Rare Bites: A Ticket in Australia’s first lottery

Rare Bites: A Ticket in Australia’s first lottery


Thank You Julie. Previous talks in this
series have focused on rare books in the library’s collection. Today I’m talking
about a rare piece of paper which is also in the library’s collection. It’s the
sort of thing that most people would have thrown away, but this one has
survived. It’s a ticket in the first lottery ever held in Australia 170 years
ago when lotteries were illegal. The concept of a lottery can be traced
back to ancient Rome and so, but in England, ah, they go back to about the 16th century.
They were mostly for charitable purposes or to build government infra
structure like highways or bridges or something like that. However, as with any
form of gambling, some people did it to excess. And in 1808, a committee of the
House of Commons described what they termed a dreadful scene of vice and
misery brought on by lotteries by which children, servants and other unwary
persons have been ruined. In 1826, the UK Parliament banned lotteries because they
were contrary to the public interest and subversive of moral and ethical
standards. Now in colonial times, British law applied in New South Wales, and so
lotteries were illegal here. And in fact it wasn’t until 1930 that the New South
Wales Parliament passed a law allowing lotteries in New South Wales. We now take lotteries for granted of course, but Australia’s first lottery
actually took place in 1849. It was illegal. It was surrounded by controversy.
But the government turned a blind eye because it seemed the only way of
averting a disaster. The disaster was the virtual collapse of the economy of New
South Wales in the early 1840’s. The crisis was to a large extent due to the
cessation of convict transportation. So long as New South Wales received
Britain’s convicts, the British government paid money to the
local economy. Not only for their accommodation and food and so forth, but
also for infrastructure. Building of roads and public buildings and that sort of thing. So with the cessation of transportation in 1840, all these subsidies were
withdrawn causing a scarcity of money and putting a severe break on public
works. There was widespread unemployment and also farmers who had been having
difficulties with prolonged droughts and who relied on the free labor of convict
servants assigned to them. Convict laborers assigned to them. Suddenly found
that their farms were unprofitable when there were no more convicts to give free
labor to the farms. So a lot of farms became unviable and the economy
genuinely was in serious danger of collapse. This Depression in 1840- early
1840’s- punctured a, a balloon of speculation in land in the 1830’s. There
had been excessive speculation in real estate fueled by the willingness of
the banks to lend into ah, to lend to speculators on the basis of land which
really was at inflated prices. They got loans at very large amounts
of money. Giving their land as a security, but the land wasn’t worth as much as
the loan that they were given. Fancy banks doing that? Um, when land values
collapsed and mortgage repayments couldn’t be made, the banks came into
possession of thou- tens of thousands of properties which were given as
security for the loans, and the banks thus found themselves with inadequate
assets to cover the deposits. And, and other liabilities. Because the land
was worth very little. And in March 1843 one of the economy’s major financial
institutions, the Bank of Australia, collapsed. In those days there was no
concept of limited liability as we have today, and so legally the shareholders of the bank
would personally liable to cover its debts. But most of the shareholders assets were
also in land investments, and therefore worth very little. So
the, the concept, or the prospect of widespread disaster loomed. The bank’s
directors decided that there must be a levy upon all the shareholders, and
that in order to assist them to meet the levy, the Bank’s assets should be divided
amongst the shareholders. The Bank’s real estate holdings were very diverse – from
large farms and prominent city buildings to small unproductive and almost
valueless rural allotments of distant country areas. In total, the Bank
identified eleven thousand two hundred and forty eight pieces of real estate. The directors considered how best to
divide this 11,248 items. Pieces of land. Among the
shareholders. So they decide that the fairest way would be by lot. It was
therefore decided that the assets would be numbered from 1 to 11,248.
