View source for War bond

{{Short description|Government debt security issued to finance wartime expenditure}}
[[Image:Put it into National War Bonds.jpg|thumb|United Kingdom national war bond advertisement (1918)]]

'''War bonds''' (sometimes referred to as '''victory bonds''', particularly in [[propaganda]]) are [[Security (finance)#Debt|debt securities]] issued by a government to finance military operations and other expenditure in times of war without raising taxes to an unpopular level. They are also a means to control [[inflation]] by removing money from circulation in a stimulated [[wartime economy]].<ref>{{cite web |title=War Bond Stamp Book from World War II |url=https://www.moaf.org/exhibits/checks_balances/franklin-roosevelt/war-bond-stamp-book |website=Museum of American Finance |access-date=6 May 2021}}</ref>  War bonds are either retail bonds marketed directly to the public or wholesale bonds traded on a stock market. Exhortations to buy war bonds have often been accompanied by appeals to [[patriotism]] and [[conscience]]. Retail war bonds, like other retail bonds, tend to have a yield which is below that offered by the market and are often made available in a wide range of denominations to make them affordable for all citizens.

==Before World War I==
[[File:1847 $1,000 6% Loan .jpg|thumb|$1000 U.S. government loan for the Mexican–American War]]

Governments throughout history have needed to borrow money to fight wars. Traditionally they dealt with a small group of rich financiers such as [[Jakob Fugger]] and [[Nathan Mayer Rothschild|Nathan Rothschild]], but no particular distinction was made between debt incurred in war or peace. An early use of the term "war bond" was for the ${{formatprice|11000000}} raised by the US Congress in an Act of 14 March 1812, to fund the [[War of 1812]], but this was not aimed at the general public. Until July 2015, perhaps the oldest bonds still outstanding as a result of war were the British [[Consol (bond)|Consols]], some of which were the result of the refinancing of incurring debts during the Napoleonic Wars, but these were redeemed following the passing of the [[Finance Act 2015]].<ref>{{cite web |url=http://www.dmo.gov.uk/index.aspx?page=gilts/about_gilts |title=About Gilts |publisher=UK Debt Management Office |access-date=2015-11-04 |url-status=dead |archive-url=https://web.archive.org/web/20161110155438/http://dmo.gov.uk/index.aspx?page=gilts%2Fabout_gilts |archive-date=2016-11-10 }}</ref><ref>{{Cite legislation UK |type=act |year=2015 |chapter=11 |act=Finance Act 2015 |section=124}}</ref>

==World War I==
===Austria and Hungary===
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The government of [[Austria-Hungary]] knew from the early days of the [[World War I|First World War]] that it could not count on advances from its principal banking institutions to meet the growing costs of the war. Instead, it implemented a war finance policy modeled upon that of Germany:<ref name="Bogart 240">[[#Reference-Bogart|Bogart]], p. 240</ref> in November 1914, the first funded loan was issued.<ref name="Bogart 239"/> As in Germany, the Austro-Hungarian loans followed a prearranged plan and were issued at half yearly intervals every November and May. The first Austrian bonds paid 5% interest and had a five-year term. The smallest bond denomination available was 100 [[Austro-Hungarian krone|kronen]].<ref name="Bogart 239">[[#Reference-Bogart|Bogart]], p. 239</ref>

Hungary issued loans separately from Austria in 1919, after the war and after it had separated from Austria, in the form of stocks that permitted the subscriber to demand repayment after a year's notice. Interest was fixed at 6%, and the smallest denomination was 50 [[Hungarian korona|korona]].<ref name="Bogart 239"/> Subscriptions to the first Austrian bond issue amounted to ${{formatprice|440200000}}; those of the first Hungarian issue amounted to ${{formatprice|235000000}}.<ref name="Bogart 239"/>

The limited financial resources of children were tapped through campaigns in schools. The initial minimum Austrian bond denomination of 100 kronen still exceeded the means of most children,<ref name="Healy 244">Healy, p. 244</ref> so the third bond issue, in 1915, introduced a scheme whereby children could donate a small amount and take out a bank loan to cover the rest of the 100 kronen.<ref name="Healy 244"/> The initiative was immensely successful, eliciting funds and encouraging loyalty to the state and its future among Austro-Hungarian youth.<ref name="Healy 244"/> Over {{Formatprice|13000000}} kronen was collected in the first three "child bond" issues.<ref name="Healy 244"/>

