The first loan was oversubscribed by 50 percent, with more than four million subscribers accepted

Because interest rates on alternative assets had risen, the rates on the subsequent loans were increased to keep them competitive, to 4 percent on the second loan and 4

The bonds were negotiable, with coupons cashable every six months. Although their term was thirty years, they were callable after fifteen. The lowest denomination available was $50. 4 This, it seemed to some, would put them out of reach for the general public. The average compensation of a production worker in manufacturing was approximately 35 cents per hour at the time. Fifty dollars would require two weeks of wages. But there was an obstacle to issuing lower denominations: the government did not want to deal with the administrative cost of tracking ownership, so it designated Liberty Bonds as “bearer bonds.” These are securities that belong to whoever is holding them at the time rather than one registered owner. Had bearer bonds been issued in small denominations, they could be used like currency to purchase goods, thereby defeating McAdoo’s reason for refusing to print money. They would be money.

In all, there were four Liberty Loan drives initiated during the war and a fifth “Victory Loan” announced after the armistice

A 25? War Savings Thrift Stamp, 1918. These were collected and used to buy a $50 Liberty Bond.(Courtesy of The Joe I. Herbstman Memorial Collection of American Finance)

McAdoo found another way to make the bonds affordable. He introduced an installment plan. Even the poorest could purchase “War Thrift Stamps,” which cost only 25 cents. 5 The Treasury Department called them “little baby bonds,” and like the Liberty Bonds, they earned interest. The stamps were pasted on a card until sixteen had been collected, at which point they were exchanged for a $5 stamp called a “War Savings Stamp.” These were affixed to a “War-Savings Certificate” which also earned interest. When ten $5 stamps were collected, the certificate could be exchanged for a $50 Liberty Bond. The key to this scheme was that the certificate was registered to its owner and could be cashed only by the person whose name was inscribed on the certificate. That made the certificate non-negotiable.

Fears of inadequate demand were proved unwarranted. Nationally, that would represent about one in every six households. Subscribers for the smallest amounts were given priority. Large subscribers were rationed. According to the New York Times, John D. Rockefeller, who pledged $15 million, was allotted only “something over $3 million.” Fifty percent of the bonds sold were for the lowest face value, $50; another one-third of those sold were for the $100 bond.

The second Liberty Loan, for $3 billion, was open for six weeks and concluded on November 15, 1917. The third and fourth drives were each about a month long in April ($3 billion) and October ($6 billion) of 1918. 25 percent on the third and fourth. All five campaigns were oversubscribed. Purchasers of the first 3.5 percent bonds could exchange their securities for the new higher-yielding bonds.

The loan drives were the subject of the greatest advertising effort ever conducted. The first drive in May 1917 used 11,000 billboards and streetcar ads in 3,200 cities, all donated. During the second drive, 60,000 women were recruited to sell bonds. This volunteer army stationed women at factory gates to distribute seven million fliers on Liberty payday loans Kentucky Day. The mail-order houses of Montgomery Ward and Sears-Roebuck mailed two million information sheets to farm women. “Enthusiastic” librarians inserted four-and-one-half million Liberty Loan reminder cards in public library books in 1,500 libraries. Celebrities were recruited. Charlie Chaplin, ong the most famous personalities in America, toured the country holding bond rallies attended by thousands. 7