Sample US WWI Liberty Bond poster (left) and WWII War Bond poster (right). Source: Wikipedia
Financing World Wars I & II in the United States
In reviewing the United States efforts to finance WWI and WWII debt through the sale of bonds, I discovered some interesting statistics when comparing the two which led to my question here.
In order to establish a basis for comparison, I converted the 1918 US dollar value of total WWI Liberty Bonds sold into 2018 US dollars using this inflation calculator, then I also converted the total value of WWII War Bonds sold (in 1945 US dollars) into 2018 US dollars.
The WWII figures dwarfed the WWI figures, even after adjusting both for inflation. So I then factored in the US duration of the two wars (WWI = two years, WWII = four years) and compared the numbers after dividing by the number of years of opportunity. WWII still dwarfed WWI.
So next I factored in the US population (using 1918 for WWI and 1945 for WWII) and calculated the percent of participation (number of bond buyers in WWI and number of bond buyers in WWII, compared to the total US populations in 1918 and 1945). WWII again far exceeded WWI in this category.
Then I compared the total dollar amount per person (in 2018 dollars, apportioned against the total populations in 1918 and 1945) and WWII topped WWI again.
Finally, I factored the number of years of opportunity into the population to calculate the bond purchase dollar value (in 2018 $) per person, per year of opportunity. WWII wins again.
I have included below a breakdown of all the calculations, using annual US population data freely available from Google and the inflation calculator previously mentioned, and bond sales values from Wikipedia. I also consulted Investopedia (WWI Liberty Bonds and WWII War Bonds), the US National Archives, Encyclopedia.com (WWI Liberty Bonds, Financing World War II), and the Federal Reserve (WWI Liberty Bonds, Federal Reserve's Role during WWII).
To be fair, the US Liberty Bond effort met its goals, as glowingly indicated in the Federal Reserve's report on Liberty Bonds. However, the other sources cited refer to the WWI Liberty Bond sales efforts as disappointing. Whether the WWI sales were a success or not (and they certainly appear to have been a success), the WWII participation rate and resulting money raised, after adjusted for inflation and apportioned by population, far exceeds the earlier war's results.
The methods for advertising the bonds in both wars were very similar, including mass marketing through the media of the day, plus drives with extremely popular celebrities in both wars. But the results differed greatly. What factors contributed to WWII's US bond sales results far exceeding those of WWI?
Below are the numbers from my calculations.
WWI Liberty Bond Statistics
Value Sold (1918 $$): $21.5 Billion
Value Sold (2018 $$): $386.785 Billion
Value Sold / year (2) (2018 $$): $193.392 Billion
US Population (1918): 103,208,000
Bond Buyers (total): 20,000,000
Participation Rate: 19%
Value sold (2018 $$) / person: $3,748
Value sold (2018 $$) / person / year (2): $1,874
WWII War Bond Statistics
Value Sold (1945 $$): $185 Billion
Value Sold (2018 $$): $2,562.25 Billion
Factor: 662% more total than WWI Liberty Bonds
Value Sold/Yr (4) (2018 $$): $640.562 Billion
Factor: 331% more per year than WWI Liberty Bonds
US Population (1945): 139,928,165
Bond Buyers (total): 85,000,000
Participation Rate: 61%
Factor: 311% more participation than WWI Liberty Bonds
Value sold (2018 $$) / person: $18,311
Factor: 489% more per person than WWI Liberty Bonds
Value sold (2018 $$) / person / year (4): $4,577
Factor: 244% more per person, per year than WWI Liberty Bonds
All things being equal (population, years of opportunity, sold bond value adjusted for inflation to 2018 dollars), and with similar marketing strategies in both wars to sell the bonds, what contributed to the higher participation rates and higher dollar contributions per capita in WWII over that of WWI? Has there been an historical analysis of this phenomena?
- Wikipedia: Liberty Bonds;
- Wikipedia: Series E Bonds (a.k.a. War Bonds)
Update: While numbers don't lie, they can also be very misleading. The numbers above are accurate and appear to indicate that WWI's US bond drives were a disappointment when compared to WWII's bond drives. The answers below from Lars Bosteen and JMS highlight important factors of the greater effectiveness of the broader mass marketing capabilities available in WWII through radio, and a greater familiarity with investing by the populace in WWII over WWI, and a more personal and emotional connection with the events that catapulted the US into WWII and the early setbacks in that war that galvanized a steely resolve in Americans, as well as a key factor brought out in the answer by Pieter Geerkens (which deserves more upvotes) being that the WWI drives achieved their goals and the bond issues were oversubscribed (indicating had more been issued, more would have sold, which would have driven the WWI bond numbers higher).
Numbers don't lie, but they also don't tell the whole story. The story is told well by the three answers (thus far) below. I can only accept one answer, but all three are excellent and helpful.