INTRODUCTION

MEET MR. PONZI, THE CHAMPION GET-RICH-QUICK WALLINGFORD OF AMERICA

Ponzi is the guy who put the crease in Croesus," wrote Neal O'Hara for the Boston Traveler toward the end of July, 1920. "He is the guy that ran up millions from a two-cent stamp. If five-spots were snowflakes, Ponzi would be a three day blizzard."

"You've got to hand it to his credit. He makes your money gain 50 percent in 45 days, which is as much as the landlords do. He delivers the goods with postage stamps, which is more than Burleson does. The way Ponzi juggles the reds and the greens, he makes Post Office look like a child's game. He simply buys stamps in Europe while the rest of the boys are buying souvenir post cards. And a postage stamp is still worth two cents in spite of the service you get for it, and any yap knows that you cannot get stuck on postage stamps unless you sit on the gluey side up."

"Ponzi's way is cheaper than making money with your own sextuple press. The way he's got it fixed with postage stamps, the Government does the printing for him. He stretches a dollar into a million with all his sleeves rolled up. You furnish the dollar and Ponzi tosses in the six zeros in back of it. This baby can turn decimal points into commas on almost any bank-book. The way that Ponzi has money here and in Europe goes to prove that half of the world are squirrels and the other half nuts. The only thing that's got 'em worried is that they don't know which side is furnishing the nuts."

"Worried" isn't the half of it. According to Miss Marguerite Mooers Marshall, a staff writer for the New York Evening World, Ponzi had them in a frenzy. Listen to what she said:—

"Whoever said that proud old New Englanders are conservative, undoubtedly made that statement before the advent of Charles Ponzi. To-day all Boston is get-rich-quick mad over him, the creator of fortunes, the modern King Midas who doubles your money in ninety days. Did I say Boston? My mistake. I should have said the entire New England, from Calais, Maine to Lake Champlain, from the Canadian border to New Jersey."

"At every corner, on the street-cars, behind the department store counters, from luxurious parlors to humble kitchens, to the very outskirts of New England, Ponzi is making more hope, more anxiety, than any conquering general of old. Mary Pickford, Sir Thomas Lipton and smuggling booze over the Canadian border aren't in it any more."

"For Ponzi makes everybody rich quick. Loan him your money, from fifty dollars to fifty thousand dollars, and in 180 days he gives you back twice as much as you gave him. He has been doing it for eight months and he is still at it."

"With no other security than his personal note, Boston is pouring all its savings into Ponzi's hands. Like a tidal wave, the passion for investment with the new Italian banker has swept over Boston folk until it took half of the Boston's police force to subdue the enthusiasm of a throng of prospective investors overflowing from the banking office, through the corridors, down the stairs, and into the street, blocking the traffic."

In the opinion of Miss Marshall, "Ponzi belongs to America, the land of the 520 per cent Miller, of the man who cornered wheat, of all the other get-rich-quick Wallingfords."

Regardless of what may develop as to the "righteousness and legality of the methods by which Ponzi, according to his own admission, has cleaned up in six months a fortune for himself, has given thousands of investors 50 per cent on their money, has operated from a central office of two rooms attended by twelve clerks and has done the whole blessed thing with postage stamps, plus a knowledge of the world postage regulations and of foreign exchange, plus an idea of magnificent simplicity and apparently bombproof consistency, plus all the nerve there is to it," she thought the world would agree with her that Ponzi "would be wasted anywhere else than in America."

"Ponzi stands as the premier get-rich-quick financier of the age," conceded the Washington Post.

When, according to the Rochester Times-Union, "a man untaught in finance shows Wall Street and the greatest financiers in the world that they are pikers, whether the Ponzi bubble bursts or not, the American people will take off their hats to a fellow so clever as he," because as Arthur B. Reeve explained it, although Ponzi might be "a product of conditions" his success is nevertheless the result of his own remarkable personality. Not every one can step out on a street cornel and persuade the passersby by the thousands to give him their pay envelopes ”even on a chance of a return as great as 400 percent a year." And the Washington Evening Star agreed that "whether he retires a millionaire or is finally detected as a swindler, Ponzi must stand as a remarkable figure" and "it must be said of him that whatever his game, he has certainly played it well."

CHAPTER I

MR. PONZI LANDS IN BOSTON WITH $2.50 TO ADD A $15,000,000.00 CHAPTER TO THE HISTORY OF STATE STREET FINANCE.

November 15, 1903, was a Sunday. A Fall day typical of the New England shores, with a fine, steady drizzle blown in by an icy East wind over miles and miles of ocean. One of those exasperating days on which only the sacred cod-fish of Massachusetts would defy the elements along Tremont Street and around the Boston Common without a diving suit on.

In the harbor and on the waterfront, the drizzle and the East wind were even more intense. From the expanse of the Atlantic, they seemed to converge upon a point between Castle and Governor's Island and blow with added force along the path of the narrow ship channel, beating up thousands of white-caps from a dirty and murky looking sea surface.

On that Sunday morning the S.S. Vancouver of the Old Dominion Line could be seen coming up the Boston harbor shortly after 8 o'clock. She was progressing slowly and majestically, pitching occasionally where the channel was deeper and rougher. In those days, a ten-thousand-ton vessel was no fishing boat and the Vancouver was well justified to feel as self-conscious of her size as a modern Cunarder.

A little ways up the harbor, the ship pulled up alongside the Company's pier in East Boston. The gang planks were lowered. A motley crowd of passengers who had been lining the decks began to ooze out of her side and onto the dock.

They were immigrants. Immigrants of various nationalities, but predominantly Italians. Most of them had travelled in steerage, some in first or second class. But they were all immigrants. They were all men, women or children who had left their native country and come to America, temporarily or for good, with the common purpose of finding better wages, better living conditions and greater economic independence.

I was one of those immigrants; one of the motley crowd oozing out of the ship's side; a diminutive figure bedecked in expensive clothes of the latest European cut and followed down the gang-plank by a couple of stewards laden with several pieces of baggage, large and small, labeled "First Class."

Truly, for an immigrant, I did not look the part. There was nothing in my appearance to suggest the bread winner; nothing that could even be remotely associated with the thought of manual labor, of work of any kind; of economic penury. From tie to spats, I looked like a million dollars just out of the mint; like a young gentleman of leisure, perhaps like the scion of wealthy parents on a pleasure tour. And that goes to show that appearances don't mean a thing. In fact, I was in a jam right then and there—in an economic ham and a critical predicament at that and five thousand miles away from home and five hundred or more miles away from my ultimate destination, in a strange country, with no friends and no money. That's it. Broke right from the start, my entire resources in cash amounting to $2.50.

Less than two weeks before I had left Italy with $200, a maternal blessing and a buoyant frame of mind, bound for the United States. I had sailed on a definite mission and with a definite purpose; on a cinch, to get rich.

