War savings stamps of the United States

Last updated
A 5-dollar War Savings Certificate Stamp, first released in late 1917. War Savings Certificate Stamp.png
A 5-dollar War Savings Certificate Stamp, first released in late 1917.
War Savings Stamps in New York City in 1918 War Savings Stamps in New York City in 1918.jpg
War Savings Stamps in New York City in 1918

War savings stamps were issued by the United States Treasury Department to help fund participation in World War I and World War II. Although these stamps were distinct from the postal savings stamps issued by the United States Post Office Department, the Post Office nevertheless played a major role in promoting and distributing war savings stamps. In contrast to Liberty Bonds, which were purchased primarily by financial institutions, war savings stamps were principally aimed at common citizens. During World War I, 25-cent Thrift stamps were offered to allow individuals to accumulate enough over time to purchase the standard 5-dollar War Savings Certificate stamp. When the Treasury began issuing war savings stamps during World War II, the lowest denomination was a 10-cent stamp, enabling ordinary citizens to purchase them. In many cases, collections of war savings stamps could be redeemed for Treasury Certificates or War Bonds.

Contents

World War I era

The United States Treasury Department issued its first war savings stamps in late 1917 in order to help pay for the costs incurred through involvement in World War I. The estimated cost of World War I for the United States was approximately $32 billion, and by the end of the war, the United States government had issued a total of $26.4 billion in debt. Although national campaigns had aimed to sell $2 billion in war savings stamps, they ultimately accounted for about $0.93 billion, or 3.5 percent, of the total debt issued. [1] [2] Despite the low proportion of total debt purchased as war savings stamps, they represented real additional savings whereas other issues were at least partly monetized already. [1] In addition, government and society leaders utilized the war savings stamps program as a vehicle to teach the importance of saving and thrift.

War Savings Certificate stamps

The primary, interest-earning stamp issued was the War Savings Certificate stamp, which was worth 5 dollars at maturity on January 1, 1923. These stamps needed to be affixed to an engraved folder called the War Savings Certificate, which carried the name of the purchaser, and could only be redeemed by that individual. Between December 3, 1917, and January 31, 1918, each stamp could be purchased at the price of $4.12. If purchased on January 2, 1918, the return on the investment would be 4 percent, compounded quarterly. The price of the stamp increased by one cent for each month after January 1918 until sales ended in December 1918. Owners of these stamps could also redeem them for cash prior to the maturity date and receive the amount paid plus one cent for every month after the original purchase. [2] The Treasury issued a new series of War Savings Certificate stamps in subsequent years, with the same interest rate and time to maturity. The final series of War Savings Certificate stamps were issued on December 21, 1920, maturing on January 1, 1926. [3]

"Joan of Arc saved France--Women of America, save your country--Buy War Savings Stamps", poster for World War I war savings stamps, 1918. Joan of Arc WWI lithograph2.jpg
"Joan of Arc saved France--Women of America, save your country--Buy War Savings Stamps", poster for World War I war savings stamps, 1918.

Thrift stamps

Along with the War Savings Certificate stamps, the Treasury also issued a set of 25-cent Thrift stamps, which bore no interest. The purpose of the Thrift stamps was to allow individuals without the means to purchase a War Savings Certificate stamp outright to gradually accumulate enough Thrift stamps to exchange for one later. The Treasury supplied Thrift cards, to which a total of sixteen Thrift stamps could be affixed. A full Thrift card was worth four dollars and could be combined with the appropriate number of cents to purchase a War Savings Certificate stamp.

Promotional efforts

Promotion of war savings stamps pervaded American culture during World War I. The Treasury Department established the War Savings Organization in order to coordinate marketing efforts throughout the nation. [3] A wide variety of posters were produced to promote war savings stamps, often invoking a sense of patriotic duty to purchase them to support war efforts. President Woodrow Wilson called upon “every man, woman and child” to save for the war and designated June 28, 1918 as National War Savings Day. [4] Governors, mayors, and other political leaders led by example by purchasing war savings stamps and encouraged their constituents to do the same. [5] The Four Minute Men organization, authorized by President Wilson, also developed a series of speech outlines related to war savings stamps for its volunteers to deliver. [6]

Support for war savings stamps also came from a variety of non-government sources. Advertisements were often donated by local newspapers in order to inform people of how war savings stamps worked and to encourage their purchase. [7] War savings societies formed within communities across the country to promote the value of thrift and to collect funds for war savings stamps. Children were also recruited to the war saving efforts primarily through their schools. Children received school kits, which included penny and nickel savings booklets so that children could save up for a 25-cent Thrift stamp a few cents at a time. [3]

World War II era

The United States Treasury Department began to issue a series of war savings stamps in late 1942. Unlike the War Savings Certificate stamps from World War I, these war savings stamps earned no interest. Instead, their sole purpose was to facilitate saving toward the purchase of Series E war bonds.

