When Wall Street Met Main Street: The Quest for an Investors' Democracy

Abstract

Julia C. Ott offers the argument that low-denomination Liberty Bonds, issued to finance World War I, introduced the average American to the concept of buying securities. The habit acquired during the war led consumers to continue investing their savings in securities rather than bank deposits, making them “citizen-investors” (p. 102). The book concentrates on World War I Liberty Bond sales, showing the extensive marketing, which included encouraging a morality-tinged “thrift” among the less wealthy. The smallest denomination Liberty Bond was $50, but after 1917, “stamps” could be bought at post offices, military institutions, and schools and saved up for a bond. The government marketed the bonds with appeals based on loyalty and directed campaigns at specific ethnic groups, labor unions, and women. Its marketing tools included intimidation, guilt, and even vague threats. It was not until after the war that the bond campaign created controversy. Government leaders saw debt as a way to fund deferred government projects, while others saw this as an inappropriate diversion from private spending. After 1920 some corporations, such as AT&T and Bell, encouraged small investors. Companies also started employee stock purchase plans. Union leaders hated the idea of workers owning stock and derided the practice as a way for companies to take back some of workers’ wages without really giving them any power.

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