"Go and make a fortune and then come back,"—had urged my elders—just like that and just as if amassing a fortune in America was something which could not be helped. "You can't miss it,"—they had insisted to overcome my hesitancy. "In the United States the streets are actually strewn with gold; all you have to do is stoop and pick it up." The events of later years showed that there was more truth than poetry in my elder's forecast. In fact, it has been my experience that I did not even have to stoop down to pick up the gold. In 1920 it was actually tossed into my lap; not by the pennyweight and with a teaspoon, but in large lumps and with a steam shovel.

Nevertheless, right after landing, as I was standing on the company's dock, on American soil, my predicament was much too critical. I still had the maternal blessing with which I had set sail but that was all. The $200 had dwindled down to $2.50 on the way over and a card sharp had taken me for most of it and the tips and the bar the rest of it. My buoyant frame of mind was buoyant no longer—it was top heavy. In fact, I stood there with my elders' assurances still ringing in my ears, ready to pick up the gold, but forced into the realization that I had been grossly duped. There was no gold at my feet or yellow nuggets strewn about; only mud—plain mud—sticky, black mud an inch deep which extended from the landing to the gate and beyond it away up the street as far as the naked eye could see. Just mud. And I had come all the way from Italy, over five thousand nautical miles of deep, blue water, to find nothing but mud and shattered dreams of untold wealth easily acquired.

The reason why Boston did not see much more of me at that time, on that particular occasion, must not be ascribed to snobbery on my part. It was that my destination had been planned in advance back home and the change had not been made on my part. I had been destined for Pittsburgh, the "Smoky City" of Pennsylvania, as the presumptive abode of some fifth cousin of some third cousin of ours. Allegedly, he was a railroad contractor, but in reality one not beyond petty pilfering during the slack season in grand larceny. Which goes to show that allegations in general, whether in court or elsewhere, must be taken with a grain of salt.

Not only had my destination been planned ahead, but my elders had seen to it that their plans did not miscarry and I had been provided with unalienable wherewithals to get there. Wise old birds, my elders. They had a hunch, based upon experience, that I might run out of cash before I got to the other side of the ocean, as I had been stranded before on much shorter trips. So they had furnished me with a prepaid railroad fare to Pittsburgh by way of New York. If they hadn't, Boston and I would have got acquainted that very drizzling Sunday.

As it was, I did not leave the dock and with the rest of the New York bound immigrants I waited on that pier until a special train picked us up about 9 P.M., and twelve solid hours in the cold, in the mud and without a thing to eat.

There is no doubt about that train being a special. I hope to tell it was. It was so far out of the ordinary for discomfort and everything else as to make a war-time 40 and 8 look like a Pullman in comparison. It was routed to New York over the Southern Pacific or the Santa Fe. It must have been, as nothing else could explain its getting into the Grand Central the day after noon, unless it ran around in circles all night, or stopped at every crossing, or bowed at every telegraph pole. The well known slow train through Kansas was a streak of lightning alongside of ours.

When we reached New York I was on the verge of cannibalism. An early edition of Wimpy as my stomach had been idle so long that it had withered and I would have traded my soul for anything that I could sink my teeth into, be it a steak of the leather variety or a pole cat. So, the moment the brakes began to screech under the shed, I took a dive out of that train and made a bee-line for the gate.

The cop on duty did not like the idea of my making a race track out of the train shed and he spread out his arms and caught me on the fly. Notwithstanding his embrace, I knew that he was no lost brother of mine and resented his untimely affection. We exchanged words and many of them, but I could no more understand his Irish twang than he could my Italian. It was a draw, an impasse, rather, so we called in a bootblack to arbitrate. The situation cleared up immediately. The cop was told that I was hungry, starved and that I wanted to eat first and talk afterwards. He conceded that my haste, once explained, was beyond argument and withdrew and the bootblack and I withdrew in the direction of the nearest restaurant. We ate; that is, I presume that he did as I was too busy with my own meal to pay any attention to his. He paid the check, but ordinarily I would have paid it, and $2.50 did not permit me to stand on ceremonies, so I let him have his way and winced. After that one experience, I believe that bootblack lost all inclination to be hospitable to incoming immigrants. One such experience is enough for anybody. My appetite must have set him back the price of a suit of clothes with two pairs of pants.

My next problem was to locate the Pennsylvania Station, which, at that time, had not moved into New York, but was still across the River, but I didn't know that, of course. All that I knew was that I had to go by street-car in one direction, then transfer to another car going in the different direction, then walk a couple of blocks to the right, then. Oh, what's the use. The gist of the thing is that I had to get there and did not have the slightest idea as to where or how. Old Teddy Roosevelt must have felt the same way when he was trying to trace the course of the River of Doubt in the Brazilian jungle.

The Pennsylvania Station proved to be the most elusive thing I ever chased after in all my life, girls included. Whenever I inquired about it, it seemed to be just around the corner—like Mr. Hoover's prosperity. But I rounded dozens of corners and walked dozens of miles and blocks in all directions before I could establish even a remote contact with it. Eventually, I got there, yes, after I discovered that I must head for a ferry boat in order to land on the New Jersey side of the River. But I got there exhausted—numb—dead. For the best part of an afternoon I had been going around loaded with "light" baggage, so-called. Light, from the standpoint of size and space, but not of weight, because it felt like lead. And when the Pennsylvania Station hove in sight, I wasn't interested in trains any longer and I didn't give a hoot whether I got to Pittsburgh or not, or whether I never hobnobbed with the Carnegies, the Fricks and the Mellons. All I craved for was a coffin; a yielding, comfortable one in which I could lay my aching limbs for an eternal rest.

CHAPTER II

MR. PONZI BOBS UP IN MONTREAL WITH ONE DOLLAR AND BUYS A PECK OF TROUBLE

To have landed in America without money was not half as bad as having landed without the least knowledge of its language. I could not fill an office job because I did not speak or understand a word of English. What I knew of other languages did not help. Likewise, my general education was useless. As a student and a man of frail physique, I was not cut out for manual labor. Still, I had to live. And in order to earn a living I had to work at something.

During the four uneventful years which followed my arrival into the United States, I filled a number of menial jobs. Jobs that I detested and loathed. Jobs at which I was invariably underpaid for my needs and overpaid for what I deserved. I filled them as a matter of necessity. Not of choice. And the net result was that I did not make any headway. I lived and that is all. But to live is to learn. And I learned. Every day served to add a few words to my English vocabulary.

I tried my hand at everything. From grocery clerk to road drummer. From sewing machine repair man to insurance salesman. From factory hand to kitchen and dining room help. In some of the jobs I lasted no time. In others, I lasted longer. Often, I would be fired. Oftener, I would quit of my own accord either disgusted or to avoid being fired. I shifted from one city to another. Sometimes by rail. Others, by foot. Pittsburgh, New York, Paterson, New Haven, Providence, and then … Montreal, Canada.

I don't know what brought me up there. The summer heat, maybe. Or fate. But one afternoon of July 1907, I alighted at the Gare Bonaventure with no baggage and a dollar bill in my pocket. Now a dollar isn't much at any time. On or off the gold standard. In a strange country, it was still less. It was, however, a sufficient incentive for me to get busy and do something.

