Soon after, Ponzi left School Street to begin another jam-packed day of interviews and meetings, much of the time with his new lawyer, Dan Coakley. He understood that the public was taking its cues from him. If he wanted to retain its support, he needed to model himself on the mallards that seemed to glide effortlessly across the duck pond in the Public Garden. On the surface, he would appear placid and carefree, but below he would churn furiously to prevent being pulled under.
Throughout the day, depositors continued to seek refunds at the Securities Exchange Company. When they got to the tellers’ windows they caught sight of a large revolver lying menacingly on a desk to discourage thoughts of holdups. One young man, sweat dripping down his face, slid a clerk a Ponzi note for ten thousand dollars due to mature into fifteen thousand dollars on Saturday.
“You know,” the clerk told him, “this comes due in two days.”
“I want my principal!” he yelled. “I want my principal!”
He got it and left.
But as the day wore on, the balance began shifting toward investors who were there not to claim early withdrawals but to cash matured notes. By two in the afternoon the line had thinned to a trickle. Just after the four o’clock closing time, a Ponzi agent poked his head outside the door to ask if anyone else wanted his money. No one was there, so he locked the door.
Meanwhile, Ponzi was taking sporadic breaks to touch base with reporters. Some had yet to hear his rags-to-riches tale, and he was happy to oblige, telling the story from his arrival with two dollars and fifty cents to his receipt of the postal coupon from the correspondent in Spain to his stupendous success. When the inevitable question arose about exchanging postal coupons for dollars, Ponzi always demurred: “My secret is, ‘How do I cash the coupons?’ That is what I do not tell.” No interview was complete without a tribute to Rose. “And then I found my inspiration,” he told a New York reporter. “She was Rose Gnecco, daughter of a wholesale fruit merchant of Boston, and the fairest and most wonderful woman in all the world. All I have done is because of Rose. She is not only my right arm, but my heart, as well.” Rose herself was dodging the limelight, preferring to support her husband in the privacy of their home.
Occasionally his press agent, William McMasters, would speak for Ponzi, but he fell far short of his employer’s deft touch. While Ponzi avoided direct confrontation with authorities, McMasters seemed intent on antagonizing them. He told reporters that Ponzi’s rallying cry had become “Let the government probe and be damned.” The Post used that comment to justify a Ponzi-bashing headline in the Friday morning paper: EXPRESSES CONTEMPT FOR INVESTIGATIONS.
Ponzi took a few missteps of his own in his talks with reporters. This day, they came to haunt him in the person of his old nemesis, furniture dealer Joseph Daniels, whose million-dollar lawsuit was still pending. When the courthouse opened, a lawyer for Daniels amended his case to put a claim on Ponzi’s stock in Hanover Trust, J. R. Poole Company, the Napoli Macaroni Manufacturing Company, and several other firms. Ponzi had bought some of the stock in other people’s names expressly to avoid attachments by Daniels or anyone else, but he had defeated his financial disguise by describing his holdings to reporters. Daniels’s case also came before Judge Wait, who ordered a hearing on the motion the following week.
On another front, the county prosecutor, Joseph Pelletier, announced that he was opening an investigation of Ponzi’s rival, the Old Colony Foreign Exchange Company and its president, a forty-five-year-old former court stenographer from Georgia named Charles Brightwell. Ponzi had gotten his wish—his competitors were feeling as much heat as he was—but he was too busy to enjoy it.
When he returned home to Slocum Road, Ponzi found a Post reporter staking out his house. Ponzi rewarded him with a tantalizing bit of information: He was thinking about selling the Securities Exchange Company for $10 million. “I was in conference with a big banker from New York today,” Ponzi told the Post man, “and he made me this offer for my business. I have not decided to accept it or not.” Ponzi would not disclose the man’s name or affiliation, but he had in fact received just such an inquiry. Whether it would become reality remained to be seen, but at the moment it was useful in his effort to maintain his credibility. Best of all, Ponzi thought, if he could somehow pull it off he might have found a way to cover his liabilities without robbing his bank.
