PREMIUM BONDS.

Dominion, Volume 6, Issue 1816, 31 July 1913, Page 8

PREMIUM BONDS.

COMMITTEE'S REPORT. BILL TO PROCEED, On behalf of the Special Committee set up to report upon the i'renlium Bonds Validation Bill Mr. W. A. Yeitch said that the committee had taken, evidenco 011 tlio Bill and recommended that it 1)9 ■allowed to proceed as amended. Tho Committee also-recommended tho Government to bring in amending legislation to remove, all doubts as to the legality of the operations of building societies in tho Dominion.

The' only material amendment to tho lfill mado by the Committee is contained in the following new clauses: "The Governor may by Order-in-Council prescribe such regulations as he may think fit for regulating the sale and purchase of premium bonds within the Dominion, andall contracts for the sale and purchase of such Ih)ihls not made in accordance therewith shall be null and void." The Bill Defended, Mr. A. HARRIS (Waitemata) said that it might not Ixj out of place if ho gave lion, members an idea at what premium jxmd'3 wore, and of what his objects were in introducing tils Bill. Premium bon(ls .were lirst sold in Hevr' Zealand by a French company in IUU9. Later, in the same year, a local company was formed. This him obtained from Jlr. Hanuci, of Auckland, a legal opinion as to the business in which it was engaged. The opinion was to the effect that the company was carrying 011 a legitimate business within the statutes. The company was registered in December, 1909. In August, liilO, a doubt having been raised as to tho legality of its business, tho companyi approached tho Minister for Justice. Proceedings were subsequently taken in the Supreme Court with a. view to determining tho position of the company. This object was not attained, but tho company was assured that there would be 110 interference with its business. I'ifteen. months later, in January, 1912, proceedings were taken against the company. At this time the company obtained ah opinion from Sir John Findlay that the talo of premium bonds was not'an offence. -In tho case against the company, the Crown Prosecutor said that it was not contended that investors in premium bonds would in ■any circrunstances lose their money. Tho company, however, lost its case, in England premium bonds were sold openly every day. In Europe premium bon:!s were looked upon as a gilt-edged security, and were much sought after, especially by the poorer people. More especially if theso bonds were purchased on tho time-payment system, they encouraged the practice of thrift. Premium tonus could not possibly be described as gambling stock, although tho system of investment might be regarded us a lottery. Mr. Harris went on to contend that life as a whole was a gamble. He cited the purchase of unclaimed luggage as an. example. Mr. Payne: Too thin. Mr. Harris contended that premium bonds were a. more desirable form of investment than building society shares. Ho went 011 to mention in justification of his proposal the land ballots, Harbour Board debentures, and tho totnlisator. How, ho asked, could a Government that legalised a gambling machine refuse to legalise a legitimate, honest, straightforward form of inve-stnicnt like premium bonds? If tho bonds were legalised thoy could 1)9 utilised in facilitating the loan-raising operations of local bodies. He ventured to predict that if his Bill becanio law tho namo of tii!> member for Waitemata would go down in history as that of a public benefactor. Mr. Russell: A budding statue! Premium Bonds Described. The Hon. D. BIJDDO (Kaiapoi) said ho thought tliero were members iu the House who did not understand what a premium bond was. It was, ho said, a Continental system of making State and municipal bonds attractive to investors, whereby one-half of tho interest which would in the ordinary course have been paid to the investors was paid into a common pool or fund, which pool or fund was afterwards distributed • annually among the investors by lot. He did not wish to condemn premium bonds unduly, recognising that they were issued in all good faith in the countries of origin, where they were accounted a desirable investment. The objcct of the Bill and the question the House would have to consider was to legalise not only what had been done in the past in tho way of sale and purchase of premium bonds, but also trading in these bonds in future. Tho fact was that until some legislation was passed, every purchaser of a premium bond was liable to a fine of .£IOO, according to the judgment of tho Court. Mr. J. PAYNE (Grey Lynn) said premium bonds were a sound investment, the money invested in them being always fully protected. Tho only question to be considered was whether a system of investment, the profits of which were distributed by a lottery, should bo permitted in this country. Ho had adopted an advanced moral code iu regard to gambling, and to let those bonds come in while we did not permit TatlorsnU's sweeps was no more than hypocrisy. Personalis", lie did not object to gambling so (or.;: iis people risked only so much of thoir money as thoy could nlford. What !v.' ..hji-lt't'i lo about 111? operations of the company offering these premium