10C/ (lowest denomination) "Minuteman" US War Savings Stamp (rose red) 1942 1942 "MInuteman" US War Savings rose red 10C/ stamp.jpg
10¢ (lowest denomination) "Minuteman" US War Savings Stamp (rose red) 1942
$5 (highest denomination) "Minuteman" War Savings Stamp (sepia) 1942 War Savings Stamp WWII.png
$5 (highest denomination) "Minuteman" War Savings Stamp (sepia) 1942

Minuteman stamps

The war savings stamps introduced during World War II were released in five different denominations – 10 cents, 25 cents, 50 cents, one dollar, and five dollars, all featuring a Minuteman statue. These stamps were purchased at face value and earned no interest. Individuals accumulated their war savings stamps in various collection booklets provided with the purchase of a stamp. Filled collection booklets could later be used to purchase Series E war bonds. For example, a full 25-cent booklet contained 75 stamps and was worth $18.75, which was the initial price of a $25 war bond. Thus, a full 25-cent booklet would be exchanged for a $25 war bond with a time to maturity of ten years. [8]

Promotional efforts

The promotion of war savings stamps during World War II was closely tied with the promotion of the Series E war bonds. In order to mobilize the home front to support the war efforts ideologically and financially, the Treasury Department's primary message revolved around patriotism. With support from the advertising industry, which donated $250 million worth of advertising during the first three years of the campaign, [9] war bonds and stamps permeated everyday life. Advertisements appeared as posters on trolley cars, songs on the radio, and movies featuring Hollywood stars like Frank Sinatra and Bob Hope. [9] Utilizing the concept of market segmentation, numerous campaigns were developed to target different populations such as women, immigrants, and children. The Treasury developed classroom material that highlighted the positive impact of war savings stamps while enforcing math skills. [10]

Similar schemes

During World War II, the Mennonite Central Committee offered red Civilian Public Service stamps and blue War Sufferers' Relief stamps for ten cents each [11] to help fund peaceful programs and offer an alternative for children from families who could not conscientiously fund the Red Cross. The Brethren in Christ had a similar program for their members. [12]

See also

Related Research Articles

<span class="mw-page-title-main">Bond (finance)</span> Instrument of indebtedness

In finance, a bond is a type of security under which the issuer (debtor) owes the holder (creditor) a debt, and is obliged – depending on the terms – to provide cash flow to the creditor. The timing and the amount of cash flow provided varies, depending on the economic value that is emphasized upon, thus giving rise to different types of bonds. The interest is usually payable at fixed intervals: semiannual, annual, and less often at other periods. Thus, a bond is a form of loan or IOU. Bonds provide the borrower with external funds to finance long-term investments or, in the case of government bonds, to finance current expenditure.

<span class="mw-page-title-main">Government bond</span> Bond issued by a government

A government bond or sovereign bond is a form of bond issued by a government to support public spending. It generally includes a commitment to pay periodic interest, called coupon payments, and to repay the face value on the maturity date.

<span class="mw-page-title-main">Bearer bond</span> Debt security not registered to any specific investor

A bearer bond or bearer note is a bond or debt security issued by a business entity such as a corporation or a government. As a bearer instrument, it differs from the more common types of investment securities in that it is unregistered—no records are kept of the owner, or the transactions involving ownership. Whoever physically holds the paper on which the bond is issued is the presumptive owner of the instrument. This is useful for investors who wish to remain anonymous.

<span class="mw-page-title-main">War bond</span> Government debt security issued to finance wartime expenditure

War bonds are debt securities issued by a government to finance military operations and other expenditure in times of war without raising taxes to an unpopular level. They are also a means to control inflation by removing money from circulation in a stimulated wartime economy. War bonds are either retail bonds marketed directly to the public or wholesale bonds traded on a stock market. Exhortations to buy war bonds have often been accompanied by appeals to patriotism and conscience. Retail war bonds, like other retail bonds, tend to have a yield which is below that offered by the market and are often made available in a wide range of denominations to make them affordable for all citizens.

