A Liberty Bond is a debt obligation issued jointly by the United States Treasury and the Federal Reserve. It was a war bond, sometimes known as a Liberty Loan, issued in four payments in 1917-18 to fund the United States’ participation in World War I and the Allied war effort in Europe.
What is the purpose of a Liberty Bond?
What were Liberty Bonds, and how did they work? The US government Liberty Bonds were a limited-edition series of US government bonds issued during WW1. Bonds are government-issued notes that are offered with the promise of repaying the money, plus interest, on a specific date.
What were Liberty Bonds used for? The primary goal of the Liberty Bonds was to raise funds for WW1, but they also urged Americans to save rather than spend during the wartime economy, which helped to contain inflation.
What was the purpose of Liberty Bonds? The Liberty Bonds were a direct and unconditional commitment by the United States to pay a certain sum of money in gold on a specific date, plus interest at a specific rate, until the bond matured or was called for redemption.
What contribution did Liberty Bonds make to the military effort? The Liberty Bonds sparked patriotism and gave Americans on the home front the feeling that they were helping the war effort. Propaganda operations for Liberty Bonds were widely used throughout WWI.
Fred Strothmann, an artist and cartoonist, drew the poster ‘Beat back the Hun with Liberty Bonds’ (1879-1958). Frederick Strothmann was born in Philadelphia, the son of German immigrants. He attended the Carl Hecker Art School in New York City, the Pennsylvania Academy of the Fine Arts, and the École Nationale Supérieure des Beaux-Arts in Paris. The ‘Beat back the Hun’ poster was one of the Committee on Public Information’s most effective (CPI). The graphic depicts the head of a bloodthirsty “Hun” (German) with piercing eyes, blood-stained fingers, and a bayonet, looking across the Atlantic Ocean at America. The Creel Committee encouraged anti-German sentiment and employed a range of fear-based propaganda techniques to spread their message.
What is the simple definition of Liberty Bonds?
A Liberty Bond is a debt obligation issued jointly by the United States Treasury and the Federal Reserve. It was a war bond, sometimes known as a Liberty Loan, issued in four payments in 1917-18 to fund the United States’ participation in World War I and the Allied war effort in Europe.
What role did Liberty Bonds play in World War One?
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.
Quiz: What are Liberty Bonds?
Interest-bearing certificates sold by the US government to fund the American World War I effort. espionage act. A statute that made it illegal to hinder the nation’s war effort and was used to suppress dissent and criticism during World War I.
Are Liberty Bonds still available?
Liberty Bonds were the first war bonds sold in the United States in 1917 to assist fund the United States’ participation in World War I. Liberty Bonds were last sold in 1918, but when war broke out in Europe again in 1939, the US government began planning to reissue Defense Bonds in order to prepare for the chance that the country may be drawn into the battle. Defense Bonds were renamed war bonds after the attack on Pearl Harbor and the United States’ entry into WWII.
What were the prices of Liberty Bonds?
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.”
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.
When did the First World War come to an end?
On November 11, 1918, Germany and the Allies reached an armistice agreement. Because of the massive bloodshed and damage, World War I was dubbed “the war to end all wars.”
Who would be urged to purchase a Liberty Bond?
The United States government issued a series of loans known as Liberty Bonds to fund the American military effort during World War I. During the conflict, the federal government provided a total of five distinct liberty loans. The Victory Bond was the name given to the fifth and final loan. By acquiring these bonds, private persons lent money to the government. If they couldn’t afford a bond, they could buy war stamps and savings certificates for less money. The government would repay the loans with interest at a later date, once the war was done.
Americans in Ohio, like the rest of the country, were encouraged to purchase these Liberty Bonds. Citizens were informed that it was their patriotic duty to buy bonds to support their military. To encourage residents to participate, many localities held special bond drives and tournaments. Ohioans bought 106 million dollars in Liberty Bonds in 1918, out of a total of two billion dollars sold nationwide.
What function did the Liberty Bonds poster serve?
The poster was designed to be dramatic in order to persuade the American public to continue to financially support the war by purchasing liberty bonds. It implies that purchasing liberty bonds will prevent the Germans from invading America. In actuality, the Germans had a slim possibility of invading the United States. They were preoccupied with fighting in Europe, and their ships were unable to pass through the English Channel. The poster’s power, like that of much war propaganda, was partly due to how well it touched into the public’s deepest fearsan enemy on one’s doorstep is undoubtedly a more tangible menace than one across the ocean. Looking at the red pattern on the boots, my colleague wondered if it was supposed to imitate a map, possibly implying territorial conquest. What are your thoughts?
John Warner Norton, the artist who designed the poster, had some military experience, having served with Theodore Roosevelt’s Rough Riders during the Spanish-American War a few decades before.
During World War I, Norton’s design was one of many that advertised Liberty Bonds. Here are two examples of persuasion that took a very different approach.