Page:Harvard Law Review Volume 9.djvu/415

387 LOTTERY BONDS. 38/ amount loaned. It must not liere be forgotten that European loans which are effected by means of issuing bonds are redeemable gradually; that is to say, that every year a certain number of bonds chosen by lot are called in for payment. In the lottery bond, however, the number of issue printed on the instrument presents a very different character. It is not merely a number of issue which permits the arrangement of a gradual liquidation, but it is primarily the number of a lottery ticket. The essential characteristic of the lottery bond is that the number which it bears shares till its liquidation in periodical drawings of more or less im- portant prizes, together with the other bonds of the same issue which have not been paid. These prizes consist of sums of money, which are sometimes of considerable value (200,000 and 500,000 fr.). In practice, the drawings for payment are made to coincide with drawings for prizes, and it is so arranged that the holders of the bonds whose numbers appear first at the drawings for payment shall be the beneficiaries of the prizes.-^ It is then evident that the lottery bond presents a double char- acter. It is at once ( i ) ^ deed of loan^ and (2) a lottery ticket. As deed of loan ^ it confers upon the holder the right to the payment of interest and reimbursement of the capital lent; as lottery ticket^ it takes part periodically in drawings of more or less important prizes. The lottery bond may then be defined as tJiat bond to which is attached the contingent right to a prizCy or, if preferred, the vested right to chances at lottery. Such is the double aspect which the lottery bond presents. At present it may be found in most of the financial markets of Europe, and of all nationalities, German, Austrian, Spanish, Greek, Italian, Russian, Swedish, and Swiss. Especially is this true in France. The many lottery loans placed by the city of Paris, the lottery bonds of the Credit Foncier, the Companies of Suez and Panama, are too well known to dwell upon. So it will suffice to cite the names here as examples. We must also here ask pardon for not tracing in detail the historical origin of these bonds, which ap- peared in their existing form at the close of the lottery loans of the eighteenth century. This would doubtless furnish a most interesting financial and historical investigation, but it is not the feature to which we would call attention in the present sketch, 1 Most of the time, also, the total of the payment is deducted for the winning bonds from the total of the prize won, so that the prize seen;s only a kind of payment with premium. 51