exemption was $2,000 for a family. Above that level taxes began at the 2 percent rate in 1917, jumping to 12 percent in 1918. On top of that there were surcharges of one percent for incomes above $5,000 to 65 percent for incomes above $1,000,000. As a result, the richest 22 percent of American taxpayers paid 96 percent of individual income taxes. Businesses faced a series of new taxes, especially on "excess profits" ranging from 20 percent to 80 percent on profits above pre-war levels. There were also excise taxes that everyone paid who purchased an automobile, jewelry, camera, or a motorboat. The greatest source of revenue came from war bonds, which were effectively merchandised to the masses through an elaborate innovative campaign to reach average Americans. Movie stars and other celebrities, supported by millions of posters, and an army of Four-Minute Men speakers explained the importance of buying bonds. In the third Liberty Loan campaign of 1918, more than half of all families subscribed. In total, $21 billion in bonds were sold with interest from 3.5 to 4.7 percent. The new Federal Reserve system encouraged banks to loan families money to buy bonds. All the bonds were redeemed, with interest, after the war. Before the United States entered the war, New York banks had loaned heavily to the British. After the U.S. entered in April 1917, the Treasury made $10 billion in long-term loans to Britain, France and the other allies, with the expectation the loans would be repaid after the war. Indeed, the United States insisted on repayment, which by the 1950s eventually was achieved by every country except Russia. Labor The American Federation of Labor (AFL) and affiliated trade unions were strong supporters of the war effort. Fear of disruptions to war production by labor radicals provided the AFL political leverage to gain recognition and mediation of labor disputes, often in favor of improvements for workers. They resisted strikes in favor of arbitration and wartime policy, and wages soared as near-full employment was reached at the height of the war. The AFL unions strongly encouraged young men to enlist in the military, and fiercely opposed efforts to reduce recruiting and slow war production by pacifists, the anti-war Industrial Workers of the World (IWW) and radical socialists. To keep factories running smoothly, Wilson established the National War Labor Board in 1918, which forced management to negotiate with existing