I got busy. Within two blocks of the railroad station, up St. James Street, I spied the sign of the Banco Zarossi and went right in. In less than five minutes I was signed up as a clerk. The first congenial job I had struck in four years!

Louis Zarossi and I got along fine. He was a big hearted man, good natured, liberal, jolly and, I dare say, on the level. Much more on the level than many I have met since, although coated with a veneer of respectability. While it is true that later events gave Zarossi a sort of black eye, it is my opinion—my expert opinion of him—that he was the victim of circumstances and bad associations rather than a man of evil intent and dishonest inclinations.

Around that time, Zarossi was well fixed. His Italian bank was doing a land office business. His reputation and credit were of the best. But he was easily led.

The usual run of dimeless promoters and sponges began to buzz and flock around him. The successful man is never without them, if he is easy with them. They can smell a sucker further and quicker than a buzzard can a corpse. They got him to engage in a number of activities. The new enterprises needed money. And he began to dip into his depositors' accounts; the same old story of a lot of bank executives. Some do it less skillfully than others and get caught. Some get away with it because they are either smarter or have more political pull.

To make a long story short, the time came when Zarossi found himself financially embarrassed. I enjoyed his full confidence and he told me of his predicament. He was not insolvent by any means. But some of his enterprises had not proved very productive and he needed some cash. Some new blood, so to speak.

Around that time who should show up in Montreal, but an old schoolmate of mine. He had come to Canada looking for business opportunities. We met, celebrated and talked. I explained to him Zarossi's situation. Brought the two together. And they made a deal. My old schoolmate sailed for Italy and returned in a few weeks with the money necessary to establish him in partnership with Zarossi.

Everything went along fine for a while. Things hummed. Then … came the revolution! Some of Zarossi's enterprises went under. The rumor got around that he was in difficulties. The banks shut down his credit. His depositors began to withdraw their money.

There wasn't much that could be done to avert a disaster. But what had to be done, had to be done quick. Self preservation being the first law of nature, each party in interest thought of himself first and … the devil take the rest. Like some of the recent marine disasters. I had nothing to lose one way or the other. Except my job. So, I merely stood by in the role of spectator, but I did not miss a thing of what was going on.

An emergency council was called into executive session to devise ways and means to keep Zarossi afloat. The council was made up of Zarossi, my old schoolmate and another man known as Spagnoli. That was not his real name. It was an alias. We knew not his real name. The police of his native city undoubtedly did. Hence the alias. Being in the confidence of all, I, of course, was the unavoidable fixture in the council room.

This old schoolmate was a peculiar sort of a fellow. Although illiterate, he had managed to amass quite a bit of money. Tainted money, it's true. But money nevertheless. If all that was said of him was true, he should have spent the best part of his life in jail. He probably ended there after I lost track of him. I don't know and I don't care.

In some way he had succeeded in winning Zarossi's confidence. It didn't take much to do that. Zarossi was always ready to welcome even a rattlesnake with open arms. Or, maybe, he had loaned Zarossi some money now and then. The fact is that "wherever Zarossi went, he was sure to go." Like Mary's little lamb.

At the emergency council's meeting, the old schoolmate got right down to brass tacks.

"Louis," he told Zarossi, "you must leave Canada. If you hang around another week, they will put in jail for embezzlement and you'll never get out!"

"But I can't run away!" Zarossi protested, "I can't leave my family. I can't give up a business I have built so painstakingly."

"Don't be a fool, Louis!" He insisted. "This is no time to get sentimental. In jail you would not be any good to your family."

"But the situation is not desperate," interposed Zarossi. "I don't need much money to see me through."

"Little or much, it is more money than you can raise just now," retorted he.

"How so?" asked Zarossi in surprise. "You have told me that you would loan me the money, haven't you?"

"Have I? I don't remember," he replied. "At any rate, I couldn't give you a dime just now. My money is all tied up. I don't see any other way out for you, but to go."

Zarossi, deprived of financial assistance at the last minute, had to give in. He agreed to run away. He made a deal by which my old schoolmate was to appear as his major creditor, petition him in bankruptcy after he had left, then offer to settle with the other creditors at two cents on the dollar. Through that deal he hoped to get ahold of Zarossi's assets which, if properly administered and liquidated, would have paid much more than 2%, and benefit thereby at the creditor's expense.

"You go along and don't worry," he told Zarossi. "As soon as I have possession of your assets, I will go 50-50 with you." And Zarossi believed him. But he was planning all the time to cheat him too.

In fact, a day or two later, while the three of us were having a drink in a barroom up St. James Street, he asked Zarossi to give him a forged note.

"Make out a note to me for a small sum and sign So-and-So's name to it," he said to him.

"But that would be forgery," protested Zarossi.

"Sure. I want it to be forgery," he admitted. "I want to make sure you will not come back to Canada, under some promise of immunity, before I lay my hands on your assets. I've got to protect myself. I'll keep the note, but will not use it against you except in the event you should come back of your own accord and spoil my plans."

Zarossi did as he was told. He gave him the note. I don't remember any more what name he did sign to it. Nor the amount. A few days later, he left Canada and went to Mexico. But before he left, he assigned to my old schoolmate some negotiable property which the bank owned out West. Enough to reimburse him for his investment. To me he assigned … the care of his family. Wife and three kids. Or were they four? I don't remember. But they were more than I had bargained for.

CHAPTER III

MR. PONZI FALLS FROM THE FRYING-PAN INTO THE FIRE AND WONDERS WHAT IT IS ALL ABOUT

At the beginning, there was an awful fuss over Zarossi's flight. Some of the depositors were real ugly. They made things generally unpleasant all around. They threatened Zarossi's family. Even my own life. But things cooled down after a while. They always do. If they didn't, there would be more bank executives hanging from tree limbs, than running around in Rolls Royces or smoking dollar cigars behind mahogany desks. And that ”God forbid!” would be one form of bank insurance that would bring home the bacon without "ifs" and "buts".

The Zarossi family left their pretentious apartment and moved with me into a couple of furnished rooms. We shared with the landlady the use of the kitchen, bath, parlor and dining-room. I went to work. Yes, on the stagger plan; now and then. The two oldest girls went to work too. The mother remained home to cook the meals and mind the house.

We led a very modest and retired life. Entirely too much so. Hardly went anywhere. We spent our evenings at home yawning until bed time. But that could not last long. I was then 26 and very susceptible to girlish charms. Zarossi's eldest daughter was 17 and very pretty. The inevitable happened. We fell in love with each other. And yawned no longer evenings.

My old schoolmate was a frequent visitor at the house. He was about my age, and equally susceptible to a girl's charms, and he fell in love too, with the same girl. But I had the edge on him. His love never got to first base.

In so far as I was concerned, his being in love with my girl did not affect my friendship for him. For the very good reason that I did not know he was in love. I learned of it later. Too late, in fact, to put me on my guard. In so far as he was concerned, I am inclined to believe that his disappointment drove him actually insane. No sane person would have done to me what he did, unless he was the reincarnation of perfidy.

