Whereas: Stories from the People’s House

A Marvel among Swindles: The Louisiana State Lottery Company and the Post Office Department

Lotteries in the United States developed as a respectable fundraising activity for towns, churches, and other civic institutions. As is often the case where the possibility exists to make large sums of money, lotteries became tainted by corruption and associated with the perceived immorality of gambling. The Louisiana State Lottery Company, the most successful of the state-chartered lotteries, became a powerful entity that expanded its reach by advertising and selling lottery tickets across state lines using the postal system. However, reliance on the Post Office Department to do business left the ventures vulnerable to regulations by the U.S. Congress. Moral and political reformers in Congress, on multiple occasions, attempted to curtail state lotteries in the post–Civil War years. Records of the House Committee on Post Office and Post Roads and congressional sources help tell the dramatic story of congressional intervention into the 19th-century Louisiana State Lottery Company.

Advertisement for the Louisiana State Lottery/tiles/non-collection/6/6-29-Louisiana-Lottery_Advertisment_Xavier.xml Image courtesy of Xavier University of Louisiana, Archives & Special Collections An 1888 advertisement for the Louisiana State Lottery promotes its monthly $20 drawing.

The Louisiana State Lottery Company

In 1868 the Louisiana Assembly chartered the Louisiana State Lottery Company. Proponents of the lottery argued that it could raise funds to rebuild the state’s finances in the aftermath of the Civil War. Under the pretense of keeping the lucrative revenue for Louisiana, the company’s charter granted it the sole right to sell lottery tickets in the state, in return for annual deposits totaling $40,000 into the state treasury. Any profit generated above the quarterly deposits belonged to the company, which was also exempt from taxation. Tickets were sold nationwide, with Washington, DC, residents purchasing the second most tickets in the nation behind New Orleans. Not only did the Lottery Company become one of the most successful postwar state-chartered lotteries, it was soon one of the largest businesses operating in the United States. By 1890, the company’s net profit was more than $8 million. There were daily drawings in New Orleans, monthly drawings, and semiannual drawings with prizes as large as $600,000. The company’s ticket agents operated in cities across the country, and lotteries were advertised in newspapers and circulars nationwide.

Allegations of bribery and corruption followed the Louisiana State Lottery almost as soon as it began. All the while, the business was making moves to hold on to its monopoly over the state lottery system, including influencing the state legislature to vote in its favor. The company also insinuated itself into the community: it offered manpower and monetary relief for natural disasters, and generated large sums for newspapers that carried its advertising. To further bolster its reputation, especially in New Orleans, the company hired two Confederate Civil War generals, P. G. T. Beauregard and Jubal Early, to “supervise” the drawings and to make public statements in support of the company when it was in hot water. The two men made $10,000 a year for the credibility their names lent to the business.

Congress and the Post Office Department

During the rise of the Louisiana State Lottery Company, the Victorian era Christian moral reform movement was also taking hold. Congress’s power to regulate the Post Office Department provided an avenue for it to intervene in the operations of a state-run business, and in effect legislate morality in the case of the lottery—an unusual example of the federal government overriding states’ rights. Still, although Congress possessed the power to regulate the Post Office Department, it struggled to pass effective legislation that would limit the dominance of the Louisiana State Lottery Company.

From 1868 to 1876, Congress attempted multiple times to pass legislation that would remove lottery material from the mail. But each time, the laws proved unenforceable. In an 1878 Supreme Court decision, Congress’s power to regulate the mail was affirmed. Nonetheless, the “sanctity of the seal,” a bedrock principle of the postal system that preserved the privacy and security of mail, meant that enforcing existing legislation was nearly impossible and consequences for those who violated the law were next to none.

Winning Tickets and Prizes from a Louisiana State Lottery Drawing/tiles/non-collection/6/6-29-Louisiana-Lottery_drawing_1889_Duke.xml Image courtesy of the Louisiana Broadside Collection 1885-1948, David M. Rubenstein Rare Book & Manuscript Library, Duke University This broadside shows the winning tickets and prizes from a drawing of the Louisiana State Lottery in New Orleans on February 12, 1889.

Debate in Congress

Congressional debate about a legislative intervention in the form of banning lottery material from the mail stretched for years. The arguments largely fell into two camps by party: moral and constitutional. Records from the Committee on Post Office and Post Roads and other congressional sources illuminate the arguments.

Anti-lottery Republicans framed the issue in terms of morality and focused on the nationwide effects of gambling debt and addiction. The Post Office and Post Roads Committee minority report from the 50th Congress stated that the lottery was so destructive that Congress was compelled to act to eliminate it. States were unable “to protect their citizens against the demoralizing influence and the seductive schemes of the lottery company in the State of Louisiana,” the report declared, “and will continue to be so long as every mail train of the United States may bring and scatter broadcast within their territory newspapers containing flaming advertisements, depicting how money and fortunes may be made.”

