How to Finance a War

Throughout history, governments have borrowed money to pay for their wars. Some used private financiers and others raised or implemented taxes. According to Wikipedia, the first use of the term “war bond” was during the War of 1812, but it was not aimed at the general public. During WWI, the U.S. sold nearly five billion dollars in war bonds.

To finance the United States entrance into WWII, War bonds had been on sale since May 1942, but the first of nine concerted campaigns began in November, with President Roosevelt purchasing the first bond. The drive’s goal of nine million dollars was exceeded and brought in thirteen million dollars. A snippet from FDR’s speech can be found on the National WWII website.

Just as athletes and well-known celebrities are used today as spokespersons for products, services, and organizations, the U.S. government sought the assistance of movie stars as well as famous fictional characters to appeal to the general public. Hollywood stars such as Kate Smith, Rita Hayworth, and Bette Davis traveled all over the country, appearing in person and on radio to make their appeals. Mickey Mouse and Popeye showed up on posters and in the news reels that preceding motion pictures.

Athletes such as Yogi Berra and Babe Ruth also did their part. Norman Rockwell created a series of illustrations distributed by The Saturday Evening Post, and Irving Berlin wrote “Any Bonds Today?” that became the Treasury Department’s National Defense Savings Program theme. Sold at 75% of their face value (from $25 to $10,000), installment plans were implemented that enabled employees to purchase bonds through payroll deduction. (When I worked at The Boeing Company in the late 1980s they still had this program in place.) There was a children’s installment plan as well that allowed kids to purchase twenty-five cent stamps that they pasted into a small booklet. When they had purchased $18.75 worth of stamps, they could exchange the book for a bond. State committee were created with volunteers canvasing for bonds door-to-door.

Contests were held with a variety of prizes awarded that are reported to include confiscated German canteens. Other prizes included a kiss from Hedy Lamarr, the horseshoes from Triple Crown winner Man O’ War, and Jack Benny’s violin. Some stadiums and movie theatres provided free admission with the purchase of a bond.

By the end of WWII, Americans had bought over $185 billion worth of bonds, and in 1980 the government retired the Series E (war bond) and replaced it with the EE Bond.

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A freelance writer for over ten years, Linda Shenton Matchett is the author of several romance novellas. Under Fire, the first in her trilogy about WWII War Correspondent/Amateur Sleuth Ruth Brown was released in July by eLectio Publishing. Visit Linda at www.LindaShentonMatchett.com.