When the United States entered World War 1 in 1917, the country found itself unprepared for the huge financial burden of the war. To solve this problem, Treasury Secretary William G. McAdoo launched an enormous campaign with the aim of getting the average American to loan the Federal Government money to support the war effort. The campaign encouraged all American citizens to support the Allied cause by purchasing war bonds called Liberty Bonds. McAdoo used speaking tours, propaganda posters with slogans such as: “Beat Back the Hun with Liberty Bonds” and celebrity endorsements to encourage average Americans to demonstrate their patriotism by purchasing these war bonds. By buying the bonds, Americans were lending their money to the Federal Government to pay for the war. In return, the bond earned a set interest rate from 3.5 to 4.5 percent and the purchaser could redeem the bond for face value at a later date. By the end of the war Liberty Bonds raised about $21 billion to finance WWI.
How do nation's fund a war?
Check for Understanding
Identify the techniques used to persuade the reader and summarize the main idea.
Aside from the Liberty Bonds campaign, the United States used other methods to finance WWI. Research these methods and list the pros and cons of each.
Art: Create a propaganda poster to encourage other Americans to support the Liberty Bond campaign.
English Language Arts: Write a speech in support of Liberty Bonds for one of McAdoo’s speaking tours.
Math: If a citizen buys a $50 war bond with an annual interest rate of 4%, how much money will the bond be worth in a year, in 5 years, in 10?