large amounts of $50 to $1000 were also made available, all of which were non-negotiable bonds, unlike the Liberty Bonds of the First World War. If buying an entire bond at once was too onerous, 10-cent savings stamps could be purchased and saved in Treasury-approved stamp albums until the receiver had amassed enough stamps to buy a bond. After the Japanese attack on Pearl Harbor on December 7, 1941, which prompted the United States to enter the war, the bonds’ name was changed to War Bonds.
The War Finance Committee was tasked with overseeing the sale of all bonds, while the War Advertising Council encouraged voluntary bond purchases. Any Bonds Today?, a 1942 Warner Bros. theatrical cartoon, was one example of popular modern art used to advertise the bonds. During the first three years of the National Defense Savings Program, more than a quarter of a billion dollars in advertising was contributed. The government used popular culture to reach out to the population. The Four Freedoms painting series by Norman Rockwell was toured as part of a $132 million war bond campaign. Bond rallies with well-known celebrities, mainly Hollywood movie stars, were staged around the country to boost bond advertising effectiveness. Many movies at the time, particularly war dramas (which were themselves propaganda), featured a graphic during the closing credits urging viewers to “Buy War Bonds and Stamps,” which were sometimes sold in the theater lobby. The Music Publishers Protective Association pushed its members to incorporate patriotic statements like “Buy U.S. Bonds and Stamps” on the front of their sheet music. Approximately $185 billion in bonds were acquired by 85 million Americans during the duration of the war.
A 1945 Paramount film encouraged bond sales following World War II, and was named after the 1942 Hollywood Victory Caravan. Bing Crosby, Bob Hope, Alan Ladd, William Demarest, Franlin Pangborn, Barbara Stanwyck, Humphrey Bogart, and others were among those featured in the short film.
During World War II, the National Service Board for Religious Objectors sold civilian bonds in the United States, primarily to members of historic peace churches, as an alternative for people who couldn’t buy something that supported the war. These were regular US government bonds, not defense bonds. In total, 33,006 subscriptions worth $6.74 million were sold, largely to Mennonites, Brethren, and Quakers.
Who sold World War I Liberty Bonds?
Let’s go over everything again. During World War I, the United States government developed and marketed Liberty Bonds to help fund the American war effort. The bonds were a method for Americans to show their support for the war, even if they couldn’t fight. Between 1917 and 1919, the bonds were issued five times. When sales were initially slow because to the low rate of return, the government reacted by launching a large propaganda campaign in order to attract more support.
By the end of the war, over half of all Americans had purchased a war bond worth $5 to $100. Lower-income Americans could buy stamps in 25-cent increments until they could afford a $5 savings certificate, thanks to the government’s War Savings Certificate Stamps program. Another significant advantage of Liberty Bonds was that they encouraged Americans to begin investing on their own. However, one disadvantage was that they may have instilled too much confidence in the stock market, leading to the 1929 meltdown. Liberty Bonds were sold again to support World War II and to aid in the recovery following the terrorist attacks on September 11, 2001.
What is the current value of a war bond?
The United States Treasury offers a useful tool for calculating the value of your bonds. The bond’s series type (EE, E, I, or Savings Notes), denomination, and issue date must all be included. You can also provide the serial number of the bond. The bond’s total value, original issue price, total interest earned, and final maturity date will then be calculated by the calculator.
Let’s look at an example to see how much these bonds might be valued. Assume you own a $500 Series E bond issued in May 1941. That bond would be worth $1,811.80 today (January 2021) if it had generated $1,436.80 in interest, according to the calculator. You’ll also discover that it was purchased for $375 and matured in May 1981.
What was the purpose of selling war bonds?
During World War II, the US government spent $300 billion, or more than $4 trillion in today’s money. The majority of the funds had to be borrowed. The government issued savings bonds to fund the war. A savings bond is a mechanism for an American citizen to invest money by leasing it to the government; after a set length of time, the bond can be redeemed, or cashed in, with interest. Savings bonds sold to pay for the war were dubbed “war bonds” by the public.
War bonds had been sold to fund the United States’ participation in World War I, but World War II necessitated the government to borrow unprecedented sums of money. During the war, 85 million Americans bought bonds for a total of more than $180 billion. Children took part by purchasing little denomination stamps. “Bond drives” were organized by school and community groups. At rallies to sell bonds, celebrities appeared, and even record labels displayed reminders to buy war stamps and bonds.