Democrats who were against the legislation countered that men and women would make their own choices with or without the law: “I am one of those who do not believe that purity in mankind, that morality in communities, can be enforced or that men’s souls can be sent to heaven by compulsory legislation,” said Maryland Democrat Barnes Compton during an 1888 anti-lottery debate. Moreover, opponents argued, the law violated several aspects of the Constitution: the 1st Amendment right of freedom of the press and the 4th Amendment right against warrantless search and seizure. During his vigorous remarks on the House Floor in 1888, Arkansas Democrat John Henry Rogers decried this apparent travesty: “Under the guidance of an influence that one can scarcely locate, individuals who, having no sins of their own, are most deeply concerned about the sins of other people, are willing to override the letter and spirit of the Constitution and to invade the liberty of speech and of the press, when the very thing which they are seeking to reach is being crushed to the earth by public sentiment throughout the whole land.” Addressing the reformers’ sense that other states were suffering at the hands of Louisiana, Democrats expressed their belief that other states’ laws were sufficient.

The Lottery Octopus/tiles/non-collection/6/6-29-Louisiana-Lottery_Octopus_HNOC.xml The Historic New Orleans Collection, 83-053-RL Used in a publication of two addresses on the Louisiana State Lottery Company by Reverend Beverly Carradine, this illustration imagines the Louisiana Lottery as an octopus whose far-reaching tentacles have a stranglehold on the entire nation.

National Debate

The records of the House Committee on Post Office and Post Roads capture the national response to anti-lottery legislation. Banning lottery material from the mail became a political and societal lightning rod, and petitions flooded Congress. Those opposed to lotteries believed they were contributing to political corruption on top of the inherent immorality of the lottery as a form of gambling. Supporters pointed to the money brought in for schools, churches, and other infrastructure. Two letters from the records of the Committee on Post Office and Post Roads illustrate the intense response the lottery provoked.

In 1890, William L. James of New Orleans wrote to the House Committee on Post Office and Post Roads to express his opposition to Louisiana’s decision to re-charter the Louisiana State Lottery Company. “Why is our Congress silent on this subject?” He continued desperately, “If you could only see the Lottery as a long suffering Christian people sees and feels it your first duty would be in bringing forward some bill that would quit forever the gang of vampires now fastened on us.”

W. Van Benthuysen, a member of the Anti-Lottery League of New Orleans, wrote to the committee’s Chairman Henry H. Bingham. “To kill the vice we must have more and leave no loophole for the Co to crawl through,” he argued. “I know that you will realize the importance of makig [sic] the contemplated legislation effective for if it turns out other-wise the effect will be very bad.”

Perhaps inspired by his devout Christianity, in 1889 President Benjamin Harrison requested anti-lottery legislation in his first Annual Message to Congress. In a July 1890 presidential message to Congress, he re-upped his request and demanded legislation that banned “all letters, newspapers, and circulars” related to the lottery business from the mail, calling lotteries “an evil of vast proportions” and the use of mail by lottery companies as “a prostitution of an agency only intended to serve the purposes of legitimate trade and a decent social discourse.”

Letter from W. Van Benthuysen to Henry H. Bingham, page 1/tiles/non-collection/6/6-29-Louisiana-Lottery_VanBenthuysenLetter_1_NARA.xml
Letter from W. Van Benthuysen to Henry H. Bingham, page 2/tiles/non-collection/6/6-29-Louisiana-Lottery_VanBenthuysenLetter_2_NARA.xml
Letter from W. Van Benthuysen to Henry H. Bingham, page 3/tiles/non-collection/6/6-29-Louisiana-Lottery_VanBenthuysenLetter_3_NARA.xml
Letter from William L. James to the Committee on Post Office and Post Roads, page 1/tiles/non-collection/6/6-29-Louisiana-Lottery_JamesLetter_1_NARA.xml
Letter from William L. James to the Committee on Post Office and Post Roads, page 2/tiles/non-collection/6/6-29-Louisiana-Lottery_JamesLetter_2_NARA.xml
Letter from W. Van Benthuysen to Henry H. Bingham, page 1
A member of the Anti-Lottery League of New Orleans wrote to Post Office and Post Roads Committee Chairman Henry H. Bingham. He gave his input on legislation before the committee to ban lottery material from the mail.
Image courtesy of the National Archives and Records Administration
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Letter from W. Van Benthuysen to Henry H. Bingham, page 2
A member of the Anti-Lottery League of New Orleans wrote to Post Office and Post Roads Committee Chairman Henry H. Bingham. He gave his input on legislation before the committee to ban lottery material from the mail.
Image courtesy of the National Archives and Records Administration
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Letter from W. Van Benthuysen to Henry H. Bingham, page 3
A member of the Anti-Lottery League of New Orleans wrote to Post Office and Post Roads Committee Chairman Henry H. Bingham. He gave his input on legislation before the committee to ban lottery material from the mail.
Image courtesy of the National Archives and Records Administration
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Letter from William L. James of New Orleans to the Committee on Post Office and Post Roads, page 1
William L. James of New Orleans wrote to the Committee on Post Office and Post Roads to express his opposition to re-chartering the Louisiana State Lottery Company, calling it a “gang of vampires now fastened on us.”
Image courtesy of the National Archives and Records Administration
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Letter from William L. James of New Orleans to the Committee on Post Office and Post Roads, page 2
William L. James of New Orleans wrote to the Committee on Post Office and Post Roads to express his opposition to re-chartering the Louisiana State Lottery Company, calling it a “gang of vampires now fastened on us.”
Image courtesy of the National Archives and Records Administration
Item 5/5

