CORRESPONDENCE. GAMBLING AND PREMIUM BONDS.

Taranaki Daily News, Volume LIV, Issue 21, 19 July 1911, Page 7

CORRESPONDENCE.

GAMBLING AND PREMIUM BONDS.

To the Editor. Sir,—ln your issue of Monday last there appears a report of a sermon on "gambling" by the Rev. J. W. Burton, with the spirit of which I am wholly in accord, but in it he makes a reference to "premium bonds," which shows that he utterly misunderstands the nature of these securities, and does them a great injustice wiien he classes them with Tattersall'a and the totalisator, and in fairness 1 must ask you to kindly give me a little space to explain their real character, which I will do as briefly as possible. A State or city such as Paris requires ito raise money for municipal purposes just as New Plymouth issues its borough loans, but instead of issuing debentures in amounts of £IOO, which can only be taken up by capitalists, it issues bonds of £4 to £lO, payable to bearer within a. stated time, and paying interest at, say, 4>/s per cent. Instead of'paying the full amount of interest .(which is secured by the city rates), only 2% per cent, is paid, and of the remaining 2 per cent., ly s per cent, provides a sum of £15,000 annually on a loan of £1,000,0(10 to be distributed as bonuses. The remaining 1 / 2 per cent, is invested at compound interest, and as it accumulates drawings are periodically held at which some of the bonds are drawn for repayment, some at par, that is, at the amount for which the bond was issued, and the remainder of those drawn are repaid with the £15,000 divided amongst them in varying amounts as bonuses. In this way the loan is made attractive to investors, and the smallest investor has an absolutely safe security for his savings. The above is the general* principle of bond issues, and I maintan that so far from being a gamble they are a check to various forms of gambling, and are an incentive to thrift, and, further, that they stand on exactly the same footing as life insurance, the benefits of which are indisputable and which is generally • recognised afl a moral duty. Like lite insurance the money contributed is absolutely secure, and at some time a larger sum will be returned to the investor than what he has paid in. The holder of bonds, however, receives his interest annually instead of accumulated as in an endowment or life policy. The principles in each are identical, namely, security, with a moderate rate of interest, payment by instalments for those who cannot put down a lump sum, and ultimate return, of the principal invested. As a provision for wife or child the purchase of premium bonds ranks with life insurance, and the addition of the bonus principle gives a spice to life , and the element of hope of a better time which has sustained many a weary worker to keep the light going. The issue of premium bonds is a very old affair, and no loan has been issued by the Citv o.f Paris under any other system since 1840. Over £800,000,000 are now invested on the Continent in municipal and State bonds, which are largely held by the small investor and careful peasant whose thrifty and saving habits have made France the wealthy nation she notoriously is. Hundreds of young men, amongst others, are now purchasing bonds by monthly instalments of £1 and upwards, and

in many cases this money would hav« been frittered away with nothing to show for it had it not been invested in these securities, whereas it will now b» earning interest, and some day, when these bonds are drawn for repayment, will be returned with perhaps a large bonus addfcd. Every pound paid is so much saved for a rainy day, and not gone for ever as is the case if a dividend does not happen to be drawn from the totalisator or Tattersall's.

Like many others who have not taken the trouble to ascertain what premium bonds really mean, Mr. Burton classes them with the German and other lotteries which 'have now been abolished for some years and which were essentially gambles similar in principle to 'fattersall's, but not in all eases so honorably conducted. Bonds appeal particularly to the worker who wants to improve his position, but has not the capital to do it, as by the legitimate investment of his savings he has the chance to become wealthy without risking his capital. Is it not better to direct this desire, which is common to us all, into a safe and healthy channel rather than that it should drive men and women to cards, the racecourse or share gambling?—l am, etc., WALTER BEWLEY.

SICKLY SENTIMENT. To the Editor. Sir, —I was very pleased to read your comments on the late child desertion ease in Wellington, and also your remarks in a former issue on the wisdom of the Cabinet in refusing to be cajoled into showing mistaken leniency to the late Kaka. There has been a lot of sickly sentiment by a certain section of the press lately on this case. One of their chief arguments against capital punishment is one that carrks its own confutation imprisonment for life. "There's no such thing" and they know it. Take for instance the case of Main Kai, who is supposed to have had the above sentence imposed on him for doing to dteaih poor, old, defenceless MaJoney. This murderer has been liberated for some time now. There is always a danger in sentencing murderers to imprisonment for life from the fact that wire-pulling by interested parties might foist them again' on the public.—l am, etc., CIVIS. OUR IRONSAND DEPOSITS. To the Editor. Sir,—ln reply to "Vigilant's" letter of to-day, re the ironsand and what an asset it is to the town of New Plymouth, and what the late E. M. Smith did in experimentng with the ironsand, with all due respect to the memory of the late E. M. Smith, I still maintain that his work is impracticable; also the wonderful .process Messrs. Smith and Tweedale have evolved whereby steel can be mado direct from the furnace. What have all those efforts amounted to so far? We are now just "as you were." I suppose "Vigilant" is waiting for the sweet bye-and-bye, when we all will be millionaires, or dead and buried. I still maintain that until we get some pushful and practical men in our community to take the industry up and push th,e thing ahead to success, it would be still be good policy to ballast out-going vessels to foreign ports with the ironsand.—l am, etci, PROGRESS. New Plymouth, July 18, 1911.