Alexander Hamilton Papers

Idea Concerning a Lottery, [January 1793]

Idea Concerning a Lottery1

[Philadelphia, January, 1793]

In concerting a lottery, with a view to the best success of the undertaking—the following points seem necessary to be attended to—

1   That it be simple and summary; because it will be more readily understood by every body & the imagination will see fewer obstacles between hope and gratification.

2   That the Tickets be at a low price and within the reach of great numbers. The Rich or adventurous can then purchase a greater number to bring their chances to the same ratio with higher prices; and the less rich or more cautious can take a chance without putting much to risk. Every body, almost, can and will be willing to hazard a trifling sum for the chance of a considerable gain.

3   That there be rather a small number of large prizes or a considerable number of considerable prizes than a great number of small prizes; for adventurers would as leave lose altogether as acquire trifling prizes and would prefer a small chance of winning a great deal to a great chance of winning little. Hope is apt to supply the place of probability and the Imagination to be struck with glittering though precarious prospects. It may be suspected that in this country the middle course will best succeed; that is a considerable number of considerable prizes. Moderate sums will appear here great to far the greatest number of adventurers. And if the sum which may be raised should be raised successively, it may be well to have such a number of prizes as will raise conversation of winnings within a number of little circles.

Taking these principles as guides and supposing 30000 Dollars (including charges) the sum to be raised—the following scheme may perhaps not be ineligible.

50000 Tickets each at 4 Dollars 200 000
Deduct sum to be raised   30 000
Difference will be the Total amt. of the prizes2  170 000
1   20 000
3   each 10000   30 000
6   each 5000   30 000
10   each 1000   10 000
10   each 500   40 000
400   each 100   40 000
500 170 000

It will probably be found easier to raise the sum allowed to be raised in different portions than in an entire sum. I should not think 30 000 likely to be beyond the reach of pretty easy accomplishment.

Offices for the sale of Tickets ought to be opened at Powles Hook on the North River and at  3 on the Delaware. This will render Philadelphia & New York the markets.

Perhaps it will be most adviseable to draw the lottery at Powles Hook.

It is not certain that the following scheme would not succeed much better.

1   50 000
1.   20 000
5.   each 10000   50 000
50   each 1000   50 000
170 0004

AD, Hamilton Papers, Library of Congress.

1This lottery plan was drawn up by H for the use of a committee appointed on January 1, 1793, by the directors of the Society for Establishing Useful Manufactures “to form a Plan for a Lottery to raise a part or the whole of the Monies authorized by the Charter for the use of the Society, and report the same to this Board at their next meeting (“Minutes of the S.U.M.,” description begins MS minutes of the Society for Establishing Useful Manufactures, City of Paterson, New Jersey, Plant Management Commission, Successors to the Society for Establishing Useful Manufactures. description ends 78).

Joseph Stancliffe Davis describes the lottery experiment of the Society for Establishing Useful Manufactures as follows: “In April the outlines of the scheme were approved and a long list of prominent citizens of New York, New Jersey, and Philadelphia appointed ‘Superintendents,’ any three of whom (always including the governor of the Society) were empowered to modify the scheme in detail and carry it into execution.… at New Year’s, 1794, public announcement was widely made. In brief the scheme was to sell 38,000 tickets at $7 each ($266,000); to give 14,539 prizes.… From the prizes fifteen per cent was to be deducted, thus raising $39,000 for the Society.… Before publishing the plan the board appointed a committee to attend the New York legislature at its next meeting with a petition requesting liberty to sell tickets of the lottery in that state. This was not accomplished. In April, 1794, the board … [recommended] ‘to the superintendants to send on Tickets to the New England States as far as Boston.…’ All efforts were fruitless. The drawings, announced ‘positively’ to take place, were repeatedly postponed. At last, in November, 1795, the failure of the scheme was faced, and a new plan for raising only $6667.50 was substituted. The drawings for this too were postponed, but they did actually take place in the summer and fall of 1796. It is gravely to be doubted, however, whether the proceeds covered the expenses which had been entailed” (Davis, Essays description begins Joseph Stancliffe Davis, Essays in the Earlier History of American Corporations (“Harvard Economic Studies,” XVI [Cambridge, 1917]). description ends , I, 477–79).

2In the margin opposite this paragraph H wrote:

“1. 30 000
1. 20 000
1. 10 000
2 e 5000 10 000
4 ea 2500 10 000
5 ea 1000 5 000

3Space left blank in MS.

4The following “Scheme for a Lottery” in an unidentified handwriting may be found among the Hamilton Papers, Library of Congress:

“Scheme for a Lottery

2 of 30,000   60,000
2 20,000   40,000
4 10,000   40,000
8 5,000   40,000
10 2,000   20 000
15 1,000   15,000
20 500   10,000
40 200   8,000
60 100   6,000
100 50   5,000
1 first Drawn   2,000+
5 first Drawn last 5 Days 10,000
1 last Drawn   2 000
16400 of 30   492 000
16668 prizes
33232 Blanks
50,000 Tickets @ 15 Ds. each 750,000

The Tickets all to be sold by Contract the Contractors giving security for keeping their engagements. The time of drawing to be fixed by Law and Commissioners appointed also by Law to attend the same. The payments to be made by installments. The Law that authorizes the drawing of the Lottery must also fix the time of payment of the prizes. There must also be a Law Authorizing proper persons who apply for the privilege to devide the Tickets in halves, quarters, Eights &c. first depositing the Ticket so divided in the hands of some responsible public officer who will by some signature Identify the shares so divided and stamp a Value upon them in the public opinion that nothing else will give them. The Tickets to be delivered to the Subscribers at 17.25 each Ticket and no deduction whatever made from the prizes. This will cover the 100,000 Dr and leave a handsome allowance for the expences attending the conducting drawing &c.”

Authorial notes

[The following note(s) appeared in the margins or otherwise outside the text flow in the original source, and have been moved here for purposes of the digital edition.]

+ transpose this to last drawn because the Sales will be promoted by the expectations at the close. Qu: would it not be well to transpose of 20 or 30,000 Drs. to the last drawn.

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