PREMIUM BONDS.

New Zealand Herald, Volume LXVII, Issue 20639, 11 August 1930, Page 14

PREMIUM BONDS.

Sir, —In Saturday's Herald, under the heading of " State Lotteries," Mr. S. F. Carter asks if there is no way of compromise between the constant stream of money from New Zealand to Tasmania (mostly wasted in a straight-out gamble) and utilising the gaming spirit which is inherent in human nature to the public good. Mr. Carter then outlined a scheme which, although somewhat more complicated, is one that has obtained in other countries for many years. As a matter of fact, the city of Paris has not raised a loan in any other manner since 1840. The added attraction of a possible prize with a small annual interest and absolute safety of capital has made the city of Paris loan flotations,so successful that they are always oversubscribed. The feudal rate of interest is 2£ per cent., with six ballots for premium redemptions annually. A sinking fund is set up to redeem the bonds at par that are not drawn at a piremium. New Zealand 5| per cents, floated under this system would allow for very handsome prizes and could be arranged to suit the purchasing power of all, without any group system as suggested by Mr. Carter. As to his idea of a half per cent, for expenses of administration adding one year extra on to the currency would provide more than requirements for this out of the interest on the accretions of sinking fund. Some day our politicians may wake up and make provision to utilise this great .untouched market for loan purposes. William Noton.