Ponzi's Scheme: The True Story of a Financial Legend

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"You've heard of the scheme. Now comes the man behind it. In Mitchell Zuckoff's book, the first nonfiction account of Charles Ponzi, we meet the charismatic rogue who launched the most famous and extraordinary scam in the annals of American finance." "It was a time when anything seemed possible - instant wealth, glittering fame, fabulous luxury - and for a run of magical weeks, in the spring and summer of 1920, Charles Ponzi made it all come true. Promising to double investors money in three months, the dapper, charming Ponzi raised the "rob ...
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Overview

"You've heard of the scheme. Now comes the man behind it. In Mitchell Zuckoff's book, the first nonfiction account of Charles Ponzi, we meet the charismatic rogue who launched the most famous and extraordinary scam in the annals of American finance." "It was a time when anything seemed possible - instant wealth, glittering fame, fabulous luxury - and for a run of magical weeks, in the spring and summer of 1920, Charles Ponzi made it all come true. Promising to double investors money in three months, the dapper, charming Ponzi raised the "rob Peter to pay Paul" scam to an art form and raked in millions at his office in downtown Boston. Ponzi's Scheme is the true story of the irresistible scoundrel who launched the most successful scheme of financial alchemy in modern history - the first roar of the Roaring Twenties." "Ponzi may have been a charlatan, but he was also a wonderfully likable man. His intentions were noble, his manners impeccable, his sales pitch enchanting. Born to a genteel Italian family, he immigrated to the United States with big dreams but no money. Only after he became hopelessly enamored of a stenographer named Rose Gnecco and persuaded her to marry him did Ponzi light on the means to make his dreams come true. His true motivation was not greed but love." "Mitchell Zuckoff conjures up the feverish atmosphere of Boston during the weeks when Ponzi's bubble grew bigger and bigger. At the peak of his success, Ponzi was taking in more than $2 million a week. And then his house of cards came crashing down - thanks in large part to the relentless investigative reporting of Richard Grozier's Boston Post." Ponzi's Scheme is a classic American tale of immigrant life and the dream of success, and the unexpectedly moving story of a man who - for a fleeting, illusory moment - attained it all.
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Editorial Reviews

