Lotteries in the 1690s: Investment or gamble?

Financial History Review

Volumn 12, Issue 2, 2005, Pages 227-246

  Murphy, Anne L ^a  

^a UNIVERSITY OF LEICESTER   (United Kingdom)

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EID: 26444607819     PISSN: 09685650     EISSN: None     Source Type: Journal    
DOI: 10.1017/S0968565005000119     Document Type: Review

References (100)

1. Modern financial historians have often relegated the lottery schemes of this period to a footnote in history. However, a number of more dated examinations do exist. Notably, the importance of lottery schemes to government finance has been dealt with by J. Cohen 'The element of lottery in British government bonds, 1694-1919', Economics, 20 (1953)
2. and R. D. Richards 'The lottery in the history of English government finance', Economic History, 3 (1934-7).
3. The most comprehensive work on the subject remains C. L. Ewen, Lotteries and Sweepstakes: an Historical, Legal and Ethical Survey of their Introduction, Suppression and Re-establishment in the British Isles (London, 1932).
4. P. G. M. Dickson, The Financial Revolution in England: a Study in the Development of Public Credit 1688-1756 (London, 1967), p. 45. For a further discussion of the contradictions inherent in Dickson's argument and the connections between gambling and investment
5. see E. Chancellor, Devil Take the Hindmost: A History of Financial Speculation (London, 1999), pp. 41-4.
6. W. R. Scott, The Constitution and Finance of English, Scottish and Irish Joint-Stock Companies to 1720, 3 vols. (Cambridge, 1910-12), vol. I, p. 383.
7. P. J. Cain and A. G. Hopkins, British Imperialism, 1688-2000, 2nd edition (London and New York, 2002), p. 73.
8. Ewen, Lotteries and Sweepstakes, pp. 25-9.
9. Anon., The Arraignment, Trial, and Condemnation of Squire Lottery, Alias Royal-Oak Lottery (London, 1699), p. 10.
10. Ewen, Lotteries and Sweepstakes, p. 122.
11. Ewen, Lotteries and Sweepstakes Ibid., p. 124.
12. J. H. Thomas, 'Thomas Neale, a seventeenth-century projector', unpublished PhD thesis, University of Southampton, 1979, p. 271.
13. The farmers of ehe Royal Oak lotteries made several attempts to preserve their monopoly in the following years and in October 1694 an advertisement was taken in the London Gazette to 'desire [that] all Civil Magestrates ... forthwith effectually suppress, and punish ... all such as shall so presume to Erect Use or Exercise any such Lotteries and Inventions without the License of the said Farmers ...'. London Gazette, 18-22 Oct. 1694.
14. London Gazette, 31 Aug.-4 Sep. 1093.
15. Dickson, Financial Revolution, p. 46.
16. Dickson, Financial Revolution, Ibid., p. 57.
17. The two lotteries together raised £2,400,000, £1,000,000 from the Million Adventure and £1,400,000 when the unsold Malt Lottery tickets were issued as cash. Of the remaining £4.5111 £1.2m was lent by the Bank of England, and £2m by the New East India Company, while £1.3m came from the sale of annuities and the floating of a tontine loan.
18. J. Hoppit (ed.), Failed Legislation, 1660-1800 extracted from the Commons and Lords Journals (London, 1997), 28.044.
19. T. Neale, The Profitable Adventure to the Fortunate: lately begun by Thomas Neale, Esq ... (London, 1694).
20. J. Houghton, A Collection for Improvement of Husbandry and Trade (London, 1692-1703), 15 June 1694. D. W.Jones has also argued that the difficulties of pursuing overseas trade during wartime led many merchants to seek alternative outlets for their capital.
21. D. W. Jones, War and Economy in the Age of William III and Marlborough (Oxford, 1988).
22. Dickson, Financial Revolution, p. 497.
