800 MILLIONAIRES

Waikato Times, Volume 92, Issue 14253, 2 January 1920, Page 2

800 MILLIONAIRES

WORLD'S GREATEST LOTTERY. GERMANY'S GIGANTIC GAMBLE. PRIZES FOR 80 YEARS. (The most gigantic lottery scheme ever organised is contemplated by the German Government. It is proposed to offer 10 chances a year for the next 80 years of becoming a millionaire, and there are many other lesser prizes. In the following article, a special correspondent of the Daily Chronicle in Germany gives full detail of this remarkable plan for the creation of 800 millionaires.) 1 Germany is offering to create 10 new millionaires a year for the next 80 years, in order to raise money for the nation. That, in brief, is the astounding attraction offered in her new Lottery Loan, the most gigantic thing ol its kind the world has ever seen. Who would not put down a few marks, it is argued, for the chance of becoming a millionaire? One is tempted to wonder whether it is seriously meant to improve the state of Germany's finances, or to provide a counter-attraction to the numerous" Berlin gambling clubs. It is certainly hard to conceive of it doing the former, but as to the latter the competition ought certainly to be keen. One has read of enormous sums being won at the gambling clubs, but a Lottery Loan to create new millionaires at the rate.of 10 per annum, or 800 during its 80 years' currency, with other tempting prizes, is obviously a new thing in the romance of the race for wealth. The loan is to be one of 5.000,000,000 marks, >or in pounds sterling at normal exchange. £250,000.000. Application lists, which are to be opened at the ■beginning of November, will remain open for about three weeks. Subscriptions 'are payable, one-half in German .5 per cent. War Loan, and one-half in cash, and five million certificates of 1000 marks each will be issued. Eighty years is to be the period of the loan, with yearly drawings. 3000 million marks be ! ng drawn for payment 'n the first 40 years, all of which is quite simple. No Interest! The first surprise, however, comes on our learning that there is to bo ho interest, or at least nothing called by that name. There is, however, to be a bonus of 5 per cent, per annum, bin this bonus, which is really interest, is not to be paid at stated periods, but is to toe held toy the Government until certificates are drawn for payment, when 'the toonus will be paid out with the principal sum. Thus a certificate drawn for payment at the end of the first year will be repaid with 50 marks as a bonus. If drawn for payment at the end of five years the bonus would amount to 259 It will be seen, therefore, that no interest is to be allowed subscribers •on the deferred payment of bonuses, and by the adoption of this policy an enormous fund is provided, from which the Government proposes to pay those lottery prizes which are the principal features of the loan. Twice yearly there are to be lottery drawings, f' nch of which there will be 2500 prices, with total prize money of 250,000.000 marks. The prizes vary in quantity and value, the maximum being five prices of 1,000.000 marks each, and the lowest 1000 prizes of 1000 marks each, all payable under a discount of 10 per cent. The winning of a. prize does not disqualify from further drawings. Substantial Bonuses. This is certainly something to be goflng on with, but there is still a two to one chance which offers templing prizes. Drawings, as said already, take place yearly, capital and accrued interest being then repaid. But every second certificate drawn for repayment receives in addition the yery considerable bonus of: — Afka. If drawn during the first :3.0 years .. ~ WW ••- If drawn during the ensuing I 10 years . . .. 2000 " If drawn during the ensuing 40 years .. .. 4000 ' Payment of lottery prizes and bonuses is.made .wo months after each drawing. ■ Altpge'ther 58 per cent, of the certificates issued can receive prizes and bonus ('apart from the interest bonus), while the total prize money distributed during the 80 years' currency of the loan will be ;«~ Ufl> Mks. For lottery drawings ~ 4,000,000,000 For bonus on every second •certificate drawn ~ • • 5.875,000,000 J&iik: ... 0,875,000,000 to come down from these dizzj' gambling heights- to the more orthodox provisions of the loan. When the issue is 20 years old Subscribers can demand .repayment from the Government on due notice, and the amount will-be immediately repaid at the end of the year at .nominal value plus accrued interest, but under discount of 10 per cent. ■ r - Remission of Duties. Privilege:; are to be accorded to the subscribers of this loan should a similar issue be made within 10 years, while special privileges arc attached to the loan regarding liability to tax. Up to 25,000 marks the loan is not subject to death or succession duties, while increases in capital arising from the operations of the lean am! any difference letween market and redemption values are 1 not subject to special k taxes affecting such changes. Profits arising from lottery drawings and profits arising from sale are not subject to income tax for the year during which profits were made, nor to the capital Such ar3 the features of this most i"t,e'-esting State gamble. The ethics of the loon are, of course, peculiar Officially it is pointed out that the defered payment of interest means that thrift is hereby encouraged, while the provision regarding repayment when notice is given is said to give the loan the character of an insurance with its accumulated premiums^ But it is rather curious that a Government which is largely Socialist, and which is taxing wealth and millionaires, and is attempting in stop the gambling mania in Berlin, should at the same time come into the market with a loan which no Socinlist principle, could justify, which provides considerable increases of wealth arisin.e- from mere chance, and which reduces State finance o the rather hectic atmosphere of Unter den Linden. Nor on its financial side can much be said of it. Probably (he loan is infunded merely ns a "feeler." First Loan Since the War. ""Irs ]•• the firs' time that the German Government has appeared in the market since the collapse last year. It naturally difficult to guise beforehand how its credit stands in the market, ami the Government has, of course, to ensure'that its first loan is a s' •- Otherwise there would be : :;- other collapse. Strong leadership of the country .would have dictated a more statesmajUiqe loan, and trusted to a more lofty •appeal to ensure its success. But German post-War psychology being what , ; , ■>,,, cn»->inr, leadership he- ,_- „„.._,."•-' —'. if 'ns W'en decided, im i.'citiy L'—t no risks can be run.

And so this loan is to toe issued, although its runs counter to many of the Government's own principles, encourages the spirit which is preventing Germany's financial purification, and makes no appeal to that bettor spirit in Germany which awaits the purification.