Funding the War
The United States would spend over $30 billion on ghting World War I. In 1913, the 16th Amendment to the U.S. Constitution had established a personal income tax. Wartime increas- es in tax rates significantly boosted funds collected by the government. However, most of America’s wartime spending was funded by war bonds. Like savings bonds, war bonds provided purchasers with a guaranteed return at a future date. The government promoted its “Liberty Bonds” with a nationwide campaign calling on the public’s patriotism. It organized huge rallies with famous actors such as Charlie Chaplin and Douglas Fairbanks (above) and commissioned promotional posters by famous artists. Boy Scouts and Girl Scouts helped sell bonds; Americans from all walks of life purchased them. War bonds would raise over $20 billion for the U.S. war effort.