As the U.S. prepared to bring the troops home from World War I, the fifth and final Liberty Loan drive was held. It began 89 years ago today and was held for three weeks, ending May 10, 1919. Among my grandparents' things, I found three interesting photos from that time. There was no identifying information on the photos beyond the images themselves, and to be able to tell you about them, I ended up doing enough research to write a book. Thanks to the internet, though, I don't have to reinvent that particular wheel. Instead, I'll tell you a little about the history in the photos, and give links to the most interesting of the information I found about many of the details therein for those who want to know more. (That's, um, all of you, right?)
Unlike the current war in Iraq for which we are heavily in debt to China, the American people purchased Liberty Loan Bonds to finance the cost of our participation in World War I. In other words, we were in debt to ourselves. (Click here to see what Liberty Loan Bonds looked like; right-click on a bond and select View Image to see a larger version.)
The first four issues were 30-year bonds, in denominations ranging from $50 to $100,000, at 3.5%, 4%, 4.25%, and 4.25% respectively. The fifth Liberty Loan, however, took the form of short-term (5-year) notes at 4.75%, about which this was said:
The Victory Reveille, issued in the interest of the Government Loan Workers of the Seventh Federal Reserve District, on April 14, 1919, emphasized these points in a discussion of "Short-Term Notes vs. Bonds", when it quoted a high executive of the Federal Reserve Bank on the attractive features of the short-term offerings as follows:The banking institutions of the country are now carrying a very large amount in total of Government war Loans of previous issues, and it would be a serious mistake to ask them to add to their present holdings a very large share of the coming issue—a mistake which would be reflected in the curtailment it would necessitate in lines of commercial credit to firms, corporations and individuals.
It is of the utmost importance that banking resources be kept liquid for commercial requirements, in order that the process of readjustment now going on, and a return to more nearly normal pre-war conditions may be expedited.
The war has taken comparatively little money out of the country, and the bulk of the war loans has gone into high wages to labor and large profits to productive industry. Savings deposits have grown tremendously and other general banking deposits have at least shown no decrease.
The money is here and the appeal in the coming Loan must be made to those who now possess it. Because of their short term and the satisfactory rate of interest which they will bear, the new notes will appeal to business men and our great commercial interests, as well as to investors generally even without the pressure of the war in progress. The Loan will go well, but it is absolutely essential to realize for it the widest possible measures of distribution. [p. 162]
[Source: The War Purse of Indiana: The Five Liberty Loans and War Savings and Thrift Campaigns in Indiana During the World War by Walter Greenough (Indiana World War Records, Volume II) published by the Indiana Historical Commission, Indianapolis, 1922. The full text of this book is online. I didn't read it cover to cover, but wherever I dipped in, I found interesting details about the Liberty Loan program. Although specific to Indiana, much of it was probably fairly representative of what took place throughout the country. The book is more like an up-close-and-personal narrative than a scholarly treatise on the history and economics of war financing, so it's pleasantly readable.]
Smaller investments were encouraged as well, in the form of War Savings Stamps, the purpose of which was slightly different:
There was a limited amount of labor and a limited supply of raw material of all kinds in the country. The vigorous prosecution of the war created a very heavy drain on the labor supply of the country, by both the selective service law, which was calling millions of men from their industrial pursuits to join the active army, and also by reason of the fact that the necessity of manufacturing the almost endless quantities of equipment and munitions required to equip such an army, caused the establishment of many new and varied industries. There was thus, at a very early stage of the war, created a shortage of labor which was very seriously interfering with the production of the equipment necessary to maintain our army and aid our allies. At the same time it was apparent that many of the non-essential industries, instead of curtailing their production, were rather increasing it, owing to the fact that, on account of the war, wages had risen in some places to unheard of extent and much of the surplus wages was being spent in luxuries.
The movement therefore was meant primarily to combat this excessive demand for luxuries, and thus release labor for both the actual military service and for work in supplying munitions for the army. The idea of the campaign was to impress upon the American people that if their money, even in small amounts, was lent to the government it would be possible to use that money in the hiring of labor and the purchase of raw material for purposes that would have a direct bearing upon the winning of the war, and that if, as a result of this loaning of small amounts to the government, consumption of non-essentials was largely decreased, this would release labor and raw material from non-essential purposes to the production of material absolutely necessary to win the war. The appeal primarily was: "Do not spend your money for unnecessary luxuries, as this will take labor and material from the essential industries."
