The Taihape Daily Times AND WAIMARINO ADVOCATE. WEDNESDAY, AUGUST 25, 1920. PREMIUM BONDS.

Taihape Daily Times, Volume XI, Issue 3561, 25 August 1920, Page 4

The Taihape Daily Times AND WAIMARINO ADVOCATE.

WEDNESDAY, AUGUST 25, 1920. PREMIUM BONDS.

With which is incorporated "The Taihape Post and Walmarino News,"

At the annual meeting of the Taihape Chamber of Commerce questions were introduced that are of more or less vital interest at this stage of after war conditions. Although such matters were not, perhaps, in tne category of subjects-primarily interesting to a Chamber of Commerce, they are distinctly legitimate and instructive subjects for discussion. One of these was a proposal to raise money—State and local body loans — per medium of what is known as premium bonds. This is not at all a new process of government loan-raising for it has been in popular vogue in Europe for a very long time. In fact, French, Turkish and other premium bonds were bought and sold in this ' Dominion some ten or fifteen years ago. The sale of such bonds' was prohibited by Act of Parliament, ostensibly to stop the gambling they in- • volve, but in part because the premium bond method of loan-raising was so popular that it enabled countries adopting it to raise a considerable portion of their cash requirements from amongst the middle and lower class people in the British Empire. During the very short period premium bond traffic was permitted in New Zealand some iof the bond-holders were fortunate enough to draw large sum s of that interest payable on bonds* which is not distributable in the exact, uniform way it is on British loans. The gambling nature of premium bonds, is explained in this distribution of interest 'On money invested. Premium bonds bear.interest just as other bonds do, but instead of four per cent being paid in full at regular periods only two or three per cent is paid and the other tone or two per cent is allowed to accumulate fOia month or more, and divided into sums, sometimes amounting to on'* hundred thousand pounds, down to one thousand, and these sums are drawn for, as they accumulate, at regular intervals, often of a month, in which drawings, or lotteries, every j bond, if it is only for on' 1 shilling, participates. Therefore the bmd-holder merely accepts two or three per cent and allows the balance of interest to be used in the Avay of a lottery. It is true that although traffic in such bonds is not permissible in the British 'Empire, there are many British holders of-them, and several cases have been reported in which those British holders have drawn very large sums of interest distributed by way of the lottery. There is another aspect which must not be lost sight of; it is reported that when war broke 'out there were hundreds of thou-tmls of pounds worth of Turkish and South i European bonds held by poo; peojle in Britain, and that by the collapse j of the Turkish Empire that money is ; likely to become a total loss. In j any case the gambling aspect will stop simply because there is no ac cumulation of interest going on. 'u these troublous times there is likely to be a desistence from touching Continental premium bonds, and it is icnly natural this would result in some effort to have a British issue ! that would satisfy the gambling appetite of large numbers of people who J have got accustomed to that particular form of gambling. However, to argue that premium bond loan rais - ing should be established simply because it is not a worse or more dangerous form of gambling than that provided by the totalisator, is illog- ' ical, because, if one form of gambling is detrimental to the State so is another, and the desire should be to lessen rather than increase the evil.