Congress passed new taxes and they used liberty bonds and victory bonds to pay for the army, navy and the supplies of war. Government placed higher taxes on the income of people and some
goods such as tobacco and railroad tickets were taxed. A Liberty Bond was money that Americans
loaned to the government to pay for the war. The government agreed to pay the money back
later...in return Americans earned a small amount of interest (additional money) for the loan.
Almost half of Americans loaned money to the government to support the war effort. The bonds
generated two thirds of the money needed to pay for the war.
1.
Why would Americans buy war bonds?