23. T. Neale, A Protable Adventure to the Fortunate .... (London, 1694).
24. Dickson, Financial Revolution, p. 254.
25. The Million Adventure was among the more expensive of the government's long-term funding measures. Interest payments on annuities ranged between 10% and 14%. The state paid 8% to the Bank of England and the New East India Company. The Malt Lottery of 1697 was less expensive. Had it been successful, it would have necessitated interest payments of just 6.3% but, as will be noted below, it failed to attract investors. For full details of the structure and costs of the government's long-term borrowing during the 1690s see Dickson, Financial Revolution, pp. 48-9.
26. Anon., The Case of the Adventurers in the Million Lottery, Humbly Offered to the Consideration of the Honourable, House, of Commons (London, 1697).
27. Payments recommenced in 1698 after a further petition to Parliament gave rise to 'An Act for the better and more Orderly Payment of the Lottery Tickets'. Ewen, 'Lotteries and Sweepstakes, p. 130.
28. B. G. Carruthers, City of Capital: Politics and Markets in the English Financial Revolution (Princeton, NJ, 1996), p. 82.
29. Houghton, Collection for Improvement, 18 May-26 Oct. 1694.
30. M. Hunter and A. Gregory (eds.), An Astrological Diary of the Seventeenth Century: Samuel Jeake of Rye, 1652-1699 (Oxford, 1988), p. 233.
31. Houghton, Collection for Improvement, passim.
32. British Library, Add. MS 34,355, Earl of Halifax's Letters on the Land Banks and Finance, 1696-1697, fo. 27.
33. Ibid., fo. 39.
34. Dickson, Financial Revolution, p. 49.
35. Lotteries were regularly used by the state throughout the eighteenth century and were not abolished until 1826. J. Raven, The abolition of the English state lotteries', The Historical Journal, 34 (1991), pp. 371-89.
36. Samuel Jeake, in April 1694, wrote in his diary of 'all those Sales of goods by Lot and money Lotteries, which about this time swarmed at London', Hunter and Gregory, Astrological Diary, p. 232.
37. Anon., Advertisement for the Disposal of Fine Lace and Flat Point to the Value of 900 l. (London, 1700?).
38. T. Saunders, Fortunatus's Looking-Glass, or an Essay Upon Lotteries (London, 1699), p. 7.
39. Flying Post, 39 Sep.-1 Oct. 1698.
40. Anon., The Honourable Undertaking, or Five Hundred Pounds for One Shilling (London, 1698).
41. Post Boy, 18-21 Feb. 1699.
42. London Gazette, July and Aug. 1694, passim.
43. For those who could not spare the time to attend the draws, the numbers of the winning tickets were generally published each day. In addition, some enterprising individuals provided a service that guaranteed to check ticket numbers at a cost of 2d for every five tickets. Athenian Mercury, Nov. 1694, passim.
44. N. Luttrell, A Brief Historical Relation of State Affairs from September 1678 to April 1714, 6 vols. (Oxford, 1857), vol. III, p. 380.
45. Anon., The Honourable Undertaking.
46. Saunders, Fortunatus's Looking Glass, p. 17.
47. Anon., The Wheel of Fortune, or Nothing for a Penny (London, 1698).
48. R. Brenner with G. A. Brenner, Gambling and Speculations Theory, a History and a Future of Some Human Decisions (Cambridge, 1990), p. 23.
49. See, for example, the Unparallel'd Adventure, Athenian Mercury, 12 Feb. 1695;
50. the Norwich Lottery, Flying Post, 26-29 Nov. 1698;
51. the Orphans Adventure to the Fortunate took an 8% rebate, Houghton, Collection for Improvement, 21 Dec. 1694
52. and the Honest Proposal was less generous claiming a 15% rebate, Flying Post, 22-24 Sep. 1698.
53. Neale, A Profitable Adventure.