The sale of the 25-cent Thrift stamp and the five dollar ($5) War Savings stamp was carried out as the most convenient means of diverting the idle quarters and dollars from the non-essentials and directing them into channels essential to the war. The actual securities were very similar to those used by the British. The smallest denomination was the 25-cent Thrift stamp. These stamps, as purchased, were placed on Thrift Cards and when sixteen stamps were attached a card had a value of four dollars ($4) if used in the purchase of a War Savings stamp. The War Savings stamp was what is technically known as a discounted security. It was a promise of the government to pay to the holder five dollars ($5) on the first of January, 1923. Inasmuch as it was to pay 4 per cent, interest, compounded quarterly, the amount of the interest was deducted from the purchase price, which was thus set at from four dollars and twelve cents ($4.12) to four dollars and twenty-three cents ($4.23). For the purpose of making the handling and sale of these stamps as simple as possible, it was provided that the cost in January, 1918, would be four dollars and twelve cents ($4.12), and that it would increase one cent each month throughout the year, and that at the close of the year that series of stamps, payable in 1923, would no longer be sold. [Greenough, p. 202-203]
In the photo above, you see a giant replica of a Burroughs adding machine standing in front of Detroit's old City Hall. My grandfather, Rosmer P. Kerr, worked for Burroughs in his twenties and spent the rest of his career life as a purchasing agent for the City of Detroit. I'm not sure which of the two he was working for at the time of this photograph, but I'm assuming that the purchasing office would have been located in Detroit's magnificent old City Hall, so this photograph was doubtless very interesting to him.
Below the numbers on the front of the adding machine it says "TOTAL SUBSCRIBED TO DATE." I'm not sure whether the total shown reflects subscriptions from Detroit only, Wayne County, the state of Michigan, or the whole Seventh District, which also included Wisconsin, Illinois, Iowa, and Indiana. However, Michigan's quota for the fifth Liberty Loan was $110,955,000 and subscriptions ultimately exceeded that amount by more than $38,000,000. [Greenough, p. 261]
To the left of the adding machine, there is a small building which I believe served as a sales office for the Liberty Loan program. Although it's impossible to make out the signs on the building, similar buildings were used in other cities.
Detroit's old City Hall was located on Woodward Avenue, across from the Soldiers and Sailors Monument at the south end of Campus Martius. It served the City of Detroit from July 1871 until September 1961, when it was razed to make way for an underground parking garage and Kennedy Square, an open plaza. At SkyscraperPage forum, a thread about your city's greatest architectural loss has an excellent photo of old City Hall (third photo from the top) and one of present-day Campus Martius (fifth photo) which includes a view of the Soldiers & Sailors Monument (it dwarfs the cars in the photo!). Since 2006, the turquoise building, One Kennedy Square, occupies the site where the old City Hall stood. Wikipedia's Detroit City Hall article includes photos of the statues which were removed from the building before demolition.
Click here for a present-day interactive 360-degree street view of Campus Martius.
Learn more about Campus Martius a century ago at a website created by James B. Moran. Scroll down the left pane for links to his pages on Old City Hall, Soldiers and Sailors Monument, Electric Streetcars, and other interesting aspects of Detroit in 1906.
Here are three books, all of them available full-text online, which have good sections describing the Soldiers and Sailors Monument and its history:
- Michigan in the War by John Robertson, W.S. George & Co., 1882 (see p. 109-114, text preceded by a full-page drawing of the monument)
- The Red Book of Michigan: A Civil, Military and Biographical History by Charles Lanman, E.B. Smith & Co., 1871 (see p. 218-221)
- The History of Detroit and Michigan: A Chronological Cyclopaedia of the Past and Present by Silas Farmer, Silas Farmer & Co., 1884 (see p. 311-312) There is also a Volume 2 (Biographical Edition), c. 1889, about notable Detroiters from all walks of life.
I've added all of the books mentioned herein to my library at Google Book Search. Readers will find all eight volumes of The World Book there. (Unfortunately they are not listed in numerical order!)