===Canada===
{{Further|Canada Savings Bond#History}}
[[Canada in World War II|Canada's involvement in the First World War]] began in 1914, with Canadian war bonds called "Victory Bonds" after 1917.<ref>{{cite news|url=http://www.cbc.ca/news/background/canada-savings-bonds/ |title=CBC News In Depth: Canada Savings Bonds |publisher=CBC |date=2007-10-03 |access-date=2010-08-16 |url-status=dead |archive-url=https://web.archive.org/web/20100811095309/http://www.cbc.ca/news/background/canada-savings-bonds/ |archive-date=August 11, 2010 }}</ref> The first domestic war loan was raised in November 1915, but not until the fourth campaign of November 1917 was the term Victory Loan applied. The First Victory Loan was a 5.5% issue of 5, 10 and 20 year gold bonds in denominations as small as $50. It was quickly oversubscribed, collecting ${{Format price|398000000}} or about $50 per capita. The Second and Third Victory Loans were floated in 1918 and 1919, bringing another ${{format price|1340000000}}.<ref>{{cite encyclopedia|title=Victory Loans |url=http://www.thecanadianencyclopedia.ca/en/article/victory-loans/ <!--Bot repaired link--> |first=Norman |last=Hillier |encyclopedia=The Canadian Encyclopedia |publisher=Historica-Dominion |access-date=2009-12-12}}</ref> For those who could not afford to buy Victory Bonds, the government also issued War Savings Certificates.{{citation needed|date=June 2013}} The government awarded communities who bought large amounts of bonds Victory Loan Honour Flags.<ref name="WDL">{{cite web |url = http://www.wdl.org/en/item/4532/ |title = 4 Reasons for Buying Victory Bonds |website = [[World Digital Library]] |year = 1917 |access-date = 2013-06-30 }}</ref>

===Germany===
[[Image:So hilft dein Geld.jpg|thumb|upright|German war bonds by [[Lucian Bernhard]]]]
Unlike France and Britain, at the outbreak of the First World War Germany found itself largely excluded from international financial markets.<ref name="Chickering 104">[[#Reference-Chickering1|Chickering (2004)]], p. 104</ref> This became most apparent after an attempt to float a major loan on Wall Street failed in 1914.<ref name="Chickering 104"/> As such, Germany was largely limited to domestic borrowing, which was induced by a series of war credit bills passing the [[Reichstag (German Empire)|Reichstag]].<ref name="NYT 28Oct1916">{{cite web|url=https://timesmachine.nytimes.com/timesmachine/1915/08/04/104651381.pdf |title=Reichstag Receives $2,856,000,000 Bill |work=The New York Times |date=1916-10-28 |access-date=2011-07-12}}</ref> This took place in many forms; however, the most publicised were the public war bond ({{lang|de|Kriegsanleihe}}) drives.<ref name="Chickering 104"/>

Nine bond drives were conducted over the length of the war and, as in Austria-Hungary, the loans were issued at six-month intervals. The drives themselves would often last several weeks, during which there was extensive use of propaganda via all possible media.<ref name="Chickering 196">[[#Reference-Chickering2|Chickering (2007)]], p. 196</ref> Most bonds had a rate of return of 5% and were redeemable over a ten-year period, in semi-annual payments.<ref name="Chickering 104"/> Like war bonds in other countries, the German war bonds drives were designed to be extravagant displays of patriotism and the bonds were sold through banks, post offices and other financial institutions.<ref name="Chickering 104"/>

As in other countries, the majority investors were not individuals but institutions and large corporations.<ref name="Chickering 198">[[#Reference-Chickering2|Chickering (2007)]], p. 198</ref> Industries, university endowments, local banks and even city governments were the prime investors in the war bonds.<ref name="Chickering 198"/> In part because of intense public pressure and in part due to patriotic commitment the bond drives proved extremely successful, raising approximately {{formatprice|10000000000}} marks in funds.<ref name="Chickering 105">[[#Reference-Chickering1|Chickering (2004)]], p. 105</ref> Although extremely successful the war bond drives only covered two-thirds of war-related expenditures.<ref name="Chickering 105"/> Meanwhile, the interest payable on the bonds represented a growing expense which required further resources to pay it.<ref name="Chickering 105"/>

===United Kingdom===
[[File:The British Sovereign Will Win Invest in the War Loan To-Day poster stamp.JPG|thumb|upright|''The British Sovereign Will Win / Invest in the War Loan To-Day''. A British publicity label from World War One.]]
In August 1914, the gold reserves of the Bank of England, and effectively of all banking institutions in Great Britain, amounted to £{{Formatprice|9000000}}.<ref name=Johnston>{{cite book | first=Thomas | last=Johnston | author-link=Tom Johnston (Scottish politician) | title= The Financiers And The Nation | year=1934 | publisher=Methuen | location=London | url=https://archive.org/details/financiersandthe033017mbp | pages=[https://archive.org/details/financiersandthe033017mbp/page/n62 45]–52}}</ref> The banks feared the declaration of war would trigger a run on the banks, so the Chancellor [[David Lloyd George]] extended the August [[bank holiday]] for three days to allow time for the passing of the [[Currency and Bank Notes Act 1914]], by which Britain left the [[gold standard]]. Under this Act the Treasury issued £{{Formatprice|300000000}} (equivalent to £{{Formatprice|{{Inflation|UK|300000000|1914|2013}}}} in 2013) of paper banknotes, without the backing of gold, with which the banks could repay their obligations.<ref name=Johnston /> Leading banker [[Walter Leaf]] described these Treasury notes as "essentially a War Loan free of interest, for an unlimited period, and as such was a highly profitable expedient from the point of view of the Government".<ref>{{cite book | title= Banking | series = Home university library of modern knowledge | first=Walter | last=Leaf | publisher = H. Holt and Company | url=https://books.google.com/books?id=bLVJAAAAIAAJ&q=%22expedient+from%22 | page=46 | year=1927}}</ref>