It happened in the summer of 1908. For some time he had been telling me that he intended to go out West to liquidate his interests in the independent branches of the Banco Zarossi. There were three of those branches. One in Sudbury, Ontario; one in Calgary, Alberta; and one in Fernie, British Columbia. I had established them and knew all about them.

He hesitated going because he was neither familiar with the language, nor the country, nor the business. He suggested that I go first and he would follow me. I told him I had no money to undertake such a trip. He said he would furnish the money and allow me a commission, and I agreed to go.

One Saturday we met in St. James Street by prearrangement. We went into the Bank of Hochelaga, in which he had an account, and he presented a check for certification. It was the closing hour or a few minutes after. I remember that, because the time had something to do with his alleged inability to cash the check right there and then. But I do not vouch for either the veracity or the accuracy of the allegation.

His failure to cash the check seemed to preclude my departure which had been set for the coming Monday. I could not go away for a month or two, on such a long trip, without a trunk, some clothes and a few things. All purchases I had planned to make that same Saturday afternoon. But he said that he might be able to cash the check elsewhere.

In the evening, when he came over to the house, he still had the check. He hadn't been able to do anything with it.

"There is a chance," he said, "that they might cash it at one of the Hochelaga branches which are open Saturday evenings. What do you say? Shall we try?"

I agreed that we should. So, we left the house and went to the branch in St. Catherine Street. He walked up to the paying-teller's window, exchanged a few words and got the cash. About $400.

We left the bank, made some purchases and went home to pack. All I had of mine did not fill one half of the trunk.

" Tomorrow I will bring some of my stuff to fill the trunk," said he and left.

The next day he came over and brought what he wanted me to take along. Mostly papers in large envelopes. He gave me about $200 in cash, saying that he would buy me the ticket in the morning and bring it over.

Monday forenoon, I went out to buy a few more things. I came home about 11:30. As I stepped into the doorway, two plain clothes men put me under arrest and rushed me upstairs to my room. They frisked me and found the $200. They went through the trunk, discovered a number of blank checks among his papers, seized everything, and took me to headquarters. There, I found myself locked up on a charge of forgery and held incommunicado.

I was dazed. I did not know what to think. I couldn't make head or tail of the whole thing. To make matters worse, I couldn't see anybody or talk with anybody.

From headquarters I was transferred later to the jail. While there, I was permitted to write letters. But I never received an answer to any of them. Never received a visit. Never saw a newspaper. I was virtually buried alive and knew not what was going on outside.

Conditions in the jail beggar description. The place was filthy and invested with vermin. The moment they assigned me to a cell, I knew I could not stand it for twenty-four hours. So, I mustered up my wits to the rescue. I cuddled up in a corner of the bed, against the wall, with a vacant stare, chewing a towel to shreds. Other inmates, going by, observed me and reported to the guard. He came over and had me transferred to the jail hospital.

There, I threw a couple of war whoops and started to climb into a barred window. Two orderlies took hold of me and put me into a strait-jacket. I lay still for a couple of hours. Then I acted as if I was coming to from an epileptic attack. The straitjacket was removed and I was given a bed in that jail. The ruse enabled me to remain in the hospital

all the time I was in jail. Conditions there were far from pleasant, but bearable.

One day, probably a month or so later, I learned, through the usual prison channels, that Zarossi was also a guest in the same jail. He had arrived the night before, brought back from Mexico under extradition proceedings. I asked to see him and was allowed.

My old schoolmate had doublecrossed him. Unable to effect a compromise with the other creditors and get ahold of Zarossi's assets, he blamed him for it. He had tried to blackmail him and his wife without success. So, he had turned right round and demanded Zarossi's extradition on the strength of the forged note.

Zarossi and I put our heads together and went over the situation. We found that only my testimony could convict him. As that of my old schoolmate could not do it. But, being in jail, I could not flee the jurisdiction of the coutry. Therefore, it was up to me to decide what to do. Whether to side with a despicable crook like my old schoolmate, or with Zarossi, a friend and my girl's father beside. I could not hesitate. I did not hesitate. I decided to save Zarossi, cost what it may.

A few days later, his came came up for a hearing. I was summoned as a witness. My old schoolmate took the stand first and accused Zarossi of having forged the note. After him, I was called to the stand to testify. I answered the preliminary questions. Then I was shown the forged note.

"Have you ever seen this note before?" I was asked.

"Yes, sir. I have." I answered.

"On what occasion did you see it?" was the next question. I related the circumstances under which I had seen it. In a barroom in St. James Street.

"Who was present on that occasion?" inquired the Crown prosecutor.

I mentioned my old schoolmate and myself.

"Was anyone else there?" insisted the prosecutor.

"No, sir. Only the two of us." I stated.

"Wasn't Zarossi there too?" asked the prosecutor a little provoked, because I was supposed to be his witness.

"No, sir. Zarossi was not there," I maintained.

The prosecutor shifted the attack from another angle.

"Do you know who wrote that note?" he asked point blank.

"I do," I replied calmly.

"Who wrote it?" he continued, believing he had me in a corner.

"I did," I replied.

"You did? You wrote that note?" exploded the prosecutor at my unexpected answer.

"Yes, sir. I did," I confirmed with the same nonchalance of a George Washington under the cherry tree.

"All of it," I said.

The hearing ended right there and then. My old schoolmate left the courtroom in a rage: like a wild man. The prosecutor asked the court to dismiss the charge. The judge ordered Zarossi discharged, but gave him twenty-hour hours to leave Canada. I went back to the jail.

Before I left the courtroom, the prosecutor, a young Italian, came up to me.

"You lied and you know you did," he whispered to me in our native language.

"Of course, I did. But you can't prove it," I replied to him with a grin.

"I don't hold it against you, Charlie," he said then. "Zarossi is a darned sight better man than the complainant."

Back in the jail, there was nothing else for me to do than to await patiently my own trial. Zarossi had left Montreal, followed shortly afterwards by his family. Their destination was unknown. My old schoolmate, apparently, had also dropped out of sight.

I was brought into court in October, I believe. There for the first time, I learned the exact nature of the charges against me. I was accused of having forged that very check which my old schoolmate had presented for certification and payment. I don't remember whose name had been forged. That of some shipping broker, I believe. And the amount was around $400.

I pleaded not guilty. The witnesses were called to the stand to testify. Four of them, I think. The man whose name had been forged, the two detectives and the paying teller. The shipping broker said he knew me. Said I had called at his office occasionally on Zarossi's business. That, was true. He also stated that the check had been torn from the back of his check book. Undoubtedly, that was also so. But he was unable to say whether I had done it. He had not seen me around his office about that time.

The two detectives testified to have found a number of blank checks in my trunk and $200 in my pocket.

"What has become of that money?" inquired the judge. "Is it here?"

"No, your Honor," answered one of the detectives. "It has been returned to the bank."

