The federal government faces a demand for billions in unclaimed bonds dating back to the fundraising efforts of patriotic World War II, leading to a confrontation between the states that say they should give the money and a Treasury Department that claims of ownership.

World War II unleashed a campaign of unprecedented buying bonds, driven by one of the largest advertising campaigns ever seen - a unit involved in obedient motives of celebrities, politicians and cartoon characters alike.

Most American households bought at least one link at a time and many never got in - thanks in part to a 40-year maturity on the bonds. And those same "Series E" war bonds still sold by the federal government until 1980.

More than $ 16 billion of bonds are unclaimed, lost or forgotten with the death of the original buyers.

The state attorneys general suing the Treasury Department charged that the federal government made no effort to find those people. They want the money given to states that have a legal system rather than find the owners of unclaimed funds.

"It's better for the millions of Americans who are the legitimate owners to have to return to the States, as States make a genuine effort to find," said David Bishop, a partner at Kirby McInerney representing the states in the suit. "If after searching for them, you can not find, the money can go to work in the communities where they bought the bonds."

The Treasury Department counters that aims to find precisely the owners of unclaimed bonds, and says he has a website where people change simply enter your Social Security number to see if you have one. And he points out that the money is not there somewhere.

"One of the misconceptions out there is that there are a lot of cash sitting somewhere in a drawer. The savings bond money was used to run the daily operational costs of the government," said Joyce Harris, Bureau public debt. "These are obligations of the federal government, not states. There is no pot of gold out there waiting for someone to take it."

The Treasury also said that most of the unclaimed bonds are much more recent than the original World War II bonds. And overall, 99 per cent of people claim their bonuses.

And no cash often choose to do so for tax reasons, or perhaps by a sense of patriotism, "Harris said.

"Frankly, people are aware of the bonds," he said. "Most, if contact with them, are aware of the bonds."

Not that the states have the required free money, about $ 55 million for Montana. States would be required to pay obligations, no matter if it takes decades - or more - to appear. In the meantime, however, States typically allocate the interest earned on unclaimed funds for schools and other purposes.

Steve Bullock, Attorney General of Montana, said states - not the federal government - legally granted the right to work with the money.

"Firstly I think that's what I do. I think it's money that should be in Montana," Bullock said. "It's important that only action to protect state interests.

The complaint was first filed in federal court in New Jersey in 2004 with New Jersey and North Carolina as the plaintiffs. Montana, Kentucky, Oklahoma and Missouri, later joined the case. All States would benefit if the claim succeeds.

The case was reduced to constitutional arguments. The federal government lawyers are discussing the states have not stopped what they see as a matter of contract between the original purchaser and the Treasury Department.

The states hope the arguments in the case that was made later this year on a federal government proposal to dismiss the case.

Six states of Kentucky, Missouri, Montana, New Jersey, North Carolina and Oklahoma, have filed suit in federal court seeking payment from the federal government for money not been distributed to individual citizens. The war bonds represent a potential gain of revenue for cash-strapped governments are demanding their own state laws that entitle them to the unclaimed property of residents.

California and New York could take as much as 1.6 billion U.S. dollars each if they join the lawsuit. Similarly, Virginia and Maryland, could get more than $ 300 million each.

The Treasury Department operates a website http://treasurydirect. gov / indiv / tools / tools_treasuryhunt.htm that allows you, using your social security number, the search for unclaimed savings Series E bonds issued in 1974 or later.

In the 1940s, the federal government tried to avoid inflation and raise funds for the imminent U.S. involvement in World War II by selling savings bonds to the public. The bonds, which acted as miniature loans bondholders of the federal government was supposed to expire in 40 years. Americans bought more than $ 180 million in U.S. war bonds In recent years, but more than $ 1.6 billion of those were never repaid after they came due. Montana's estimated share of the pot is $ 55 million, said state attorney general, Steve Bullock.

The long maturation period for the relatively low return on investment in bonds led to billions of dollars go unclaimed bonds, probably because they have lost, forgotten, or the bondholders died and his heirs claimed them.

Montana, along with Kentucky, Missouri, New Jersey, North Carolina and Oklahoma, filed a lawsuit in federal court last year trying to force the U.S. government to deliver unclaimed federal bonds to the states. If successful, the suit could be a boon to revenue-depleted states.

But federal officials will not give up without a fight to reclaim money. According to court documents, the federal government plans to argue that states have no authority to intervene in what amounts to a loan agreement between the government and bondholders.

Both sides are expected to have his case in federal court in New Jersey in the coming weeks.

Bullock said the lawsuit was not filed by the States as a means of securing a new source of revenue, but has to do with defending the legal responsibility of States to deal with the property claimed.

"This is an area that has not been delegated to the federal government," Bullock said. "The driver did not turn around and say:" Let the government fund. The driver was that this is an area that is Prevue states, and instead of having to sit on money in the bank account of the federal government is money that belongs to any of the bondholders or the people of Montana. "

According to court documents, the states say the Treasury Department never attempted to find the original bondholders or their descendants. Unlike the federal government, states have a legal framework in place for dealing with unclaimed property.

"(Related unclaimed property) has always been a role that states are filled, not federal," Bullock said.

Each of the states involved in the lawsuit in its statutes on their books requiring that unclaimed property be turned over to the protective custody of the state. Under Montana law, if the state is not the true owner of the property within three years, should be sold to the highest bidder. In the case of war bonds, Bullock said the money would go to the state general fund.

"At this point you have $ 16 billion in Federal Treasury, $ 55 million of which belongs to Montana," Bullock said. "Instead of having that money sitting in the Treasury of the Federation in which nobody is making any effort to return it, it seems that it should be returned to the state.

"These statements are not asking for anything more than what was promised during the sale of the bonds."