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DEFINITION of 'Liberty Bond'

A type of bond issued by the U.S. government during World War I. Liberty bonds were introduced as a means of financing the war effort in Europe. Bonds that were sold under the same name were reissued after the September 11, 2001, terrorist attacks to finance the rebuilding of "ground zero" and other damaged areas.

BREAKING DOWN 'Liberty Bond'

The law that Congress passed to introduce the liberty bonds still stands as the legislation that allows the issue of all U.S. Treasury securities. Their issuance represents a major milestone in the awakening of the American investing public to individual securities. However, the first issue of these bonds was not completely sold, which embarrassed the Treasury Department greatly. In response, they launched a massive public awareness campaign using posters, movie stars and other outlets when they issued their second offering in late 1917.

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