"Returned to the bank?" asked the judge rather amazed. "And upon whose authority?"

"It was the bank's money," explained the witness. "We saw no reason for holding it."

"That's it," interrupted the judge, considerably provoked. "The police take it upon themselves to decide what is and is not material evidence. If it had been some poor man's money, he would not have got it back so easily. But, being the money of the Bank of Hochelaga, a great bank, the police must go out of their way, actually violate the law, to see to it that the bank is not inconvenienced.

"I am going to adjourn this case and look into the matter. I want to see where the responsibility rests for the unwarranted return of that money. Upon the proper identification of that money, hinges, to a large extent, the defendant's guilt or innocence. He has a right to be confronted with the alleged proofs against him. He has a legitimate title to that money until it has been properly identified in this court as someone else's property."

After that blasting from the bench, a blasting which made headlines in the Montreal papers, I went back to the jail in high spirits. I felt reasonably sure that the judge would dismiss the case. And that goes to show how little I knew about judges at that time.

In fact, when the trial was resumed, the judge's attitude was changed. The money incident was dropped. The last witness was called to the stand. He was the paying-teller.

"Is this the man who presented the check and to whom it was paid?" the prosecutor asked him pointing to me.

The paying-teller said he "presumed" I was the man. Three months had elapsed and he had not seen me since, he admitted. However, he was under the impression that the man who presented the check was taller, thinner, clean shaved and had light hair. His description certainly did not fit me. It was more like that of my old schoolmate.

For an identification, it was a corker! But it got by. Anything would have got by that day. Besides, I couldn't butt in because I was represented by counsel. I hadn't mentioned that. But I had a lawyer. He had volunteered to represent me gratis because I had saved his client from jail.

He was the least loquacious member of the bar I ever ran across. Cal Coolidge was actually garrulous alongside of that lawyer. Throughout the whole trial, he never cross-examined a witness, he never put in an objection, he never so much as glanced in my direction. The only thing he did was to get up, presumably to argue in my behalf, and say:

"If Your Honor please, I recommend my client to the mercy of this Court."

When I heard that, they could have knocked me down with a feather. He had virtually conceded my guilt even before the court had pronounced me guilty. In a way, I am glad he did not say more. If he had, they would have hung me!

I got my first taste of legal uncertainties when the judge spoke:

"Notwithstanding the brilliant argument of counsel for the defense," he said, "the evidence compels me to find the defendant guilty of forgery as charged, etc …"

Now, can you tie that? Brilliant argument of counsel, etc …! He could have said just as well: "Failure of counsel to put up a defense, compels me to conclude that my belief in the defendant's guilt is shared by counsel …" and let it go at that. It wouldn't have been half as raw as the other way.

A few days later, the court sentenced me to three years of imprisonment in the St. Vincent de Paul Penitentiary. The same afternoon, I was transferred there from the jail. An hour afterwards, my own mother would not have recognized me. I was bathed, shaved, clipped, dressed in a hideous uniform, mugged, fingerprinted and numbered. I had ceased to be a citizen. To have a name of my own. I had become a number!

CHAPTER IV

BY ADDING TWO AND TWO TOGETHER, MR. PONZI DEVELOPS AN ANALYTIC MIND AND ARRIVES AT THE INEVITABLE HOUR

The St. Vincent de Paul Penitentiary was no kindergarten. It was a prison where a man did time every minute of the day. It was a gaol. A replica of the Old Bailey. Of the Bastille. Of the Chateau d'If of Count of Monte Cristo fame.

From the sack of corn leaves and cobs which served as a mattress to the basement dungeons, that prison was indeed a place of penance and punishment. But, with all of that, I cannot say that I have ever witnessed an act of brutality or cruelty. The rules were strict. The utmost severity prevailed. But the prisoners were not abused unnecessarily nor exposed to inhumane treatment.

Favoritism was not practiced there. Each man stood on his own merits, be he a banker or a laborer, a native or a foreigner. Each had to start from the bottom of the ladder and work his way up with good behavior and industry. Outside influence did not get beyond the gate. But there were opportunities for advancement. There were jobs better than others. Privileges to be earned, and a man had to earn what he got.

My first assignment was to be a shed where they "made little ones Out of big ones". Just that. I was supposed to pound lumps of rock into gravel with a mallet for seven or eight hours a day, and I did it.

In the two or three months I was in that shed, I figure I crushed enough rock to gravel the Yellowstone National Park. I got to be so proficient at it, that they must have blasted a couple of mountain ranges out in the Rockies to keep me going. After I started on that job, British Columbia never looked the same. Had they kept me at it a little longer, I would have flattened that province down smoother than a pancake!

Eventually, my prowess received recognition and I was promoted to a clerkship in the blacksmith shop. From there I graduated into the Chief Engineer's office. Then, out front with the Chief Clerk and in the Warden's office. I couldn't go any further up without stepping out of the gate.

As the Warden's clerk, I had the freedom of the prison. I could go anywhere within the walls, at any time, without being escorted by a guard. I was permitted to talk to other prisoners on official business. But, of course, a guard forty feet away could not tell whether my conversations with other prisoners were official or private. So, I conversed frequently. Especially with an ex-banker, because what I wanted to know in the worst way was how in the world I could have been arrested on a Monday morning for a forged check cashed only the preceding Saturday night.

In the first place, it did not seem likely that the forgery could have been discovered in that short a period of time. Secondly, since my name did not appear on the check and I was unknown at the bank and at police headquarters, it looked like a physical impossibility that I could be connected with that check within less than forty-eight hours.

A Monsieur Lecoq or a Sherlock Holmes could not have traced that check to me in forty-eight hours. Even a sorcerer or fortune teller could not have done that. For the very good reason that any person gifted with superhuman vision would, in any event, have gone to Pizzoccolo first. Then, perhaps, he would have come to me. But it was absolutely inconceivable that two detectives, who could not see further than their nose, should, although in error, outclass a Lecoq, a Sherlock Holmes, and even a seer!

When I explained the circumstances to the ex-banker, he said it was clear as daylight that somebody had tipped off both the bank and the police.

"You see," he told me, "that check was drawn upon the main office and cashed at a branch on Saturday night. It could not have gone from the branch to the main office much before 10 o'clock Monday morning.

Checks are usually held in banks longer than that, two or three days, sometimes. At the main office they had no way of telling it was forged, since they had not detected the forgery at the time of certification. The man whose name had been forged did not know and could not know. He would have known of it only at the end of the month when he got his statement from the bank. Or, he might have learned of it before if the forged check should have caused him to overdraw his account."

"Then it is your opinion that somebody tipped the bank off?" I asked him.

"Of course," he said.

"But I don't believe anybody knew about the check, except my old schoolmate and myself," I hazarded.

"Then it's clear that he tipped off the bank," he affirmed.

"Impossible!" I declared, as if appalled at the enormity of the thing, "I could not believe that of him. Beside, he could not put me in trouble and keep out himself."

