Final answer:
To pay for World War I, Congress passed the War Revenue Act of 1917 to impose taxes on the wealthy and inheritances, issued war bonds through the National Bank Acts and the Treasury, and printed money through the Legal Tender Act of 1862.
Step-by-step explanation:
The main answer to how Congress helped pay the cost of World War I is through several methods, including the passage of the War Revenue Act of 1917, which levied a tax on the income of the wealthy and inheritances, as well as the enforcement of high tariffs. Additionally, they supported these acts by enacting the National Bank Acts of 1863 and 1864 which led Union banks to purchase war bonds and the Treasury to issue them. Moreover, the Legal Tender Act of 1862 facilitated the printing of paper money, known as greenbacks. Together, these efforts were designed to ensure that the government could finance the incredibly costly war efforts without solely relying on any single method of capital generation.Explanation in more than 100 words: The financing of World War I required Congress to enact several financial measures. They needed to find a balance between political acceptability and effective fund-raising. Borrowing via war bonds became a key approach, with citizens encouraged to purchase these bonds as a show of support. Taxes were initially avoided due to their political unpopularity, but eventually Congress turned to them as part of a broader strategy. The Liberty Loan Act was significant for raising funds through liberty bonds. The Sixteenth Amendment, ratified in 1913, allowed for federal income tax revenue to be used for the war. Overall, a combination of loans, taxes, bond sales, and inflationary money printing helped finance the war.Conclusion: In essence, Congress employed a multifaceted financial strategy to pay for World War I, using taxation of the wealthy, bond issuance, tariffs, and printed money. This strategy allowed for the accumulation of funds necessary for the United States' participation in the war, while balancing political repercussions.