<span class="mw-page-title-main">United States Treasury security</span> US government debt instruments

United States Treasury securities, also called Treasuries or Treasurys, are government debt instruments issued by the United States Department of the Treasury to finance government spending, in addition to taxation. Since 2012, the U.S. government debt has been managed by the Bureau of the Fiscal Service, succeeding the Bureau of the Public Debt.

<span class="mw-page-title-main">United States ten-dollar bill</span> Current denomination of United States currency

The United States ten-dollar bill (US$10) is a denomination of U.S. currency. The obverse of the bill features the portrait of Alexander Hamilton, who served as the first U.S. Secretary of the Treasury, two renditions of the torch of the Statue of Liberty, and the words "We the People" from the original engrossed preamble of the United States Constitution. The reverse features the U.S. Treasury Building. All $10 bills issued today are Federal Reserve Notes.

<span class="mw-page-title-main">Silver certificate (United States)</span> Paper currency used between 1878 and 1964

Silver certificates are a type of representative money issued between 1878 and 1964 in the United States as part of its circulation of paper currency. They were produced in response to silver agitation by citizens who were angered by the Fourth Coinage Act, which had effectively placed the United States on a gold standard. The certificates were initially redeemable for their face value of silver dollar coins and later in raw silver bullion. Since 1968 they have been redeemable only in Federal Reserve Notes and are thus obsolete, but still valid legal tender at their face value and thus are still an accepted form of currency.

<span class="mw-page-title-main">Liberty bond</span> American war bond sold in World War I

A liberty bond or liberty loan was a war bond that was sold in the United States to support the Allied cause in World War I. Subscribing to the bonds became a symbol of patriotic duty in the United States and introduced the idea of financial securities to many citizens for the first time.

The history of the United States dollar began with moves by the Founding Fathers of the United States of America to establish a national currency based on the Spanish silver dollar, which had been in use in the North American colonies of the Kingdom of Great Britain for over 100 years prior to the United States Declaration of Independence. The new Congress's Coinage Act of 1792 established the United States dollar as the country's standard unit of money, creating the United States Mint tasked with producing and circulating coinage. Initially defined under a bimetallic standard in terms of a fixed quantity of silver or gold, it formally adopted the gold standard in 1900, and finally eliminated all links to gold in 1971.

The Canada Savings Bond was an investment instrument offered by the Government of Canada from 1945 to 2017, sold between early October and December 1 of every year. It was issued by the Bank of Canada and was intended to offer a competitive interest rate, and had a guaranteed minimum interest rate.

<span class="mw-page-title-main">Refunding Certificate</span>

The Refunding Certificate was a type of interest-bearing banknote that the United States Treasury issued in 1879. They issued it only in the $10 denomination, depicting Benjamin Franklin. Their issuance reflects the end of a coin-hoarding period that began during the American Civil War, and represented a return to public confidence in paper money.

TreasuryDirect is a website run by the Bureau of the Fiscal Service under the United States Department of the Treasury that allows US individual investors to purchase treasury securities, such as savings bonds, directly from the US government. It enables people to manage their investments online, including connecting their TreasuryDirect account to a bank account for deposits and withdrawals.

<span class="mw-page-title-main">Fractional currency</span> Series of United States dollar banknotes

Fractional currency, also referred to as shinplasters, was introduced by the United States federal government following the outbreak of the Civil War. These low-denomination banknotes of the United States dollar were in use between 21 August 1862 and 15 February 1876, and issued in denominations of 3, 5, 10, 15, 25, and 50 cents across five issuing periods. The complete type set below is part of the National Numismatic Collection, housed at the National Museum of American History, part of the Smithsonian Institution.

<span class="mw-page-title-main">Series E bond</span> U.S. government bond

Series E United States Savings Bonds were government bonds marketed by the United States Department of the Treasury as war bonds during World War II from 1941 to 1945. After the war, they continued to be offered as retail investments until 1980, when they were replaced by other savings bonds.

<span class="mw-page-title-main">United States Savings Bonds</span> Debt issued by the government of the United States.