"Is that so?" the banker said a bit cynically. "Figure it out for yourself then. You are in trouble and he is not."

" Yes, but that is so because I did not mention his name," I explained in his justification.

"That's it! He was probably figuring you wouldn't," he retorted.

"Why wouldn't I?" I asked.

"Because, even if it dawned upon you that he was at the bottom of the whole thing, you could not have cleared yourself by blaming him," replied the ex-banker. "The evidence is just as strong against you as it may have been against him. The both of you would've been convicted. By the way," he asked, "where is he now?"

"I don't know," I answered.

"Have you seen him since? Has he written to you? Has he helped you in any way?" continued the ex-banker in his cross-examination of me.

"No," I admitted, gradually Impressed by his logic.

"Then, for the love of Mike, wake up and begin to realize that you have been done for to a crisp!" the ex-banker exploded. "Get even with him! Write a letter to the bank and tell on him! They may help you to get out!"

"Oh, I wouldn't do that," I said, rejecting the suggestion. "If I have any bones to pick with him I will look him up. I'll catch up with him some day!"

Little did I realize then how difficult it is to track down a man who does not want to be found. In fact, all my inquiries about him never got further than the West Coast. I heard he bought some moving picture shows. That he was at it for a couple of years. Then, I lost track of him entirely.

The main reason probably was that he was not the only one in that territory at that time opening up moving picture shows. There were others doing the very same thing. Adolph Zukor too, I believe, was there. Some did well, some went under. Zukor, for instance, did exceedingly well. He organized or acquired the Paramount. But my old schoolmate dropped out of sight as if the earth had swallowed him. He is either dead or he has been so successful in altering his identity as to defy recognition. It's true that we have never met face to face since. One such meeting might make all the difference in the world.

What started me on his trail was a visit from my Montreal landlady. She called at the prison shortly after my conversation with the ex-banker. I was hungry for news. News of my girl. Of Zarossi. Of everybody I knew.

"Zarossi is somewhere in the United States," she told me. "I don't know where. I never heard from any of them."

"Not even from Angelina?" I asked. She was my girl.

"No. And you? Have you heard from her?" she inquired.

"No," I had to admit with a certain reluctance. I hated to think she had dropped me so abruptly. "Did she believe me guilty?" I asked.

"I could not say. She never said much," my landlady replied. "Only once she remarked that my old schoolmate, perhaps, knew more about it than we thought."

"She did? What could have made her say that?" I said wondering.

"I don't know," she answered. "I guess she did not like him much because he had been bothering her."

"He had been bothering her?" I asked considerably surprised. "When was that? After I was arrested?"

"No, no. Before," said my landlady somewhat disappointed at my lack of perception. "What's the matter with you? Were you blind? Hadn't you noticed that he too was stuck on Angelina?"

"Of course not," I said. "It's all news to me."

"Oh, you men are all alike!" she declared almost chagrined at her discovery that I was as dumb as the rest. "When you are wrapped up in a girl, you men never see what's going on around her!"

"Maybe you are right," I admitted without the least abashment. "But tell me some more. What's become of him?"

"I don't know," she replied. "I never saw him after you were arrested. I heard he went West."

"Has he ever written?" I asked her.

"No," she said. "But I have talked with a man who had met him out there."

"What was he doing?" I kept asking.

"It seems that he liquidated the branches and then started in business for himself," she replied.

"What business? Where?" I inquired further.

"I don't know where. In several places. All over, I guess," she informed me. "I heard he was buying or putting up small moving picture houses all over the West Coast."

"Then he must be doing well," I said.

"They say he was," she agreed.

That visit gave me all of the information I needed to figure out what had happened to me. There could be no longer any doubt that he had framed me. With jealousy as the motive, he had planned and executed the crime. Then he had fastened it on to me and led the police to my door. And he was doing well while I was doing … time!

Fortunately, there is an end to everything. Even to a prison term. And the end of mine was approaching. Not very fast, it's true. But approaching nevertheless. In fact, approaching faster than I thought because I was not counting the unexpected. On a … Never mind. I was going to let the cat out of the bag beforehand.

Here is what happened. One day, the 13th of July, 1910, I was sitting at the typewriter in the Chief Clerk's office. The Warden came in with a paper in his hand.

"Charlie," he said handing it to me. "I want you to make me a copy of this right away."

"All right, Warden," I said taking the paper from him. I put a sheet in the typewriter, I laid the one to be copied in front of me, and I started to write. It was a printed communication from the Governor General's office. I had typed scores of similar communications before. They all began the same way. This one looked like a pardon.

I kept on typing mechanically until I got to the inmate's name. The Warden was standing in the back of my chair watching me. When I got to the name, I paused petrified. My eyes felt blurred. I rubbed them with the back of my hands and looked again at that name. It was there. Just as plain as day. There could not be any doubt about it. It was a name I had not heard in twenty or more months. It was my name!

The Warden chuckled and patted me on the shoulder.

"You have deserved it, Charlie," he said with a fatherly inflection in his voice. "It is not for me to judge whether or not you should have been sent here in the first place. But, for your sake, I am glad it's over. Run along now and get dressed so that you can make the afternoon train for Montreal."

He did not have to urge me twice. I flew inside and up to the tailor-shop. I took the first suit they gave me. Who cared whether it fitted or not? Who cared for appearances? All that mattered was freedom. And two hours later I was on the street, dressed somewhat grotesquely, with only five dollars in my pocket but happy. I was a free man once more!

CHAPTER V

UNCLE SAM, IN THE PERSON OF AN IMMIGRATION INSPECTOR, PLAYS A DIRTY TRICK ON MR. PONZI

Back in Montreal the same evening, I stayed with friends. I couldn't go back to the Windsor Hotel on five dollars. Hardly anywhere, in fact, because the money had to last me until I landed a job. But I couldn't stay in the street either. So, I accepted the hospitality which was tendered to me by those kind hearts, figuring that in a couple of days or so I would be able to find work.

However, I soon discovered that I was entirely too optimistic. A few calls among people, who knew me and who, ordinarily, could have used my services, brought to me the realization that I was up against it. I had a prison record! I was a jail bird! They could not hire me. They would not have me around.

I explained my predicament to one of my old schoolmates, who was running a bank there, a combination of labor and steamship agency. He and I had worked together some years before. He suggested that I leave Montreal and return to the United States.

"They won't know of your record there," he said, "and you can find a job much more easily."

"I would like to go," I told him, "but I have not enough money for the fare."

"Where would you want to go?" he asked.

"New York, I guess, if I can," I replied. "But any other place will do. Buffalo, Rochester, Syracuse, anywhere."

"Why don't you try some smaller places instead?" he urged, "Nearer the border. You might get a job as a time-keeper and interpreter in some camp."'

A few days later, he told me that there were some such camps around Norwood and Ogdenburg, in New York State.

"The fare isn't much," he said. "How are you fixed for money?"

"I am not very flush," I answered. "But I have put in a day here and a day there at odd jobs."