The first interest-bearing War Loan was issued in November 1914 at an interest rate of 3.5%, to be redeemed at [[par value]] in 1925–28. It raised £{{Formatprice|332500000}}; £{{Formatprice|350000000}} at face value as it was issued at a 5% discount.<ref name=LloydGeorge>{{cite book | first=David | last=Lloyd George | title=War Memoirs Volume I | year=1938 | publisher=Odhams Press | location=London | url=https://archive.org/details/warmemoirsvolume035284mbp | pages=[https://archive.org/details/warmemoirsvolume035284mbp/page/n110 73]–4}}</ref>  It was revealed in 2017 that public subscriptions amounted to £91m, and the balance had been subscribed by the Bank of England, under the names of then governor, [[John Gordon Nairne]], and his deputy [[Ernest Harvey (cashier)|Ernest Harvey]].<ref>{{Cite news|work=The Times|date=8 August 2017|page=20|title=Bank governor covered up failure of war bonds}}</ref>  It was followed by £{{Formatprice|901000000}} of a second War Loan in June 1915, at 4.5%. £{{Formatprice|17600000}} of this was accounted for by conversion of the 3.5% issue, and a further £{{Formatprice|138000000}} by holders of 2.5% and 2.75% [[Consols]], who were also allowed to transfer to the higher interest rate.<ref name=Johnston /><!-- Lloyd George says £570m new money, £276.5m conversions --> The government also pledged that if they issued War Loans at even higher interest, holders of the 4.5% bonds might also convert to the new rate.<ref name=Johnston /> In his memoirs Lloyd George stated his regret that his successor [[Reginald McKenna]] increased the interest rate at a time when investors had few alternatives. Not only did it directly increase the nation's annual interest payments by £{{Formatprice|100000000}} but it meant interest rates were higher throughout the economy during the [[Economic history of the United Kingdom#Postwar stagnation|post-war depression]].<ref name=LloydGeorge />

Compared to France, the British government relied more on short-term financing in the form of treasury bills and exchequer bonds during World War I.<ref name=Horn82>{{cite book | title=Britain, France, and the financing of the First World War | first= Martin | last= Horn | publisher = McGill-Queen's Press | year=2002 | isbn=978-0-7735-2294-7 |url=https://books.google.com/books?id=H1l8CHbZG74C&pg=PA82 | page=82}}</ref> Treasury bills provided the bulk of British government funds in 1916, and were available for terms of 3, 6, 9 and 12 months at an interest rate of 5%.<ref name=Horn82 /> Although these were not formally designated as war bonds, advertising was explicit about their purpose. This April 1916 advertisement for 5% Exchequer bonds was typical of the time: "Lend Your Money to Your Country. The soldier does not grudge offering his life to his country. He offers it freely, for his life may be the price of Victory. But Victory cannot be won without money as well as men, and your money is needed. Unlike the soldier, the investor runs no risk. If you invest in Exchequer Bonds your money, capital and interest alike, is secured on the Consolidated Fund of the United Kingdom, the premier security of the world."<ref>{{cite news | title=Lend your Money to your Country | url=https://news.google.com/newspapers?nid=2507&dat=19160413&id=hMdAAAAAIBAJ&pg=6303,4185074 | page=9 | newspaper=The Glasgow Herald | date= April 13, 1916}}</ref>

Policy changed when [[H. H. Asquith|Asquith]]'s government fell in December 1916 and [[Bonar Law]] became Chancellor in the new [[United Kingdom coalition government (1916–1922)|coalition government]]. The third War Loan was launched in January 1917 at a 5% discount to face value and paying 5% interest (or 4% tax-free for 25 years), a rate Lloyd George described as "penal".<ref name=LloydGeorge /> Holders of existing War Loans, Treasury Bills and War Expenditure Certificates could convert to the 5% issue.<ref name=Johnston /> Of the £{{Formatprice|2075250000}} raised by the 5% War Loan,<ref>Another £{{Formatprice|52000000}} was raised from the 4% tax-free issue in 1917.</ref> only £{{Formatprice|844750000}} was new money; the rest was conversions of £{{Formatprice|820000000}} of 4.5% Loan, £{{Formatprice|280500000}} of Exchequer Bonds and £{{Formatprice|130000000}} of Treasury Bills.<ref name=Johnston /> Labour politician [[Tom Johnston (Scottish politician)|Tom Johnston]] would later write of the 1917 War Loan "No foreign conqueror could have devised a more complete robbery and enslavement of the British Nation".<ref name=Johnston />

