BROWSE

War Bond

Definition

War bonds are debt securities issued by a government to finance military operations and other expenditure in times of war.

What is a 'War Bond'

A war bond consists of debt securities issued by a government for the purpose of financing military operations during times of war. It is an emotional appeal to patriotic citizens to lend the government their money because these bonds offer a rate of return below the market rate.

Explaining 'War Bond'

At first they were called Defense Bonds and issued by the U.S. Government, but that name was changed to War Bonds after the Japanese attack on Pearl Harbor on Dec 7, 1941. The bonds were zero-coupon bonds that sold for 75% of their face value in denominations from $10 to $100,000. To get an idea of the relative value of a dollar in 1942, in current terms, something that cost $1.00 in 1942, would cost around $11.00 in 2002.


Further Reading


The original Operation Twist: the War Finance Corporation's war bond purchases, 1918–1920
www.cambridge.org [PDF]
… JL Butkiewicz (corresponding author), University of Delaware, Department of Economics, Newark, DE  USA … M. Solcan, Deloitte Economic Consulting, London; email: [email protected] … that Leffingwell felt too much money was spent on war bond purchases, and that …

Dissolution of an empire: Insights from the İstanbul Bourse and the Ottoman War BondDissolution of an empire: Insights from the İstanbul Bourse and the Ottoman War Bond
www.tandfonline.com [PDF]
… JL Butkiewicz (corresponding author), University of Delaware, Department of Economics, Newark, DE  USA … M. Solcan, Deloitte Economic Consulting, London; email: [email protected] … that Leffingwell felt too much money was spent on war bond purchases, and that …

Daily Newspaper Advertising Trends During World War II: IRS Tax Rulings and the War Bond DrivesDaily Newspaper Advertising Trends During World War II: IRS Tax Rulings and the War Bond Drives
www.tandfonline.com [PDF]
… JL Butkiewicz (corresponding author), University of Delaware, Department of Economics, Newark, DE  USA … M. Solcan, Deloitte Economic Consulting, London; email: [email protected] … that Leffingwell felt too much money was spent on war bond purchases, and that …

Did Nordic countries recognize the gathering storm of World War II? Evidence from the bond marketsDid Nordic countries recognize the gathering storm of World War II? Evidence from the bond markets
www.sciencedirect.com [PDF]
… JL Butkiewicz (corresponding author), University of Delaware, Department of Economics, Newark, DE  USA … M. Solcan, Deloitte Economic Consulting, London; email: [email protected] … that Leffingwell felt too much money was spent on war bond purchases, and that …

Bond underwriting by banks and conflicts of interest: Evidence from Japan during the pre-war periodBond underwriting by banks and conflicts of interest: Evidence from Japan during the pre-war period
www.sciencedirect.com [PDF]
… JL Butkiewicz (corresponding author), University of Delaware, Department of Economics, Newark, DE  USA … M. Solcan, Deloitte Economic Consulting, London; email: [email protected] … that Leffingwell felt too much money was spent on war bond purchases, and that …



Q&A About War Bond


Do these bonds ever expire or become worthless if not redeemed before maturity date?

No, once purchased your investment remains intact until maturity date when you will receive 100% back from your investment plus any accrued interest earned since purchase date."

What is a war bond?

A war bond is debt securities issued by a government for the purpose of financing military operations during times of war.

Who can purchase these bonds and how many can you buy per year?

Anyone who has income over $3,000 annually can purchase them and there is no limit on how many you can buy per year as long as you have enough money available to cover them all when they mature.

What are the two main types of war bonds?

There are two main types, defense and victory.

How much do these bonds cost at face value?

The bonds sold for 75% of face value in denominations from $25 to $1,000.

Why did people buy these bonds even though they didn't pay interest or dividends like other investments at that time?

People bought them because it was an emotional appeal to patriotic citizens to lend money to their country because these bonds offered a rate of return below market rate.

When were they first called defense bonds?

They were first called Defense Bonds in 1941 after Pearl Harbor was attacked.

How much would something that cost $1 in 1942 cost today if it were adjusted for inflation?

It would be around 11 dollars today if it had been adjusted for inflation.

What did they change their name to after the attack on Pearl Harbor?

After the attack on Pearl Harbor, they changed their name to War Bonds.