The Lotteries like the investment
The Lotteries were another very popular form of investment. The United States
Congress itself had sponsored a lottery. States, churches, schools, and business
organizations found lotteries like the sort of investment and a common,
convenient way to raise funds, a practice that dated back to at least 1655 in New
Amsterdam ( NY now ). Benjamin Franklin organized a famous lottery to buy
cannons to defend against the enemies - French and Indians.
After the Revolution,in the US the states allowed turnpike, canal, and bridge
corporations to raise funds through such kind of investment as the lotteries.
Brokers and lottery contractors were frequently used to sell the lottery tickets.
Counterfeiting of lottery tickets became a problem that had to be met by severe
punishments. North Carolina initially made such transgressions punishable by
death. In 1779, the Tarheels reduced the penalty to lashing, pillorying, having an
ear cut off, being branded on the cheek, imprisonment, and forfeiture of one-half
of the violator's possessions. "Finally, in 1784, perhaps in a spirit of charity, the
death penalty was restored." Options and a form of futures contract were being
sold on lottery tickets.
The sellers of lottery tickets often branched off into investment banking. S. &
M. Allen had opened offices across the United States through which it sold lottery
tickets. This firm conducted banking transactions and bought and sold bank shares
as a sideline. Later, when opposition to the lotteries became widespread, the firm
began concentrating on buying and selling bills of exchange and stocks. Jacob I.
Cohen, Jr. & Brothers established a private bank in Baltimore after starting as a
lottery ticket seller. John Thompson was another seller of lottery tickets. He later
formed a brokerage firm, published the Thompson Note Detector (NAREIT), and
was a founder of the Chase National Bank. Other investment banks had similar
beginnings, including E.W. Clark & Co. of Philadelphia, which would be the
genesis of Jay Cooke & Co., a leading investment banking firm during the Civil
War. Not all of the lottery ticket sellers became investment bankers. P.T. Barnum
was one lottery ticket seller who pursued other endeavors. Barnum did rather well
for himself, leaving a fortune of $4.1 million when he died.