Savings bonds also contributed to the war effort in another way. Because everyone was working now, everyone had money to spend, which was something that many people didn’t have during the Depression. However, supplies were scarce. Prices could have soared if people had battled for scarce items. The government kept inflation low during the war by convincing Americans that it was their patriotic duty to buy war bonds.
What is the value of a 1944 $25 war bond?
SEAGROVE, N.Y. In today’s environment, a $25 US savings bond may not be worth much. When it’s dated April 1944, however, all those years might add up to a lot of money.
Mona Rae Chriscoe of Seagrove had kept on to her savings bond, which had grown in value over the years “It has the date “April 5, 1944” stamped on it. “I preserved this one because it has sentimental importance,” she explained.
Mona Rae Ferree grew up in High Point with her parents and attended Oak Hill Elementary School. Evia High, her aunt, would give her quarters to purchase US savings stamps. She may trade stamps for bonds once she had amassed a sufficient number.
Her father relocated the family to Hampton, Virginia, after World War II began so he could work as an airplane mechanic at Langley Field. Mona continued to take her quarters to school in order to purchase stamps.
She and her mother, Alma Lee Ferree, were 9 years old when they exchanged stamps for a $25 savings bond. The issue price, according to the back side of the bond, was $18.75. A graph depicts how the value would increase over time until it reached its face value of $25 at maturity after ten years.
Chriscoe purchased numerous more savings bonds throughout those years, including one with a $100 face value. She finally cashed the other bonds, but kept the $25 bond she acquired in Hampton in April 1944.
The Ferrees returned to High Point after the war, then to a farm in Randolph County.
“Chriscoe, who graduated in 1953, stated, “I went to Brower (School) and then to Seagrove.”
She married Bobby Chriscoe after graduation and needed to decorate their new home. “When I got married, I cashed the $100 bond and went to Sears in High Point and bought a Coldspot refrigerator,” she explained.
“I had a fantastic childhood,” Chriscoe stated. “We could ride our bicycles or roller skate without fear of being attacked by someone. All of High Point’s mills were operating at full capacity, and everyone was glad to be there. It was a different era back then.”
Chriscoe just removed the savings bond from the box where she held it for years. “It’s been with me for a long time,” she stated, referring to the fact that she is approaching 75 years old.
The connection has been broken “On the top right and left corners, measure 25”. The image of George Washington is on the left, while the stamp on the right states that it was acquired on April 5, 1944, in Hampton, Virginia.
The words “typed on lines in the center” are typed on the lines in the center “Mrs. Alma Lee Ferree OR Miss Mona Rae Ferree” with their Hampton address listed underneath. The lower right corner has a serial number, while the lower left says that it’s a book “Series E War Savings Bonds.”
These sentences appear at the top center: “The United States of America will pay twenty-five dollars 10 years from the date of this instrument.”
Last Monday, Chriscoe took it to a bank, where the employees were very helpful “I was at a loss for what to do. They’d never seen one so ancient before.”
Chriscoe stated that a bank employee will investigate the savings bond’s worth and provide her documentation.
“She smiled, “I told them I wanted a million bucks for it, but they wouldn’t give it to me.”
She is still debating what to do with her savings bond, but she has some ideas: “Unless someone offers a large sum for it, I guess I’ll retain it.”
When President Franklin D. Roosevelt signed legislation on Feb. 1, 1935, allowing the Treasury Department to market the new type of security, U.S. savings bonds were established. The main objective of the bonds when the country entered World War II was to assist finance the war, and they were known as war savings bonds.
Savings stamps were sold in denominations of ten cents, twenty-five cents, fifty-five cents, one dollar, and five dollars, and were held in collecting booklets until enough were collected to convert for savings bonds. Back then, all proceeds went to the war effort.
Savings bonds remained popular with families after the war because they rose in value and were backed by the US government. They were promoted on television, in films, and in other advertising. There was a large enrolment in savings bonds when President John F. Kennedy encouraged Americans to acquire them.
Savings bonds were made accessible for purchase and redemption online by the Treasury Department in 2002. By 2012, banks and financial institutions had stopped selling them, leaving just http://www.treasurydirect.gov/ as a source of savings bonds.
