What is Liberty Bond?
Liberty Bond was a bond issued by a US cash register to finance the First World War. The first bond of Liberty was not very successful due to lack of interest, but later due to various advertising campaigns were more popular bonds. After a terrorist attack of 11 September, a bond was issued under the same name to finance the reconstruction of the affected areas.
Governments often select bonds to finance wars, because the cost of military campaigns can cover all other government expenditures. It is estimated that the First World War cost the US federal government $ 30 billion in the US (USD). The annual expenditure of the war was several times larger than all other government programs together. The idea of a war bond is that the financial victim created by citizens will be worth the wider consequences of victory in the war. Bonds are also a way that citizens outside the army can contribute to war effort.
The first Liberty Bond did not achieve the popularity that government planners had hoped for. Eventually sold $ 2 billion (USD), which is less than half of the $ 5 billion (USD). Many of them considered this underline an embarrassment for the American cash register. Those who bought bonds earned an annual interest rate of 3.5%, of which they were exempt from taxes up to $ 30,000 (USD). The bonds were issued in 1917 and could be redeemed after 15 years.
In response to the performance of the first Bond Liberty, the Ministry of Finance organized a campaign to increase the popularity of bonds. Renowned artists were employed to design patriotic posters who call on Americans to participate in the Bond program. Stickers, buttons and even movies were made. Finally, the famous film stars and celebrities hosted the bonds defending Bonds. This effort was largely successful and, together with the higher interest rates offered, led to another $ 3.8 Billale (USD) on the sale of bonds.
Fourth Bond Liberty was released in 1918, at the end of the firstWorld War II. Allowed the sale of the final $ 6 billion (USD). The redeemable period of the volume was at the beginning of the 30th year, during a major depression. Given the financial situation in this period, the US government was not able to meet the original bond repayment conditions.
Recently, the US government has issued a free bond to finance the reconstruction of the place of the former World Trade Center in New York. Not only were the twins destroyed, but many neighboring buildings have suffered severe damage. Estimates of real estate damage for terrorist attacks of 11 September ranging from $ 20 billion to $ 50 billion (USD). A bond of freedom was issued for the purpose of raising funds without incurring high interest rates of commercial bonds.