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Thayne -> RE: war bonds (1/17/2005 6:01:05 PM)
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quote:
ORIGINAL: Grunty
Can someone explain me the meaning of war bonds during WW2 in USA and how could an individual purchase (or sell?) them and what would good would that do to him?...
just curious ..always noticing those war bonds posters and wanna know more about that...
thanks
War bonds were savings bonds. You purchased a bond for $18.75. You then put it away in a desk drawer or in a safe deposit box, and in 10 years the government promised to buy it back from you for $25.00. (This is about a 3% interest rate.) Of course, to do this the government had to win the war . . . which gave everybody an incentive to make sure that it did just that.
You could purchase your war bonds at work. This works a lot like the modern 401(k) program. The company deducted money from your paycheck, and gave you war bonds instead.
You could also purchase war stamps for as little as 10 cents. You would put these stamps in a stamp book until you had $18.75 worth of stamps, which you could then trade in for a war bond. In this way, even children could participate in the war bond effort.
This meant that in the early 1950s, households were getting a lot of free cash. This then lead to the consumer culture of the 1950s, with everything from homes to washing machines to television sets being purchased on a massive scale.
As was mentioned above, this also had the advantage of taming inflation and spreading the cost of the war out among several people. Tax payers in the 1950s were still paying for the war by paying taxes to buy back the war bonds from 10 years earlier.
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