On 30 June 1932 [[Neville Chamberlain]] announced that the Government would exercise its right to call in the 5% War Loan, offering a choice of taking cash or continuing the loan at 3.5%.<ref name=Hansard19320630>{{citation | url=https://api.parliament.uk/historic-hansard/commons/1932/jun/30/me-chamberlains-statement | date=30 June 1932 | title = Mr. chamberlain's statement | journal = Hansard | volume = 267 | pages=2121–26}}</ref> Although they were obliged to give 90 days' notice of such a change, a 1% tax-free cash bonus was offered to holders who acted by 31 July.<ref name=Hansard19320630 /> This conversion saved the government about £{{Formatprice|23000000}} net per year.<ref name=Hansard19320630 /> On 3 December 2014 the UK Government announced it would redeem the outstanding war loans on 9 March 2015.<ref>{{cite web|title=Press notice Redemption of 3½% War Loan|url=http://www.dmo.gov.uk/documentview.aspx?docName=/gilts/press/pr031214.pdf|author=United Kingdom Debt Management Office|date=3 December 2014|access-date=23 September 2017|archive-url=https://web.archive.org/web/20170923194237/http://www.dmo.gov.uk/documentview.aspx?docName=%2Fgilts%2Fpress%2Fpr031214.pdf|archive-date=2017-09-23|url-status=dead}}</ref>

===United States===
{{Main|Liberty bond}}
[[Image:LibertyBond-WinsorMcCay.jpg|thumb|upright|Advertising poster for [[World War I]] Liberty Bonds]]
In 1917 and 1918, the United States government issued Liberty Bonds to raise money for its involvement in World War 1. An aggressive campaign was created by [[Secretary of the Treasury]] [[William Gibbs McAdoo]] to popularize the bonds, grounded largely as patriotic appeals.<ref name="Kimble 15">[[#Reference-Kimble|Kimble]], p.15</ref> The Treasury Department worked closely with the [[Committee on Public Information]] in developing Liberty Bond campaigns.<ref name="Kimble 16">[[#Reference-Kimble|Kimble]], p.16</ref> The resulting propaganda messages often borrowed heavily from military colloquial speech.<ref name="Kimble 16"/>

The government used famous artists to make posters and used movie and stage stars to host bond rallies.  [[Al Jolson]], [[Ethel Barrymore]], [[Marie Dressler]], [[Elsie Janis]], [[Theda Bara]], [[Fatty Arbuckle]], [[Mabel Normand]], [[Mary Pickford]], [[Douglas Fairbanks]] and [[Charlie Chaplin]] were among the celebrities who made public appearances promoting the patriotic element of purchasing Liberty Bonds.<ref>''Gale Encyclopedia of U.S. Economic History''</ref> Chaplin also made a short film, ''[[The Bond]]'', at his own expense for the drive.<ref>{{cite book |last=Chaplin |first=Charlie |title=My Autobiography |url=https://archive.org/details/myautobiography00chaprich |url-access=registration |year=1964|publisher=New York, Simon and Schuster }}</ref> Even the [[Boy Scouts of America|Boy Scouts]] and [[Girl Scouts of the USA|Girl Scouts]] sold bonds under the slogan "Every Scout to Save a Soldier". The campaign spurred community efforts across the country to sell the bonds and was a great success resulting in over-subscriptions to the second, third, and fourth bond issues.<ref>'' New York Times'', March 27, 1918, page 4.</ref> According to the [[Massachusetts Historical Society]], "Because the first World War cost the federal government more than ${{Formatprice|30000000000}} (by way of comparison, total federal expenditures in 1913 were only ${{Formatprice|970000000}}), these programs became vital as a way to raise funds."<ref>{{cite web | url = http://www.masshist.org/cabinet/june2002/stamps.htm | title = Focus on: Women and War | year = 2002 | publisher = [[Massachusetts Historical Society]] | access-date = 2006-10-18 |archive-url = https://web.archive.org/web/20060520153713/http://www.masshist.org/cabinet/june2002/stamps.htm <!-- Bot retrieved archive --> |archive-date = 2006-05-20}}</ref>

==World War II==
{{anchor|Canada in WWII}}
===Canada===
[[File:GiveUsTheTools.jpg|thumb|right|upright|[[A. J. Casson]]'s Canadian Victory Bonds poster ''Give Us The Tools'' 1941]]
[[File:News. First Victory Bond in N.D.G BAnQ P48S1P09334.jpg|left|thumb|Victory Bond sales in Montreal in 1943]]
[[Military history of Canada during World War II|Canada's involvement in the Second World War]] began when Canada declared war on [[Nazi Germany]] on September 10, 1939, one week after the United Kingdom. Approximately half of the Canadian war cost was covered by War Savings Certificates and war bonds known as "Victory Bonds" as in World War I.<ref name="Keshen 31">[[#Reference-Keshen|Keshen]], p. 31</ref> War Savings Certificates began selling in May 1940 and were sold door-to-door by volunteers as well as at banks, post offices, trust companies and other authorised dealers.<ref name="Keshen 31"/> The certificates matured after seven years, providing a return of $5 for every $4 invested. Initially, individual ownership was limited to $500 in maturities per year, though this cap was later raised to $600.<ref>{{cite web |title=You Save by Serving |url=https://dai.mun.ca/PDFs/cns_tools/WarSavingsCertificatesInformationBooklet.pdf |website=wartimecanada.c |access-date=5 November 2024}}</ref> Although the effort raised ${{Formatprice|318000000}} in funds and was successful in financially involving millions of Canadians in the war effort, it only provided the Government of Canada with a fraction of what was needed.<ref name="Keshen 31"/>

