THE BOND SYSTEM

New Zealand Times, Volume XLI, Issue 9257, 26 January 1916, Page 2

THE BOND SYSTEM

To the Editor “N.Z. Times.” Sir. —In last week’s "World’s News” appeared an interesting article, by A. (i t Gardiner, on "The Roots of War, and Struggle of Endurance, in which he strongly advocates economy and thrift. In what better way could Britain and her colonies stimulate this, and at the same time attract large sums of money from other countries* than by totlowing tho example of France and several other countries, and procuring their loans on the Bond system? Take, for example, the £10,900,01)0 loan at 4( per cent, the Commonwealth is advertising for, for nine years. The interest on this would be £4,050,000, making a total to repay of £14,050,000. Now put this loan out on tb© Bond system of bonds of £5 each, giving 2 per cent, interest annually, and dividing, say, about 3 per cent.' in prizes annually. Th© interest would start at £200,000 the first year, and th© prize-money to £300,000 annually. Bach one receiving a prize would only receive that, and not the extra £5 for th© bond. Naturally a person receiving a prize of, say, £IOO would be quite satisfied with that, without tho extra £5. Th© £BOO,OOO prizemoney could be divided into twelve drawings for the year, with 236 prizes each month- . As each prize would mean a bond of £5 wiped out, it would mean an 'annual decrease of £14,160 off the principal each year, with a corresponding decrease in the interest. This would make a total approximate interest and repayments for the nine'years of £1,917,|246, and leaving a balance to repay at th© end of £9,886,720. making a full total repaid altogether of £11,803,966, which would be £2,246,034 less than the way the loan is advertised at 4(t per cent., making a saving tp the Commonwealth of nearly 2i million pounds. By adopting the Bondi system a large proportion of the working class would economise, in every, way they could, to take as many bonds as they could. A large sum would be diverted from such sources as Tatteraali’s, totalisators, gambling saloons, etc., thereby increasing the thrift and economy of the people as a whole. The people would know their money was guaranteed by the Government, and, they would get some interest for their money, until they received it back, on the maturing or the loan, if they had not.received a prize in’ the meantime. A large sum of money would, also bo attracted from other countries. Tb© bonds could bo still further popularised by allowing reputable firms to sell them on the deferred system of 10s to 20s per month, charging about £5 5s for 'each £5 bond. The prizes for the drawings could be allotted as follow-.—Twelve drawings a year, of 236 prizes each drawing, first • prize to be alternately £20,000 . and £10,000; then monthly one each of £4OOO and £IOOO, three each of £SOO, ten of £IOO, twenty of £SO, 100 of £lO, and £IOO of £5. In addition to th© gain to Commonwealth of nearly 2i million pounds on the loan, there would also be a number of ‘ the prizes, and also the interest never claimed, which amounts would also;' of Course, revert to the Govern- . meat. The bonds could be issued with detachable interest coupons attached redeemable at any post office—l am, etc., ECONOMY. Petone, January 24th. .'