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Authors: Benjamin Ginsberg

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After the revolution, the new federal government was prohibited from levying direct taxes and was financed via land sales and tariff and customs duties supplemented by moderate borrowing in national and international credit markets. During the Civil War, however, its need for revenue increased so dramatically that the government could not secure sufficient funds from domestic banks and financiers. European investors, for their part, had no confidence that the Union would prevail on the battlefield and were reluctant to purchase US securities.
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This situation forced the federal government to turn to new forms of revenue extraction, including income taxes, bond sales to small investors, and the issue of a variety of legal tender notes in small denominations. All these revenue devices depended upon a measure of popular acceptance and left the government financially dependent upon popular confidence to meet the Union's military expenses, which ultimately totaled the then-astronomical sum of more than $4 billion.

One major source of federal revenue was the sale of government bonds to small investors. In 1862, Treasury Secretary Salmon P. Chase invited Ohio Republican banker Jay Cooke to attempt to place $500 million in government bonds that could not be sold to domestic banks or foreign investors. Cooke developed a plan to market these securities to ordinary citizens who had never before purchased government bonds. He thought he could appeal to the patriotism of ordinary Americans, and he believed that widespread ownership of government bonds would give ordinary Americans a greater concern for their nation's welfare.
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Cooke established a network of 2,500 sales agents throughout the North and used the press to promote the idea that purchasing government securities was both a patriotic duty and a wise investment. In every community, Republican Party organizations worked hand-in-hand with Cooke's sales agents, providing what historian Eric McKitrick calls the “continual affirmation of purpose” needed to sustain popular support and the regime's finances through four long years of war.
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During the First World War, all the major powers dramatically increased taxes on individual incomes and made use of bond sale campaigns to persuade citizens to contribute to the war effort. Germany's government, for example, conducted nine bond drives during the course of the war, through which it raised nearly two-thirds of the military expenditures required by the war effort. Great Britain raised more than a billion pounds in a public campaign that urged the British people to “Lend your money to your country.” In the United States, the government urged Americans through “borrow and buy” campaigns to participate in what were called “Liberty Loans” and “Victory Loans.” The Liberty and Victory Loan campaigns were conducted by the War Loan Organization, which was organized into sales, speaking, and publicity bureaus. Bonds were sold in denominations as low as $50, and purchase on an installment plan was allowed so that even impecunious citizens could participate. Tens of thousands of volunteers sold the bonds throughout the nation. For those too poor to afford these bonds, the government also sold thrift stamps, war savings certificates,
and small bonds in schools, post offices, and factories. Stamps cost as little as twenty-five cents each. A sheet of sixteen thrift stamps could be exchanged for and interest-bearing $5 bond. Stamps and savings certificates were also sold by an army of civilian volunteers.
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During the Second World War, the United States also significantly broadened its tax base. The 1942 Revenue Act increased the number of households subject to the income tax from thirteen million to twenty-eight million. At the same time, the government launched bond campaigns that eventually produced $50 billion in revenues to help finance the war effort. American workers were encouraged to enroll in the payroll savings plan. Under this scheme, workers agreed to have 10 percent of their income automatically deducted from their paychecks and invested in savings bonds. By the end of the war, some twenty-eight million workers were participating in the plan.

Wartime Production

By the end of the eighteenth century, the large-scale industrial production required for an effective military effort not only increased the cost of armed conflict but also made the factory worker as much a soldier in the war effort as the infantryman in the front line. During the First World War, the United States alone produced 3.5 million rifles, 226,000 machine guns, 3,000 bombers and more than 630 million pounds of gunpowder. During the course of World War II, America's defense plants produced 1,200 major warships and 124,000 other vessels, 100,000 tanks and armored vehicles, 310,000 aircraft, 40,000 artillery pieces, 12 million rifles and carbines, and 41 billion rounds of ammunition. The Soviet Union, despite having to evacuate its major defense industries to the Ural mountains after the Germans overran Western Russia, managed to build more than 90,000 tanks, 137,000 military aircraft, and more than 400,000 artillery pieces.
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These prodigious efforts required enormous armies of production workers, including millions of women, willing to work long hours undertaking physically strenuous and often dangerous tasks.

In Britain and the United States, during both world wars, millions of women joined the industrial workforce to replace men who had been called to the military. In Britain during World War I, women became the mainstays of the munitions industry, and in the United States the number of women in the workforce increased by more than five million during World War II. These women were celebrated by the heroic symbol of “Rosie the Riveter,” first presented in the eponymous 1942 song written by Redd Evans and John Loeb. Rosie was said to be a tireless worker in a defense plant, who was doing her part to help the American war effort. Rosie had her counterparts in other belligerent nations. Canadian wartime posters, for example, featured a female assembly line worker named “Ronnie, the Bren Gun Girl.” In the Soviet Union during World War II, tens of millions of women replaced men in the nation's factories and on the farms. After the German invasion, some 2,500 Soviet defense plants had hastily evacuated thousands of miles into the Soviet interior. Here, millions of women, along with men too old or too young for the military, worked to build the tanks and aircraft and other weapons upon which the USSR depended. Generally, defense workers were expected to work a sixty-six-hour week with one rest day per month. There were no holidays, and compulsory overtime was the norm. In the initial months after the evacuation of industry to the Ural Mountains, the conditions of life were primitive, to say the least. Workers slept in caves or tents, and factories had no walls or roofs. Nevertheless, without the weapons being produced, the USSR would collapse.