Publishers Weekly
Before Charles Ponzi (1882-1949) sailed from Italy to the shores of America in 1903, his father assured him that the streets were really paved with gold-and that Ponzi would be able to get a piece. As journalist Zuckoff observes in this engaging and fast-paced biography, Ponzi learned as soon as he disembarked that though the streets were often cobblestone, he could still make a fortune in a culture caught in the throes of the Gilded Age. Zuckoff deftly chronicles Ponzi's mercurial rise and fall as he conjured up one get-rich-quick scheme after another. Charming, gregarious and popular, Ponzi devised and carried out the scheme that carries his name in 1920 in the open (and with a brief period of approval from Boston's newspapers and financial sector). Many investors did indeed double their investments, as Ponzi would use money of new investors to pay old investors, and Ponzi himself became a millionaire. Eventually, Zuckoff shows, the Boston Post uncovered this "robbing Peter to pay Paul" system (as it was then known), and Ponzi's life unraveled. Zuckoff provides not only a definitive portrait of Ponzi's life but also insights into immigrant life and the social world of early 20th-century Boston. (On sale Mar. 8) Copyright 2005 Reed Business Information.
Library Journal
Ponzi's Scheme consists of three fascinating parallel stories. Charles Ponzi was a dapper, charismatic, debonair Italian immigrant who amassed $15 million by promising investors a 50 percent return on their money in 45 days. His "rob Peter to pay Paul" scam was exposed by the Boston Post in a Pulitzer Prize-winning report. The rise of the Post and its new second-generation editor, Richard Grozier, runs parallel to Ponzi's rise and fall. The third story is the love and devotion of Ponzi and his loyal wife, Rose. Grover Gardner reads very well; his voice portrays both Ponzi's confident bravado and Rose's modest demeanor. Recommended for all audio collections. Ilka Gordon, Park Synagogue Lib., Pepper Pike, OH Copyright 2006 Reed Business Information.
Kirkus Reviews
From former Boston Globe reporter Zuckoff (Journalism/Boston Univ.; Choosing Naia, 2002): an entertaining history about the 1920 financial bubble that became a prototype for later business scandals. Main character: Charles Ponzi, owner of the Securities Exchange Co. In the prior 14 years, he had tramped around North America, twice going to jail (for forgery and for smuggling aliens into the US) before returning to Boston. America was kicking off the Roaring Twenties when, Zuckoff notes, "a new ethos was emerging, one that would reshape what it meant to be an American. No more pennies saved and pennies earned." A none-too-serious college education in Italy, along with banking and exporting jobs in the New World, boosted Ponzi's indefatigable self-confidence and his desire for fine living. Noticing fluctuating currency exchange rates, this dapper little man told gullible investors he'd double their money in three months through purchases of international postage stamps. But it was a classic get-rich-quick scheme involving "robbing Peter to pay Paul"-depending on an influx of later investors to pay back earlier clients. When thousands (including an estimated three-quarters of the badly paid Boston Police Department) rushed to put their savings into his scheme, Ponzi became an overnight success. Or so it seemed until the Massachusetts attorney general, a bank examiner, and both the federal and county DA, prodded by the Boston Post and financial journalist Clarence Barron, began to investigate. The jerry-rigged structure trembled, and Ponzi went back to prison. Zuckoff pays attention to Ponzi's resentment of the blueblood media and business establishment that he assailed as "an autocraticclique which has been able to prey upon the credulity of the people." Though unquestionably a con artist, Ponzi comes off as more appealing than many of his tormentors: optimistic, generous, devoted to his wife-just a dreamer whose impulses outran his resources and common sense. A well-told portrait of a would-be titan-and a cautionary history for our own era. (b&w photos, not seen)
The New York Times
Writing scientific narrative nonfiction for young children is challenge enough, but creating engaging picture books for older children about the natural world isn't easy either. How to pull in the Diary of a Wimpy Kid reader? Credit to Jason Chin, who succeeded at both in Coral Reefs (2011) and Redwoods (2009). He does so again in his latest, Island: A Story of the Galápagos. Chin's remarkable introduction to the Galápagos is not just a story. It's…science…gracefully combined with superb illustrative art.
—Pamela Paul
The Washington Post
…thanks to Mitchell Zuckoff…who has given Ponzi exactly what he deserves: a thorough account of his life and a candid but sympathetic portrait…for the most part [Zuckoff] moves Ponzi's story along briskly, eschewing psycho-biographical nonsense and sticking to the facts as best he has been able to discover them.
—Jonathan Yardley
From the Publisher
“This is the first full nonfiction account of the Ponzi scheme, and Mitchell Zuckoff . . . has made it as agreeable as the ‘smiling, cane-twirling banty rooster of a man’ behind it. . . . A history that is both solid and entertaining.”
–Chicago Sun-Times

“In his charming book . . . Mitchell Zuckoff vividly recounts the story of Charles Ponzi [with] impressive research and elegant writing.”
–Boston Sunday Globe

“Thanks to Mitchell Zuckoff . . . who has given Ponzi exactly what he deserves: a thorough account of his life and a candid but sympathetic portrait.”
–The Washington Post Book World

“Zuckoff’s biography of this charming rogue . . . provokes our wonder precisely because his subject is so brazen–and yet so naively captive to his own illusions.”
–The Wall Street Journal

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Product Details

  • ISBN-13: 9780739318775
  • Publisher: Random House Audio Publishing Group
  • Publication date: 3/8/2005
  • Format: CD
  • Edition description: Abridged
  • Product dimensions: 4.90 (w) x 5.70 (h) x 1.00 (d)

Meet the Author

Mitchell Zuckoff

Mitchell Zuckoff is a professor of journalism at Boston University. He is co-author of Judgment Ridge, which was a finalist for an Edgar Award, and author of Choosing Naia, a Boston Globe bestseller and winner of the Christopher Award. As a reporter with The Boston Globe, he was a Pulitzer Prize finalist and winner of numerous national honors, including the 2000 Distinguished Writing Award from the American Society of Newspaper Editors. He lives outside Boston with his wife and two daughters.

