War Bonds A form of government borrowing for the financing of war expenditures. War bonds were issued by the belligerent states during the World War, thus allowing for the mobilization of significant parts of the social wealth. Both their attractive conditions – interest rates frequently better than in peacetime – as well as a massive propaganda drive, ensured that the first war bonds were able to raise a considerable amount of capital. The bondholders typically reflected a broad spectrum of the p…