The same number of tickets would be printed and numbered,
and the tickets would be issued to the shareholders in proportion to their
shareholdings. So if you had five percent of the bank shares, you got five
percent of the lottery tickets. As a private arrangement among the shareholders. This
was not a public lottery and so it wasn’t illegal. But quite a few of the
shareholders didn’t want to participate because they were afraid of getting a
very small and probably worthless- almost worthless- piece of land instead of a
major prize. And they- it was therefore agreed that shareholders who didn’t want
to participate could sell their tickets to somebody else.
And there were lots of advertisements in the newspapers at the time. People-
shareholders- wanting to sell their tickets. This made it more like a public lottery and it was
felt that some legal permission was required. Fortunately some of the
shareholders and directors of the bank were members of the Legislative Council,
and they drafted the bill which would allow the Bank to dispose of its
property assets by lottery. The bill was referred to a committee
chaired by William Charles Wentworth, who was a major shareholder in the Bank.
Wentworth’s Committee reported favorably on the bill and it was passed by the
Minister. Apparently the concept of in the
conflict of interest wasn’t very well known in New South Wales at that time.
However, the Governor, Sir George Gibbs, refused to give the royal assent to the
bill because he doubted the, he doubted whether the colonial legislature could
pass a law which was in conflict with the law in Britain. He referred the Bill
to London for decision by Queen Victoria. In doing so, Gibbs made it clear in his
dispatch to London that although he personally disapproved of lotteries,
paramount consideration for the good of the colony should be the settlement of
the Bank of Australian mess by almost any means. He concluded his report by
saying “it would give me much pleasure for the Bill be allowed by Her Majesty,
though I can scarcely venture to hope that it can be. Indeed, its dispatch to
London was accompanied by a petition from the Bank’s directors to the Queen
setting out the reasons why the Bill should be allowed. Essentially they
argued that settlement of the Bank’s affairs would greatly relieve the
present economic depression of the colony. The state of the markets made it
impossible for the Bank’s assets to be to be disposed off by sale. And the
proposed lottery was the only effective means of resolving the situation and restoring
value to the economy. These appeals un fortunately were in vain. British
government advised the Queen not to give the Royal Assent on the grounds that-
however worthy the cause- public lotteries are regarded with the highest disfavor
by Parliament and by public opinion. The Queen’s advisors’ also noticed the apparent
conflict of interest that had gone on in New South Wales with people who were
most affected drafting the law and then voting for it.
There were a whole lot of other legal challenges which we don’t need to
go into, and the whole thing dragged on until 1848, when the Privy Council
finally ruled that the Bank’s shareholders were indeed personally liable for the
bank’s debts and the whole thing blew up again. The prospect of widespread
bankruptcy and disaster. Well, it required a desperate remedy and the Directors
confirmed their decision to have a lottery. Without formal legal sanction on
the rather shaky grounds that there was no law in New South Wales expressly
forbidding a lottery. So in October 1848 11240 game tickets were printed and issued
to the shareholders in proportion of their shareholding. As expected, many
shareholders preferred to sell their tickets to a third party and the
assignment value was set at four pounds. That’s the ticket that the library owns.
It was issued to a shareholder named Duncan MacKeller and it’s signed by four
Directors of the bank, including MacLay from the MacLay Museum. MacKellar sold his
ticket to another person but unfortunately it’s very difficult to
read what is on the back of the ticket. All tickets carried this form to be
filled in with that was sold. It says “in consideration of four pounds
which I have received from blank, I hereby assigned to him all my right and
interests in the within ticket and drawing. And the original ticket holder,
Mr Mackellar, filled in the name of the purchaser and signed it and it was
then the, the ticket and any prize it won, was then the property of the purchaser whose name was on the back of the ticket. It’s worth noting as I said the tickets were
valued at, were priced at, four pounds each. Four pounds in 1849 is equivalent to
something like a thousand dollars today. So they weren’t cheap, but many of the
prizes were very attractive. The Bank issued a list of the prizes in
order of their importance and value, and that’s on the table. The most
valuable prize, said to be worth 6,000 pounds, which is about one and a half
million dollars today, comprised two large farms. One of more than 8,000 acres
including three thousand seven hundred head of cattle in the Dungog district,
north of Newcastle, and the other farm of 64,000 acres on the Liverpool Plains.