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Read an Excerpt

Chapter One

"I'm the man."

The huge blue car moved slowly through the crooked streets of the old city, its owner sitting on the wide rear seat, his bottom comforted by deep, horsehair-filled cushions that absorbed the bumps from the uneven cobblestones. Heat and sunlight bounced off the brick and granite buildings, baking the Locomobile limousine and broiling its passengers. The morning air bristled with the hint of a developing thunderstorm. When the skies broke loose it would be a welcome relief from the weeks of summer heat that had made downtown Boston ripe with the smells of horses, fish, fruit, fresh-cut leather, and tight-wound rope, all seasoned by salt from the nearby harbor.

At the wheel of the hand-polished Locomobile was a young Irish immigrant named John Collins, wearing the hat and brass-buttoned uniform of a newly created job: motorcar chauffeur. His boss, an Italian immigrant, had taken delivery of the dazzling vehicle only three weeks earlier, paying a thousand dollars in cash above the $12,600 list price to spirit it away from the New York financier for whom it had been custom-built. For the same price a man could own twenty Model T's, with enough change to buy a modest house. But what was the point of that? In 1920, the Locomobile was the most expensive car in America, dripping with luxury, from its sterling-silver trim to its crystal bud vases. Purring, glistening Locomobiles filled the garages of Carnegies and Vanderbilts, and General John J. "Black Jack" Pershing, commander of American forces in the Great War, had shipped his to France for use as a staff car. The executives at the Locomobile Company of America understood that exclusivity appealed to the elites. They had positioned their automobile in direct opposition to Henry Ford's backfiring rattletrap of the masses. The company's ads, with the look of engraved invitations, stated that Locomobiles were built by hand "in strictly limited quantities because the making of any pre-eminently fine article is impossible on a large scale."

In the short time he had been driving the car, Collins had learned well the daily twelve-mile route that began at his boss's gracious home in the historic suburb of Lexington, less than a mile from the site of the first skirmish of the Revolutionary War. From there, they rolled east through working-class Arlington and Somerville, into tony Cambridge, across the Charles River, then down Tremont Street to a nondescript building on School Street, less than a block from Boston City Hall. Occasionally there would be detours, most often to a bank, and the boss would use the one-way intercom from the back seat to relay the new directions to Collins. But on this day-July 24, 1920-it was straight from home to office.

Collins slowed as he turned down School Street and saw what awaited them: a mob of several hundred men and women, crowded together hip to hip, chest to back. Viewed from above, it looked like an abstract mosaic of straw boaters and colorful felt cloche hats, punctuated by the dark crowns of a few bowlers. Some in the throng had brought bewildered children, who cried or whined as they struggled to avoid being trampled underfoot. The street was alive with electricity unrelated to the gathering thunderclouds. It came from the horde itself. Each member was a charged electron jittering in a magnetic field created by the man in the back seat of the Locomobile.

The street normally would have been all but deserted on a sultry Saturday in late July. But this was no ordinary day. When the crowd saw the limousine turn down the street they pressed toward it, half in reverence and half in mindless desire. They parted to allow Collins to steer toward the curb in front of the Niles Building, at 27 School Street, the modest home of his boss's extravagantly immodest firm, the impressively named Securities Exchange Company.

From his perch in the back seat, Collins's boss could see that some men in the street were holding copies of that morning's Boston Post. The banner headline trumpeted a victory in one of the America's Cup races by the American yacht Resolute over its British challenger, Shamrock IV. At a time when anything seemed possible except a legal drink of whiskey, elite sports like yachting and golf had captured the public imagination.

If one subject interested Bostonians more than rich men's sports, it was the prospect of becoming rich themselves. Undeniable evidence could be found in that morning's Post, just below the yacht race story. On the left side of the front page, in bold black letters, was the headline that had filled School Street to bursting:

DOUBLES THE

MONEY WITHIN

THREE MONTHS

A Post reporter had visited 27 School Street a day earlier and acquired a basic understanding of how the Securities Exchange Company claimed to create spectacular profits for its investors. The unbylined story even described the Locomobile limousine and the boss's Lexington home, which was "furnished with the best" and "does not give the impression of nouveau riche either, for the fine Italian tastes of the owner fixed that."

