Liberty Bond

Some things in life are just really expensive, like college, home ownership, and snacks at the movies. Happily for us, we have the option to take out loans for our bigger expenses (not our purchase of Junior Mints).

But you know what else is really expensive? War. And it’s not like the government can just take out a loan from B of A to fund its war efforts.

So how do nations pay for it all?

Well, one option is bonds. During World War I, the U.S. government issued what are known as “Liberty Bonds”: bonds that the average American could buy to support the war effort and show some patriotic pride. Liberty Bonds were offered four times throughout the course of the war, and offered interest rates that varied from 3.5% to 4.25%. The first issue, which was offered on April 24, 1917, was even tax-exempt up to $30,000, which was a nice little added incentive. The last of the WWI Liberty Bonds matured in 1938, but the bond certificates are still coveted collector’s items.