That was worth about six thousand pounds. The second most valuable was three
thousand pounds. Was a parcel of several public houses and cottages in Sydney.
Plus the public house and two acres of land at Woolloomooloo. Plus a farm on the
Nepean River and other smaller properties. That was about three thousand
pound. The list is in order of value so what, so item number one is the most
valuable. That’s the $6,000 one. Item number two is the three thousand. The third item on
the list was the Normal Institution, Elizabeth Street Sydney, fronting Hyde
Park. That was a school on the site where David Jones Elizabeth Street shop is
now. And there were 11,200 X other prizes. They included many houses and
shops and pubs in Sydney and suburbs and country towns. A huge number of housing
or farming allotments presumably forfeited by bankrupt developers. For
example, there were bankrupt real estate subdivisions in Newtown, Lane Cove, Tempe,
along Bourke Street, Surry Hills – to name only a few. There were 700 acres of
land at Kiama. All subdivided ready to go. There were
other large holdings in Maitland Wollongong, Gosford, Camden, Yass and elsewhere.
It was an enormous portfolio of property. Some of it very valuable but
the majority were small allotments outside of Sydney alleged to be worth
about four pounds each. Which was the price of the ticket. It was- the lottery was- a great
novelty. It caused tremendous excitement because lotteries were banned. There’d never
been one before. Nobody had ever experienced a lottery before. Um, the
prospect of obtaining a valuable property for only four pounds. Caught the
popular imagination. I’d love to own, you know, farms at Dungog and three
thousand head of cattle and what not for four pounds. And despite the fact
that the bill, that the bill allowing it had been outlawed by both the colonial
governor and the Queen, the local authorities decided to avert their
gaze. They realized that this was the only feasible way of avoiding the
economic disaster which crippled the colonies if the Bank of Australia mess was
not cleared up. Sydney was a long way from London. Queen Victoria didn’t need to be
told everything that was going on. There was a new governor- as I said- Governor
Gibbs had vetoed the bill- but a new- by this time 1849- a new
Governor, Sir Charles Fitzroy, had come and perhaps his view of
lotteries was, was less rigid. Ah, but the public opinion certainly on the side of
the lottery. Every ticket won a prize. It was seen to be a lottery that you
couldn’t, you couldn’t fail! The drawing of the prizes were set for January the first
1849, and it took three days to complete. It was conducted in the city theater in
Market Street, which is approximately where the State Theater is now. Crowds
besieged the City Theater. For three days, Market Street was closed because of the
mobs trying to get into the theater to see if their ticket was going to win
something valuable. People but desperate to witness what
was going on. Later on, the Sydney Morning Herald
published a list of all the tickets and the prizes, but they wanted to know
now! The drawing was quite a complicated affair and it’s described in the, in the
list of prizes. Unlike today’s lottery where the first ticket out gets first
prize and the second ticket the second prize and so on, there were, this was done
with two wheels. There was a ticket wheel and there was a lot wheel. And
the ticket wheel was spun and a ticket number was drawn, and then the lot wheel
was spun and that ticket won that prize. So there were two, two reasons to
be excited! Will my ticket be the next one to win? And if so, what will it win?
And this went on for three days. The breathless report in the Herald by
one of their reporters- its little bit long but its worth reading. “Who that saw them can
ever forget the rows upon rows of anxious purchasers of tickets, male and
female, daily and all day long crowded in the pit and boxes of the City Theater.
