The gubernatorial campaign of 1892 turned upon the question, whether or no the charter of the Louisiana State Lottery should be renewed. As this institution was domiciled in New Orleans, and, in one way or another, entered into almost every phase of life in the community, the city had a vital interest in the result. During the quarter century of its existence, the lottery entrenched itself in local business life, in politics, and to some extent in society. It is probably not going too far to say that at the moment at which we have now arrived, no important undertaking in New Orleans could be financed without the assistance of one of the little group of capitalists connected with the lottery. For a long time its money and its lobbyists had played an important, and sometimes a decisive part, in state elections, and, less frequently, in city elections also. Finally, the existence of a chartered form of gambling had a corrupting effect upon the life of the community and tended to break down habits of industry, and to build up a lawless spirit which was in no small degree responsible for long train of disorders which constitute the burden of so many pages in this volume.
It must be confessed that the Louisiana State Lottery Company was not responsible for introducing into Louisiana the idea of licensed gambling. From the early days of the nineteenth century the State Legislature had wrestled with the problem of gambling, and with regard especially to New Orleans, had tried repeatedly the experiment of putting it under governmental control and supervision. The earliest lottery of which we have record in Louisiana was one held by the rector, wardens, and vestrymen of Christ Church, to raise a fund of $10,000 for religious purposes. The act incorporating this enterprise was passed March 6, 1810. In 1814 a lottery was organized to raise funds for the improvement of navigation in Bayou Boeuf. The incorporators were George Matthews, Henry Clements, William Miller, Levy Wells, and Leonard Compton, all responsible and, presumably, patriotic citizens. In 1819 the State Medical Society was authorized to raise $10,000 by means of a lottery, with which to purchase instruments and a library. In 1822 a lottery of which the proceeds were to be used to improve Bayou Lafourche was incorporated by Alfred Hennen, Agricola Fusilier, Peter Regnier, and John Wilkinson. Another for the benefit of the "Chafalaya," had among its Auguste Louallier, James Still, J. M. Dubaillon, Luke LeSassier, and William Haslet. At that time the First Presbyterian Church had incurred a debt of $30,000, and no better way offered to clear it off than to hold a lottery, permission for which was obtained from the State Legislature. The Grand Lodge of Masons built a Masonic Hall in New Orleans in 1827 on the money raised by a lottery. In the same year lotteries were authorized for the extension of the public roads in Iberville parish and for the benefit of the College of Louisiana, which was in need of $4,000 for new buildings. At the same time a state lottery was proposed which, it was expected, would bring into the depleted state coffers the sum of $200,000 annually. This enterprise was promoted by Henry L. Ranyon but does not seem to have materialized. And, p484merely to close a list which might be considerably extended, a lottery may be mentioned which was engineered by the regents of the New Orleans schools, to raise a fund for the erection of a central high school and some primary school houses.1 Louisiana was not the only state which favored lotteries as a means of procuring cash for benevolent, religious and educational purposes. Later on, after the Civil war, for example, foreign lotteries, among which may be mentioned the Havana, the Royal Saxon, and the Hamburg, vended their tickets in Louisiana. There were also lotteries of which the headquarters were in the adjoining states of Alabama, Georgia and Kentucky. The magnitude of their sales in Louisiana suggested the possibility of a local lottery company, and thus led the way to the establishment of the colossal enterprise, the fate of which was determined in the campaign of 1892.2
There was, however, never lacking in Louisiana a public sentiment adverse to the lottery idea. As early as 1826 Governor Johnson, in a message to the State Legislature, had commented upon the number of lotteries that had been organized in the state. "It may deserve inquiry," he wrote, "whether it is expedient to resort for any object whatever to a mode of raising money so uncertain in its results, and so extravagantly expensive when effectual." In 1833 a bill was carried through the Legislature forbidding lotteries in Louisiana under heavy penalties. Although this law received the governor's signature, it does not seem to have been enforced. In 1841 similar legislation was enacted, but with correspondingly little effect.3 The anti-lottery sentiment in the community, however, gathered strength with the growth of education and of experience, and it is extremely doubtful if the Louisiana State Lottery could ever have obtained its charter, except for the moral and political confusion of the reconstruction epoch. By exploring these exceptional conditions, however, it was successful, in the face of the disapproval of the wisest and most enlightened part of the population, both of city and of state.
In 1863 the agent in New Orleans of the Alabama Lottery Company was a man named Johnson. The very large business done by Johnson attracted the attention of C. T. Howard and John A. Morris, who at that time owned one of the finest stock-farms in the State of Texas, and had also important connections with New York, where, many years later, he built the famous race-course at Morris Park. Morris and Howard interested Ben Wood, C. H. Murray, and other New Yorkers in the idea of a lottery in Louisiana, and in 1868 applied to the carpet-bag Legislature for a charter. The conditions under which the grant was made were afterwards severely criticized.4 Then the people acquiesced, it is true, but some justification can be found for their in the fact that the Civil war had left them sorely impoverished, and that the spoliation perpetrated by the carpet-baggers had reduced the state to extremes. Thus, when the lottery company offered to pay an annuity of $40,000 to the Charity Hospital in p485New Orleans, it was openly defended by many persons. The company's charter fixed its capital at $1,000,000. It was to enjoy a monopoly of the lottery business in the state for a period of twenty-five years.
None of the original promoters of the scheme, however, had any practical experience in the lottery business and the result was virtual failure. No money was made, although an estimated $100,000 was invested in the venture. The company was on the verge of quitting, in fact had decided to quit, when a man who had been working for the concern in a minor capacity sought an audience with the management. This man was Dr. M. A. Dauphin, an Austrian physician of very weak body but of very shrewd mind. He told his employers that he could make the lottery pay, if they would put $50,000 more into it as working capital to be used as he might direct.