The man who owned the fine home, the flashy car, the Securities Exchange Company, the adoration of the people on School Street, and anything else he cared to buy was named Charles Ponzi.

Reading the Post story that morning, Ponzi could chuckle with appreciation of his good judgment in granting the reporter access to his office and home. He had handled the interview himself, but from now on he would rely on advice from a publicity man he had just hired, an ex-reporter named William McMasters. At first, Ponzi had been skeptical about publicity-he had not needed much to achieve success that approached his wildest dreams-but his gentle treatment by the Post made it seem as though every card he turned would be an ace.

The front-page Post story eclipsed two previous stories Boston papers had printed about him and his business. The first, six weeks earlier in the Boston Traveler, had described his company in flattering terms but never mentioned it or him by name. Still, word had spread as to the identity and location of Ponzi's operation, and hundreds of thousands of dollars had poured in during the weeks that followed. The second story, three weeks earlier in the Post, had been a brief item about a million-dollar lawsuit filed against Ponzi by a furniture dealer. That, too, had helped. The fact that he was rich enough to be sued for a million dollars had attracted swarms of new investors.

The brief account of the enormous lawsuit had piqued the interest of the Post's young acting editor and publisher, who had ordered the follow-up feature story that appeared this day. In it, the Post reporter printed Ponzi's comments at length and without challenge, as though Ponzi had delivered them with his hand on a Bible. During the course of several hours of discourse, the thirty-eight-year-old entrepreneur had offered a condensed, sanitized version of the seventeen years since he had emigrated from Italy. Then Ponzi had explained his business in broad, confident terms, telling how it was built on a modest and unlikely medium: International Reply Coupons, slips of paper that could be redeemed for postage stamps. He'd described his company's growth-from pennies to millions of dollars in seven months-and had boasted of the opening of branch offices from Maine to New Jersey. The reporter had filled a notebook with Ponzi's comments and played the notes back to Post readers as clear and sweet as a song from a Victrola.

Ponzi had capped the interview with a priceless assertion, and again the reporter had obliged him by printing it: "I get no pleasure out of spending money on myself, but a great deal in doing some good with it. Always I have said to myself, if I can get one million dollars, I can live with all the comfort I want for the rest of my life. If I get more than one million dollars, I will spend all over and above the one million trying to do good in the world. Now I have the million. That I have put aside. If my business closed tomorrow I am sure that I will have that amount on which to make myself and family comfortable for the rest of our days." If anyone doubted how secure Ponzi felt, the story continued: "Ponzi estimates his wealth in excess of $8.5 million."

With a maestro's touch, Ponzi had struck a perfect balance among the forces competing to control the new American identity: altruism and avarice. Now that he was all set, he insisted, he had no need for more investors. But he would continue accepting their money out of the goodness of his heart, so they could join him and his family in savoring the finer things in life.

If there was any reason for the people of Boston to be suspicious of Ponzi, they would not find it in the morning Post. The story read with all the confidence of the advertisements the paper ran that promised disappearing dandruff to wise buyers of Petrole hair tonic, or "sunshiny" stomachs courtesy of Goldenglo tablets, or relief from chronic constipation in a tin of Fruit-a-Tives.

The closest the story came to skepticism was to mention that federal and state authorities had looked into Ponzi's extraordinary investment plan. But the reporter defused that land mine in a single sentence, writing, "The authorities have not been able to discover a single illegal thing about it." Ponzi could not have hoped for a more sterling endorsement.

Adding to Ponzi's delight, below the front-page story was an ad for a prominent local bank, the Cosmopolitan Trust Company. The bank was trying to drum up new deposits by guaranteeing a generous interest rate: 5 percent a year, compounded monthly. To Ponzi, the ad was a divine gift. For months he had been comparing his promised rate of return-50 percent in forty-five days-to the paltry sum paid by banks. Here was the same comparison on the front page of the Post, the self-proclaimed "Great Breakfast Table Paper of New England."