Who can ever forget the eager looks, the patient and sustained listening to the
announcements of the numbers of the tickets as drawn. The hard breathing of
the excitement whenever something considered a prize was drawn. The almost
audible groans of the old woman as a Fitzroy fell to her”. ‘Fitzroy’ was current
slang for something contemptible and worthless. Which was an allusion to
alleged malfeasance by the governor of the site. As I said, The Herald published,
published a list of all the prizes and I’ll bet you’re all wondering who won
the first prize! Large farming properties near Dungog and Liverpool Plains valued at 6,000 pounds. The winner was a six-year-old boy named
Angus MacDonald. One of the children of a Scottish farm labourer who lived near
Maitland. His father had brought several tickets and had given one to each of
his children, and I’ll bet the shareholder who sold that winning
ticket was kicking himself. The father- because the boy was only six- the father
assumed ownership of the prize properties as guardian for the son until the boy
turned 21. This would have changed his life. Imagine you’re a labourer on
somebody else’s farm and suddenly you’re managing, effectively owning, properties in
Dungog and along the Liverpool Plain- all for four pounds! Unfortunately Mr.
MacDonald didn’t live to enjoy his triumph. Three months later he was killed
by falling off his horse on one of the properties and his widow had to apply to
the court to become the boy’s Guardian and run the farms on his behalf.
Now I don’t know whether anybody has ever researched the family history, but
what a terrific story! The family fortune established by a child winning an
illegal lottery! Most other ticket holders were not as fortunate as Mr MacDonald- the young MacDonald. By one
estimate, there were about 200 properties which could be considered valuable. But
the other 11,000 or so were really small allotments in distant parts of the
country. Frequent, frequently poorly subdivided and difficult to ID. And
therefore almost worthless at least in the short term. One disgruntled winner wrote
to the Herald and described them as worthless scrum inhabited by snakes.
Hundreds of miles in the interior where they are likely to remain unclaimed for
a century to come! Some disappointed winners advertised their tickets for
sale. Presumably at less than the original four
pounds. Just to get rid of it rather than take possession of their prize.
What did the library’s ticket win? From the Herald’s list it one prize
number nine five three six, which is on this page towards the very end of the
list of prizes which were in order of value. It won only a small acreage
somewhere inland from Port Macquarie, allegedly worth the four pounds
it cost it’s buyer. But hardly worth bothering about. Indeed it’s buyer didn’t bother to collect his prize which is why the ticket has
survived. In order to collect your prize, you had to hand the ticket into the bank
and they cancelled it and then you win the prize. But a lot of people who won these
very small distance country allotments couldn’t be bothered. They didn’t want the property,
and so most unconnected prize tickets were thrown away. This one has survived.
Remarkably it seems that about fifteen hundred of the eleven thousand tickets
have survived in archives and collections. There are thirteen tickets
in the National Library’s collection. There are 23 in the Mitchell library’s
collection, and the Fisher Library has this one. This one was donated to the
library in the 1960’s by a man called Harry Lipton. He was a German Jew who
fled the Nazis and finished up in Sydney. He married Rachel Mandelbaum who died in
1978 and left her estate to the University to establish Mandelbaum house,
which is the residence for Jewish students in Darlington. So this was Rachel Mandelbaum’s
husband. How Mr. Lipton came by it, we don’t know. All these tickets survived because their
owners couldn’t be bothered collecting the almost valuable, the almost worthless
prizes. But the Mitchell library has a further 14 hundred or so cancelled
tickets as part of its archive of the Bank of Australia’s records. So there are about
fourteen hundred cancelled tickets in the Mitchell and about sort of 50 others
which, like this one, were never cashed in. And finally I’ve got two tickets in my own
collection, which is what started me doing research on all this. I think its a
remarkable story that deserves to be better known. Thanks. The story behind my own tickets. They were
given to me because they were going to be thrown away. They came from my brother.
My brother was the executive director of the New South Wales Cricket Association,
and they had been in the same office building in the city for many decades.
