The total cost of the war to the United States, down to the signing of the armistice, was, in round numbers, something over $21,000,000,000. The unavoidable continuation for a period of the expenses of the war establishment will have added $10,205,000,000 to that sum by the end of June, 1919, and the complete return of the country to a peace basis will somewhat increase that sum. However, a considerable portion, probably more than one-quarter, will be reclaimed from values gained or salvaged from the properties in which it was invested. Loans to the nations associated with us in the war, of which ten asked for credits, amounted, at the cessation of hostilities, to $8,000,000,000, and were increased by $2,000,000,000 more during the next six months. That sum will in time be removed from the country’s net war expenditure. But $21,000,000,000 in excess of the nation’s usual outlay for the carrying on of its governmental affairs had to be raised quickly and, for the most part, expended as soon as collected. The plan of the Government for financing the war provided for the raising of approximately one-third of this sum by taxation and from customs duties and other usual sources and the remainder by bonds and certificates maturing in from five to thirty years. Therefore the entire cost of the war will be borne practically by those now living who as mature persons have been a part of it or who as children have witnessed or aided the work for it of their elders.
Accustomed hardly at all to direct taxation, the people nevertheless took up readily a war burden of income and excess profits taxes far heavier than anything they had ever dreamed of before. For the first time in their lives millions of people were called upon to make direct contributions to the support of the Federal Government. The sum of $3,694,000,000 raised by direct taxation was the largest tax ever paid by any country and represented a larger proportion of the nation’s war budget than any other belligerent engaged in the great war had been able to defray from tax revenues. About seven-eighths of this sum came from taxes on income and excess profits and the remainder from taxes on liquors and tobacco. Only about $22,000,000 of the revenue from incomes was paid by those having incomes of $3,000 or less, the bulk of it coming from large fortunes and excess profits.
The story of the four great Liberty Loans that preceded the signing of the armistice can never be adequately written. It is regrettable that it cannot be told in all its richness of enthusiasm and desire to be of service, its hard and willing work, and its lavish outpouring of money from men, women and children of every economic class and social condition who thus proved their determination to support the men in khaki who had gone overseas to maintain the integrity and uphold the ideals of the American Union. For if it could be told in all that fullness it would be one of those great stories of humanity that for centuries retain their vital spark and their power to thrill and inspire. A flame of passionate purpose swept the country and caught into its burning ardor almost every home in the land, whether on isolated farms, in remote mountain valleys, in thriving towns, on poor city streets, or on mansion-lined avenues. The nation asked the people to buy, in the four loans, a total of $14,000,000,000 worth of bonds, and they over-subscribed even this vast amount by $4,800,000,000. It was by far the greatest financial achievement ever carried through by any nation in response to appeals to its people.
The First Liberty Loan took place in May and June, 1917, when subscriptions were asked for bonds to the value of $2,000,000,000. There was an oversubscription of more than fifty per cent, amounting, in round numbers, to $1,035,000,000. But as the issue was limited to the amount offered none of the oversubscriptions could be taken. There were over 4,000,000 individual subscriptions, of which ninety-nine per cent were for amounts ranging from $50 to $10,000. There were only twenty-one subscriptions for amounts of $5,000,000 and over, and they aggregated somewhat less than $190,000,000.
The Second Liberty Loan occurred in October, 1917, the amount asked for being $3,000,000,000. The final returns showed an oversubscription of fifty-four per cent, or somewhat more than $1,617,000,000, half of which the Treasury Department was authorized to accept. The loan was taken by 9,400,000 men and women, of whom ninety-nine per cent, subscribing in amounts ranging from $50 to $50,000, took nearly two and a half billion dollars.
The Third Liberty Loan took place in April, 1918, opening on the anniversary of our entrance into the war, when bonds were offered to the amount of $3,000,000,000. These were over-subscribed by more than $1,158,000,000, the full amount being allotted by the Treasury Department. The number of subscribers was 18,300,000, of whom 18,285,000 subscribed for amounts ranging from $50 to $10,000.