$25, $50, $75, $100, $200, $500, $1,000, and $5,000 savings bonds are available. A buyer must wait at least 12 months after purchasing them before cashing them in. Maturity varies per denomination and can last up to 17 years. The longer you wait, the more interest you earn, up to a limit of 30 years, after which they stop earning interest.
Because the account is registered, if a savings bond is lost, stolen, or destroyed, the Treasury Department can replace it at no cost. Since the government no longer issues bonds in paper form, they can be valuable as collectibles.
You can compute the value of existing bonds on the US Treasury’s website, https://www.treasurydirect.gov/BC/SBCPrice. To find out how much a bond is worth and when it will mature, enter the Series (EE Bonds, I Bonds, E Bonds, or Savings Notes), the denomination, the serial number, and the issue date (in MM/YYYYY format).
Plugging in the information from Mona Chriscoe’s 1944 bond results in a value of $105.09. The original purchase price of the $25 bond was $18.75, therefore it earned $88.34 in interest, or over five times the original purchase price.
For a bond that is approximately 75 years old, that is a straight-up value that does not incorporate potential sentimental or collector’s worth.
Her bond had an ultimate maturity date of 1984, according to the website, meaning it earned interest for 40 years.
The TreasuryDirect website claims to be the first financial services website that allows customers to buy and redeem assets directly from the US Treasury Department in a paperless electronic format. The website was created by the Bureau of the Fiscal Service of the United States Department of the Treasury.
World War I
War bonds were made available to both retail and wholesale investors during World War I (WWI), with the goal of obtaining enough funds to fund the governments’ increasing military expenses. A massive propaganda operation was launched to appeal to the nation’s patriotism. The US government raised about $20 billion through the sale of four separate Liberty Bonds between 1917 and 1919.
The Liberty Bonds were not warmly accepted when they were first issued, and the bonds frequently traded below par value. In an attempt to fix the bond sales difficulty, the bonds were eventually re-issued at higher interest rates. In order to increase the popularity of the bonds, the government initiated a marketing effort. Famous people, like as Charlie Chaplin, took part in the effort to raise awareness of the bonds among the general public. Although the campaign was not totally effective, it did for the first time communicate the concept of financial securities to a significant number of individuals. In the end, commercial investors and financial institutions purchased Liberty Bonds for their investment potential rather than as a patriotic civic duty by regular investors.
World War II
During WWII, the US government issued war bonds known as Defense Bonds. After the attack on Pearl Harbor, they were renamed war bonds. The sale of war bonds in the United States helped the government raise $185 billion. Over 84 million Americans purchased bonds. The bonds were advertised all across the country, from sporting events to radio station promotions. The bond purchases were mostly motivated by patriotism and a sense of “doing one’s part” in the war.
Modern-Day War Bonds
Printing additional money is one of the strategies that governments utilize nowadays to pay increases in military spending. The disadvantage of printing more money is that it increases the money supply, which leads to inflation. To counteract the impacts of inflation, the government issues bonds, reducing the money supply and hence the inflationary pressure. This increases the pace with which the government may spend money on the military.
How War Bonds Work
For wartime, there is never enough time or preparedness. In general, governments want immediate access to huge quantities of finance during times of crisis. Conflict bonds are a mechanism for the government to borrow money from its citizens in order to fund greater military spending during times of war. As a result, they are attractive financial products during times of conflict, which are often associated with periods of inflation due to increased spending.
War bonds function similarly to regular government bonds, except they may pay a lower interest rate than the market rate. A bond is a fixed-income debt security that pays interest on a regular basis over a certain period of time. When the designated period of time comes to an end, the bond reaches maturity, and the bondholder receives the principal amount paid for the bond returned.
Who purchased war bonds?
When full employment collided with rationing during World War II, war bonds were considered as a mechanism to remove money from circulation while also reducing inflation.
They were originally known as Defense Bonds and were issued by the United States government.
After the Japanese attack on Pearl Harbor on December 7, 1941, the name was changed to War Bonds.
The bonds, known as debt instruments, were issued to fund military operations during wartime and yielded only 2.9 percent after a 10-year maturity.
During World War II, living in the United States on a median income meant earning around $2,000 per year.
Despite the difficulties of the war, 134 million Americans were invited to buy war bonds to help pay it.