The sale of Victory Bonds proved far more successful financially. There were ten wartime and one postwar Victory Bond drives. Unlike the War Savings Certificates, there was no purchase limit to Victory Bonds.<ref name="Keshen 31"/> The bonds were issued with maturities of between six and fourteen years with interest rates ranging from 1.5% for short-term bonds and 3% for long-term bonds and were issued in denominations of between $50 and $100,000.<ref name="Keshen 31"/> Canadians bought ${{Formatprice|12500000000}} worth of Victory Bonds or some $550 per capita with businesses accounting for half of all Victory Bond sales.<ref name="Keshen 31"/> The first Victory Bond issue in February 1940 met its goal of ${{Formatprice|20000000}} in less than 48 hours, the second issue in September 1940 reaching its goal of ${{Formatprice|30000000}} almost as quickly.<ref name="Keshen 32">[[#Reference-Keshen|Keshen]], p. 32</ref>

When it became apparent that the war would last a number of years the war bond and certificate programs were organised more formally under the [[National War Finance Committee]] in December 1941, directed initially by the president of the [[Bank of Montreal]] and subsequently by the Governor of the [[Bank of Canada]].<ref name="Keshen 32"/> Under the more honed direction the committee developed strategies, propaganda and the wide recruitment of volunteers for bonds drives. Bond drives took place every six months during which no other organization was permitted to solicit the public for money.<ref name="Keshen 32"/> The government spent over ${{Formatprice|3000000}} on marketing which employed posters, direct mailing, movie trailers (including some by Walt Disney in cooperation with the newly established [[National Film Board of Canada]]'s animation department that the former partner helped establish),<ref name="disney">{{cite web |last1=Walt Disney Studios |title=All Together |url=https://archive.org/details/AllTogether |website=archive.org |publisher=National Film Board of Canada |access-date=23 January 2020 |ref=disney |language=en |date=1941}}</ref> radio commercials and full page advertisements in most major daily newspapers and weekly magazines.<ref name="Keshen 33">[[#Reference-Keshen|Keshen]], p.33</ref> Realistic staged military invasions, such as the [[If Day]] scenario in [[Winnipeg]], [[Manitoba]], were even employed to raise awareness and shock citizens into purchasing bonds.<ref name="Keshen 34">[[#Reference-Keshen|Keshen]], p. 34</ref>

===Germany===
The [[Nazi Germany|Nazi regime]] never attempted to convince the general populace to buy long-term war bonds as had been done during the First World War.<ref name="Aly 294">[[#Reference-Aly|Aly & Chase]], p. 294</ref> The Reich government did not want to present any perceived form of public referendum on the war, which would be the indirect result if a bond drive did poorly.<ref name="Aly 298">[[#Reference-Aly|Aly & Chase]], p. 298</ref> Rather, the regime financed its war efforts by borrowing directly from financial institutions, using short-term war bonds as collateral.<ref name="Aly 294"/> German bankers, with no demonstration of resistance, agreed to taking state bonds into their portfolios.<ref name="Aly 294"/> Financial institutions transferred their money to the Finance Department in exchange for promissory notes. Through this strategy, 40 million bank and investment accounts were quietly converted into war bonds, providing the Reich government with a continuous supply of money.<ref name="Aly 295">[[#Reference-Aly|Aly & Chase]], p. 295</ref> Likewise, German bank commissioners compelled occupied Czechoslovakia to buy up German war bonds. By the end of the war, German war bonds accounted for 70% of investments held by [[Czechoslovakia|Czechoslovak]] banks.<ref name="Aly 295"/>

===United Kingdom===
In the United Kingdom, the [[National Savings Movement]] was instrumental in raising funds for the [[war effort]] during both world wars. During World War II a ''War Savings Campaign'' was set up by the [[War Office]] to support the war effort. ''Local savings weeks'' were held which were promoted with posters with titles such as "Lend to Defend the Right to Be Free", "Save Your Way to Victory" and "War Savings Are Warships".

===United States=== <!-- The article "Hedy Lamarr" links here. -->
{{see also|Series E bond}}

[[File:1941-05-01 President Buys First Bond.ogv|thumb|President [[Franklin D. Roosevelt]] introduces the Series E Bond.]]
By the summer of 1940, the victories of [[Nazi Germany]] against [[Nazi invasion of Poland|Poland]], [[Nazi invasion of Denmark|Denmark]], [[Nazi invasion of Norway|Norway]], [[Nazi invasion of Belgium|Belgium]], the [[Nazi invasion of the Netherlands|Netherlands]], [[Nazi invasion of France|France]], and [[Nazi invasion of Luxembourg|Luxembourg]] brought urgency to the government, which was discreetly preparing for possible United States involvement in [[World War II]].<ref name="Kimble 19">[[#Reference-Kimble|Kimble]], p. 19</ref> Of principal concern were issues surrounding war financing. Many of President [[Franklin D. Roosevelt]]'s advisers favored a system of tax increases and enforced savings program as advocated by British economist [[John Maynard Keynes]].<ref name="Kimble 19"/> In theory, this would permit increased spending while decreasing the risk of inflation.<ref name="Kimble 19"/> However, Secretary of the Treasury [[Henry Morgenthau Jr.]] preferred a voluntary loan system and began planning a national defense bond program in the fall of 1940. The intent was to unite the attractiveness of the baby bonds that had been implemented in the interwar period with the patriotic element of the [[Liberty Bonds]] from the First World War.<ref name="Kimble 20">[[#Reference-Kimble|Kimble]], p. 20</ref>