A working man with one hundred dollars to invest, reading that day's Post over a bowl of Grape-Nuts, faced two choices of seemingly equal reliability but vastly different outcomes. Even in the margins of his newspaper, he could calculate that depositing his hundred dollars in the Cosmopolitan Trust Company would yield him an annual profit of five dollars and change. That was assuming the bank did not fail in these days when federal insurance for deposits was barely a whisper of an idea. Or he could entrust his hundred dollars to this Charles Ponzi fellow and watch it multiply over and again during the same year.

If he reinvested his hundred dollars plus interest after each forty-five-day period, he would walk away with more than twenty-five hundred dollars after a year. If he let it ride for a second year, he would pocket more than sixty-five thousand dollars. It was an unimaginable sum at a time when the average U.S. income was about two thousand dollars, the president of Harvard University was paid six thousand dollars, a Men's Ventilated Raincoat could be ordered from the Sears catalog for less than twelve dollars, a can of codfish cakes for a family of three cost twenty-five cents, and the newspaper he held in his hands cost two cents. Only a fool would choose the bank's interest over Ponzi's.

Having read the Post and done the math, would-be investors had begun assembling on School Street long before the Locomobile had even started the trip from Lexington. They came from all corners of Boston and beyond, a miniature League of Nations, with immigrants brushing shoulders with Brahmins, Italians mingling with Spaniards, Irish alongside English, Greeks chatting with Poles. Among them were Swedes, Frenchmen, Jews, blacks, and Portuguese, new and old Americans. Kitchen maids stood alongside businessmen, office boys squeezed against society matrons. It was the one place in the tribal city where the only denomination that mattered was engraved on the bills clutched in investors' hands.

Bookbinder Arthur Case of the city's Dorchester neighborhood was ready to invest a whopping three thousand dollars, just a week after his wife, Clara, had put in one thousand. Their neighbor, candy-factory worker William Hoff, emptied his wallet and came up with seventy-eight dollars. Boston florist Philip Feinstein was ready to place eleven hundred dollars in Ponzi's hands, while Patrick Horan had stuffed sixteen hundred dollars into his billfold. Benjamin Brown intended to add six hundred dollars to the six hundred he had deposited just four days earlier. Stable worker Timothy Donovan of suburban Somerville and Alfred Authoir of nearby Cambridge each expected their fifty-dollar investments to grow into seventy-five dollars by the first week of September. Print shop foreman Percy Stott of Methuen had made the thirty-mile trip to Boston for the third straight day, this time to add one hundred dollars to the two hundred he had already invested.

Luggage shop owner Joseph Pearlstein came bearing not cash but a note signed by Ponzi that would allow him to collect fifteen hundred dollars. He had heard about the Securities Exchange Company from none other than the lovely Rose Gnecco Ponzi, who had stopped at his Dorchester store the first week in June. She had come by to purchase new bags for a trip she and her husband, Charles, were planning to Italy, to visit his mother. Rose Ponzi had proudly described her husband's remarkable financial skills to the luggage vendor, and Pearlstein had been so impressed he had invested one thousand dollars. Now his note was due, so Pearlstein was in line to collect his original stake plus his five-hundred-dollar profit. But he would not invest again. Reluctant to press his luck, Pearlstein was satisfied with one spin of the wheel.

The crowd also included a fourteen-year-old boy in short pants named Frank Thomas. He earned $7.20 a week running errands, and he was eager to invest ten dollars with Ponzi. Charlie Gnecco of Medford, six miles away across the Mystic River, was there for his fourth and largest investment of the month, one thousand dollars. And why not? His baby sister, Rose, was happily married to the man in charge of the whole operation. If she had faith in Ponzi, well then, Charlie Gnecco did, too. Carmela Ottavi of nearby Chelsea brought two thousand dollars to add to the six hundred she had invested twelve days earlier. Ponzi's chauffeur, John Collins, had already thrown in five hundred. Watching the crowd from the front seat of the Locomobile, he resolved to add seven hundred more.

While some had come because of the Post story, others had heard from friends and relatives of the profits to be found on School Street. Although the Post seemed to have only just discovered the Securities Exchange Company, the streets of Boston had been buzzing about it and Ponzi for months.

