War Bond Stamp Book from World War II

During both World Wars, Treasury realized that selling bonds to the poorest Americans was good for the war effort because it helped to reduce inflation and tie the interests of a wide swath of the public to that of the national government.

Bonds helped to reduce inflation by redirecting demand away from consumer goods, most of which were in short supply due to the shift to wartime production and the decreased availability of certain strategic raw materials.

Bonds decreased the likelihood of civil unrest by making the government a debtor to as many people as possible. Bondholders disdain anything that threatens the security of their principal and interest, including everything from Hitler himself to the neighbor trying to circumvent the rationing system. Widespread ownership of bonds also decreased perceptions that the poor were being taxed to support wealthy investors.

Low income Americans rarely had $25 in their pockets with which to purchase a government bond. (In 1942, production workers averaged only 86 cents per hour. Even at the war’s end they averaged only $1.06.) But they often had loose change they could use to purchase a 25 cent stamp which could be pasted into a book like the one shown. Buying 75 such stamps entitled them to a $25 savings bond. If you are thinking 75 times $.25 equals only $18.75, you are right. Savings bonds, like those of the famous Series E, were of the discount variety. In other words, the $25 was the payment made to the bondholder when the bond matured years afterward; the $6.25 difference between the face ($25) and purchase price ($18.75) was the interest.

In an extension of the same theme, Americans, including schoolchildren, could buy a Defense Stamp for as little as one thin dime.