CORRESPONDENCE. PREMIUM BONDS AND GAMBLING.

Taranaki Daily News, Volume LIV, Issue 22, 20 July 1911, Page 6

CORRESPONDENCE.

PREMIUM BONDS AND GAMBLING.

To the Editor. . Sir,—lt is always a pleasure to reply to a man who 'has the courage to sign his name. Mr. Walter Bewley, in a letter in your columns of yesterday, takes exception to my inclusion of "Premium Bonds" in the category of gambling. This he charitably puts down to my ignorance of this type of investment, and concludes that "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, etc." Let me assure Mr. Bewley that, however kind it may be, it is. useless to apologise for me in that way. I always endeavor to have chapter and verse for every statement I make from the pulpit, or elsewhere; and in this particular case I knew perfectly well what I was talking about. Premium, Bonds are no new thing, and even since I came to New Plymouth I ,received a pamphlet published by the International Investment Co., for which. Mr. Bewley is agent, explaining the operation of these bonds. I quite admit that they are not the same form of gambling as the totalisator or Tattersall's, but they are gambling nevertheless. The speciality of this form, shorn of all its red-herring phrases of "bonuses," etc., as that the principal is not lost and part of the interest also is secured. So far it is a perfectly innocent, though not a very paying .investment. But instead of paying the full 4 per cent, interest earned by the bond, only, say, 2 per cent, is actually paid, to the' investor; the balance is pooled and then drawn for. So the investor really gambles 50 per cent, of his interest. But what is the difference, in principle, between this form and that of an investor who draws 4 per cent, from an ordinary mortgage and puts half of it on tickets in Tattersall'a?

Life insurance, I need not tell Mr. Bewley, who is a business man, is quite a. different thing. Though it is true that individual life is as uncertain as the throw of dice, yet the average of life is almost an arithmetical constant. It is upon this law of averages that all profits, are based, and then they are divided A not by some principle of chance or! "luck," but on a proportionate and ma- j thenmtical basis. I

I am sure that Mr. Bewley will believe me when I say that I have no wish to injure Ms business or to single him out because he is the agent for these bonds. It is because I believe them to be a pernicious and unethical way of investing funds that I attack them. I am in favor of splitting up our State securities so that the poorest may not be shait out from an opportunity of thrifty investment; but never on a gambling or a chance (basis. I wisih Mr. Bewley could see his way to drop this agency, and I am sure he would do something thereby to help an object which, I gather from his letter, is common to us both—the lessening and ultimate elimination of the gambling spirit from our Dominion.—l am, etc., JOHN W. BURTON. New Plymouth, July 19, 1911.