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3708 UNIVERSAL HISTORY .-THE MODERN WORLD.

Army and National Guard as nuclei for

larger forces. Our West Pointers and

National Guard officers could be used

in training new men. Our troops did not,

in fact, do any really serious fighting

until over thirteen months after we entered

the war. Behind the protection of the

British navy and of the French and

British armies we were able to build up

our armies almost at leisure.

Our Allies gladly offered us the benefit

of their experience and advice. We were

given an opportunity to profit by their

experiences. Many French and British

officers came to America to help in the

training. Even greater assistance was

rendered when our troops landed on the

other side. Furthermore, our Allies furnished us with war supplies. In fact,

of the material actually used in fighting,

all the tanks, most of the aeroplanes and

many of the shells were furnished by the

French or British.

It was evident that the war would be

enormously costly. Not only must the

Government expend vast sums on its

own military and naval program but it

was early decided to advance money to

our associates in the conflict. It was

certain that most of the money must be

obtained by loans. Congress authorized

the issuance of certificates of indebtedness,

War Saving Certificates, better known as

Thrift Stamps, and government bonds.

The certificates of indebtedness were designed to run for only a few months and

bore interest at rates running from two

to three and a quarter per cent. Large

sums were temporarily obtained through

this plan and over $800,000,000 was

realized from the sale of Thrift Stamps.

But by far the greatest amount of money

was raised through the sale of bonds.

In all, five great loans were floated and

sold after vigorous campaigns. The first

four were known as Liberty Loans; the

last, which was floated after the armistice

was signed, was called the Victory Loan.

The First Liberty Loan was announced

on May 14, 1917. The bonds were dated

June 15, 1917, and were to bear 3-1/2 per cent

interest from that date, payable semiannually. The bonds were to mature

on June 15, 1947, and were made redeemable by the Government on or after

June 15, 1932. These bonds were made

exempt, both as to principal and interest,

from all taxation, federal, state, and local,

except inheritance taxes. Holders of these

bonds were also given the privilege of

converting them into bonds bearing a

higher rate of interest to be issued subsequently. The bonds were issued in denominations as low as $100 for registered

bonds and $50 for coupon bonds. A

plan of partial payment was adopted,

and other devices were employed to

encourage small investors to subscribe.

When the lists were closed it was found

that over 4,000,000 persons had subscribed

and that the total subscriptions amounted

to $3,035,226,850, or more than 150 per

cent of the amount offered. Allotments

were made in full to those who had subscribed $10,000 or less. Those subscribing

for larger amounts were allotted from 60

per cent to 20 per cent of the amount they

subscribed.

A second loan of $3,000,000,000 was

offered on the 1st of the following October.

The rate was fixed at 4 per cent, payable

semi-annually, and the bonds were to

run 25 years, but the Government might

at its option redeem them in ten years.

They were also made convertible into any

subsequent issue bearing a higher rate of

interest. These bonds were also made

exempt as to principal and interest from

state and local taxation except state

income taxes, but were not exempt from

graduated income taxes and excess profits

and war profits taxes levied by the

federal Government. The selling campaign

was pushed with great vigor and enthusiasm. Nearly 10,000,000 persons subscribed a total of $4,617,532,300. This

was an excess of 54 per cent, but the Government accepted one-half of the excess.

A Third Liberty Loan of $3,000,000,000

was offered on April 6, 1918, and the selling

campaign closed on May 4. The rate

was fixed at 4-1/4 per cent with about the

same exemptions and privileges as was

the case with the second issue except that