[[File:"85 Million Americans Hold War Bonds" - NARA - 514205.tif|thumb|upright|left|A poster designed to encourage war bond purchases.]]
Henry Morgenthau Jr. sought the aid of [[Peter Odegard]], a political scientist specialised in propaganda, in drawing up the goals for the bond program.<ref name="Kimble 23">[[#Reference-Kimble|Kimble]], p. 23</ref> On the advice of Odegard the Treasury began marketing the previously successful baby bonds as "defense bonds".<ref name="Kimble 23"/> Three new series of bond notes, Series E, F and G, would be introduced, of which [[Series E bond|Series E]] would be targeted at individuals as "defense bonds".<ref name="Kimble 23"/> Like the baby bonds, they were sold for as little as $18.75 and matured in ten years, at which time the United States government paid the bondholder $25.<ref name="Kimble 23"/> Large denominations of between $50 and $1000 were also made available, all of which, unlike the Liberty Bonds of the First World War, were non-negotiable bonds.<ref name="Kimble 23"/> For those who found it difficult to purchase an entire bond at once, 10-cent savings [[War savings stamps of the United States|stamps]] could be purchased and collected in Treasury-approved stamp albums until the recipient had accumulated enough stamps for a bond purchase.<ref name="Kimble 24">[[#Reference-Kimble|Kimble]], p. 24</ref> The name of the bonds was eventually changed to War Bonds after the Japanese [[attack on Pearl Harbor]] on 7 December 1941, which resulted in the United States entering the war.

The War Finance Committee was placed in charge of supervising the sale of all bonds, and the [[War Advertising Council]] promoted voluntary compliance with bond buying. Popular contemporary art was used to help promote the bonds such as ''[[Any Bonds Today?]]'', a 1942 [[Warner Bros. Cartoons|Warner Bros.]] theatrical cartoon. More than a quarter of a billion dollars' worth of advertising was donated during the first three years of the National Defense Savings Program. The government appealed to the public through popular culture. [[Norman Rockwell]]'s painting series, the ''[[Four Freedoms (Norman Rockwell)|Four Freedoms]]'', toured in a war bond effort that raised ${{Formatprice|132000000}}.<ref name=MAMPFAIRaHfF>{{cite press release|url=http://www.michenermuseum.org/press/?item=2007-08-08 |title=Michener Art Museum Pairs Famed American Illustrators Rockwell and Hargens for Fall Exhibitions in New Hope |publisher=The James A. Michener Art Museum |access-date=2008-04-05 |date=2007-08-08 |url-status=usurped |archive-url=https://web.archive.org/web/20080207071544/http://www.michenermuseum.org/press/?item=2007-08-08 |archive-date=February 7, 2008 }}</ref><ref>''Saturday Evening Post'', March 20, 1943, Vol. 215 Issue 38, p. 4-4, 1/5p; (AN 18990616).</ref> Bond rallies were held throughout the country with famous celebrities, usually Hollywood film stars, to enhance the bond advertising effectiveness. Many motion pictures during the time, especially war dramas (a form of propaganda itself), included a graphic shown during the [[closing credits]] advising patrons to "Buy War Bonds and Stamps", which were sometimes sold in the lobby of the theater. The Music Publishers Protective Association encouraged its members to include patriotic messages on the front of their sheet music like "Buy U.S. Bonds and Stamps". Over the course of the war 85 million Americans purchased bonds totalling approximately ${{Formatprice|185000000000}}.

Named after the 1942 [[Hollywood Victory Caravan]], a 1945 Paramount-produced film promoted bond sales after the end of World War II. The short subject included Bing Crosby, Bob Hope, Alan Ladd, William Demarest, [[Franklin Pangborn]], Barbara Stanwyck, Humphrey Bogart, and others.