There was some hesitation on the part of the lottery managers, but they finally decided to give Doctor Dauphin a chance. The feeble-bodied, but nimble-witted, Austrian physician revised the plan on which the company had been running. He brought to bear all the information regarding lotteries which he had brought with him to America from Europe. From the day Doctor Dauphin assumed direction of affairs the Louisiana State Lottery became a gold mine for its owners. How much of the authorized capital stock ever was issued was never known to the outside world, as the concern was and, until the United States Government dealt p486it its death blow, always remained a close corporation. It is known, however, that under the direction of Doctor Dauphin the shares of a par value of $100 rose from $35 in 1879 to $1,200 in 1890 — so that the market value of its stock in the latter year was more than double the whole banking capital of the state. Through the mismanagement of later years this stock declined to as low as $7 a share, at which price the widow of the real originator of the scheme sold a large block to a New Orleans banker, who thereafter was prominently identified with the affairs of the company. It is not believed that more than $500,000 ever was paid into the treasury in the form of actual cash for stock. The promoters of the enterprise built up the original capital, and accumulated an enormous reserve, while declaring dividends of from eighty to 170 per cent per annum, and that, too, out of only one-half of the net earnings, the other half belonging to Morris and Howard.
For ten years the lottery company maintained itself, against constant legislative assault, by the skillful use of its large political influence and abundant funds. In 1879, however, the Legislature repealed the charter. This result was brought about by the narrow margin of two votes in the senate. The company promptly took the matter into the courts, where Judge E. C. Billings, United States district judge, practically annulled the action of the Legislature, in a decision which held that the act of 1868 was in the nature of a contract, and could not be abrogated without the consent of all parties. The soundness of this decision was questioned at the time on the ground that the charter, if a contract, was an immoral one, and as such indefensible under the Constitution of the United States. There was, moreover, a decision of the United States Supreme Court which seemed to run directly contrary to Judge Billings' views.5 The lottery company, therefore, did not feel safe. It felt the need of more definite legal safeguards. If the lottery company could induce the delegates to insert into the fundamental law of the state a provision defining its status, then it would thereafter be safe from the danger of legislative interference with its business.
Accordingly, when the convention met, the lottery agents brought the matter before the members. They supported their arguments with Billings' decision, with promises to give up the company's monopoly, to retire from politics, and to allow a provision to be into the constitution prohibiting all lotteries after January 1, 1895. Among the delegates were several distinguished attorneys who owed their seats to the influence exerted on their behalf by the lottery or its henchmen. The whole convention was surrounded "by a strong lobby of purchased respectability."6 Under the circumstances the operation was powerless to prevent the insertion into the new constitution of an article re-instating the repealed charter, without its monopolistic feature; permitting the Legislature to charter other lotteries; and providing that after January 1, 1895, all lotteries whatsoever should be prohibited in Louisiana. This provision was regarded generally as a compromise. Rather than defeat the constitution in which it was embedded, the people adopted it, in the belief that, in a few years, the whole lottery evil would be extinguished beyond the possibility of resurrection.
p487 The concessions which the lottery people had made were merely apparent. The renounced monopoly was, in effect, retained by the company, which, through the immense political influence commanded by its wealth, prevented every Legislature elected after 1880 from granting any additional lottery charters. To this end the prejudice of good men against the multiplication of such charters was also industriously exploited.
The business of the lottery company increased with amazing rapidity. The charter gave it a monopoly not only of the lottery business but of the "policy" business in New Orleans. This policy privilege was of enormous value but in the end proved the undoing of the lottery company. Policy, in substantially the same form as it was played in Chicago up to the citizens' association crusade of 1905, had existed in New Orleans for years, as it existed in all cities where any considerable proportion of the population was negro.
Under the new, constitutionally ratified charter the Louisiana company organized the policy game in a way that gave it a tremendous impetus. Before long the city was policy mad. Visitors to New Orleans in the '80s, remember well the open policy booths in the main business streets of the city and the lines and crowds of negroes and whites that thronged the "book," seeking to bet their nickels and dimes on the innumerable combinations of figures which superstition or fancy dictated. There were policy booths in front of laundries, bar-rooms, groceries and markets. There were instances where as much as $5,000 was paid for a stand if the location were favorable enough, which might not be more than •four feet square of space, with a small table and chair. More than a hundred policy shops existed in New Orleans. The profits from the policy game, in which there were two drawings daily, were large enough to pay all the expenses of the lottery proper, in which the drawing was monthly, leaving the profits from the national business, over the payments of prizes, clear gain.
The Louisiana State Lottery, in its monthly drawing scheme, started by issuing a ticket which sold for 25 cents and by offering a capital prize of $3,750. It was allowed to issue only 100,000 numbers. The immense popularity of the new scheme soon made it necessary for the company to devise a plan under which it would be able to increase the volume of the business to meet the demand for the tickets.
The first change was to a 50-cent and a $7,500 prize. Successively, as the business grew and the demand for tickets increased, the prices for whole tickets and capital prizes were established as follows: $15,000 for a $1 ticket, $30,000 for a $2 ticket, $75,000 for a $5 ticket, $150,000 for a $10 ticket, $300,000 for a $20 ticket, and, finally, the extraordinary capital prize of $600,000 for a $40 ticket. This last-named, almost fabulous, prize was awarded semi-annually. There is no record that the $600,000 prize ever was drawn in a lump sum by a person holding the whole $40 ticket, but the time is still remembered when a New Orleans barber won and was promptly paid $300,000 which he won on a whole $20 ticket. The aggregate schemes of monthly and semi-annual drawings reached the sum of $28,000,000 annually. The aggregate of the daily drawings came to about $20,000,000 more.
In formulating his original plan the shrewd Doctor Dauphin had considered well the fact that the lottery company must depend for its ultimate success on a belief on the part of the public that the drawings of the p488company were, in fact, pure chance and that all prizes would be paid without quibble to the holders of "lucky numbers." He knew that the concern could prosper only as the public had confidence in it. It must be remembered that in these early days of the lottery the buying of a lottery ticket was scarcely considered gambling. Of course the official sanction given the concern by the state had much to do with differentiating the purchase of lottery tickets from other forms of gambling in a sentimental aspect. Virtually no prejudice had to be overcome, therefore, and the main object to accomplish was to convince the public that the scheme was "square." While the name of Morris went far toward accomplishing this, Doctor Dauphin hit on the plan of placing the drawings under the supervision of men whose very endorsement would be a guarantee to the public that the lottery was as honestly conducted as possible.
