Purpose of War Bonds
War bonds were issued to American citizens in 1941 by the U.S. government to help fund the United States' participation in World War II. These certificates were called defense bonds before WWII; after the United States entered the conflict, the it changed their name to war bonds. War bonds provided a secure and stable form of investment for decades until they mostly fell out of favor.
Other People Are Reading
-
History
-
Funding the U.S. Armed Forces during World War II was not an easy feat. During World War I, the United States lost millions of dollars when it issued "liberty bonds" to American citizens. Reasons for this loss include borrowers (other countries) who were not able to pay back their loans from the U.S. government and the fact that the U.S. government accepted payments at lower rates of interest than originally promised. Regardless of the past outcome with the liberty bonds, the U.S. government issued more bonds in WWII. Debt, inflation and defense expenditures limited the government's ability to fund this campaign; government officials knew that without the help of the American people they would not be successful.
Purpose
-
When World War II took place, the U.S. economy was still recovering from the Great Depression. One of the problems that the U.S. government faced was that its citizens didn't have a lot of money to help fund the war effort. So the government issued bonds to raise the money they needed to sustain their troops in Europe and Asia. They used famous celebrities of the time, businesses and an effective marketing campaign to influence U.S. citizens to purchase war bonds. According to the U.S. Department of the Treasury, this particular campaign for war bonds was considered a unique blend of nationalism and consumerism.
-
Savings Stamps
-
Savings stamps were a part of the campaign for getting Americans to buy bonds. One way that the U.S. government inspired financially strapped citizens to buy bonds was by getting them to buy savings stamps. They encouraged individuals to buy one stamp at a time, until they equaled the value of one war bond. Stamps were issued in denominations of 10 cents to $5. Poorer Americans could now participate in the war effort without causing them financial hardship. Patriotism and thrift were the platforms that the government used to promote savings stamps.
Sound Investment
-
War bonds generally had lower interest rates than most type of bonds, and the interest rates were fixed. They were exempt from state and local taxes, plus they were sold at three-fourths of their face value. Since the United States always pays its debt, the bonds are promptly paid upon maturity. Originally the bonds were set to mature within 10 years, and, in time, some of them had maturity dates that were extended to 30 or 40 years.
Series E
-
War bonds are series E bonds, and at the end of the Korean War they became known as savings bonds. Series E bonds were replaced by series EE bonds in 1980. Series E bonds will stop earning interest in the year 2010. War bonds were acquired by millions of American families during and after World War II. There were more than $68 billion in war bond purchases. Many of the bonds were bought in denominations of $25 to $1,000. Saving bonds lost their appeal to the public during the 1990s, when more investors began switching their focus to the stock market.
-
References
- Photo Credit war image by mark smith from Fotolia.com
More Like This
Comments
-
I have been looking for a collector of wwll memorabilia I have a book half full of stamps from the 40's to buy war bonds can any one help me?
