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H.R. 2762, An Act to authorize an issue of bonds to meet expenditures for national security and defense . . . (Liberty Loan Act), April 16, 1917

The Liberty Loan Act authorized the U.S. Treasury to borrow money by selling bonds. The first bond offering was for $2 billion at a 3.5 percent rate of return. In all, the treasury issued four bond offerings during the war and a fifth after the armistice. Today, treasury bonds continue to be issued under the authority of the Liberty Loan Act of 1917.

Records of the U.S. Senate, National Archives and Records Administration

H.R. 2762 H.R. 2762 H.R. 2762 H.R. 2762 H.R. 2762 H.R. 2762 H.R. 2762

Liberty Bonds

The U.S. Constitution grants Congress the power to declare war, but how does the nation pay for it? Eighteen days after Congress declared war against Germany in 1917, it passed the Liberty Loan Act, authorizing the treasury secretary to issue $5 billion worth of bonds to raise war funds. By the war’s end, 20 million Americans had purchased more than $21 billion of Liberty Bonds, funding two-thirds of the cost of the war. New taxes covered the remaining costs.

We act with the belief that the debt we are about to incur, stupendous though it is, is no greater than this, the greatest Republic of all time, owes to human civilization.

Representative Nicholas Longworth of Ohio, Speech to the U.S. House of Representatives, April 13, 1917