It was in this way that Gen. P. G. T. Beauregard and Gen. Jubal A. Early were brought into the scheme. The former lived in New Orleans and the latter in Virginia. Both were men of much popularity in the North, and in the South they were popular idols. Their distinguished services for the confederacy in the Civil war placed them in positions in the public mind little below that which had been occupied by Gen. Robert E. Lee. Financially both of these distinguished soldiers were in straightened circumstances. The Louisiana Lottery Company offered each one of them $30,000 a year to act as commissioner for the company and to supervise the drawings. This was as far as the connection of either with the company went. Not more than two days' work per month was required of them.
Office of Louisiana State Lottery
On 100,000 slips of paper •an inch wide and six inches long were printed that many numbers. The numbers were in large type. Each of these 100,000 slips was rolled tightly with the number on the inside, and the roll was inserted in a case consisting of a section of small rubber hose •about an inch long. These 100,000 tubes were then dumped in a hollow wheel •about five feet in diameter and two feet thick.
The wheel was made of two glass discs joined at the periphery with a thin wooden band as wide as the wheel. In this band was arranged a slide which could be opened and a hand inserted into the hollow wheel. On the stage near this "number wheel" stood a similarly constructed wheel one-third the size. In all, the scheme called for a giving of 3,434 prizes at each drawing; and the smaller, or "prize wheel," contained that many of the small rubber tubes — the "prize tubes," — minus the number of "terminal" and "approximation" prizes. In each one of these tubes was a slip of paper containing figures representing a prize.
Thus equipped, the commissioners were ready to begin the drawing. For spectacular effect two boys from the local asylum for the blind were chosen to draw the tubes from the wheels. A robust negro turned the cranks, mixing the rubber tubes in the wheels thoroughly. Then one of the blind boys drew a tube from the big wheel. A man selected by the commissioners for the purpose extracted the rolled slip from the tube, held it up before the audience and announced the number. At the same p489time the other blind boy drew a tube from the prize wheel and the announcer called out the sum marked on this slip. This prize, then, was drawn by the number drawn from the other wheel at the same time. The drawing required hours and usually was witnessed by a large audience.
After it was over Beauregard and Early placed the rubber tubes into sacks, sealed the sacks, placed them in vaults to which they only had the combination and sealed these vaults with paper strips fastened by wax seals impressed with seal rings which they wore. Once each year new slips were substituted.
So honestly were the features advertised providing for insuring an honest drawing that the public soon became convinced that there was no chance for jugglery, and so long as the company existed, the buyers purchased tickets in the utmost confidence that if they did not win it was not because of unfair drawings. The idea of purchasing the name of some distinguished Confederate officer proved so valuable that after the deaths of both Beauregard and Early the services of Gen. W. L. Cabell of Texas secured. General Cabell was known to the South as "Old Tige," by virtue of his fierce fighting record in the Civil war. He was a West Point graduate and was at one time the commander-in-chief of the trans-Mississippi division of the United Confederate Veterans. The war left him poor, and, as it did many others, unqualified to a great extent for the struggles of civic life. The lottery company secured his services as commissioner for $6,000 in the beginning of his service with it, although this amount was probably increased later on. General Cabell was eventually involved in the prosecutions instituted by the Government to suppress the lottery.
The death of John A. Morris brought Doctor Dauphin into the presidency of the company and he held this position until he in turn died. Under his administration the affairs of the scheme prospered amazingly. The next president was C. T. Howard. It was under Howard that the lottery company received its widest publicity. On every occasion for charity or volunteer funds for public purposes the lottery company promptly appeared with a big subscription. In this way it came to be regarded as a public benefactor by many people in the State of Louisiana. The Mississippi River in those days not infrequently overflowed the levees and wrought havoc on hundreds of farms, and on all such occasions, with the unlimited funds of the lottery at its disposal, its officers chartered steamboats, loaded them with supplies and went to the rescue of the flood sufferers.
Of course these things were done for advertising purposes solely, but at the same time they served to place the Louisiana lottery in a position by itself among the gambling schemes of the country. These open-handed charities on the part of the management unquestionably served to make the authorities lenient toward the Louisiana company in later years.
After the day of Howard the presidents of the company were Paul Conrad, E. J. Demarest and W. J. Demarest, the latter's brother. Conrad had little or no executive ability, and in the palmy days of the lottery made no plans to tide the concern over the troublous times which he must have known awaited it. E. J. Demarest, the succeeding president, had been an employe of the company. He stepped out when he thought he saw trouble ahead and placed his brother in the position of buffer p490between the company and the Government. The name of W. J. Demarest was signed to the last tickets issued by the lottery in 1907.
The degree to which the power of the lottery company was felt in New Orleans may be inferred from an experience which befell Col. A. K. McClure, the famous editor of the Philadelphia Times. McClure was instrumental in procuring the passage by the Pennsylvania Legislature of a bill prohibiting the publication of lottery advertising in newspapers in that state. The lottery company sued the Times for libel, but the case was thrown out of court when only a part of the argument had been heard, on the ground that lottery dealing was an outlaw occupation in Pennsylvania, and could claim no protection from criticism under the laws of the state or the nation. Unfortunately for McClure, he ventured to visit New Orleans in 1885, where different views regarding the lottery enterprise existed. He was met at the station by a deputy marshal, who served him with a writ sued out by President Dauphin, charging libel, and asking damages of $100,000. "I confess," says McClure, in his reminiscences of the event, "that I was somewhat disturbed because I knew of the almost limitless power of the lottery company, extending even to courts and juries, and when I arrived at the St. Charles Hotel, of which my old friend Colonel Rivers was host, I told him of the writ that was served upon me, and asked him where I could find an able and honest lawyer who was entirely independent of the lottery. He said frankly: 'We are all in it here, and I hardly know how to advise you; but there is one man that you can trust, and that man is Governor Nicholls.' The governor came into the hotel during the evening, and he exhibited great interest in the case. He said [. . .] that he did not see how it was possible for me to escape without paying a round sum in damages to the lottery company; that the sentiment of the community was with the lottery; that the officials of the city, executive and judicial, were generally in sympathy with them, and that it would be impossible to get a jury that would not resolve all doubts in their favor; and he finally concluded that I should get an adjustment of the matter on the best basis I could."