The next morning, Friday, July 30, the Post thought it had an even bigger scoop, which it trumpeted in a front-page headline:
EXTRA COUPON PLAN IS EXPLODED
New York Postmaster Says Not Enough in Whole World to Make Fortune Ponzi Claims
The story—printed entirely in bold type—quoted New York Postmaster Thomas G. Patten as declaring that Ponzi’s claims were “impossible” because far too few postal reply coupons existed to create an $8 million fortune. Patten either did not know or did not say how many coupons were in existence worldwide, but he said New York kept only twenty-seven thousand on hand at any time—worth about fourteen hundred dollars—because the demand was so small.
A separate front-page story gave the Post an opportunity to vent its growing frustrations at Ponzi’s continued survival and prosecutors’ apparent inaction. “Federal, state, and local investigations of Ponzi’s get-rich-quick scheme failed yesterday to bring any tangible results,” the story derisively began. The Post also turned to ridicule, printing its first editorial cartoon about the situation. The paper’s celebrated cartoonist, William Norman Ritchie, caricatured Ponzi as a dashing little moneybags with cash bursting from his pockets and a dollar sign for a tie clasp. Surrounding him were stereotypical European officials begging him in fractured English to solve their financial problems. An Italian cartoon figure, with a silly crown and a sash labeling him “King,” implored, “Signor Ponzi, the Old Home Lire Is ina D’Hole. Will You Taka D’Job of Minister of Finance?”
Yet neither the Post’s stories to date nor its latest scoop about the New York postmaster’s assertion seemed to be having any lasting effect. If anything, Ponzi appeared to be gaining more fans. Fewer than forty people were waiting when the Bell-in-Hand doors opened. Ponzi was still bound by his agreement not to accept new investments, but the bleeding had stopped. The run was over.
The swing in momentum could be read in several of the city’s other newspapers, which seemed to delight in the possibility that the Post had been wrong and Ponzi was on the level. The Boston Traveler ran a sports column that compared Ponzi to Babe Ruth, written as a letter to the Home Run King. “Give half that pedestal to Charlie Ponzi. Great pair, Ruth and Ponzi,” it read. “Ponzi is a lot like you, Babe. The bankers are said to be trying to retire him with the banks full. Just like trying to retire you with the bases full, hey Babe?” Even better for Ponzi, the afternoon Boston American quoted a North End banker as saying that Ponzi’s business “is honorable and it certainly presents no legal objections.” A separate story allowed a New York importer to expound at length about how he had figured out Ponzi’s secret formula for wealth. “For an expert in foreign exchange, there is not the slightest mystery about the operation by Mr. Ponzi,” said the self-proclaimed authority, E. H. Newfield of the importing firm E. Luca Manoussa.
But the Post did have at least one important ally: Clarence Barron. In the Friday edition of his Boston News Bureau circular and in several public statements, Barron intensified his attack, strongly suggesting that Ponzi was engaged in a Peter-to-Paul scheme. He also criticized the authorities for the slow pace of their investigations. But what burned Ponzi most was Barron’s suggestion that Ponzi was exploiting his own people, Italian immigrants. Ponzi was certain he had been libeled. He immediately ordered his lawyers to file a $5 million lawsuit against Barron that included attachments against his home in Boston and his beloved farm on the South Shore. “I tied him up so thoroughly,” Ponzi boasted, “even his cows couldn’t give milk.”
Barron would not back down. Late in the day he intensified his criticism while leaving himself open to charges
of condescending bigotry. “If there is anybody in this country requiring protection at the present time it is the humble Italian immigrant,” he said. “These poor people from Italy, who are children in finance, come to this country, and many of them take out citizenship papers. They can then be put into the trenches and made to give up their lives in defence of this country. Are we to do nothing to protect their savings and their hard-earned dollars?” He repeated his challenges to prosecutors and scoffed at Ponzi’s lawsuit: “Ponzi or anyone else in his class may pile their attachments on me as high as Bunker Hill Monument and I shall still be found answering to the best of my ability the financial problems that are properly put to me.”
