PAYING FOR THE WAR.

Manawatu Herald, Volume XLI, Issue 2054, 13 November 1919, Page 4

PAYING FOR THE WAR.

FRENCH LOTTERY SCHEMES

FINANCIER’S NOVEL HILL

In view of the. .heavy deficit in the French Budget ami the; imperative need for raisin”; money to meet the enormous charges arising out of the war, the lotion that the end in view could be best achieved by the organisation of a colossal lottery is steadily gaining ground in France.

Two propositions' for State lotteries were laid before the Chamber some weeks ago, the amount involved in one proposal being £1,200,000,000 sterling, and in the other £4,000,000,000. The authors of these proposals, however, were deputies who have no claim to expert knowledge of finance.

The question has now en up, by M. Andre Lefovre, who shares with M. de Monzie and Raoul Pcret the reputation of beijjg one of the soundest financial authorities in the Chamber. M. Lefevrelms brought forward a Bill to raise £2,400,000,000 by means of a lottery. This, he proposes, should take the form of an issue of 120.000,000 bonds of £2O each. Those bonds would yield no interest, but would be redeemable at par by half-yearly drawings covering a period of twenty years. Thus the scheme really amounts to a loan without interest. In order to compensate for non-payment of interest, it is proposed that in addition to the redemption drawings referred to, there should be a scries of very substantial, prizes which would be drawn for in a manner adopted under the premium bond system. The Bill proposes that for the first two years there should be-a daily drawing for a prize 0f'4,250,000 francs, or £50,000, ami that iu addition there should be two weekly prizes of £20,000, and ten of £4,000. After the first two years it is proposed that the drawing for the £50,000 prize should be weekly instead of daily.

Such, a plan, it is urged, would enable the State to escape the heavy annual interest on charges involved by national loans of the ordinary kind, and would place the Treasury in immediate possession of an enormous sum of ready money. An ordinary loan issued at 25 per cent, discount, redeemable at par and yielding, say, 4 per cent, inteiest tor 25 years, it is pointed out, is a ruinous method of raising money, as it really results in the Stale having to pay something like"£22o for a loan of £IOO.

The advocates of this particular lottery system urge'that it offers a middle course between a costly loan of the type hitherto in vogue and a heavy tax on capital, and they emphasise the fact that although lottery loan bonds carry no interest, they are redeemable at par, whereas a capital levy would be equivalent to absolute confiscation of the amount taken by the Stale,