McClure engaged a prominent New Orleans attorney to represent him. This gentleman, though a staunch opponent of the lottery company, the franchise of which he had opposed as a member of the constitutional convention of 1880, told him frankly that there seemed to be no possible means of escape from judgment, as the judges, the marshal who drew the jurors, and the community generally were in sympathy with the Louisiana lottery, which was lavish in its benevolent gifts to charity and to the public. "I said that I desired to get the case to the Supreme Court of the United States, where I was satisfied the charter could be overthrown, but his answer was that they would never permit such an appeal, that there was appeal only in cases of judgment of $5,000 or more, and that a verdict would be found against me something under $5,000."
This suit against McClure was ably fought, and ended, finally, in a compromise, the proposal for which emanated from the attorneys for the lottery company. The affair, however, did as much as any other one thing aside from the growing prejudice against what was regarded throughout the country as a gigantic evil, to cause its final overthrow. Two laws had been enacted by Congress to restrain the use of the mails for lottery purposes; but they were practically inoperative; and the fact p491that the president of the lottery company had brought an action against the postmaster general, claiming $100,000 damages for restraining his use of the mails, gave additional reason why there should be more decisive legislation against this growing evil. Benjamin Harris Brewster was then attorney-general. McClure and some of his friends persuaded him to carry the lottery affair into the United States Supreme Court, on the ground that the lottery company was interfering with the administration of the laws and vexing the officers of the Government with damage suits. They insisted that there should be a speedy and final judgment as to the rights of the company under its franchise. Nothing came of this motion, but it served to bring before the public and before Congress the fact that the lottery company presumed to dominate the press of the country, as in the matter of the Times suit, and the government itself, as in the case of the action brought against the attorney-general.7
New Orleans was by no means the only city heavily involved in the lottery business. Aside from the revenues from the daily policy drawings, which came only in part from New Orleans, the heaviest sales of tickets reported from any one locality were from Chicago. James, commonly known as "Doc" Moore, was the Chicago agent for many years, succeeding his father in that capacity. The sales at one time were as high as $85,000 a month in this city; and when the end came in 1907 the Government agents on the case claimed that Moore's sales were $60,000 a month. This Chicago agency of the lottery company had been worth not less than $50,000 a year net for a third of a century. It was a business that attracted little attention because of there being but one drawing a month and the investments of the class of people who bought lottery tickets were made very inconspicuously.
Strangely enough, Boston bought more Louisiana lottery tickets than any other city of its size in the country, the monthly sales in that city being about $50,000. New York bought about as heavily. All the other large cities were good markets for the contests and the local agents made large sums of money. In fact, the lottery company claimed that 93 per cent of its revenue was drawn from sources outside of Louisiana.
It is doubtful if the lottery would have been tolerated in the United States as long as it was, had it not been for the reputation of "squareness" established by the Louisiana company. Regardless of what the theory of the operation of the law may be, it remains a fact that in dealing with gamblers the authorities are disposed to treat the "square" gambler with more leniency than they do a "crooked" gambler, or "sure-thing man." This rule operated to the benefit and long life of the Louisiana company. Thousands of Government officials bought the tickets monthly. In one case a Texas judge announced from the bench in a lottery trial that he did not consider a "square" lottery a bad thing, and proceeded to draw from his vest pocket a ticket which he had just bought. Before the Government began its fight on the Louisiana company a winning ticket was known to be as good as a certified check, and express companies and many banks cashed them.
The charter of the lottery company was to expire on January 1, 1894. It was improbable that so profitable a business would be abandoned p492without a struggle. Therefore, as that date approached, the lottery question was debated with increasing warmth. The lottery was, of course, supported by those who benefited from it, directly or indirectly. But there was also an honest difference of opinion over the propriety of continuing its charter. Many advocated it in the belief that the financial situation of the state was such as to render absolutely necessary the revenue which the company would be counted on to offer. Others opposed it on the ground that for the state to be known as the patron of such an institution would keep away capital and discourage emigration. The corrupting effects of the lottery on the population, moreover, offered a sound basis of criticism. Particularly upon the servant class and upon the young was the influence of the enterprise open to question. For these reasons early in 1890 a movement sprang into existence to fight the attempt to renew the charter which it was understood the company was preparing to make. A meeting was held in New Orleans in February, at which the Anti-Lottery League was organized. This association conducted a systematic canvass against the lottery, beginning with a series of meetings in New Orleans, and then extending its efforts to other parts of the state.
The lottery company, on its side, used every means in its power to control the members elected to the State Legislature of that year. It was successful in securing the election of a friendly majority in the House, but in the Senate, in spite of every exertion, its majority was very insecure. Consequently, in the resulting contest at the state capital interest centered in the latter chamber. On April 17, just a month before the opening of the session, John A. Morris, on behalf of the company, published a letter announcing its intention to apply for an extension of its franchise, and proposing to pay $500,000 per annum for a monopoly to run twenty-five years. The Legislature met on May 12, and the following day Mr. Morris increased his offer to $1,000,000 per annum. Governor Nicholls, who was then at the head of the state administration, was a man of uncompromising integrity. It was well known that he opposed the lottery and would fight it to the last. He had already made this clear by refusing to accept the offer of $100,000 made by the company earlier in the year to be used to protect the state from inundation as a result of the unprecedented high water in the Mississippi, which made February, 1890 forever memorable. A disastrous series of "crevasses" inundated a large part of the most fertile section of the state. Now the governor, in his annual message to the Legislature, left no doubt as to his position. He made a strong argument against any legislation favorable to lotteries, and announced his intention to veto any such acts.
The lottery bill was promptly introduced in both houses. In the Senate the debate opened on May 21. The leader of the anti-lottery forces there was Murphy J. Foster of St. Mary. The effrontery of the methods taken to force the measure through was shown by the fact that a resolution was passed to have the Senate meet in the sick room of a member known to favor the lottery, in order that the two-thirds majority required by statute might be completed by having him vote as he lay on his deathbed. In fact, the scandal became so great that resolutions were introduced making charges that members had been bribed, or that attempts to bribe them had been made, and calling for an investigation. In the House these resolutions were indefinitely postponed; p493in the Senate they were referred to a special committee, which eventually reported them without action, and they were pigeonholed. The only effect which resulted from this effort on the part of the anti-lottery people to ventilate the methods of the lottery lobby was the passage of a law which punished with fine and imprisonment persons bribing or attempting to bribe public officials or voters as well as the person receiving the bribe. One member, it is true, was arrested on a charge of receiving a bribe, but the prosecution had no case and he was promptly set at liberty.
