As the U.S. entered World War I in April 1917, President Wilson and his economic advisors had to find a way to finance the war. In addition to increased taxation, one of the most successful tactics used to bring money in for the war effort, was the sale of war “liberty” bonds. Secretary of the Treasury, William McAdoo, launched a series of Liberty Loan drives to encourage regular citizens to loan their money to the government to help America win the war. Propaganda posters flooded the nation urging people to do their part. The Boy Scouts were used to help sell bonds. Banks put out posters and pleas to try to convince people to do what they could to help out. Movie stars were used to draw in support for the drives. The bonds were similar to what savings bonds are today. Different values were available for purchase, so that all people could contribute no matter what their financial situation was. The government had five huge rallies throughout the time the U.S. was involved in the war and as it pushed ideas of loyalty and doing one’s bit for the war, the American people loaned their money in huge quantities. For the 1917 drive, McAdoo claimed that a man who couldn’t loan his government $1.25 per week with 4% interest had no right to be a U.S. citizen. Tactics like this, mixed with all of the advertising, propaganda, and rallies, allowed the U.S. to raise over $20 billion, 30% of which was from people earning less than $2,000 per year.
How do citizens contribute to a war effort?
Check for Understanding
Identify the key ideas in this poster and explain the purpose of the libery loan.