Liberty Loans

The pamphlet I chose to write this blog post about is called the “Liberty Loans / Guaranty Trust Company of New York” written in 1917 by the Guaranty Trust Company of New York. The bank to display their commitment to the Liberty Loans and to demonstrate their efforts to help the American cause of financially supporting mobilization produced this pamphlet and distributed it to the public.

This pamphlet was produced about the second offering of Liberty Loans by the Treasury Department and displayed the sheer size of the bond offering as well as the Guaranty Trust Company’s involvement. The second Liberty Loan effectively raised $5,000,000,000 in only twenty-three working days, a total feat of the capital markets of the time (1). The Guaranty Trust Company used their capital to purchase bonds and hold on their books and sold them to other investors as well. The bank purchased over $111,000,000 on the second Liberty Loan (2). The bank’s ability to act as bond salesmen as well made the Liberty Loans a huge success. Over 9,400,000 different entities subscribed to the Liberty Loan making this the most widely distributed bond of any nation “not only in this war but for all time” (2).

A large part of why the Liberty Loan was so successful is the rise of vigilantism in American culture where Americans believed if they didn’t take matters into their own hands then the task at hand would not be completed. The name of the bond also lent itself to a “patriotic impulse” and appeal that brought many subscribers to invest in the offering (2). The vigilantism in America had a large effect on the success of the program, even a ““a flying squad of Guaranty employees volunteered their services for a personal canvass of office buildings and factories in Greater New York, soliciting each individual therein” (6). Drawing comparisons to military units as this squad went throughout the city to solicit as many subscribers as possible for the bond offering. The vast success of the bond’s numbers raised “represent[ed] far more than dollars; they register[ed] a patriotism which is doing more to unite the people” (2). While, the bonds themselves were subscribed to with patriotism, the uniting factor of a group coming together also created patriotism and unity among the American people.

The Guaranty Trust Company of New York along with other banks made sure that the Liberty Loans were fully subscribed through different measures. Banks created payment plans as well as created specific loans for investors looking to purchase the bonds. The Guaranty Trust Company “decided to take subscriptions on a weekly payment plan to accommodate small subscribers who were unable to make payment on the government installment plan of 2 per cent” (7). This was one of the methods by which banks attempted to make more money for their bottom line through creating payment plans and making loans for investors to afford the Liberty Loans. The Liberty Loans’ success was of huge importance for the Guaranty Trust Company and “for the actual selling of the bonds, the company lent as many members of its main office staff as were needed” (4). On all fronts the Liberty Loan program was a huge success in shoring up capital needed to supply our soldiers as well as creating a sense of unity and patriotism within America.