Early in the session the lottery agents inaugurated a scheme of compromise with their opponents. Numerous conferences were held, at one of which the proposition was broached to refer the whole matter in controversy to the voters, and let them pass upon it at a special election. If that election resulted favorably to the lottery, then, it was proposed, the anti-lotterites should drop all opposition in the Legislature to the enactment of the pending lottery legislation. This scheme was debated for some time, but finally dropped.
The lottery bill was in the form of a proposal to amend the state constitution, but included other, though allied, matter. In substance, it prescribed the manner which should be followed in submitting to the people the amendment therein set forth. Ordinarily, these subjects should have been divided, but the exigencies of the situation made it undesirable, from the lottery point of view, to force the fighting on two measures, the defeat of either one of which would prove fatal to the project. But in combining the bills, ground was given for raising a constitutional question that, as a matter of fact, very nearly resulted disastrously. The state constitution provided that a bill proposing an amendment should pass each house by a two-thirds majority, after having been read on three separate days; that such amendment with the ayes and noes thereon be inscribed upon the official journal; and that the secretary of state should cause it to be published in certain newspapers. Then it should go before the people. But did the basic law require that such acts go before the governor, like all other legislation, and receive his approbation? Nothing to that effect was said in the constitution, but from the general tenor of the instrument that was legitimately to be inferred. This was the point on which the lottery legislation finally turned.
The bill passed the House on June 25 by a vote of 66 to 29. It stipulated that the lottery company should pay $1,000,000 per annum to the state, divided as follows: $350,000 for levee work, $350,000 for schools, $50,000 for pensions to Confederate veterans, $100,000 towards a drainage system for the City of New Orleans, and the remainder to go to charities hitherto supported exclusively by the state. While the measure was under debate in the lower chamber a man named Newgass had submitted a proposal to pay the state $1,250,000 per annum for the identical privileges sought by the lottery corporation. The applicant also offered to provide an adequate bond to guarantee the faithful performance of his contractual obligations. Morris countered the Newgass proposition by offering to lend the state $2,000,000 without interest — $1,000,000 in 1890 and $1,000,000 in 1891 — to be used for levees. On the ground that the latter tender more than offset the advantages derivable from the Newgass offer, the House rejected the latter. The Senate, however, on taking up the bill, amended it to raise the annual payment to an amount equal to that offered by Newgass, the additional $250,000 to be applied p494to the general fund of the state. It also inserted a provision requiring a bond. In this form it passed the act on July 1 by a vote of 24 to 12. On the following day the House adopted the bill as amended by the Senate. It was then sent up to the governor, who promptly returned it with his veto. With it Nicholls sent a message flaming with indignation. "So far as a claim for the necessity of the present measure is sought to be predicated upon the poverty of Louisiana," he wrote, "I, as its governor, pronounce it totally without justification or warrant." He would not sign the bill, because he would not permit one of his hands "to aid in degrading what the other was lost in seeking to uphold" — the honor of his native state.8
On July 8 the House passed the bill over the governor's veto. In the Senate, however, the lottery company could not count on enough votes to insure similar action. But could it be shown that legislation of this type did not require the governor's approval, then the bill might be considered before the people. All that would remain would be to have the secretary of state promulgate it. A resolution was therefore hurried through the Senate along those lines. The bill was returned to the House, which reconsidered the vote by which it had been passed over the veto, and ordered the act sent to the secretary of state for promulgation. But that official refused. He set up various reasons for declining to act. He affirmed that the act as passed was void because it had not been read in full on three separate days, as required in case of all amendments to the constitution, and that alterations in the printed journals of both houses had been made without authority with the intent to create the impression that the bill had been so read, when as a matter of fact it had been read by title merely. Secretary Mason also claimed that he was obliged by his oath of office to investigate such facts and exercise his discretion as to action in the premises. He also stressed the fact that the bill contained matter other than the proposed amendment, and that even if the amendment itself did not require the governor's signature, the rest was subject to the veto.9
The next step, of course, was to take the matter into the courts. On December 15 Morris filed in the District Court of East Baton Rouge a petition for a mandamus to compel the secretary of state to make publication. The hearing was set for the following January, and on the 19th of that month Judge Buckner handed down a decision in favor of the defendant. An appeal was immediately taken to the Supreme Court of the state, which, on April 27, in a long opinion, reversed the decision of the lower court. The chief justice, Bermudez, and Justices McEnery and Watkins decided that the amendment was of a character such as need not be submitted to the governor, that having once passed each house of the Legislature by a two-thirds vote, there was no option but for the secretary of state to publish and lay it before the people. They held that the journals were proof of the facts which they related, and that the amendment was not void because of the extraneous matter contained therein. Justices Fenner and Breaux dissented, the former on the ground that Articles 73 and 75 of the state constitution provided that all acts going through the Legislature must be submitted to the p495governor, and the latter, that the act provisions which were, in effect, appropriations, and as such could not be incorporated into an act proposing a constitutional amendment.
The lottery question now became a political issue. If an amendment to the state constitution was to be voted on, it would go before the voters at the election of April, 1892. At that election a full slate ticket would be elected. Thus, immediately, the matter of the lottery charter became complicated with various local and party considerations. It was obvious that whichever faction captured the democratic gubernatorial nomination would determine the fate of the lottery company. Both sides made preparations for a desperate fight. The anti-lottery campaign opened at a great mass meeting in New Orleans, at the Grand Opera House at which Rev. B. M. Palmer made an address which was one of the turning points in the struggle. The effect of this single oration was electrical. There are many who believe that it really decided the issue of the campaign. But, whether it did or not, it must be counted as a factor which affected notably the final result.10 The pro-lottery campaign was launched at Natchitochesº on August 20.
