Ukraine has issued military bonds to support the army. Has anyone done this before? And did it help in the war? Sure! And the debts were repaid not only by the winners — a story in archival photos

Serhii Pyvovarov
Yevhen Spirin
Ukraine has issued military bonds to support the army. Has anyone done this before? And did it help in the war? Sure! And the debts were repaid not only by the winners — a story in archival photos

American radio host and singer Kate Smith during the 17-hour war bond marathon, February 1, 1944.

Getty Images / «Babel'»

After a large-scale Russian invasion, the Ukrainian government announced the issuance of military bonds. In essence, this means that the state borrows money from its citizens during the war to support the economy and especially the army, guaranteeing a future return of these funds with interest. A similar scheme has been used by different states for over 200 years. Such bonds flourished during the two world wars of the twentieth century. Thanks to them, for example, the United States and Great Britain were able to cover most of their military expenses. And the debts on the bonds were paid even by Germany, which lost the First World War. And only the totalitarian Nazi and Communist regimes forced citizens to buy military bonds, and the debts werenʼt paid. Babel remembers the history of military bonds in different countries in archival photos.


The term "military bonds" first appeared in the United States in the early nineteenth century. In 1812, the US Congress passed a law to raise $11 million to finance the war with Great Britain. But at that time, these bonds could not be bought by anyone but only a limited number of financial elites. The US government used a similar system of government loans in other wars, such as the conflict with Mexico in 1846-1848.

US Treasury Bond for the Mexican War, 1847.


The first to come up with the idea of selling military bonds to the general public, calling for patriotic feelings, was the American financier Jay Cooke, who during the American Civil War of 1861—1865 supported the people of the north. As a result, the Union of the northern states financed 62% of its military spending through bonds. Their opponents, the Confederacy of southern states, also tried to use military bonds, but not so successfully.

One thousand dollar Confederate States bond issued in February 1864 at the end of the American Civil War.

Getty Images / «Babel'»

Truly massive the military bonds became during the First World War. But in the United States, things didnʼt go well at first. The first issues of military bonds, or "freedom bonds" as they were then called, were not in great demand. Brokers even sold them below their nominal worth. In response, the board of directors of the New York Stock Exchange conducted an investigation into such brokerage firms for "German influence".

For subsequent bond issues, the government raised the interest rate from 3.5% first to 4% and then to 4.25%. But most importantly — it launched a large-scale campaign of promoting bonds. Well-known artists have painted thousands of campaign posters. Film and theater stars spoke at rallies, promoting the idea that buying freedom bonds was a patriotic act. Young silent film star Charlie Chaplin even made a short film, The Bond, which was so successful that it was adapted for screening in Britain.

American movie star Douglas Fairbanks speaks at a Liberty Bond rally in front of the Treasury Department in New York, April 1918.


Adolescents from the scout movement were included in the sales campaign under the slogan "Every scout acts to save a soldier". The air show was particularly successful, selecting five military pilots and touring the country. At that time, most people not just didnʼt fly themselves — they saw planes for the first time. And every buyer of freedom bonds was promised an "unforgettable air journey".

Boy Scouts advertising Liberty Bonds in New York, 1918.

Getty Images / «Babel'»

In the end, more than half of the $30 billion spent by the United States on World War I was repaid through the sale of military bonds. But on the other hand, by August 1919, the national debt on military bonds, including interest, amounted to more than $25 billion. The probability that this debt will not be repaid on time was growing. The Democrat government led by Woodrow Wilson was rapidly losing popularity. This was played by the Republicans, who won a landslide victory in the presidential election of 1920 and then in 1924.

As for the debt, most of it was repaid or refinanced by other government securities during the 1920s. And for the remaining part, a default was announced.

Liberty bond advertising poster with the slogan "Invest your money with Uncle Sam", 1917.

Getty Images / «Babel'»

At the beginning of World War II, the Democrat government led by Franklin Roosevelt began preparing for a possible US entry into the war. The main problem was again a financial one. But remembering the defeat of the Democrats in the 1920s, the presidentʼs advisers initially suggested simply raising taxes. Though later they decided to stop on the option with military bonds.

To sell them, they launched an equally large-scale advertising campaign. Celebrities, first of all Hollywood movie stars, were connected to it again. Private film companies such as Paramount and Warner Bros actively promoted war bonds as well.