Ponzi immediately shot back with a measured yet biting response: “From the several articles published by Mr. Barron, I derive that he considers himself an authority on international finance, also that he is prejudiced, and that he is openly hostile to me,” Ponzi said in a statement handed to reporters. “His allusion implies a decided contempt toward the Italian race, which is uncalled for and unjustifiable.” After scolding Barron for forgetting, or never learning, the rules of polite society, Ponzi raised the banner of immigrant pride, borrowing from Curley’s playbook on ethnic politics. “If his allusion did not offend millions of my countrymen I would never even have noticed it, but since the allusion is plainly offensive and misleading, I wish to remind him that banking had its origin in Italy and that the bill of exchange was devised by Italians. It is not surprising, therefore, that I, an Italian by birth and educated in Italy, should have come from Italy with perhaps a deeper knowledge of foreign exchange, foreign customs, and foreign commerce far superior than the knowledge Mr. Barron has, ever did have, or ever will have.” To demonstrate that his interest was principle rather than principal, Ponzi promised that if he won the suit, the $5 million would go to charity.
Proof that Ponzi’s man-of-the-people pose was working came that afternoon. With the temperature approaching eighty degrees, Ponzi stepped outside the downtown branch of Hanover Trust onto Washington Street, planning to walk a few blocks to the bank’s North End branch. His appearance on the street caused a stir. As he walked toward the market district, several dozen people fell in step behind him. With each block he covered, more followers walked in his wake. By the time the financial pied piper had reached the North End, his entourage numbered more than a hundred. They called his name and hailed him as a hero. They urged him to resume taking investments. The bolder among them grasped his hand for a congratulatory shake. Some shouted “Ponzi for mayor!” But that seemed too modest to others, who cried, “Ponzi for governor!”
The shouts of encouragement rattled around Ponzi’s brain. Afterward, he gleefully told reporters he was thinking about using his wealth to support a “wet” candidate who would oppose Prohibition. But Ponzi preferred the role of king to kingmaker, and soon he mused about running for office—once he got citizenship, of course—as a friend to the workingman.
“I am not a Red or an extreme Socialist,” he told a reporter for the New York Times. “But I do believe that the average man ought to have his chance to live in the right way. I am advocating that so-much-abused term, ‘American standard.’ I believe every man should have the opportunity to live a decent, wholesome life, and that he should be able by his industry not only to have enough to live comfortably, but to be able to have enough to take care of him during his old age and meanwhile, to give his children enough education so they may avail themselves of the opportunities which present themselves.”
Before writing any acceptance speeches, Ponzi still had to contend with the investigations of his business. The number of inquiries fell from three to two this day, however, when District Attorney Joseph Pelletier withdrew from the probe. Attorney General J. Weston Allen had sent Pelletier a letter stressing Governor Coolidge’s call for a state investigation and pointing out that Pelletier’s jurisdiction extended only within Suffolk County, while Ponzi was operating throughout Massachusetts and beyond. Pelletier acted unruffled about being elbowed aside. He said he stood ready to help the other investigations. He even gave Ponzi a qualified endorsement, when he told a reporter that the business seemed to have been conducted “normally” and remarked that Ponzi seemed generous to charity. For Ponzi, Pelletier’s withdrawal meant less opportunity for Dan Coakley to shape the investigation by playing the influence game, though Coakley’s friendship with Gallagher might still prove useful.
Having booted Pelletier from the field, Attorney General Allen was eager to get his hands on Ponzi’s books. But he was a step too slow. Gallagher had already appointed an accountant to review the finances of the Securities Exchange Company. He was a meek-looking fellow named Edwin L. Pride who, in recent years, had made himself indispensable to state and federal prosecutors as a financial analyst. Pride had helped the government expose and imprison a swindler named Cardenio F. King, who’d sold bogus stock in a Texas mining company.