The Lottery’s Downfall

The day before President Harrison’s message, Ohio Representative John Caldwell, a Republican on the Committee on Post Office and Post Roads, introduced House bill 11569 as a substitute for similar bills considered during the 51st Congress. Debate on the bill on the House Floor rehashed the arguments Democrats and Republicans made during consideration of earlier lottery legislation, but with even greater focus on the Louisiana State Lottery Company. Dire warnings and serious charges about the nefarious influence of the company were made by Republican Henry Clay Evans of Tennessee. “Almost within the shadow of the Dome of the Capitol of this nation, a well known gentleman of this city gave a dinner . . . one of the speakers of the occasion took the opportunity to put all parties upon notice that if there was any legislation permitted at this session of Congress antagonistic to the interests of the Louisiana State Lottery, the company would see during the next campaign that any member favoring such legislation should be relegated to the shades of private life.”

Despite these threats, this time, the tide had finally turned. The legislation passed the House by voice vote on August 16, 1890, and became law on September 19. Publishers were now forbidden from mailing newspapers containing lottery advertisements. The 1890 legislation, in combination with the appointment of a local New Orleans postmaster willing to enforce it, was the undoing of the Louisiana State Lottery Company. Within months of its passage, the volume of mail at the New Orleans Post Office dropped so precipitously that revenue was down by a third and nine postal clerks lost their jobs. The state constitutional amendment that would have re-chartered the Louisiana State Lottery Company was soundly defeated in 1892. By 1894, the influence of the moral crusade against lotteries and the corruption of state lottery systems, exemplified by the Louisiana State Lottery, led to the end of such lotteries for decades to come.

Sources: RG 233, Records of the Committee on Post Office and Post Roads, National Archives and Records Administration; Congressional Record, House, 50th Cong., 1st sess. (13 February 1888): 1153–1161; Congressional Record, House, 51st Cong., 1st sess. (16 August 1890): 8698–8721; House Committee on Post Office and Post Roads, Advertisements of Lotteries, 50th Cong., 1st sess., H. Rept. 787 (1888); House Committee on Post Office and Post Roads, Use of the Mail for Lotteries, 51st Cong., 1st sess., H. Rept. 2844 (1890); Message from the President of the United States transmitting Letter of the Postmaster General in regard to the use of the mails by the Louisiana Lottery Company, and Exhibit A, history of the Post-Office Department concerning lotteries, Senate, Ex. Doc. 196, 51st Cong., 1st sess. (29 July 1890); Wayne E. Fuller, Morality and the Mail in Nineteenth-Century America (Urbana: University of Illinois Press, 2003): 192–221; Dorothy Ganfield Fowler, Unmailable: Congress and the Post Office (Athens: University of Georgia Press, 1977); G.W. McGinty, “The Louisiana Lottery Company,” The Southwestern Social Science Quarterly 20, no. 4 (March 1940): 329–348; G. Robert Blakey and Harold A. Kurland, “Development of the Federal Law of Gambling,” Cornell Law Review 63, no. 6 (August 1978): 923–1021; United States Postal Service, “The United States Postal Service: An American History, 1775–2006,” Publication 100, November 2012; J. Paul Leslie, “Louisiana Lottery,” 64 Parishes, accessed 20 October 2020, https://64parishes.org/entry/louisiana-lottery; Aleida Fernandez, “All Bets Are Off: Comstock, the POD, and the Battle Against the Lottery,” Smithsonian National Postal Museum Research Articles, accessed 21 April 2021, https://postalmuseum.si.edu/research-articles/all-bets-are-off/special-agent-of-the-us-post-office-department.