A woman stands behind a counter advertising war bonds, 1942.
Advertising campaign for war bonds in the United States. Inside the car are dolls of the German and Italian dictators Hitler and Mussolini, as well as the Japanese Emperor Hirohito. The car was eventually thrown off Niagara Falls on September 1, 1942.

A woman stands behind a counter advertising war bonds, 1942. Advertising campaign for war bonds in the United States. Inside the car are dolls of the German and Italian dictators Hitler and Mussolini, as well as the Japanese Emperor Hirohito. The car was eventually thrown off Niagara Falls on September 1, 1942.

Getty Images / «Babel'»

The campaign was very successful, with 85 million Americans buying about $185 billion worth of bonds, more than in any other country during the war. But this time the Democrats didnʼt promise to pay off debts in a few years. Now the bonds were issued at low interest rates, from 1.5 to 3.5%, for a period of 40 years.

American war bond advertising poster, 1943.

Getty Images / «Babel'»

United Kingdom

On the eve of World War I, Britainʼs financial situation was challenging. In August 1914, the gold reserves of the Bank of England amounted to only 9 million pounds.

As early as November 1914, the British government issued the first military bonds, called "Treasury bills" and "Treasury bonds." The interest rate was initially 3.5%, and for subsequent issues it was raised to 5%.

Advertising campaign for war bonds in the center of London. For this an installation was staged in the form of a village destroyed by shelling, October 7, 1918.

Getty Images / «Babel'»

The advertising campaign for promotion was held under approximately the following slogans: “A soldier offers his life to his country for the sake of victory. You can lend your country your money, which is also needed to win. But unlike a soldier, you donʼt risk anything, because your capital, together with interest, is protected by the worldʼs most reliable financial system, the United Kingdom." The campaign was so successful that in a few years it managed to raise about three billion pounds.

British advertising poster for World War I war bonds.

Getty Images / «Babel'»

But with bond payments, everything was much more complicated. Initially, debts were promised to be repaid by the end of the 1920s. In the early 1930s, the British government extended the payment period. At the same time, the accrual of interest remained, but no more than 3.5% per annum.

The British government has not yet repaid World War I bond debt when World War II began. Now it had to rely solely on patriotism. The British were offered an interest-free deposit, ie a loan to the state for military needs to protect the country, and the government undertook to return the money within a certain period. Then the National Savings Movement became popular, which originated in the 1910s. About seven million Britons joined it. Fundraising campaigns were conducted under the slogans "Borrow to protect your freedom", and "Military savings become warships". They managed to raise up to five million pounds a week.

As for payments on military bonds, they have been delayed for a long time. The last debt on the bonds of the First World War, the British government repaid only in 2015.

The mascot of the British Royal Navy is Queenie the bulldog, he often appeared in advertising for war bonds in England, December 1942.
An advertising campaign for war bonds in Trafalgar Square in London during World War II.

The mascot of the British Royal Navy is Queenie the bulldog, he often appeared in advertising for war bonds in England, December 1942. An advertising campaign for war bonds in Trafalgar Square in London during World War II.

Getty Images / «Babel'»


Unlike its opponents in the First World War, Germany on the eve of the war was virtually isolated from world financial markets. Particularly significant was the failed attempt to obtain a large loan on Wall Street — the financial center of New York.

Therefore, Germany was the first country in the First World War to issue military bonds. To promote them, it also launched a large-scale advertising campaign focusing on patriotism. During the war, there were nine issues of military bonds in Germany. As a result, about 10 billion marks were collected, covering about two-thirds of military spending.

The queue for the purchase of war bonds in a bank in Berlin, 1915.

Getty Images / «Babel'»

Advertising of subscriptions to military bonds was aimed at all segments of the population, but met with less and less enthusiasm during the war. Eventually, large companies and financial institutions became the main bondholders.

German war bond advertising poster, 1915.

Getty Images / «Babel'»

Despite the defeat in the war and the rather high five percent interest rate, the German government was able to pay off all bond debts by 1923. But it had to resort to a trick: the government played on hyperinflation in the war and postwar period, when the German mark lost more than half its value. As a result, bondholders returned virtually nothing from the original amount borrowed from the state, let alone interest.