Ponzi joined Pride for a meeting in Gallagher’s office, and then escorted Pride to the Securities Exchange Company to gather up the unusual bookless bookkeeping system of index cards with investors’ names, as opposed to traditional ledgers—Roberto de Masellis had not had time to redo the system. Speaking to reporters who watched the procession, Ponzi repeated that he would not reveal his business methods. The only purpose of the voluntary audit, he insisted, was to determine whether his assets exceeded his liabilities. “There can be but one result,” Ponzi told a Post reporter. “I am solvent, and the probes will not only reveal that, but will prove that I have carried out every promise made to my investors.” He took pains to distance himself from the antagonistic comment McMasters had attributed to him the day before. “My attitude towards the investigators is not one of contempt. I wish to assist them in every way I can.” Pride expected that auditing Ponzi’s “books” would take about four days. He vowed to work straight through the weekend until the job was done.
The next morning, Saturday, July 31, the Post continued its drumbeat, this time quoting Washington postal officials as saying it was impossible for Ponzi to have made a fortune with reply coupons. The paper spent the rest of the weekend impatiently cracking the whip to urge the investigations onward. The peak came when a news story scolded Attorney General Allen, declaring, “All initiative in the case thus far has come from Mr. Gallagher’s office, with the attorney general’s office trailing behind and apparently not quite sure what to do.” While criticizing Allen for his evident inaction, the Post heaped praise on New Hampshire officials for initiating their own investigation. Alongside the story, a new editorial cartoon by Ritchie pictured a smiling Ponzi with a magic wand and a pot of money, surrounded by jealous price gougers, war profiteers, greedy landlords, and monopolists.
Unknown to Grozier or his reporters, or to Ponzi for that matter, the attorney general had surreptitiously begun his investigation by tapping Ponzi’s telephones at his home and office. Allen hoped to hear damaging admissions or clues about the nature of Ponzi’s mysterious business. But Ponzi never revealed anything to anyone. Allen’s phone minders only heard Ponzi talking about his idea to sell stock to the public, bank presidents and businessmen soliciting Ponzi’s business, and calls from various other people—police officials to professionals to newly arrived immigrants—seeking Ponzi’s money, time, help, advice, or all four. Allen also sent one of his assistants, Albert Hurwitz, to New York to check on Ponzi’s claims that he had sent more than a million dollars abroad via a Milan bank with a branch in Manhattan. Hurwitz’s trip was part of an emerging strategy by the attorney general to determine if Ponzi could be charged with “larceny by false pretenses.” It was a charge that depended on proving that Ponzi had knowingly made false statements with the intent to deceive. Lying to the attorney general about how and where he did business might fit the bill.
Meanwhile, Barron seconded the Post’s conclusion about the dubious profitability of postal coupons. Ignoring the $5 million lawsuit, Barron published an article on
Saturday sarcastically suggesting that Ponzi use his incredible powers of financial alchemy to pay the costs of the Great War. “Surely the allies could spare him a million and within three years clean up that debt tangle. Germany might cheaply hire him to wipe out the indemnity within four years.”
Still, no crowds turned up that morning on School Street.
If Barron and the Post were openly hostile to Ponzi, the other Boston papers generally reported the unvarnished news of the run and the investigations. Although at times they displayed skepticism, for the most part they recounted the day’s events impartially. But in a city with so many different, competing voices, perhaps it was inevitable that one or two would root for Ponzi, pandering to the public’s embrace of him and maybe hoping that the powerful Post would fall on its face.
As newsboys for the Post were yelling about the paper’s exclusive Washington reporting, the Boston American was crowing over a gossamer interview with Rose Ponzi. The paper splashed a huge headline across its front page—WIFE TELLS OF PONZI’S PLANS—and printed a photo of the flattering portrait of Rose that hung in the Ponzis’ living room. Rose offered no revelations; she beamed with pride about “my Charles,” and the only plan she disclosed was a hoped-for trip to Florida “to idle away our time on a second honeymoon.” The story concluded: “A young woman, rarely beautiful, smiled in wifely triumph. For she was the woman married to the man who had made the dream come true.”
On the perfect summer day that story appeared, Mr. and Mrs. Charles Ponzi took a ride in their limousine from Lexington to Boston’s Jamaica Plain neighborhood. Shortly after noon, the car stopped on Centre Street and the two stepped out, Ponzi in one of his immaculate summer suits and Rose in a loose-fitting white satin gown that fell well below her knees. Not for her the short-short skirts of the flappers.
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