Lottery Schemes in 17th-Century America

Seventeenth-century colonists fashioned a more individualistic culture and a less centralized pattern of government.

They were relatively removed from the social convention, aristocratic hierarchy, and concentrated government of England.

Over the course of the next century, imperial economic policy perpetuated the colonists' provincial position by subordinating settlers increasingly to the metropolis and contributed to their estrangement from England.

Through American society had begun to mature and adopt the cultural forms of English civilization, colonists were never permitted to lose sight of their position on the perimeter of the British world.

Both colonial status and frontier conditions generated a demand for such a revenue-raising device as the lottery and ensured that the contests assumed a significance somewhat different from that in England.

While the mother country had periodic, large-scale lotteries to fund central government, the colonies employed smaller and more frequent schemes designed to raise money for local and private purposes.

Lotteries were a means to accumulate relatively large sums of money from people who had little cash to acquire revenue from people who perpetually complained of overtaxation.

The perennial shortage of currency in the colonies made it difficult to sell valuable property and to pay taxes.

In order to obtain reasonable cash prices for merchandise or real estate, in an age when no single buyer could raise large sums of ready money and when instruments of credit for consumers had not developed very extensively, sellers sold by private lottery, a method that English government generally prohibited.

They attained their price by persuading large numbers of small investors to gamble for big prizes of valuable property.

Merchants employed this method during the eighteenth century to dispose of their inventory, and developers used it to sell real estate.

Lots and houses in New York City, Philadelphia, and the Pennsylvania countryside were sold by lottery schemes at prices which virtually no individual could afford to pay in cash.

Like England but on a reduced scale, colonial governments also employed lotteries to supplement other forms of taxation. The device was an attractive alternative because it was voluntary, and thus offered relief to the many colonists who felt overtaxed.

Moreover, whereas a regular assessment might have drained currency from an already cash-poor society at an inconvenient time, before the harvest and sale of crops, lotteries proved flexible enough to raise enough money only when it was available in the different sectors of the economy.

Local governments, which could not borrow very easily against anticipated revenues, turned to lotteries increasingly during the mid-eighteenth century in order to raise funds for specific projects.