Savings Bonds - History

History

On February 1, 1935, President Franklin D. Roosevelt signed legislation that allowed the U.S. Department of the Treasury to sell a new type of security, thus the Savings Bond was born. One month later, the first Series A Savings Bond proceeded to be issued with a face value of $25. At first, the main purpose was help finance World War II, these were referred to as Defensive Bonds. On April 30, 1941 Roosevelt purchased the first bond from Treasury Secretary Henry Morgenthau. The next day, they were made available to the public. After the attack on Pearl Harbor, Defensive Bonds were informally known as War Savings Bonds, citizens could buy the bonds for a dime. All the revenue coming in from the bonds, went directly to support the war. Even after the war ended, Savings Bonds became popular with families. Unlike before, people started to just wait to cash them so the bonds would grow in value. To help sustain post-war sales, they were advertised on television, films, and commercials. Even when John F. Kennedy was president, he encouraged Americans to purchase them, which stimulated a large enrollment in Savings Bonds. By 1976, President Ford helped celebrate the 35th anniversary of the U.S. Savings Bond Program. The film, "An American Partnership" honored the role of citizens in financing the nation's growth. In 1990, Congress created the Education Savings Bond program which helped Americans finance a college education. A bond purchased on or after January 1, 1990, is tax-free if used to pay tuition and fees at an eligible institution. In 2002, the U.S Department of the Treasury's Bureau of Public Debt made Savings Bonds available for purchasing and redeeming. Finally, on January 1, 2012 banks and other financial institutions terminated their sales of bonds. Currently, Americans can only buy them online at http://www.treasurydirect.gov/.