"Then I would go, if I were you," he urged on. "You will probably strike somebody we know in those camps. We sent a lot of men down that way when we were with Zarossi."

That, decided me. Zarossi had placed thousands of laborers in that territory. Both with railroads and private contractors. Zarossi's men had built the Transcontinental. They were everywhere. With the C. P. R., with the Grand Trunk, with the B. & M. On both sides of the border. And I, as one of Zarossi's former clerks, was fairly well known among contractors and foremen.

In the morning of July 30, 1910, I left Montreal. My old schoolmate was at the depot when I bought my ticket. With him were five men. Apparently, there were going my way. They were Italians. Newly arrived immigrants, and he asked me to look after them.

"Give them a hand, Charlie," he said. "Tell them when to get off. They have to change trains at Norwood." I believe he mentioned Norwood, or some such place like that.

The train was one of those locals that stopped at every shed along the road, for ten and fifteen minutes at a stretch. It hobbled on most of the morning in the direction of the border and made it about noon. At the last station on the Canadian side, it settled down for what looked like a regular siesta.

A United States immigration inspector came on board and went through the coaches, pausing here and there to interview each passenger. Eventually, he got to where the five Italians and myself were. He spoke to them first. They did not understand a word. So, he turned to me.

"Are these men with you?" the inspector asked me.

"Not exactly," I said, but they are going my way and I have been asked to help them out."

"Where are they going?" he inquired.

"I don't know for sure," I stated. "Somewhere near Norwood. I think."

"What are they going there for?" he pressed on.

I had to ask the men before I could answer the question. They said they were going on some job. I believe they even exhibited some letter to show their destination.

"Where are they coming from?" the inspector wanted to know.

"From Montreal," I replied.

"All right," he said, and he walked along into the next coach.

Five minutes later, the train started off again. The next stop was Moers Junction, N. Y., on the United States side of the border. We were looking indifferently out of the window at the usual activity which follows the arrival of any train, when somebody yelled out:

"Hey, you men!"

We turned around and saw the immigration inspector on the doorway of the coach. He was addressing us. No doubt about that.

"You men get off this train and follow me," he directed. I conveyed his order to the five Italians and we did as we were told. He took us to a little shack. A sort of an office. There he informed us that we were under arrest. He said we had violated the immigration laws of the United States.

The same afternoon, we were transferred to Rouses Point. N. Y., and locked up. A couple of days later, we were brought to Plattsburg and put in jail there to await trial in the Fall. I was held for smuggling aliens into the United States. The five Italians were held as material witnesses.

The whole thing did not seem to make sense. I tried to figure it out. But gave it up as a bad job. Finally, I had a chance to see an assistant United States Attorney. I told him the facts. He listened.

"You brought those men into the United States in violation of immigration laws," he said.

"I did nothing of the kind," I retorted. "They came of their own accord. We were merely on the same train."

"But you've helped them. You have acted as interpreter for them," he insisted.

"Why shouldn't I have acted as interpreter?" I shot back at him. "It seems to me that I have helped both sides, in any case."

"At any rate," he continued, "you have all effected an illegal entry into the United States. None of you had a permit to enter."

"I, for one, did not know a permit was necessary." I explained. "Since I went to Canada three years ago, I have come in and out of the United States half a dozen times without a permit. I was never asked for one. I never met with an immigration inspector on the train. The only officials I ever ran across at the border were custom officers. They would come aboard and inspect the baggage."

"That does not alter the fact that this time you are all in the United States illegally," he went on.

"I won't concede even that," I told him. "We were interviewed on the Canadian side of the border. The train was not in motion. If we were not admissible for any reason, it seems to me that that was the time to exclude us. The inspector should have told us then.

"The inspector does not need to be told by you what he should or should not have done," the attorney interrupted.

"It seems to me that he does too," I poured back at him, losing my head. "It was his duty to warn us. To keep us from violating the law. Regardless of whether or not we were ignorant of the law. Instead, he actually coaxed us, led us, into a violation of the law in order to make a record for himself. I have no earthly use for that sort of public official. He, and not I, is the one who should be charged with smuggling those aliens."

"You will sing a different tune in a couple of months from now," he threatened with a leer.

"Maybe I will and, yet, maybe I won't," I snapped back. By then I was ready to relegate him to the seventh hell. If I didn't tell him so, he certainly read my mind because he brought the interview to a close.

All five of us languished in the Plattsburg jail until October. We could not raise bail. Fortunately, I had a cell all to myself, while other prisoners were required to bunk together. I managed to kill time sleeping and reading old magazines. But jail life, with its depressing idleness, began to get on my nerves. Two months of it had put me in a frame of mind where I no longer cared what happened to me, so long as I could have it over with.

Evidently, that assistant United States Attorney was a psychologist I will let it go at that. It is not exactly what I thought he was. But "psychologist" sounds better. He knew or sensed that I was ripe for any sort of an approach. Just think of it! What an uncanny intuition that man had! He was utterly wasted in a district attorney's office! He was a naturally born "con" man! One who could tell and play a sucker better than any professional.

He sent for me. Told me how sorry he was about the whole thing. How he hated to go through with it. But his duty was clear. He was under oath to uphold and preserve the Constitution … etc. It never occurred to me then to tell him that the Constitution had been preserved so long that it was actually pickled! Instead, I felt so blue over his predicament that it almost brought tears to my eyes! It certainly was a darned shame that any scalliwag like me should be permitted to put such a nice man in that kind of stew!

The situation was so tense, that I actually expected him any minute to fall all over me and weep! I was scared. The prison suit I had on was not pre-shrunk. A good cry and it would have been all over with it. It would have left me looking like a bell-boy in shorts!

"Charlie," he said (they always call me Charlie when they want to stick me). "I want to help you. You are a pretty good sort of a fellow. Will you take my advice?"

"Sure," I told him before I knew what the advice was. "I'll do anything you say, bud …" I was about to say "buddy" but corrected myself and changed it to "sir".

"Then plead guilty," he urged with an entreating look on his face.

"I will, like hell!" I jumped up. I might have felt soft-hearted. But not that soft.

"Don't get excited, Charlie," he purred on, "I am your friend. I am advising you for your own good. If you go through with the trial, you will be convicted. The evidence is against you. The judge will believe the inspector. He won't believe you, because you have a prison record. You would be licked before you started."

In that, I agreed with him. I did not tell him so. But I knew even then how hopeless it was to buck the government without shekels or influential friends. However, I did not give in right away.

"If I am convicted, I won't be any worse off than if I plead guilty," I said.

"Oh, yes, you will," he rebutted. "The judge won't feel so inclined to be lenient. He might send you away for a long stretch. Make an example of you. The penalty is two years and $1,000 fine for each alien. In your case he would give you ten years and $5,000 fine."

"Not if I plead guilty, what will happen?" I asked.

"No much, I guess," he said shrugging his shoulders. "Perhaps a $50 fine."

"But I can't pay the fine," I told him. "I haven't $50."