Stamps, which start at ten cents each, can also be purchased to contribute to the bond.
Treasury Secretary Henry Morgenthau sold President Franklin D. Roosevelt the first Series ‘E’ US Savings Bond.
The bonds were sold for 75% of their face value in denominations ranging from $25 to $10,000, with some restrictions.
The war bonds were essentially a loan to the government to aid in the financing of the war effort.
The War Finance Committee was in charge of overseeing the sale of all bonds, while the War Advertising Council encouraged people to acquire bonds voluntarily.
The combined efforts of the two groups resulted in the most advertising ever created in the United States.
The public was constantly exhorted to acquire bonds in the sake of defending American liberty and democracy, as well as as safe havens for investment.
Advertising was used to make an emotional appeal to the population.
Despite the fact that the bonds paid a lower rate of return than the market, they constituted a moral and financial investment in the war effort.
The commercials began on the radio and in newspapers, and then expanded to include magazines in order to reach a wider audience.
The bond campaign was unique in that commercials were made by both the government and private enterprises.
Those that donated advertising space believed they were contributing even more to the war effort; others created their own war bond advertisements to show their patriotism.
To improve its appeal to Americans, the government enlisted the help of New York’s greatest advertising agencies, well-known entertainers, and even recognizable comic strip characters.
The New York Stock Exchange advised buyers not to cash in their bonds in their marketing.
During the first three years of the National Defense Savings Program, more than a quarter of a billion dollars in advertising was contributed.
Massive advertising campaigns made advantage of every available medium, and the campaign was a big success.
The word traveled swiftly; within only one month, polls showed that 90% of individuals polled were aware of war bonds.
Bonds became the ideal way for citizens at home to contribute to the nation’s defense.
To boost the advertising’s impact, Bond rallies were hosted across the country with well-known celebrities, generally Hollywood movie stars.
Free movie days were conducted in theaters across the country, with the purchase of a bond serving as entry.
Greer Garson, Bette Davis, and Rita Hayworth, among others, undertook seven tours in more than 300 cities and villages to support war bonds.
The “Stars Over America” bond blitz, which included 337 celebrities, exceeded its quota and collected $838,540,000 in bonds.
One promotional cardboard featured 75 quarter slots, totaling $18.75.
When it was full, it could be returned to the post office for a $25 war bond with a 10-year maturity.
With their own advertisements, local clubs, organizations, movie theaters, and hotels contributed as well.
Then there was the Civilian D-Day on June 6th, 1944, when tens of thousands of advertisements were dropped from the sky over Chicago in an attempt to catch the attention and hearts of potential donors.
Girl Scouts got engaged as well, with each scout providing one stamp.
These stamps, which cost 10 cents each, were then exchanged for war bonds through a nationwide organization.
In 1941, Norman Rockwell designed a series of pictures that became the focal point of war bond marketing. The Saturday Evening Post reprinted and distributed them, much to the delight of the public. While Norman Rockwell was the most well-known war bond artist, Irving Berlin was the most well-known composer. He wrote a song called “Any Bonds Today?” that became the theme song for the Treasury Department’s National Defense Savings Program. He is best known for his song “God Bless America.” The Andrew Sisters were one of the most well-known performers of this classic song.
A 16-hour marathon radio broadcast on CBS, during which approximately $40 million in bonds were sold, was one of the most successful single events.
Kate Smith, known for her rendition of “God Bless America,” performed during the marathon.
Purchases of war bonds could demonstrate patriotism and the spirit of sacrifice.
The war bond endeavor drew in millions of people.
The sports world contributed as well, with special football and baseball games featuring a war bond as the ticket fee.
The New York Yankees, New York Giants, and Brooklyn Dodgers played an odd baseball game in New York City.
In the same nine-inning contest, each side came to bat six times.
The Dodgers won 5 to 1 against the Yankees and 0 to 0 against the Giants, giving the US government $56,500,000 in war bond sales.
The last earnings from the Victory War Bond campaign were transferred into the US Treasury on January 3, 1946, at the end of World War II.
More than 85 million Americans, or half the population, bought $185.7 billion in bonds.
Those astounding achievements, thanks to mass selling initiatives that helped fund the war, have never been equaled since.
The Series E bond was phased out on June 30, 1980, and the Series EE bond took its place, making the War Bond a thing of the past.