United States Lottery

United States National Lottery of 1776
Financing Independence Under Fire

“Before stable credit. Before federal taxation. Before Wall Street.
There was a national lottery to save the Union.”

 Exhibit Overview

In November 1776, with the Revolutionary War intensifying and public credit deteriorating, the United States Continental Congress authorized a bold national experiment: a four-class United States Lottery designed to raise $1.5 million for the war effort.

Passed on November 18, 1776, the resolution created what amounted to a federally sponsored borrowing mechanism. Congress lacked independent taxing authority. It lacked specie reserves. It lacked a stable currency. The lottery was an attempt to compensate for all three.

This exhibit presents original documentary evidence of that effort - tickets, correspondence, accounting records, currency, and official journals - reconstructing how Congress sought to finance independence under extreme fiscal pressure.

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The Four Classes of the United States Lottery

Congress established four separate classes:

1. Class the First - Drawing held May 1, 1778, Ticket No. 52mm061 signed by Sharp Delaney, Lottery Manager.
2. Class the Second - Drawing held January 1, 1779, Ticket No. 31m677 signed by John Mease, Lottery Manager.
3. Class the Third - Drawing held March 1, 1780, Ticket No. blank, signed by George Campbell, Lottery Manager.
4. Class the Fourth - Drawing begun April 2, 1781; completed April 16, 1782, after repeated delays. Complete uncut vertical sheet of nine tickets (Nos. 12,250-12,258), signed by Lottery Manager George Campbell, bearing identifying asterisks.

Distribution delays, unsold allocations, and postponed drawings plagued every class. The paper machinery functioned; the marketplace did not.

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Primary Documents on Display

This exhibit presents authenticated artifacts that reconstruct the lottery’s operation in real time:

• 1776 Journals of Congress (Aitken 1776, Dunlap 1778, or Fowell 1800 edition), exhibited open to the November 18, 1776 lottery resolution.
• Owen Biddle (ALS, August 29, 1777) - Resigning as Lottery Manager amid administrative strain
• George Clinton (ADS, May 1, 1778) - Accounting for 2,335 returned Class I tickets as Governor of New York.
• John Forsyth (ALS, January 3, 1779) - Reporting 354 unsold tickets and recommending postponement to stimulate demand.
• John Hubley (ALS, January 1, 1779) - Returning 462 of 500 allocated tickets unsold.
• James Durand (ANS, French) - Verifying fifty Class IV tickets; nine of those tickets survive here uncut.

Each autographed letter/document signed reveals a consistent pattern: weak sales, logistical friction, and declining public confidence in Continental paper obligations.

 

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Currency, Depreciation, and Collapse

Displayed alongside the lottery materials:

• Continental Currency (1775-1779 issues)
• Depreciation tables showing Continental currency falling from 1:1 parity in 1776 to over 1000:1 in Spanish silver dollar terms by 1787
• Spanish Milled Dollars ("Pieces of Eight") - the specie benchmark of the era

 

  

The contrast is stark: paper promises versus silver reality.

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Historical Significance

The United States Lottery was not a sideshow. It was a national fiscal strategy under wartime pressure.

It illustrates:

1. The structural weakness of the Continental Congress government.
2. The absence of federal taxation authority.
3. The destructive effect of uncontrolled currency emission.
4. The mounting financial instability intensified calls for constitutional reform.

Operationally strained and financially undermined by currency collapse, the lottery exposed the limits of national power under the revolutionary framework.

The lottery’s limited real return underscored the necessity of federal taxing authority later granted under Article I, Section 8 of the United States Constitution of 1787.

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Economic Reality

Nominally, the program appeared viable. Receipts totaled $3,565,000 against outgo of $3,137,250, suggesting a paper surplus of $427,750 (Lucius Wilmerding, Jr., The United States Lottery, 1963). On paper, it worked.

In economic reality, it did not.

When adjusted using contemporary Treasury depreciation tables, total receipts collapsed to approximately $247,667 in specie value. The real balance shrank to roughly $96,556. Prize certificates nominally valued at $1,763,000 were worth about $63,316 in specie. Effective real borrowing may not have exceeded $40,000.

By the later classes, depreciation reached catastrophic levels - 40:1 and even 100:1 - rendering much of the paper revenue economically hollow.

The lottery did provide short-term liquidity for military and administrative expenses. It did not provide structural financial stability.

This was an early federal experiment in public finance and a cautionary case study in monetary collapse. 

The United States Lottery episode exposes a hard truth: without taxing authority or monetary discipline, innovation alone could not save revolutionary finance.

Conclusion: The United States Lottery - Scandal Reconsidered, State Formation Revealed

The United States Lottery has long been treated as a financial embarrassment of the Revolutionary era - mismanaged, ineffective, and perhaps corrupt. That interpretation collapses when the original documents are examined in full context and read alongside Lucius Wilmerding Jr.’s careful analysis (Wilmerding, Lucius, Jr. “The United States Lottery.” The New-York Historical Society Quarterly, vol. 47, no. 1, January 1963, pp. 5–39.).

Wilmerding dismantles the long-standing claim that the lottery was incompetently administered or designed to enrich its managers. He demonstrates that the scheme, authorized by Congress on November 18, 1776, was conceived not as mere gaming but as a fiscal stabilization device. Its purpose was to raise specie, restore public credit, and counteract the accelerating depreciation of Continental currency. The lottery was an instrument of national finance under wartime emergency.

The artifacts displayed here corroborate that interpretation. The Dunlap printing of the Journals records a structured and regulated plan: four classes, bonded managers, Treasury lodging of funds, and defined prize schedules. Surviving Second and Third-Class tickets reflect formal issuance under congressional authority. Manager correspondence, such as the letters of John Hubley and John Forsyth, documents unsold tickets and postponed drawings. These are not the marks of fraud. They are symptoms of collapsing monetary confidence.

 

Wilmerding makes clear that administrative difficulties stemmed from war conditions, inflation, state interference, and shifting congressional policy, not managerial misconduct. Frequent resignations, including Charles Biddle’s, reflected financial sacrifice and public burden. Managers were poorly compensated, often paid late or inadequately. They were not profiteers; they were fiduciaries operating within an unstable monetary system.

The structural weakness lay elsewhere. As Continental currency depreciated, so too did the perceived value of lottery prizes denominated in paper. Public participation waned not because the managers failed, but because Congress’s monetary policy failed to stabilize value. The lottery became a casualty of the U.S. dollar's collapse.

When Robert Morris assumed office as Superintendent of Finance in 1781, he inherited not corruption but disorder. His intervention in the Fourth Class sought to regularize obligations and move the nation toward a centralized, credit-based fiscal system. The lottery's winding down was part of that transition.

This exhibition, therefore, presents a different verdict. The United States Lottery was not a scandal. It was an early federal experiment in public credit, overtaken by inflation, wartime instability, and evolving fiscal theory. The documents assembled here demonstrate that before the Constitution, Congress exercised sovereign financial authority, struggled with national credit formation, and learned hard lessons that would shape the American fiscal state.

The lottery failed as a revenue mechanism. It succeeded as a chapter in the creation of American public finance.