United States Savings Bonds are debt securities issued by the United States Department of the Treasury to help pay for the U.S. government's borrowing needs. They are considered one of the safest investments because they are backed by the full faith and credit of the United States government. The savings bonds are nonmarketable treasury securities issued to the public, which means they cannot be traded on secondary markets or otherwise transferred. They are redeemable only by the original purchaser, a recipient or a beneficiary in case of the original holder's death.

Morgan v. United States, 113 U.S. 476 (1885), was a case involving several judgments of the United States Court of Claims in four cases against the United States for the payment of United States bonds known as "five-twenty bonds."

<span class="mw-page-title-main">3rd Liberty Loan Act</span>

The Third Liberty Loan Act was a liberty bond sold during World War I that helped cover the war expenses of the United States. In effect, the bonds were loans from citizens to the US Government which would be repaid with interest in the future. There were two previous loan acts, The Liberty Loan Act and The Second Liberty Loan Act, each providing additional money to the US Government to fund the war. The Third Liberty Loan Act was enacted on April 5, 1918. The third act specifically allowed the US government to issue $3 billion worth of war bonds at a rate of 4.5% interest for up to 10 years with an individual aggregate limit of $45,000. The bonds produced by the Third Liberty Loan Act were not redeemable until September 15, 1928.

<span class="mw-page-title-main">Treasury Note (19th century)</span> Type of short term debt instrument in the United States

A Treasury Note is a type of short term debt instrument issued by the United States prior to the creation of the Federal Reserve System in 1913. Without the alternatives offered by a federal paper money or a central bank, the U.S. government relied on these instruments for funding during periods of financial stress such as the War of 1812, the Panic of 1837, and the American Civil War. While the Treasury Notes, as issued, were neither legal tender nor representative money, some issues were used as money in lieu of an official federal paper money. However the motivation behind their issuance was always funding federal expenditures rather than the provision of a circulating medium. These notes typically were hand-signed, of large denomination, of large dimension, bore interest, were payable to the order of the owner, and matured in no more than three years – though some issues lacked one or more of these properties. Often they were receivable at face value by the government in payment of taxes and for purchases of publicly owned land, and thus "might to some extent be regarded as paper money." On many issues the interest rate was chosen to make interest calculations particularly easy, paying either 1, 1+12, or 2 cents per day on a $100 note.

From 1775-1779 the Continental Congress issued Continental currency banknotes. Then there was a period when the United States just used gold and silver, rather than paper currency. In 1812 the US began issuing Treasury Notes, although the motivation behind their issuance was funding federal expenditures rather than the provision of a circulating medium. In 1861 the US began issuing Demand Notes, which were the first paper money issued by the United States whose main purpose was to circulate. And since 1914 the US has issued Federal Reserve Notes.

<span class="mw-page-title-main">Schools at War</span> American WWII student program

The American Schools at War program was a program during World War II run by the U.S. Treasury Department, in which schoolchildren set goals to sell stamps and bonds to help the war effort. The program was also administered by the U.S. Office of Education, the Federal government agency that interfaced with the nation's school systems and its thirty-two million students. The Office, however, allowed the Treasury to work with the schools directly as the main objective of the program was raising money.

References

  1. 1 2 Rockoff, Hugh (June 2004). "Until it's Over, Over There: The U.S. Economy in World War I". NBER Working Paper No. 10580. doi: 10.3386/w10580 .
  2. 1 2 United States Department of the Treasury. United States Government War-savings Stamps
  3. 1 2 3 Charles, Harry K. (2008). Postal and Treasury Savings Stamp Systems: The War Years
  4. The Telegraph. June 22, 1918. IMPORTANT NOTICE!
  5. The New York Times. December 4, 1917. War Thrift Stamps Stir City Patriotism
  6. Four Minute Men. January 2, 1918. Bulletin No. 21
  7. The Salem Press. January 24, 1918. Little Brothers of Liberty Bonds
  8. Tuttle, William M. (1993). "Daddy's Gone to War"
  9. 1 2 Samuel, Lawrence R. (1997). Pledging Allegiance
  10. United States Department of the Treasury. The Teacher of Mathematics and the War Savings Program
  11. Gingerich p. 355-356.
  12. Gingerich, Melvin (1949), Service for Peace, A History of Mennonite Civilian Public Service, Mennonite Central Committee