Bonds

Real World Example

During the period of 1785-1805, the new United States government used bonds to raise money to pay off wartime debts from the Revolutionary War. Bonds represented trust and faith in the government's ability to repay its debts, which was crucial for establishing the nation's financial credibility. They played a critical role in Alexander Hamilton's financial plan to stabilize the American economy and encourage investment. Today, bonds are still important as they help fund government projects like building roads and schools, showing how people continue to invest in their communities' future. For example, when someone buys a savings bond today, they are essentially lending money to the government in exchange for gradual financial growth, similar to how people invested in the young nation's future centuries ago.