From the Hardcover edition.

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First Chapter

Chapter One

"I'm the man."

The huge blue car moved slowly through the crooked streets of the old city, its owner sitting on the wide rear seat, his bottom comforted by deep, horsehair-filled cushions that absorbed the bumps from the uneven cobblestones. Heat and sunlight bounced off the brick and granite buildings, baking the Locomobile limousine and broiling its passengers. The morning air bristled with the hint of a developing thunderstorm. When the skies broke loose it would be a welcome relief from the weeks of summer heat that had made downtown Boston ripe with the smells of horses, fish, fruit, fresh-cut leather, and tight-wound rope, all seasoned by salt from the nearby harbor.

At the wheel of the hand-polished Locomobile was a young Irish immigrant named John Collins, wearing the hat and brass-buttoned uniform of a newly created job: motorcar chauffeur. His boss, an Italian immigrant, had taken delivery of the dazzling vehicle only three weeks earlier, paying a thousand dollars in cash above the $12,600 list price to spirit it away from the New York financier for whom it had been custom-built. For the same price a man could own twenty Model T's, with enough change to buy a modest house. But what was the point of that? In 1920, the Locomobile was the most expensive car in America, dripping with luxury, from its sterling-silver trim to its crystal bud vases. Purring, glistening Locomobiles filled the garages of Carnegies and Vanderbilts, and General John J. "Black Jack" Pershing, commander of American forces in the Great War, had shipped his to France for use as a staff car. The executives at the Locomobile Company of America understood that exclusivityappealed to the elites. They had positioned their automobile in direct opposition to Henry Ford's backfiring rattletrap of the masses. The company's ads, with the look of engraved invitations, stated that Locomobiles were built by hand "in strictly limited quantities because the making of any pre-eminently fine article is impossible on a large scale."

In the short time he had been driving the car, Collins had learned well the daily twelve-mile route that began at his boss's gracious home in the historic suburb of Lexington, less than a mile from the site of the first skirmish of the Revolutionary War. From there, they rolled east through working-class Arlington and Somerville, into tony Cambridge, across the Charles River, then down Tremont Street to a nondescript building on School Street, less than a block from Boston City Hall. Occasionally there would be detours, most often to a bank, and the boss would use the one-way intercom from the back seat to relay the new directions to Collins. But on this day-July 24, 1920-it was straight from home to office.

Collins slowed as he turned down School Street and saw what awaited them: a mob of several hundred men and women, crowded together hip to hip, chest to back. Viewed from above, it looked like an abstract mosaic of straw boaters and colorful felt cloche hats, punctuated by the dark crowns of a few bowlers. Some in the throng had brought bewildered children, who cried or whined as they struggled to avoid being trampled underfoot. The street was alive with electricity unrelated to the gathering thunderclouds. It came from the horde itself. Each member was a charged electron jittering in a magnetic field created by the man in the back seat of the Locomobile.

The street normally would have been all but deserted on a sultry Saturday in late July. But this was no ordinary day. When the crowd saw the limousine turn down the street they pressed toward it, half in reverence and half in mindless desire. They parted to allow Collins to steer toward the curb in front of the Niles Building, at 27 School Street, the modest home of his boss's extravagantly immodest firm, the impressively named Securities Exchange Company.

From his perch in the back seat, Collins's boss could see that some men in the street were holding copies of that morning's Boston Post. The banner headline trumpeted a victory in one of the America's Cup races by the American yacht Resolute over its British challenger, Shamrock IV. At a time when anything seemed possible except a legal drink of whiskey, elite sports like yachting and golf had captured the public imagination.

If one subject interested Bostonians more than rich men's sports, it was the prospect of becoming rich themselves. Undeniable evidence could be found in that morning's Post, just below the yacht race story. On the left side of the front page, in bold black letters, was the headline that had filled School Street to bursting:

DOUBLES THE

MONEY WITHIN

THREE MONTHS


A Post reporter had visited 27 School Street a day earlier and acquired a basic understanding of how the Securities Exchange Company claimed to create spectacular profits for its investors. The unbylined story even described the Locomobile limousine and the boss's Lexington home, which was "furnished with the best" and "does not give the impression of nouveau riche either, for the fine Italian tastes of the owner fixed that."

