PREMIUM BONDS.

Otago Witness, Issue 3099, 6 August 1913, Page 37

PREMIUM BONDS.

FAVOURABLE REPORT FROM COMMITTEE. (From Our Own Correspondent.) WELLINGTON, July 30. The Premium Bonds Validation Bill, which is in charge of Mr Harris, was again under discussion in the House this afternoon. The report of the special committee, to which tiie Bill was referred last week, was brought up by the chairman (Mr Veitch). The report stated that the committee had taken evidence in regard to the Bill, and it recommended that it be allowed to proceed as amended. The committee also recommended the Government to bring in amending legislation to remove all doubts as to the legality of the operations of building societies in the dominion. The only material amendment to the Bill made by the committee is contained in the following new clause :—“ The Governor may by Order-iu-Council prescribe such regulation as he may think lit for regulating the sale and purchase of premium bonds within the dominion, and all contracts in the sale and purchase of such bonds not made in accordance therewith shall be null and void. Mr Harris stated that last year a petition signed by over 8000 people, asking that the sale of premium bonds be legalised, was presented to Parliament. These bonds were first sold in New Zealand in 1909, when the agent of the French firm sold a considerable number in Auekli.il. In November, 1909, a company with a capital of £42,000 was formed for the purpose of dealing in these securities. Prior to this a legal opinion to the effect that the business was a legitimate one was obtained from Mr A. Hanna. A similar opinion was subsequently expressed by Sir John Findlay. Last year after business had been carried on without interference by the company for about two years and a-half a prosecution was instituted against the company without notice, and its business was declared to be illegal. Very many of these bonds had been purchased in Now Zealand, and a hardship would be inflicted upon the holders if the Bill were not passed. He contended that the premium bonds afforded a better form of investment than building societies. The holders of the bonds always received sonic interest on their money, and they were not required to pay anything towards working expenses, whereas in the case of building societies no interest was received and a contribution had to be made to working expenses. If the company’s business was legalised it would be able to underwrite loans for local bodies at more favourable rates than those obtainable at present. If this were done the name of the member for Waitemata would go down to posterity as that of a public benefactor. —(Laughter.) Mr Buddo explained that the main feature of the premium bonds was that one-half of the interest was retained and put into a lottery. It was necessary for something to be done, as under last year’s judgment every purchaser of the bonds was liable to a fine of £IOO. He considered that the member for Waitemata

was justified in introducing the Bill when asked to do so by one of his constituents. Mr Payne opposed the legalisation of the bonds. He said there was no analogy between these bonds and building societies. Dealings in the bonds was not only a form of lottery, but it also involved the sending of money out of the country. The chance of holders of the bonds receiving prizes was infinitesimal. Mr Isitt said that tire Bill had not “Buckley’s” chance of passing. When the company entered upon its operations it was fully aware that it was standing upon very thin ice. It was not acting in ignorance. If the House passed the Bill it could not consistently refuse to establish national lotteries. If the member for Waitemata would bring down a Bill to compel the company to refund the money received from the holders of the bonds he would support it. Mr Pearce said that the sale of the premium bonds was one of the worst possible forms of gambling. If the Bill passed it would soon reduce the deposits in the Post Office Savings Bank. The report was ordered to lie on the table, and the Bill was set down for committal next sitting day.