But they were moving, and they had a strong room attached to the office
where they had their archives. The minutes, books, ledger’s and what not. And, ah, my brother assigned
one of the staff to pack up the strong room. And he said, if you find anything that
you don’t think needs to be moved to the new place just put it aside and we’ll
consider it for disposal. So this chap came to my brother afterwards and said I
packed up the strong room and I found this envelope and it’s got these two old
bits of paper in it. I don’t know what they are. But I’ve read them and they
don’t mention cricket, so I don’t think they’re relevant to our archives. So my
brother looked at them and he had no idea what they were either but my brother knew that
I’d collect rare books as a hobby and I might know something about old things. It dated 1849, so you know you can tell its old.. So my brother showed them to me and
explained how he came by them and said, you know, what, what do you think they are?
And I had, I didn’t have any idea what they were, and I said well, what are you going to do
with them? And my brother said well, we’re going to toss them out unless you want them.
So I said oh yeah, righto, I’ll take them, and then that’s what got me started on what is the
Bank of Australia lottery. Ah, and that’s, that’s how I discovered all of this about
the illegal lottery and all the rest of it. The next lottery was 1930 when Jack Lang
was Premier and he was desperate for money during the depression.
And he got the parliament to pass a bill allowing lotteries, and the churches objected. But in order to shut the churches up, he promised that all the profits would go to hospitals. And because the churches, particularly the Catholic church, ran a lot of hospitals, they couldn’t very well say no, no, we’re not going to have a lottery because we don’t want the money. And, we’ve had lotteries ever since. The question is- because of the great excitement among public about this, was there any kind of kind of black market in selling or
acquiring tickets? Not that I know of. There are lots of advertisements in the
newspapers offering them for sale, and you had to apply to particular agents
and so on to get it. I’ve never found any suggestion that there was any black market.
So far as I can tell, everybody paid the four pounds. They thought it was
cheap to get one of these wonderful prizes. They didn’t realize that there were also
11,000 crappy prizes. What happened to the unclaimed pieces of
land? I don’t know. Um, I assume that they were simply given back to the borrower
who had put them into the bank as security for his money but I don’t know. Um, it
could be that they went in some other way. They were distributed in
some other way. I haven’t found any records about what happened to the
unclaimed, the unclaimed lots. The bank did try to have a second lottery
in the middle of 1849 because they found a whole lot more properties that hadn’t been in the
first lottery. That was banned by the government. The government by then thought
well, we’ve had one lottery that’s illegal, that’s enough But more interesting, if I can just go on for another minute. William Charles Wentworth, who was considered Director
of the bank and got to build through the local Parliament and so on, he thought gee this
is a neat way to get rid of property that you can’t sell. Because of the
depression. He was a great property investor. He had a lot of pieces of
property all around. He needed some money to pay his levy on shareholders of the
bank. Cause they all had to pay to deal with , to cover the bank’s liabilities. So William Charles Wentworth announced a lottery that he was going to run for
himself with his property investments as the prizes. And he was selling tickets,
5 pounds a ticket, and I think he was planning to make 60,000 pounds that way.
And uh, this, these were advertised in the paper. The middle of 1849. Again the Attorney
General stepped in and said come on, this is illegal. A lottery to clear up the
Bank of Australia is one thing, but a lottery and your benefit to give you
sixty thousand pounds is quite another thing! And he was threatened with arrest and prison…so he had to refund everybody ‘s 5 pounds. Did you discover whether any of the winners
who won very big holdings, whether any of those holdings became famous
properties that survive till today? Survived in history ?Did I
discover that any of the lottery winnings, the more important ones,
became well-known or well-known people I suppose.
No I didn’t. Like any lottery, you’re tremendously interested until
it’s drawn and then when somebody else wins something good, you lose interest
completely, and there’s no records that I’ve seen in local papers about the
person who won some land at Woolloomooloo doing something wonderful. No, it’s just the
excitement died down as soon as the prizes had been announced. So far as I can tell. Good, thanks.

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