War bond

A war loan (credit or war) is an interest-bearing or non-interest bearing securities, the purpose of financing a war. Issuer is a government in general. The purchase of the Bonds to the granting of a loan to the government’s equal.

Sales of war bonds

War bonds are usually accompanied by extensive propaganda to win in this way the home front to support the war directly. In order to find as many investors will mostly appeal to their patriotism, arguing that the sale of war bonds have a decisive importance. Investors speculate on interest rates, which will szahlungen by repair with a victory finance the state. In the case of a lost war – but also in the event of a war won – there is the risk that the bond will not be refunded. The capital invested is lost. History knows many examples of such losses.

As well as advertising for war bonds often take place administrative measures to promote the sale of war bonds:

•Closure of the stock exchanges

•Prohibition of issue of securities for other purposes

•Commitment of the central bank and commercial bank for the purchase of war bonds

•Forced loan

Thus, on 1 August 1914 closed at the beginning of the First World War, the stock exchanges in Germany and many other countries. While shares were traded again in the following years, the trade was with Empire bonds until 1 September 1919 resumed. Investors could buy bonds on the secondary market does not, but only on the primary market. There was no falling rates for government bonds are public. From the spring of 1917 new issues of stocks and bonds to the approval of the Reichsbank were made ​​dependent. This investment opportunities were further reduced as a war bonds in other systems.


War bonds are there if earlier under a different name since the Middle Ages.

In Switzerland, these were issued in 1848. In 1936, the Switzerland of a military loan, which was intended to be as well prepared for an expected war.

World War I

The First World War, financed mainly Germany, Austria-Hungary and Russia over war bonds. While the United States their funds through the budget (U.S. $ 13 billion) ready set, and four Liberty Bonds (U.S. $ 17 billion) lent in the population, England raised taxes, but also gave out loans that applied the Parliamentary War Savings Committee . Both England and France also received loans from the U.S.

In Germany, a total of nine war bonds were issued between 1914 and 1918 that earned 98 billion Reichsmarks, and covered about 60% of the German war costs.

As “the” war bond is called in German history in general that that decision of the SPD in 1914, which enabled the financing of the First World War. Also a result of the truce policy was the separation of the German labor movement.

After the outbreak of the First World War written and published Walter Ulbricht (1893-1973) as a member of the left wing of the SPD, led by Karl Liebknecht and Rosa Luxembourg numerous leaflets with calls to end the war. On an official meeting of the SPD “Greater Leipzig” in December 1914 called Ulbricht, the Reichstag the SPD should continue to vote against further war credits. He was attacked for his personal attitude, the application was rejected.

German war bonds and treasury bills in the First World War (in millions of dollars)

War Bonds

Principal amount of the drawing

Outstanding Treasury


I.  September 1914 4,460  2,632  +1832

II.   March 1915  9,060 7,209  +1851

III.  September 1915  12,101 9,691  +2410

IV.   March 1916  10,712 10,388  +324

V.  September 1916  10,652 12,766  -2114

VI.  March 1917  13,122 14,855  -1733

VII.  September 1917  12,626  27,204  -14 578

VIII.  March 1918  15,001  38,971  -23 970

IX.  September 1918  10,443 49,414  -38 971

World War II

During the period of National Socialism, the regime saw them hang from national war bonds, which would have aroused unpleasant memories among the population. Instead, short-term savings without the knowledge and consent of savers were mortgaged with the banks that were lending to collection of the State and the funds moored long term with him. This circulation of capital based on the fact that ‘wearing the income recipient is not legally usable income amounts to the bank and the banks pass the money to the collection of Treasury bills to the Treasury.” The “silent” conversion of savings and pension reserves in long-term debt securities was supplemented by the “Iron Save” and flanked by wage and price controls (see also silent war funding).

1945 was the state with the German banks with 110 billion Reichsmarks in debt, the savings banks stood at $ 54 billion and $ 25 billion to the insurance book.

The German war finance was also supported by exorbitant costs of occupation, who had to pay the occupied countries. Czech banks had invested in the end more than 70 percent of their deposits in German war bonds.

Unlike Germany, Britain gave up on long-term war bonds. End of 1941 were drawn, of which 1.7 billion of small savers had deposited 4.6 billion pounds (converted 61 billion Reichsmark). Taxes rose during the Second World War there by 336%.

War bonds were sold in the United States with pathetic propaganda. The United States Office of War Information in 1943 toured through the U.S. and collected four paintings by Norman Rockwell, adopted by a congressional speech of President Franklin D. Roosevelt on The Four Freedoms had created, $ 130 million for a war bonds. This accounted for only a fraction of the expenditure. But the Lend-Lease Act required the United States before entering the war to $ 50 billion military aid to the Allies.

Military History

Economic History


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