The Fourth Liberty Loan followed in October, 1918, the request being for $6,000,000,000. The amount asked for equaled the combined requests of the Second and the Third Loans, all three occurring within one year. It was the largest single loan any nation, at that time, had ever asked of its people and was described by the Secretary of the Treasury as “the greatest financial achievement of all history.” No American can fail to feel that it was a privilege and a milestone in his life to witness and be a part of the patriotic fervor that carried it to a triumphant conclusion. The influenza epidemic that swept the country during the period of the loan kept many hundreds of thousands of people in sick-beds or sent them to their graves, disorganized business for many weeks, closed schools, churches, theaters, and all public assemblies in many places and everywhere interfered seriously with the progress of the campaign. Nevertheless, it was over-subscribed by almost $1,000,000,000. More than 21,000,000 people subscribed for bonds, thus making, if five persons be counted to the family, an average of a bond for every family in the country.
The rising tide of the nation’s spirit was marked by the increase of subscribers from loan to loan. The number subscribing to the second loan doubled those to the first, and the third almost doubled those to the second, while the fourth made a huge leap forward of 3,000,000 subscribers beyond the third. The over-subscription to the Fourth Liberty Loan, all of which was allotted, was sixteen and a half per cent. As in the previous loans, the great bulk of the securities taken was in the smaller amounts, thus proving the almost unlimited extent to which the mass of the people, of small fortune, were willing to stand behind the government with their savings.
Their spirit was all the more notable because of the fact that the American people have never been accustomed to purchase government bonds and have never sought, in any considerable number, bond investments of any kind. Each bond sale, with cumulative energy and enthusiasm that found their climax in the fourth, was made the medium of a great informative and patriotic campaign that sought to bring the meaning of the war, the aims and ideals of America and the imperative necessity of the winning of the conflict as soon as possible straight home to the heart of every American. Hundreds of thousands of workers talked and sang to assemblages and to crowds on the streets, carried on house to house canvasses, received contributions at booths in hotels, banks, public places of every sort. Cities and towns were gay with posters, banners and parades and the flags of America and the Allies floated from poles and house-tops and windows. Soldiers returning from the front told the American people in hundreds of addresses why their money was needed for the men on the fighting lines. Trophies of war, captured from the enemy, taken over the country everywhere aroused enthusiasm. Artists gave their talent and skill in the making of posters that had nation-wide display. Men and women of prominence organized meetings and made addresses, and societies, newspapers and press associations aided in many ways. During the third and fourth campaigns it is estimated that not less than 2,000,000 men and women devoted themselves to helping the sale of the bonds.
The work done by the National Woman’s Liberty Loan Committee, of which more detailed description is given in the chapter dealing with “The Work of Women for the War,” deserves mention here because of the importance of its contribution to the success of the loans. When the committee was appointed by the Secretary of the Treasury in May, 1917, it was made independent of all other loan organizations and given the status of a Bureau of the United States Treasury. It was a unique pioneer, for it was the first executive committee of women in the Government of the United States. When it was established the campaign for the First Liberty Loan was already in full swing, but it made a beginning, produced some good results and then bent its energies to thorough organization. It had a county chairman in practically every one of the thirty-two hundred counties in the United States, with 49,500 associate chairmen organizing subordinate units, and in cities, towns, villages, farming regions, mountain and desert districts, its members canvassed for subscriptions from house to house, by carriage, by motor, by horseback and on foot, in rain or shine, in mud or dust. In the Fourth Liberty Loan campaign there were nearly 1,000,000 working members of the Woman’s Committee, every one of whom was busy as organizer, or canvasser, or both. In the Second Liberty Loan the organization was officially credited with the raising of $1,000,000,000 and in the Third Loan with a similar sum, while in the Fourth the Woman’s Committee sold bonds to the amount of $1,500,000,000. The total contribution of the Committee to the three loans for which it worked was, therefore, one-fourth of the total asked for these three loans and only a slightly smaller proportion of the total subscriptions.