War bonds to be issued for first time since WWII

Associated Press

WASHINGTON — The Treasury Department says it will issue war bonds — the first since World War II — to help pay for the fight against terrorism and for relief efforts.

Several lawmakers sent a letter to Treasury Secretary Paul O’Neill Friday urging that "Patriot Bonds" be issued.

When they will be available to the public, how many will be sold and in what denominations will be up the department. Treasury spokeswoman Betsy Holahan said Friday the bonds could probably be issued within a month.

"The public is unified in its desire to take decisive action, and now will have the opportunity to contribute directly to help rebuild the broken and retaliate against terrorism," said Sen. Mitch McConnell, R-Ky., who sponsored war bond legislation in the Senate and signed the letter to O’Neill.

The government has issued special bonds, essentially a version of existing savings bonds, to help pay for war efforts since the Revolutionary War. In World War II, they were initially offered in May 1941 as defense bonds and changed to war bonds after the Japanese attack on Pearl Harbor.

The government raised billions through bond drives between 1941 and 1946, including $50 billion in war bonds, according to the Congressional Research Service.

The Senate and House recently approved legislation for the issuance of war bonds.

Treasury officials had been lukewarm to the idea, saying a better way for citizens to help the country would be to donate to charity or spend money to boost the economy.

The situation was different during World War II, when the government wanted people to save money rather than buy goods to keep inflation in check.