[[File:For victory put at least 10% of every pay into war bonds. - DPLA - 35cd1330f36f3b669c5ced2be7cd5283.jpg|thumb|"Bonds, Not [[German-American Bund|Bunds]]" poster, 1943]]
Aside from movies and music, there were countless other programs held throughout the states to encourage the purchasing of war bonds. One such promotion that was held, at the least, in Nebraska and Montana, allowed for citizens to "get Hitler's goat," a play on the phrase "to get someone's goat" meaning to make someone angry or annoyed. The goat would be held up for "auction" with the money going directly towards war bonds.<ref>{{cite news |title=Getting Hitler's Goat is Montana Pastime |work=Sarasota Herald Tribune |issue=21 |date=October 26, 1942 |page=2}}</ref> According to one source, the auctioning of "Hitler's goat" in Nebraska in 1942 raised $90,000 in War Bond sales.<ref>{{cite book |last1=Olney |first1=Laurence M. |title=The War Bond Story |date=1971 |publisher=United States Dept of the Treasury |isbn=9781341677878 |page=54 |url=https://fraser.stlouisfed.org/files/docs/publications/books/1971_warbondstory_olney.pdf}}</ref>

The [[Center on Conscience & War|National Service Board for Religious Objectors]] offered civilian bonds in the United States during World War II, primarily to members of the [[Peace churches|historic peace churches]] as an alternative for those who could not conscientiously buy something meant to support the war. These were U.S. Government Bonds not labelled as defense bonds. In all, 33,006 subscriptions were sold for a total value of ${{Formatprice|6740161}}, mostly to [[Mennonite]]s, [[Church of the Brethren|Brethren]], and [[Religious Society of Friends|Quakers]].<ref>{{cite book | last = Gingerich | first = Melvin | year = 1949 | title = Service for Peace, A History of Mennonite Civilian Public Service | location = Akron, Pa. | publisher = Mennonite Central Committee | pages = 355–358 | oclc = 1247191 }}</ref><ref>{{cite web|url=https://www.gameo.org/index.php?title=Mennonite_Central_Committee_Peace_Section |title=Mennonite Central Committee Peace Section |publisher=Global Anabaptist Mennonite Encyclopedia Online |date=1987}}</ref>

Research has shown that parties to a conflict at the beginning of warfare can obtain cheap financing. As the conflict develops, bond yields increase but only to a certain level. Once a certain threshold is exceeded, there is no increase in the yield. The phenomenon was explained by the clientele effect, i.e., the differentiation of groups that purchase financial instruments. The first issuances of war bonds are mainly covered by investors seeking profit and the so-called "patriotic demand". As the conflict develops, the risk increases, and only patriotic demand persists.<ref>{{cite journal |last1=Szkutnik |first1=Włodzmierz |last2=Wyłuda |first2=Tomasz |title=Effectiveness of investing in war bonds |journal=Scientific Journal of the Military University of Land Forces |date=15 June 2022 |volume=204 |issue=2 |pages=214–221 |doi=10.5604/01.3001.0015.8974 |doi-access=free}} {{CC-notice|cc=by4}}</ref>

==After World War II==
=== South Africa ===
In the late 1970s and 1980s South Africa issued Defence Bonus Bonds in order to fund the border wars in Angola and Namibia and to fund the Defence Industry that was necessary due to sanctions.<ref>{{Cite web |last=Lunderstedt |first=Steve |date=2024-01-29 |title=TODAY IN KIMBERLEY'S HISTORY 29 JANUARY |url=https://www.kimberley.org.za/today-in-kimberleys-history-29-january/ |access-date=2024-02-26 |website=Kimberley City Info |language=en-US}}</ref>

===Iraq===
During the [[Iran-Iraq War]], the Iraqi government started a campaign to gather warbonds, with paying them being optional, with most Iraqis opting to pay them as an act of honorablity, each war bond costed 100 dinars, they also requested Iraqis donate any extra/spare gold they had to go towards the war effort, Iraqis, by estimate, possibly raised over 700 kilos to a ton of gold to the Iraqi war effort against Iran.

===Ukraine===
[[File:Ua minfin - government bonds en.jpg|thumb|Promotion of Ukrainian war bond auction in English (2022)]]

On 1 March 2022, following the [[Russian invasion of Ukraine]], the Ukrainian government announced it would issue war bonds to pay its armed forces.<ref>{{cite news |title=Ukraine to sell 'war bonds' to fund armed forces |url=https://www.bbc.co.uk/news/business-60566776 |access-date=1 March 2022 |work=BBC News |date=1 March 2022}}</ref> Between March and May 2022, around $270 million equivalent of bonds were sold, maturing in one year and yielding 11 percent. The bonds were sold in small units of 1,000 [[Ukrainian hryvnia|hryvnias]], with over 70,000 buyers.<ref>{{cite news |title=Analysis {{!}} What are War Bonds and Why Did Ukraine Sell Them? |url=https://www.washingtonpost.com/business/what-are-war-bonds-and-why-did-ukraine-sell-them/2022/06/25/20bed83c-f44c-11ec-ac16-8fbf7194cd78_story.html |access-date=11 October 2022 |newspaper=Washington Post |date=25 June 2022}}</ref><ref>{{Cite web |last=Wang |first=Weizhen Tan,Christine |date=2022-03-02 |title=Ukraine raises $270 million from sale of war bonds to fund army as Russia's invasion continues |url=https://www.cnbc.com/2022/03/02/ukraine-raises-270-million-from-sale-of-war-bonds-to-fund-army.html |access-date=2023-11-24 |website=CNBC |language=en}}</ref>
{{clear}}

