Sunday August 18^th, 1918

Feel pounds better but cannot walk. Looked after well and light diet. Good food – chicken for dinner and fruit for tea. 99.6. Wrote home.

Financing the War

In the first few years of the war, Britain took out War Loans.  These were targeted at banks, institutional investors and very wealthy individuals.  Over the course of the war, the returns on these Loans has steadily increased, starting at 3.5% in 1914 and rising to 5% by early 1917.

The cost of war has also been steadily rising.  In mid-1918, the Chancellor of the Exchequer, Andrew Bonar Law, declared that the country needs to borrow £25 million a week to finance the war.² The money is needed both for Britain’s war efforts and to support its Allies.

The Select Committee on National Expenditure recently reported that to the end of June 1918, Britain had advanced £1,400,000,000 to its Allies.  This was ‘… more than twice the total sum added to the British National Debt during the twenty-three years of the Napoleonic wars’. While the Committee noted that the ‘… defection of Russia and the entry of the US have lessened our heavy financial burden’, these advances are still running at £250 million a year.¹ 

National War Bonds

Despite some scepticism, the Chancellor, introduced the National War Bond scheme in October 1917.  His ambition was that British citizens would buy War Bonds on a regular basis.  This would improve the nation’s cash flow – as War Loans could only be issued in tranches and sporadically.

Since the War Bonds’ introduction, there has been a sustained publicity campaign. One very successful example, shown in the photograph, included a tank and war trophies which moved, with the campaign, across Britain.  There has also been a healthy competition amongst the big cities about which of them could raise the most money.

All-in-all, the introduction of War Bonds has been a great success. Between its launch in October 1917 and mid-August 1918, the country has already raised £1,000,000,000.

A delighted Mr Bonar Law declared, ‘We made our appeal to the patriotism of the British nation, and the response has exceeded our most sanguine expectations. This is more remarkable as National War Bonds were issued in the fourth year of the war, at the moment when our enemies’ hopes were at their highest. 

Now we know that the financial effort of the country will not only be sustained but surpassed and that we shall be able to finance the war through to victory.’²

9^th Battalion / Manchester Regiment War Diary – 18^h  August 1918 – Haudricourt

Church Service as usual. Programme of Training and Work for 19^th & 20^th inst issued (Appendix No 5). Major JS Smylie rejoined form leave to UK.

References & Further Reading

¹ The Observer, August 11^th, 1918, page 6

² The Guardian, August 16th, 1918, page 6

^ Q 30328, copyright Imperial War Museums

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