The man who owned the fine home, the flashy car, the Securities Exchange Company, the adoration of the people on School Street, and anything else he cared to buy was named Charles Ponzi.

Reading the Post story that morning, Ponzi could chuckle with appreciation of his good judgment in granting the reporter access to his office and home. He had handled the interview himself, but from now on he would rely on advice from a publicity man he had just hired, an ex-reporter named William McMasters. At first, Ponzi had been skeptical about publicity-he had not needed much to achieve success that approached his wildest dreams-but his gentle treatment by the Post made it seem as though every card he turned would be an ace.

The front-page Post story eclipsed two previous stories Boston papers had printed about him and his business. The first, six weeks earlier in the Boston Traveler, had described his company in flattering terms but never mentioned it or him by name. Still, word had spread as to the identity and location of Ponzi's operation, and hundreds of thousands of dollars had poured in during the weeks that followed. The second story, three weeks earlier in the Post, had been a brief item about a million-dollar lawsuit filed against Ponzi by a furniture dealer. That, too, had helped. The fact that he was rich enough to be sued for a million dollars had attracted swarms of new investors.

The brief account of the enormous lawsuit had piqued the interest of the Post's young acting editor and publisher, who had ordered the follow-up feature story that appeared this day. In it, the Post reporter printed Ponzi's comments at length and without challenge, as though Ponzi had delivered them with his hand on a Bible. During the course of several hours of discourse, the thirty-eight-year-old entrepreneur had offered a condensed, sanitized version of the seventeen years since he had emigrated from Italy. Then Ponzi had explained his business in broad, confident terms, telling how it was built on a modest and unlikely medium: International Reply Coupons, slips of paper that could be redeemed for postage stamps. He'd described his company's growth-from pennies to millions of dollars in seven months-and had boasted of the opening of branch offices from Maine to New Jersey. The reporter had filled a notebook with Ponzi's comments and played the notes back to Post readers as clear and sweet as a song from a Victrola.

Ponzi had capped the interview with a priceless assertion, and again the reporter had obliged him by printing it: "I get no pleasure out of spending money on myself, but a great deal in doing some good with it. Always I have said to myself, if I can get one million dollars, I can live with all the comfort I want for the rest of my life. If I get more than one million dollars, I will spend all over and above the one million trying to do good in the world. Now I have the million. That I have put aside. If my business closed tomorrow I am sure that I will have that amount on which to make myself and family comfortable for the rest of our days." If anyone doubted how secure Ponzi felt, the story continued: "Ponzi estimates his wealth in excess of $8.5 million."

With a maestro's touch, Ponzi had struck a perfect balance among the forces competing to control the new American identity: altruism and avarice. Now that he was all set, he insisted, he had no need for more investors. But he would continue accepting their money out of the goodness of his heart, so they could join him and his family in savoring the finer things in life.

If there was any reason for the people of Boston to be suspicious of Ponzi, they would not find it in the morning Post. The story read with all the confidence of the advertisements the paper ran that promised disappearing dandruff to wise buyers of Petrole hair tonic, or "sunshiny" stomachs courtesy of Goldenglo tablets, or relief from chronic constipation in a tin of Fruit-a-Tives.

The closest the story came to skepticism was to mention that federal and state authorities had looked into Ponzi's extraordinary investment plan. But the reporter defused that land mine in a single sentence, writing, "The authorities have not been able to discover a single illegal thing about it." Ponzi could not have hoped for a more sterling endorsement.

Adding to Ponzi's delight, below the front-page story was an ad for a prominent local bank, the Cosmopolitan Trust Company. The bank was trying to drum up new deposits by guaranteeing a generous interest rate: 5 percent a year, compounded monthly. To Ponzi, the ad was a divine gift. For months he had been comparing his promised rate of return-50 percent in forty-five days-to the paltry sum paid by banks. Here was the same comparison on the front page of the Post, the self-proclaimed "Great Breakfast Table Paper of New England."