Voluntarism

States at war during the past two centuries have relied upon their people not only to fight, pay taxes, and work, they have also depended upon millions of citizens to devote their time on a voluntary basis to engage in the hundreds of tasks necessary to support a nation at war. For example, the American Red Cross was an outgrowth of the voluntary relief efforts mounted to aid wounded soldiers during the Civil War.
During World War I, the Red Cross received a government charter and built a network of 3,500 chapters with some twenty million volunteer members.
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During the First World War, the Red Cross, along with the YMCA, organized voluntary efforts to provide spiritual, recreational, and medical support for soldiers at home and abroad. Similar efforts were made by such voluntary organizations as the Knights of Columbus, the Salvation Army, and a host of others. And, as noted above, the administration's all-important bond drives depended upon armies of volunteers who organized bond rallies and sold bonds to their neighbors.

During the Second World War, volunteer efforts in every community were organized to support bond sales, to recycle materials that might be useful for the war effort, and to mount a civil defense effort in case enemy bombers appeared over the nation's skies. One unusual group of volunteers called itself the Women Airforce Service Pilots (WASPs). The WASPs consisted of some one thousand women pilots who volunteered to fly new warplanes from factories throughout the nation to East coast ports for shipment to Europe. The 1,200 WASPs allowed a similar number of male pilots to be assigned to combat duties. During the war, the WASPs flew more than 12,000 aircraft to their ports of embarkation. They also towed targets for flight students engaged in gunnery practice, crews engaged in anti-aircraft practice, and functioned as test pilots for new aircraft.

Volunteers also played a major role on the British home front in both world wars. Hundreds of thousands of men too old or infirm for military service volunteered for the Home Guard, where they some manned some 1,500 anti-aircraft guns, served as sentries, and watched for German aircraft and parachutists. Tens of thousands of women volunteered to serve in a variety of military auxiliary forces. For example, members of the Women's Auxiliary Air Force (WAAF) served as radar operators and plotters and operators of barrage balloons, and played a key role in directing British fighters to intercept German bombers during the Battle of Britain. Another group of women volunteers replaced the farm workers called to serve in the military. During both
the First and Second World Wars, the Women's Land Army (WLA), engaged in farm work. In the Second World War, some 90,000 WLA workers ensured that Britain would not starve despite the German blockade of its shipping.

FROM COERCION TO PERSUASION

As governments came to depend upon popular willingness to engage in such voluntary activities, along with a willingness on the part of millions of individuals to serve in the military, pay taxes, buy bonds, and work long hours in factories, governments also found it necessary to rule less through force and more through persuasion. In other words, war gradually impelled regimes to show their own people what Gramsci called the velvet glove, rather than the mailed fist, of state power.

Propaganda

An early manifestation of this shift in modes of governance was the rise of propaganda as a major governmental tool. The term
propaganda
simply refers to a campaign of information and ideas, whether true or false, designed to persuade some audience to support a particular cause or political leader. Similar information and idea campaigns used to promote products and services are usually called advertising. The term
propaganda
apparently derives from the Catholic Church's
Congregatio de Propaganda Fide
, or Congregation for Propagating the Faith, established in 1622 to encourage the spread of Catholic teachings in non-Catholic realms.

The term
propaganda
has a negative connotation because of its association with Nazi Germany and Stalin's USSR. Accordingly, the US government refers to its own propaganda efforts as “public information.” Propaganda, however, should be seen in a more positive light. Governments able to rule entirely through force and fear have no need to employ propaganda to persuade their citizens of anything, though
they may aim propaganda at external audiences they do not control. Domestic use of propaganda suggests that a government is, for one or another reason, interested in courting popular support and approval. Every government, of course, makes use of both force and propaganda but, in what we might call the most martially experienced states, the balance seems to favor carrots over sticks. The US government, for one, generally incarcerates or—as we have learned—sometimes kills only those who have proven extremely resistant to its public information efforts.

In ancient times, long before the term was introduced, secular rulers made use of propaganda, mainly to bolster the morale of their own troops before battle and to attempt to unnerve the enemy forces facing them. For example, in the campaign against Athens during the fifth century BCE, Spartan troops were told, “We must not then fall short of our fathers' standards, nor fail to live up to our own reputation. For, the whole of Hellas is eagerly watching this action of ours…Think, too, of the glory, or, if events turn out differently, the shame which you will bring to your ancestors and to yourselves, and with all this in mind follow your leaders…”
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Writing in the fourth century BCE, Kautilya recommended the use of propaganda to confuse and demoralize opponents. “In the enemy's territory they shall advertise, in particular, the appearance of gods and his receiving arm and treasury from divine sources. Whenever there is an opportunity (e. g., when interpreting questions to gods [
devaprasna
] through oracles, omens, the crowing of crows, body-language, dreams, bird calls, and animal noises), they shall proclaim the meaning to be victory for the conqueror and defeat for the enemy. Any appearance of a meteor in the constellation stars of the enemy's birth shall be proclaimed by a beat of drums as an omen of the imminent defeat of the enemy.”
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In the seventeenth century, with the expanded use of printing presses and the development of copper plate that permitted posters to be quickly printed, propaganda could be aimed at a larger audience. This became evident during the Thirty Years' War, when the pen and the sword were said to have forged a “formidable alliance.”
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Much of
the propaganda produced in the seventeenth and eighteenth centuries had an external rather than internal target. That is, government propaganda was aimed more at undermining the morale of the troops, supporters, and subjects of an opposing regime than rallying support among the government's own subjects. For example, when Gustavus Adolphus of Sweden entered the war on the side of the Protestant forces, he launched a propaganda campaign aimed at the subjects of the various German principalities that his troops invaded. His “War Manifesto,” along with a host of other leaflets and pamphlets, was widely circulated. These propaganda tracts were designed to justify Gustavus's involvement in the war as an effort to liberate his coreligionists from Papist tyranny. During the same war, Protestant forces sometimes waged propaganda campaigns against one another. Thus, the Lutheran stronghold of Saxony issued pamphlets and posters attacking the Calvinist forces in the Palitinate.
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