bonds in New Zealand ilie insidious way in which v.orlc-peoplc had been persuaded to tako up these bonds by timepayment. He. urged tlmt if we were to permit gambling by premium bonds, wo .should "go the whole hoy," ami do away with all our restraints on gambling. For the real inducement held out to investors was not the safety of the investment, or I lie interest, which wa* low, but tho chance of a prize, and (he agents always concealed from the prospective buyer the infinitesimal chance he had of winning a prize. Another objection to the system of premium bonds' investment was' that it would send money out of the country which was badly needed here.

"Bill Has No Chance." Mr. L. M. ISITT (Chriskhurch Xorth) said that it F-semed to him that tho member for Waitemata was wasting the time of the House. Surely the debate on' tho proposal to set up the committee ought to. have convinced him that the Bill had 110 possible chance of being passed. Tho member for Grey Lynn had said that wo had readied "a high moral tone in gambling." This, he declared, was surely a ridiculous statement, only justified by the partnership which the State had taken in the wretched totalisator machine, which 'did more to cripple the finances of til e country except the liquor traffic. The member for Waitemata had professed to bo, actuated by pity for the holders of the bonds. If the member for Waitemata would bring in a Bill to compel tho company to refund all tho money backto investors, 110 would support it. This would protect the investors, and would not foster what he believed to be a most mischievous form of gambling. Mr. G. V. PEARCE (Patea) also said ha objected to the introduction of this most objectionable form of gambling, which would draw out of the country money that was very badly needed. Tho report of tho committee was laid on tho'table,-and the Bill was set dowij for committal to-day.

DEATH OF EX-MEMBERS. MOTIONS OP CONDOLENCE. Tho 11011. W. F. MASSEY (Prime. Minister) moved that the House record its high sense of appreciation of tho services rendered to the Dominion by tho late Alfred Richard Barclay, formerly a member of tho House of Representatives, and respectfully tender to his wife and family sincere sympathy with them in their bereavement. Mr. Barclay, ho said, had, while representing Dunedin, been a popular member of tho House, and although his views did not always find acceptance, he was recognised as a man of strong opinions and of strong character. He (the Prime Minister) was sure the House would 1 concur in extending sympathy to tho widow and family of tho late Mr. Barclay. „ ~, Mr. T. K. SIDEY (Dunedin SoutlO said he could claim a long acquaintance with Sir. Barclay. The late Mr. Barclay had been a distinguished student, and later had been a fluent and versatile speaker. Later he had lectured at Otago University in Constitutional History, and with conspicuous success. As a politician 110 was a Radical, and if he had lived and enjoyed good health 110 might have occupied a much higher position than he had. previously. Mr. G. M. THOMSON (Dunedin North) said that as tho representative.of tho district which tho late Mr. Barclay hhd formerly represented, lie wished to support tho motion. He had known Mr. Barclay from his student days, and ho knew him to be a man of outstanding ability—a member of a family distinguished by ability. Ho was sure the House felt sincere sympathy for his widow, especially in view of the sad circumstances under which his death took place. Mr. J. ROBERTSON (Otaki) also paid a high tribute to the good qualities of tho late Mr. Barclay. Tho' motion was affirmed. Tho Hon. W. F. MASSEY (Prime Minister) moved a similar resolution in respect of tho death of the late George Henry Swan, formerly member for Napier. Ho stated that 110 could-not claim an acquaintance with Mr. Swan, but 110 knew Mr. Swan to havo been a good colonist and to havo had a good record, worthy of emulation, as a public man. Mr. Cx. HUNTER' (Waipawa), Mr. W. D. S. MACDONALD (Bay of Plenty), and Mr. W. A. VEITCH (Wanganui) supported the motion. This motion was also affirmed, and on the motion, of tho. Prime Minister tho House rose at 5.10 p.m. until 7.30. as a mark of respect to the memory-of the two deceased gentlemen.