54. It seems probable that the government was at this time responding to many calls for the suppression of the lotteries. Ewen, Sweepstakes and Lotteries, pp. 173-4.
55. Anon., Diluvium Lachrymarum. A Review of the Fortunate and Unfortunate Adventurers (London, 1694), P. 3.
56. Hoare's Bank Archive, London, Ledger D. 2, 1692-5, fos. 257-60.
57. The total ticket sale for this lottery was 50,000, thus, Hoare's ledger contains a little under 8% of the total. The remaining tickets were issued by other goldsmiths.
58. In cases where the gender of an individual cannot be positively identified it has been assumed that the person was male.
59. Hoare's Ledger D. 2, fos. 260, 259.
60. Lutterell, Brief Historical Relation, vol. III, pp. 222, 225.
61. Lutterell, Brief Historical Relation, Ibid., pp. 384-94.
62. Anon., Wheel of Fortune.
63. Post Boy 19-21 Jan. 1699;
64. Saunders, Fortunatus's Looking-Glass, p. 2.
65. The Million Bank was established in 1695. Initial subscriptions could be made in the form of cash, or by exchanging tickets from the Million Adventure. There was a capital enlargement in 1700, at which time payments in cash, tickets or in the form of government annuities were accepted. Only 37 people exchanged tickets in 1695; these comprised only £4,750 out of the initial £200,000 subscription. However, in 1700 over 10,000 tickets were exchanged. Scott, Constitution and Finance, vol. III, pp. 275-87;
66. Public Record Office, C114/16, List of subscriptions to the Million Bank.
67. Hunter and Gregory, Astrological Diary, passim.
68. Post Boy, 4-6 July 1695.
69. Post Boy, 3-5 Oct. 1695;
70. Flying Post 30 Mar.-1 Apr. 1699.
71. Flying Post, 26-28 Jan. 1699.
72. G. Clark, Betting on Lives: the Culture of Life Insurance in England, 1695-1775 (Manchester, 1999), p. 35.
73. Athenian Mercury, 16 Dec. 1693.
74. Hunter and Gregory, Astrological Diary, p. 232.
75. Hunter and Gregory, Astrological Diary, p. 232. Ibid.
76. Athenian Mercury, 16 Oct. 1694.
77. Neale, A Profitable. Adventure.
78. Anon., Plain Dealing: in a Dialogue between Mr. Johnson and Mr. Wary ... (London, 1691), p. 6.
79. G. Gigerenzer et al., The Empire of Chance: How Probability Changed Science and Everyday Life (Cambridge, 1989), p. 20.
80. Anon., An Elegaick Essay upon the Decease of the Groom Porter and the Lotteries (London, 1700).
81. Anon., Diluvium Lachrymaram, p. 6.
82. Hoare's Ledger D.2, fos. 257-60.
83. Dickson, Financial Revolution, p. 282.
84. K. G. Davies, 'Joint-scock investment in the later seventeenth century', Economic History Review, 4 (1952), p. 300.
85. For a further discussion of the role women played in the Financial Revolution see A. M. Carlos and L. Neal, 'Women investors in early capital markets, 1720-1725', Financial History Review, 11 (2004).
86. G. Orwell, The Road to Wigan Pier (London, 1963), p. 82.
87. D. Defoe, An Essay Upon Projects (London, 1697), p. 29.
88. Scott, Constitution and Finance, vol. II, pp. 445-6.
89. Scott, Constitution and Finance, Ibid., p. 447.
90. Flying Post, 8-11 Oct. 1698;
91. Luttrell, Brief Historical Relation, vol. III, p. 219.
92. Athenian Mercury, 13 Nov. 1694;
93. Post Boy, 21-24 Dec. 1695.
94. Anon., Diluvium Lachrymarum, p. 10.
95. Hunter and Gregory, Astrological Diary, p. 235.
96. Athenian Mercury, 23 Mar. 1695; 12 Feb. 1695.
97. Pepys to Newton, 22 Nov. 1693, quoted in Thomas, Thomas Neale, p. 272.
98. For a fuller discussion of this topic see Clark, Betting on Lives.
99. Perhaps a contradiction of the assertion made by Gigerenzer et al. that the lottery crazes that swept Europe 'provided the mathematicians with problems but very little employment'. Gigerenzer, Empire of Chance, p. 19.
100. Dickson, Financial Revolution, p. 46.