The political situation was complicated by the fact that at this time the agricultural interests of the state had enlisted in the Farmers' Alliance. This organization had swept over the country and promised to become a power in local as well as national politics. The leader of the organization in Louisiana was Thomas Scott Adams of West Feliciana. Adams was ambitious to become governor of the state and had the support of the party for that office. The Farmers' Alliance was understood to be opposed to the lottery. It was obvious that under the circumstances a fusion of the anti-lottery and the alliance factions was desirable. Feelers put out early in the summer by the former met with an encouraging response. Then conference committees were named by both sides. The chairman of the alliance committee was A. D. Lafargue. The chairman of that anti-lottery committee was J. D. Hill, and the members were G. W. Bolton, R. S. Perry, John Vance and James Moise. The first conference was held at Alexandria. It became apparent there that the alliance was determined to reserve for itself the right of naming the gubernatorial candidate. Only on that consideration was any fusion of the parties possible. Unfortunately, the anti-lottery people had already committed themselves to the candidacy of Murphy J. Foster, whose course in the Senate, while the lottery bill was under consideration, made him the logical choice for that position. A deadlock resulted. In August, however, the conferences were renewed at Lafayette. Something had to be done, as it was understood that the lottery people were contemplating making proposals to the alliance and might possibly be induced to effect a combination with them, in which case the anti-lottery case was lost. It was then that Hill took on himself the responsibility of formulating an agreement under which the state offices were to be apportioned between the two factions, the alliance to name the governor, the anti-lottery party to name the lieutenant-governor, and so on, alternately, through the entire list of state officials. This agreement his committee refused to sanction, but consented to allow him to submit it to the committee. It proved satisfactory in all respects, except that a clause was inserted providing that the anti-lottery group should undertake p496the entire financial responsibility for the campaign. That night Hill submitted the proposition to Foster and to Donaldson Caffery. The latter was a leading member of the party. Foster subsequently appointed him United States senator. They came to Lafayette in response to a telegram from Hill. After discussing the matter far into the night, Foster gave his approval. Caffery did the same, but reluctantly, and then only on the ground that Foster was the person primarily concerned and therefore entitled to make the decision.
A peculiar condition resulted. The anti-lottery people, claiming to be democrats, were pledged to nominate a Farmers' Alliance candidate. Yet they proposed to avail themselves of their party affiliations to elect delegates to the democratic state nominating convention, which was due to meet in December. On the other hand, the regular democratic organization favored the candidacy of Samuel D. McEnery. McEnery was one of the members of the State Supreme Court who had decided the suit of Morris vs. Mason a few months before. This recommended him to the lottery people. The peculiar alignment of factions made McEnery appear as the lottery candidate. At the primaries a few weeks later a vote for him was regarded as a vote for the lottery, while a vote for Adams was understood to be one against the lottery. It is not clear how McEnery was induced to accept the candidacy. He had previously allowed it to be understood that he was opposed to the lottery. Probably an appeal was made to his sense of party loyalty. That he was actuated only by the most honorable motives was conceded even by his opponents. Some months later, Foster, then governor, recognizing his exceptional personal qualities, reappointed him to the State Supreme Court. At the primaries McEnery carried every ward in New Orleans. But the parishes — as the country districts of Louisiana are called — sent up a number of anti-lottery delegates, and there were numerous contesting delegations. Before the convention opened an effort was made to harmonize the warring factions, but no basis of agreement having been reached by December 15, the anti-lottery people determined to take no part in the convention and to put out an independent ticket.
The program agreed upon between the alliance and the anti-lottery parties was, that each nominating convention should assemble at the same moment, organize separately and proceed independently to make the nominations apportioned to it. They met on December 16, the Farmers' Alliance in the hall of the House of Representatives in the State Capitol in Baton Rouge, and the anti-lottery delegates in the Senate chamber in the same building. The former was called to order by Hiram P. Lott of West Carroll. The latter were called to order by Chairman Lanier of the regular democratic state central committee. The anti-lottery people, with Lanier's support and 372 delegates out of a total of 686 members of the state central committee, set up a claim to be the real regular democratic organization. The McEnery faction, however, denied this contention, met on the morning of the 16th, deposed Lanier from the chairmanship and elected ex-Governor R. C. Wickliffe in his place.
In the meantime the leaders of the alliance and of the anti-lottery people had been in consultation. The candidacy of Adams had gradually become impossible. It was feared that the rank and file of the anti-lottery faction, as loyal democrats, would refuse to support an alliance candidate, but would, in preference, cast their ballots for a lottery candidate p497provided he was put before them with the approval of the regular democratic organization. Adams himself had been brought to realize the impossibility of his election. He had agreed that, when tendered the compliment of a nomination, he would decline it in the interest of harmony and party success. On December 16, when the conventions met, the name of Adams was put before the alliance gathering and nominated amidst scenes of great enthusiasm. It was then brought before the anti-lottery convention and endorsed, according to the program. The time had now come for Adams to announce his refusal of the honor. He refused to do so. He said that he had consulted his friends and they were unwilling for him to withdraw. This was unquestionably true. Many members of the alliance wanted him and made every effort to induce him to remain at the head of the ticket. Much time and persuasion was required to bring him back into line, and it was only after Parlange and Hill had escorted him down to the office of Governor Nicholls, which was situated in the capitol, that he was induced, very reluctantly, to write out his withdrawal. Even so, the alliance convention persisted in his support. He was renominated. It was necessary for Adams to appear personally in the rostrum in the anti-lottery convention and ask that this re-nomination be not endorsed before the fact of his withdrawal was accepted by all parties. Then the candidacy of Foster was sprung in the alliance convention, and his nomination went through without serious opposition. In the anti-lottery group, of course, this nomination was endorsed as soon as it was presented.11