A working man with one hundred dollars to invest, reading that day's Post over a bowl of Grape-Nuts, faced two choices of seemingly equal reliability but vastly different outcomes. Even in the margins of his newspaper, he could calculate that depositing his hundred dollars in the Cosmopolitan Trust Company would yield him an annual profit of five dollars and change. That was assuming the bank did not fail in these days when federal insurance for deposits was barely a whisper of an idea. Or he could entrust his hundred dollars to this Charles Ponzi fellow and watch it multiply over and again during the same year.

If he reinvested his hundred dollars plus interest after each forty-five-day period, he would walk away with more than twenty-five hundred dollars after a year. If he let it ride for a second year, he would pocket more than sixty-five thousand dollars. It was an unimaginable sum at a time when the average U.S. income was about two thousand dollars, the president of Harvard University was paid six thousand dollars, a Men's Ventilated Raincoat could be ordered from the Sears catalog for less than twelve dollars, a can of codfish cakes for a family of three cost twenty-five cents, and the newspaper he held in his hands cost two cents. Only a fool would choose the bank's interest over Ponzi's.

Having read the Post and done the math, would-be investors had begun assembling on School Street long before the Locomobile had even started the trip from Lexington. They came from all corners of Boston and beyond, a miniature League of Nations, with immigrants brushing shoulders with Brahmins, Italians mingling with Spaniards, Irish alongside English, Greeks chatting with Poles. Among them were Swedes, Frenchmen, Jews, blacks, and Portuguese, new and old Americans. Kitchen maids stood alongside businessmen, office boys squeezed against society matrons. It was the one place in the tribal city where the only denomination that mattered was engraved on the bills clutched in investors' hands.

Bookbinder Arthur Case of the city's Dorchester neighborhood was ready to invest a whopping three thousand dollars, just a week after his wife, Clara, had put in one thousand. Their neighbor, candy-factory worker William Hoff, emptied his wallet and came up with seventy-eight dollars. Boston florist Philip Feinstein was ready to place eleven hundred dollars in Ponzi's hands, while Patrick Horan had stuffed sixteen hundred dollars into his billfold. Benjamin Brown intended to add six hundred dollars to the six hundred he had deposited just four days earlier. Stable worker Timothy Donovan of suburban Somerville and Alfred Authoir of nearby Cambridge each expected their fifty-dollar investments to grow into seventy-five dollars by the first week of September. Print shop foreman Percy Stott of Methuen had made the thirty-mile trip to Boston for the third straight day, this time to add one hundred dollars to the two hundred he had already invested.

Luggage shop owner Joseph Pearlstein came bearing not cash but a note signed by Ponzi that would allow him to collect fifteen hundred dollars. He had heard about the Securities Exchange Company from none other than the lovely Rose Gnecco Ponzi, who had stopped at his Dorchester store the first week in June. She had come by to purchase new bags for a trip she and her husband, Charles, were planning to Italy, to visit his mother. Rose Ponzi had proudly described her husband's remarkable financial skills to the luggage vendor, and Pearlstein had been so impressed he had invested one thousand dollars. Now his note was due, so Pearlstein was in line to collect his original stake plus his five-hundred-dollar profit. But he would not invest again. Reluctant to press his luck, Pearlstein was satisfied with one spin of the wheel.

The crowd also included a fourteen-year-old boy in short pants named Frank Thomas. He earned $7.20 a week running errands, and he was eager to invest ten dollars with Ponzi. Charlie Gnecco of Medford, six miles away across the Mystic River, was there for his fourth and largest investment of the month, one thousand dollars. And why not? His baby sister, Rose, was happily married to the man in charge of the whole operation. If she had faith in Ponzi, well then, Charlie Gnecco did, too. Carmela Ottavi of nearby Chelsea brought two thousand dollars to add to the six hundred she had invested twelve days earlier. Ponzi's chauffeur, John Collins, had already thrown in five hundred. Watching the crowd from the front seat of the Locomobile, he resolved to add seven hundred more.

While some had come because of the Post story, others had heard from friends and relatives of the profits to be found on School Street. Although the Post seemed to have only just discovered the Securities Exchange Company, the streets of Boston had been buzzing about it and Ponzi for months.
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