=== Canada ===
On 28 October 2022, during the Russian invasion of Ukraine, the Government of Canada announced the issuance of 5-year bonds to raise funds for Ukraine.<ref>{{Cite news |last=Nickel |first=Rod |date=2022-10-28 |title=Canada raising money for Ukraine with sale of bonds |language=en |work=Reuters |url=https://www.reuters.com/world/canada-raising-money-ukraine-with-sale-bonds-2022-10-28/ |access-date=2022-10-29}}</ref> In late November 2022, the C$500 million raised from the bond issuance was directed to the [[International Monetary Fund|IMF's]] Administered Account for Ukraine.<ref>{{Cite web |title=Ukraine Sovereignty Bond |url=https://www.canada.ca/en/department-finance/programs/financial-sector-policy/ukraine-sovereignty-bond.html#how-to-purchase}}</ref> 

==Notes==
{{Reflist|20em}}

==References==
{{refbegin|30em}}
*{{cite book | ref=Reference
  |title=Address of President Franklin D. Roosevelt in connection with the opening of the fifth war loan drive. 2009| publisher=Essential Speeches}}
*{{cite book |ref=Reference-Aly |title=Hitler's beneficiaries: plunder, racial war, and the Nazi welfare state |last1=Aly |first1=Götz |last2=Chase |first2=Jefferson |year=2007 |publisher=Macmillan |location=New York |isbn=978-0-8050-7926-5 |url-access=registration |url=https://archive.org/details/hitlersbeneficia00alyg }}
*{{cite book | ref=Reference-Bird
  |title= Design for victory : World War II posters on the American home front|last1=Bird |first1=William L. Jr|last2=Rubenstein|first2=Harry R.|year=1998|publisher=Princeton Architectural Press|location=New York}}
*{{cite book | ref=Reference-Bogart
  |title= Direct and Indirect Costs of the Great World War| url=https://archive.org/details/cihm_991742
  |last=Bogart |first=Ernest Ludlow|authorlink=Ernest L. Bogart |editor=David Kinley |year=1919 | edition=2nd |publisher=Oxford University Press |location=Vancouver |isbn=0-7748-0923-X}}
*{{cite book | ref=Reference-Chickering1
  |title= Imperial Germany and the Great War, 1914–1918|last=Chickering |first=Roger |edition=2nd |year=2004 | publisher=Cambridge University Press |location=Cambridge |isbn=0-521-54780-6}}
*{{cite book | ref=Reference-Chickering2
  |title= The Great War and urban life in Germany: Freiburg, 1914–1918|last=Chickering |first=Roger |year=2007 | publisher=Cambridge University Press |location=Cambridge |isbn=978-0-521-85256-2}}
*{{cite book | ref=Reference-Keshen
  |title= Saints, sinners, and soldiers: Canada's Second World War| url=https://archive.org/details/saintssinnerssol0000kesh
  | url-access=registration
  |last=Keshen |first=Jeff |year=2004 | publisher=UBC Press |location=Vancouver |isbn=0-7748-0923-X}}
*{{cite book | ref=Reference-Kimble
  |title= Mobilizing the home front: war bonds and domestic propaganda|last=Kimble |first=James J. |year=2006 | publisher=Texas A&M University Press |location=Dallas |isbn=1-58544-485-5}}
*{{cite book | ref=Reference-Sparrow
  |title= "Buying our boys back": The mass foundations of fiscal citizenship in World War II|last1=Sparrow |first1=J.T.|year=2008 | publisher=Journal of Policy History, 20(2), 263–286}}
*{{cite book | ref=Reference-Streib
  |title= Idealism and war bonds: Comparative study of the two world wars|last1=Streib |first1=G.F.|year=1948 | publisher=Oxford Journals, Public Opinion Quarterly 12, 272–279}}
*{{cite book | ref=Reference-Unknown
  |last1= Witowski |first1=Terrence H. |year=2003 | publisher=Journal of Advertising: Volume 32, number 1/spring 2003| pages=69–82|title=World War II Poster Campaigns: Preaching Frugality to American Consumers}}
{{refend}}

==External links==
{{Commons category|War bonds}}
*[https://archive.org/details/U.s.WarBondsCommercial Bugs Bunny, Porky Pig and Elmer Fudd pitch War Bonds]
*[http://docsouth.unc.edu/global/result.html?lcsh=World%20War,%201914-1918%20--%20Finance. The University of North Carolina at Chapel Hill: World War I 1914–1918 bond posters and writings]
*{{Wikisource-inline|list=
**{{Cite EB1922|wstitle=Dollar Securities Mobilization|first=George Ernest |last=May |authorlink=George Ernest May |noicon=x}}
**{{Cite EB1922|wstitle=Liberty Loan Publicity Campaigns|first=Martin |last=Vogel |noicon=x}}
**{{Cite EB1922|wstitle=Savings Movement|first=Theodore Gervase |last=Chambers|first2=William Mather |last2=Lewis |authorlink=William Mather Lewis |noicon=x}}
**{{Cite EB1922|wstitle=War Loan Publicity Campaigns|first=George Augustus |last=Sutton|noicon=x}}
}}

[[Category:Military economics]]
[[Category:Military terminology]]
[[Category:Government bonds]]
[[Category:Articles containing video clips]]