The remainder of the ticket was quickly made up. Parlange was nominated for lieutenant governor; John Pickett, for treasurer; W. W. Heard, for auditor; M. J. Cunningham, for attorney-general; A. D. Lafargue, superintendent of education. The office of secretary of state, which was then the best paying position in the state administration, was given to Adams, but did not altogether console him for the prize that he had lost. He never ceased to feel that he had been very badly used. The anti-lottery convention also adopted a long platform. Regarding lotteries, it read: "Such means of raising revenue are at variance with the civilization of the century, in opposition to and subversive of all democratic principle. Demanding equal rights for all and special privileges for none, we affirm our uncompromising hostility to the entire principle of lottery gambling." The proposed lottery amendment was specifically reprobated. "No democratic platform should be adopted which does not condemn and denounce all lotteries until they shall have ceased to exist in Louisiana, nor should any democrat vote for any state, legislative or judicial officer who is not unalterably opposed to lotteries and pledged to promote the passage of laws which will secure their suppression."12
At the same time, in Pike's Hall, only a stone's throw from the state capitol in Baton Rouge, where the foregoing events were being enacted, the McEnery convention was in session. H. C. Knobloch of Lafourche was its permanent chairman. It completed its work on December 18 by nominating McEnery for governor; R. C. Wickliffe for lieutenant governor; L. F. Mason for secretary of state; Gabriel Montegut for treasurer; O. B. Steele for auditor; E. W. Sutherlin for attorney-general, p498and J. V. Calhoun for superintendent of education. The platform denounced "the revolutionary acts of those [. . .] who without cause or provocation refused to take their seats or participate in its [the convention's] deliberations, as they were appointed to do, but on the contrary organized a separate convention and placed in nomination a ticket which had none of the authority and regularity of the democratic nomination with which to go before the people, and can only be classed as an independent or third party ticket." Regarding the lottery nothing specific appeared in this document, but a resolution was embodied directing that all honorable efforts be made to bring about an agreement between the two wings of the party.13
Believing that in the dissentions of the democrats an opportunity offered for them, the republicans also nominated a state ticket. But they split over the gubernatorial nomination. The Leonard faction put out a ticket headed by their leader, and the Warmoth faction did the same, with the difference, however, that J. E. Breaux of Pointe Coupee was chosen as their nominee for governor. These factions continued in active opposition to one another till October, when the withdrawal of the Warmoth faction left the party in the hands of the Leonard people. The platform adopted by the latter group declared against the lottery. In pledging support to the anti-lottery movement, this document defined the party as "opposed to any measure having for its object the legalizing of any form of gambling."
On January 23, 1892, the McEnery party requested Nicholls, as governor, to guarantee a free ballot and a fair count at the approaching election. This request was renewed a week later. To it the governor finally responded by promising to select himself the officers who would be responsible for the purity and peace of the election. This was followed by an effort to harmonize the party. McEnery took the first steps in that direction. He proposed that the candidates on both sides withdraw, that a new convention be elected and that a new ticket be nominated. This proposition was made formally by the McEnery executive committee to the anti-lottery committee. Foster and Parlange immediately placed their resignations in the hands of their representatives. On February 17, however, the committee, after mature deliberation, decided to reject the proposal. In its place counter proposals were made, to the effect that a new ticket be chosen, the offices to be divided equally between the two factions and the Farmers' Alliance, the state central committee to be reorganized and all ballots to be printed "against" the lottery amendment. This, it was thought, was as far as the committee could go in the way of compromise, in view, first, of its commitments to the alliance, and, secondly, of the moral issue involved. Of course the proposal was unacceptable to the McEnery committee. But the effort at compromise continued on both sides. Conference committees were appointed, and on the 20th it was agreed that both Foster and McEnery should submit their pretensions to a primary of the white voters of the state, the result of which should be binding upon all factions. This primary, it was decided, should be held under the auspices of a committee of seven, composed of three representatives each from the McEnery and the Foster parties, and Col. John S. Young of Caddo as chairman. Among the other members were F. C. Zacharie and James Moise, who were chosen p499by the Fosterites, and John Fitzpatrick and Charles Butler by the McEneryites. Fitzpatrick's position on what was in effect the lottery side was curious. He had been one of the most consistent opponents of the lottery legislation in the Legislature of 1878, when the original franchise was granted. But his feeling of party loyalty was sincere and profound. He was a type of many other men who stood staunchly by the regular democratic nominee, in spite of their conviction as to the essential immorality of the lottery proposition.
The primaries took place on March 22. The returns were delivered to the supervisory committee at the St. Charles Hotel in New Orleans. The count began on March 28. It consumed a long time. The committee found that it had undertaken a difficult and delicate task. Meanwhile, the excitement among the people was very great. The New Orleans newspapers, all of which, with the exception of the Delta, supported McEnery, printed statements which seemed to indicate that Young was impressed with the certainty of McEnery's success. When, therefore, on April 4, the committee rejected certain polls in the Sixth, Eighth and Ninth wards of New Orleans, on the ground of fraud, the wildest indignation prevailed amongst the members of the lottery party. As a matter of fact, fraud had been confessed by the election officials of both sides in these precincts. It is difficult to see what other course was open to the committee.14 The vote in the committee was, however, a strictly party one, and Young was called on to decide between the two groups. He voted in favor of rejecting the polls. Thereupon the McEnery members of the committee withdrew. The feeling in New Orleans was so great that an indignation meeting was held in the lower part of the city to protest against the action of the committee, and was attended by an immense number of lottery supporters. The seceding committeemen proceeded to tabulate the returns according to their theory of the situation. On April 5 both parties to the dispute announced the result. The Fosterite committeemen promulgated the following totals: Foster, 43,602; McEnery, 43,053. The McEnery figures were: McEnery, 45,547; Foster, 42,728. This gave Foster, on his own returns, a majority of but 549. The McEnery partisans therefore felt that it was good policy, as well as a matter of principle, to keep their ticket in the field. They accordingly repudiated the results of the primary. Both sides issued long statements; public feeling rose to fever heat; there was talk of revolution, and all parties waited with the final test of strength.