Depreciated German marks in a Berlin bank, late 1910s.

Getty Images / «Babel'»

During World War II, the totalitarian Nazi regime decided not to bother with the distribution of military bonds among the population. Instead, they launched an "iron savings" program — they turned directly to the banks and forced them to buy military bonds without the consent and knowledge of their depositors. This also applied to banks in occupied Czechoslovakia, which had to invest more than 70% of their deposits in German military bonds. As of 1945, the state owed banks about 110 billion Reichsmarks. In the end, the debts on these bonds were not repaid.

An American soldier inspects bags of Nazi money and gold in the Heilbronn salt mines in northern Germany on May 3, 1945.

Getty Images / «Babel'»

Russia and the USSR

The First World War was a serious financial challenge for the Russian Empire. If the first year of the war cost 12 million gold rubles, the first months of 1917 cost the treasury about 55 million. The countryʼs gold reserves have almost halved, and the paper ruble cost no more than 20-25 kopecks in gold. In total, the First World War cost Russia about 48 billion rubles, excluding 8-10 billion in foreign loans.

Following the example of its allies, Russia has also begun issuing military bonds. But it didnʼt help much. The average interest rate was even higher than in Britain and the United States, about 5.5%. But regarding payment terms of 49 and then 80 years, large investors were not satisfied. And the common people, more than 70 percent of whom were peasants, firstly, were not very passionate about patriotism, and secondly, were simply impoverished. Therefore, by 1917, only about eight billion rubles had been collected on military bonds.

Advertising poster for war bonds of the Russian Empire, 1916.

Getty Images / «Babel'»

As a result, it all ended with the February Revolution and the abdication of Emperor Nicholas II. And at the end of March 1917, the Provisional Government issued the last military bonds — the "loan of freedom". It was expected to be repaid in 49 years, starting in 1922. Artists, poets, singers and actors were involved in the campaign to buy bonds. By October-November 1917 the state managed to raise about four billion rubles. At that moment, the Bolsheviks staged a coup and seized power. Of course, they were not going to pay either the internal or external debts of the previous government.

Advertising campaign for war bonds of the "freedom loan" of the Provisional Government in the center of Petrograd (now St. Petersburg), 1917.


But the Bolsheviks liked the capitalist invention of state loans so much that they began to practice it in the first years after they finally established themselves in power in the early 1920s. Various types of bonds were in the process — short-term and long-term, interest-bearing and interest-free. There were also natural ones, payments for which were repaid with a certain amount of products, the so-called "sugar" and "bread" bonds. Winning bonds were especially common, for which you could get a large amount in the draw, although the chances of winning were very small. Such bonds were issued in the USSR until the early 1980s.

But the main feature of these loans was that they were in fact mandatory. The state simply issued bonds instead of part of the salary, regardless of its size. In propaganda it was called "saving part of the salary with insurance against depreciation".

Soviet schoolchildren with government bonds, 1932.

Getty Images / «Babel'»

During World War II, the Soviet Union began issuing military bonds only in the spring of 1942, after the German invasion. The first issue was for 20 years, subscription was mandatory. Workers and employees signed up for an amount equal to their monthly earnings, which they had to pay for ten months. Top workers were forced to sign for one and a half or even two salaries. Army officers signed for 170% of the monthly salary, and generals — for all 200%. Subscription to the "state military loan" was organized even on some occupied territories. Military bonds were issued until 1945, and about 80 billion rubles were collected, which is about 10-15% of the total cost of the war.

Soviet war bond from World War II.

Getty Images / «Babel'»

In the late 1950s, the national debt on military and other bonds amounted to about 300 billion rubles. Then the Soviet government defaulted on bonds and froze payments for 20 years. And then they arranged something like a pyramid — they offered to exchange old bonds for new ones, but at a loss of value. In the end, most people didnʼt receive the money they lent to the state until the collapse of the Soviet Union.

Exchange of Soviet rubles for karbovanets (provisional Ukrainian currency) in Kyiv after the collapse of the USSR, January 1992.

Getty Images / «Babel'»

We tell honestly and objectively about historical events. Support Babel:🔸donate in hryvnia 🔸in cryptocurrency 🔸via PayPal: [email protected]