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The bonds were collateral for the war loans taken out by the US Treasury. Here is a simple explanation of a more complex process. The people buy One million Dollars in bonds. The US treasury then goes to the banks and says we have one million dollars. We need more than that but we will take one million dollars. Now they can surrender the one million over now or pay it later. They choose to borrow the one million dollars and the bonds are held in collateral. Then The bank earns interest on the one million dollars in held in bond. They get paid back by the US government. The people who come back later to collect their war bond earnings. The money they paid is returned along with interest. The Bank however keeps back a portion of the interest for themselves.
So the US raised billions of dollars in the War Bonds and had a continuous flow of dollars to use to make the war effort work out. The Banks made money and the US War bond buyers earned money too.
It really is much more complicated but you get the basic idea that the war bonds raised a lot more money than taxes could ever raise for the war effort.
What else can I help you with?
Why Americans buy War Bonds?
When people bought war bonds, they loaned the government money to help the war effort.
Why did the Us government sell war bonds during the war?
When people bought war bonds, they loaned the government money to help the war effort.
What is the main reason that Americans bought war bonds during world war 2?
To help support the war effort.
Why did many Americans buy bonds?
people loaned the government money to help the war effort.
Why were war bonds important to the war effort?
War bonds were important to the war effort because they allowed the government to raise funds to finance military operations without causing inflation. By encouraging citizens to purchase bonds, the government could effectively mobilize public support for the war and help cover the enormous costs associated with warfare. Overall, war bonds were a key tool for financing and sustaining the war effort.
What is the main reason that many Americans bought war bonds during world 2?
To help support the war effort.
Are war bonds considered a war effort?
yes
What are victory bonds?
A type of savings bond used by combatant nations to help fund a war effort. Canadas war bonds where called Victory Bonds. This information is from: http://en.wikipedia.org/wiki/War_bond
What are war bonds for World War 2?
Military Bonds You Could Purchase them to help Fund The war effort then later you could collect your money you payed for you country. The Bonds funded Weapons,Ammo, Vehicles, ETC. The Bonds played the same roles as Company Bonds.
What bonds sold to finance the American war effort?
Liberty Bonds
What were war bonds for?
Support for the war effort in World War 2
What were war bonds.?
Support for the war effort in World War 2