The election took place on April 19. Foster and the ticket which he headed received 79,388 votes. McEnery and his ticket obtained only 47,037 votes. The republican ticket was voted by no less than 25,459 persons. There were also in the field an independent republican ticket which received 12,359 votes; a people's party ticket, which was voted by 9,792 voters. In all a total of 178,298 votes were cast, of which Foster received a plurality, but not, as it appears, a majority. There were, in addition to the proposed lottery amendment, several other amendments to the state constitution on which the people were called on to pass. One relating to the city debt was approved, but all the rest were lost.15
The result, as far as concerned the lottery company, was decisive. Its business was doomed. But events had transpired which would have p500made certain the destruction of the lottery business in Louisiana, even had the election turned out differently. The agitation against the business had taken a nation-wide scope. As early as May, 1890, the importance of interesting the national government in the movement had been appreciated. Senator Blair then introduced in the United States Senate a resolution proposing an amendment to the National Constitution prohibiting lotteries in the United States. In July, 1890, President Harrison sent a message to Congress on the subject, pointing out that the Government was made an unwilling partner in a nefarious business by the lottery company's use of the postoffice and recommending "severe and effective legislation to purge the mails of all letters, newspapers and circulars relating to that business."16 The result was that a bill of the nature outlined by the President passed the Congress on September 19, 1890, without a division. This was a death blow to the lottery. Several prosecutions took place in New Orleans and adjacent cities under this act. The editor of an afternoon paper in New Orleans and of a morning paper in Mobile were arrested for violating the law by sending through the mail their publications containing lottery advertising.17 The officials of the lottery company were arraigned before the United States commissioner in New Orleans,18 and indictments followed in Sioux Falls, Boston and San Antonio.19
The lottery continued to do business with New Orleans as its headquarters till the expiration of its charter. But it worked under constantly increasing difficulties. In 1895 Congress passed another act by which the interstate transportation of lottery tickets or other publications was prohibited. The management of the company was advised by counsel that this act was unconstitutional, and for some years it appears they continued to send their tickets throughout the country through the express companies.20 In the meantime it was casting around for a new home. Mexico was at first considered, the government there having legalized lotteries by instituting a tax on them; but Honduras ultimately received the doubtful honor of the choice. The change of domicile was effected in 1895. Thereafter the company was known as the Honduras National Lottery. But the mere fact that its legal residence was abroad did not prevent it from doing the greater part of its business in the United States. The manner in which the tickets were vended and the prizes paid during the next ten or twelve years, and how ultimately the agents of the United States Department of Justice broke up the traffic form material for a story of intense interest, but which can here be told only in outline.
When as a result of a decision of the Supreme Court in 1903 the express companies were closed to the use of the lottery, the company adopted the practice of sending its tickets as personal baggage, and thus avoided the transmission of them by common carriers. Thereafter the tickets were printed at a printing office in Wilmington, Del., which ostensibly was doing a legitimate business. They were taken by messengers from Wilmington to New York and there stored in different p501warehouses. Every month representatives of the lottery company would withdraw a supply of tickets from these places of deposit. Each officer and agent of the company had an assumed name. The tickets were taken in their baggage to Washington, D. C., and there repacked and sent by messengers to the various state agents throughout the United States. Towards the last there were a number of states in which even by these means the lottery company was unable to do business. The state agents, upon receiving their supply of tickets, attended to their further distribution and sale. On the date of the drawing all the unsold tickets were cancelled by cutting off the fac-simile signature of the president of the lottery company and shipped to Bay St. Louis, Miss. On the same day each state agent forwarded to New Orleans a statement of the tickets sold for that drawing. Monthly drawings were held at the company's headquarters in Pueblo Cortez, under the supervision of their commissioners, who certified that the performance had been honestly conducted. The winning numbers were cabled to New Orleans in cypher and the official list was returned with the commissioners on the first ship sailing from Honduras for Mobile. At Mobile the approximation and terminal prizes — which were numerous and important — were figured out. At Mobile, also, were printed the lists of prizes, which, when completed, were shipped by express under assumed names to the agents throughout the country.
The attention of the authorities was eventually called to the printing office in Wilmington during a printers' strike. Some of the strikers informed the government regarding the character of the business done there and a watch was set. In April, 1906, the proprietor of the establishment shipped to a printer in New York a box containing the plates used in printing the lottery tickets. The consignment was intercepted by the Government agents, but as it did not include any printed matter there was technically no violation of the law, and the Government was unable to secure indictments at this time. A raid on the Wilmington establishment which took place during this month resulted in securing a quantity of other lottery machinery. In June, 1907, the secret of the Mobile plant was discovered, and a shipment of lottery printed matter made therefrom was obtained by the Government agents. The place was raided, several lottery officials were discovered and twenty-one printers and pressmen were taken into custody. The prosecution of the parties now known to be behind the business in the United States was arranged, but came to an abrupt termination when the defendants in the Mobile cases, through their attorneys, announced their willingness to plead guilty and accept punishment. The maximum fines were imposed; the printing establishments at Mobile and Wilmington were closed up and the paraphernalia and records of the business were surrendered to the Government. This result was attained in June, 1907. With that date the history of the Louisiana lottery, as far as New Orleans and the United States is concerned, came to an end.21
1 "Memoirs of Louisiana," I, 209-210. The data given is evidently taken from Martin's History of Louisiana.
2 Chicago Record-Herald, February 24, 1907; Jewell's Crescent City Illustrated.
3 Martin, "History of Louisiana," 424-442, passim.
4 Southwestern Presbyterian, August 21, 1890; see also Johnson, "Life of Benjamin Morgan Palmer," 547.
5 Boyd vs. Alabama. See Johnson's Palmer, 547.
6 See the address issued by The Anti-Lottery Convention which met in Baton Rouge, August 21, 1890.
7 A. K. McClure, "Inside History of the Origin of the Louisiana Lottery," Chicago Inter-Ocean, November 10, 1901. See also the Chicago Record-Herald, February 24, 1907. The later article was written by a New Orleans newspaperman familiar with the workings of the lottery.
8 Annual Encyclopaedia, 1890, pp501-508. Nicholls had lost his left arm during the Civil war.
9 State ex rel John A. Morris vs. L. F. Mason, Secretary of State, Louisiana Annual Reports, 1891, pp590-699.
10 Johnson, "Life of B. M. Palmer," 554-563.
11 Statement to author of J. D. Hill.
12 Annual Encyclopaedia, 1891, p443.
13 Annual Encyclopaedia, 1891, 443 ff.
15 See "Annals of Ten Years" (The Picayune, 1895), 95.
16 Richardson, "Messages and Papers of the Presidents," IX, 81.
17 Picayune, March 2, May 1, 1891.
18 Ibid., August 28, 1891.
19 Ibid., October 24, 1891.
20 In 1903 the Supreme Court, in the case of Champion vs. Ames, upheld the constitutionality of the act of 1895.
21 See the detailed account in the New Orleans Item, June 4, 1907.
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