"In that case, you will have to serve a month in jail for it," he explained.

"Are you sure?" I insisted.

"Practically," he confirmed. "It is up to me to recommend the penalty. Judges always take the district attorney's recommendations."

"And you promise to let me off with a $50 fine if I plead guilty?" I asked him again.

"Yes," he said, "I promise you that I will speak to the judge."

And he did! But God, the judge and himself only know what he told him! I kept my end of the bargain. I pleaded guilty. Then he walked up to the bench. He handed some papers to the judge. He whispered to him. The judge glanced through the papers and took a squint at me. Then he said:

"Oh, what's the use!… Two years and $500 fine!" and he passed the paper along to the clerk.

Somebody, a deputy-marshal, I guess, took me by the arm and led me out of the court-room before I had time to realize what had happened. If he hadn't done that, I might have had to face additional charges of assault and battery and contempt. I was so mad, I was fit to be tied!

A couple of days later, I and four more federal prisoners, with a couple of deputy-marshals, started on our way South to serve our respective sentences in the United States Penitentiary at Atlanta, Ga.

The five Italians were discharged from custody right after my trial. There were paid their two or more months allowances as government witnesses. They were legally permitted to remain in the United States! Can you, reader, figure that out? I can't. I have been trying to ever since, but without success.

CHAPTER VI

MR. PONZI SWAPS A 2' x 4' COUNTY JAIL FOR UNCLE SAM'S $10,000,000 BIG-HOUSE

On the way South, we travelled by Pullman, had our meals in the dining-car, and lounged about in our seats like tourists. In Washington, we had lunch at a pretentious restaurant near the station. Then we took a walk through the Capitol grounds. We would have gone inside, but were afraid to embarrass some of the boys.

We did not visit at the White House either. President Taft asked to be excused. He was busy. Probably figuring how he could beat Teddy Roosevelt at the next presidential elections. But figures do lie sometimes!

In Atlanta, the deputy-marshals took us to a "bar-room" (?!) for a bracer. Something to pep us up before the ordeal of a prison commitment. The hardest stuff there, was near beer! In fact, it was so far from any beer taste that it could not have caught up with it in a coon's age. We drank it and groaned. Keeled over, almost!

We found the United States Penitentiary a sight for sore eyes. It wasn't like anything we had seen before. Not I, at least. In those days, it had the reputation of being a Biltmore, a Ritz-Carlton in its line. And it lived up to its reputation too! Why wouldn't it? It was the potential abode of every big man in the country. "Big" from the standpoint of money, power or brains. From cabinet members and members of Congress to national bank officials and postal clerks. From incometax dodgers to bootleggers and mail-robbers. And it stands to reason that those birds, knowing that an ounce of prevention is worth two points of cure, would take the New Willard as a pattern for "their" prison. They probably figured that since it had to be a cage, it might as well be a gilded cage.

I didn't have much trouble down there in getting myself a clerical job. I found it waiting for me. In the laundry. But my knowledge of Italian, English and French got me promoted. I was transferred to the mail clerk's office, who by the way, is now the present Warden of that institution. Besides addressing and sealing envelopes, it was my duty to translate into English and type all incoming and outgoing mail, if written in any of the foreign languages with which I was more or less familiar. Particularly so, all correspondence from and for Ignazio Lupo and his alleged co-partners in crime.

Lupo was supposed to be an early edition of Al Capone. He was doing 30 years for counterfeiting. The same as Capone is doing eleven years for not having paid an income-tax. Actually, Lupo was doing time for all the crimes which were attributed to him. Among them, he was reputed to have ordered the killing in Sicily of Lieutenant Petrosino of the New York police force.

Far be it from me to uphold murder or any form of crime. I believe that a man ought to be punished for his misdeeds. But I believe also that he should be dealt with on the level. That he should be punished for what he has actually done. And not overpunished, for a minor infraction or punished for something he never did, even if the man deserves ten times as much for other things which cannot be proved against him.

Of his other alleged crimes, I don't know anything about. I don't care and don't want to know. They are something between him and his Maker and no business of mine in any way, shape or form.

Lupo approached me in the prison yard during a ball game. He asked me whether I would mind moving into the same cell with him. He said that the prison officials, acting upon instructions were giving him one stool-pigeon after another for a cell-mate. Which was true. They were driving him crazy. He wanted somebody whom he knew wouldn't be there just to hurt him.

His plight was distressing. Regardless of the fact that a man with a 30-year sentence is not apt to prove a very cheerful companion, I told him I would ask to move in with him. We were put together. And I found much in him that I liked. He was extremely good-hearted.

Frank, direct, and with "guts."

After I got to know more about his case, I became convinced that he had been used to further the advancement of one of the officers of the United States Secret Service. If I needed any evidence of it, I got it on my release from Atlanta. I had promised Lupo that I would call on the editors of the Atlanta Constitution and of the Atlanta Journal and give them the facts. I kept my promises. But the editors talked and the Secret Service got wind of it. One day, two of those guys cornered me in Peachtree Street and warned me to keep my nose out of Lupo's case.

"If you don't, inside of a week we will have you back with him for a long stretch," they threatened and they meant it too.

Evidence of Secret Service activities was not lacking even at the prison, anyway. An operator, Italian, had been attached to the mail clerk's office as an assistant. He wore a uniform and also did guard duty.

But his main function was to check my translation in general, and of Lupo's letters in particular, and forward copies to Washington. What the Secret Service were after, was evidence of Lupo's connection with other crimes. They assumed he would be fool enough to let the cat out of the bag someday, if there was any cat in the bag. And they never stopped to think that I was his cell-mate and helped him write all those letters. Letters which I knew I would have to translate later for their benefit! Of all the dumb Alecs, they surely deserved the blue ribbon!

My job kept me out of the cell Sundays and holidays. Not to work. Just to sit around the office with other clerks. To smoke, talk or play checkers and chess. With us was Charlie W. Morse, the same who had been rubbing elbows with the Big Wigs in Wall Street. The same to whom a well-known steamship company was said to have handed a cool million dollars on his release from prison.

Charlie Morse was a pretty good sort of fellow. Loaded with money. Liberal. A good mixer. And extremely well versed in Wall Street finance. He could read the stock exchange quotations backwards.

One day he walked into Warden Moyer's office and asked him for the privilege to send a code wire to his brokers. The Warden, after much arguing back and forth, finally gave in. He told him not to make it a practice and send only that one wire along. Charlie did.

Several days later, again he walked into the Warden's office and handed him a check for $2,000 to bearer. The Warden wanted to know whom and what it was for.

"It's for you, "Charlie told him. "It's your share of the deal I put through with my code wire."

It seems that he had made quite a haul on a stock transaction. But Warden Moyer did not like that a bit. He declined the check and gave him hell. He even threatened to lock him up. Charlie did not mind the blasting. It was like water on a duck's back for him. But he was never permitted to send out another wire. Not from that United States Penitentiary, at any rate.

Perhaps, it didn't make much difference to him. He had all the money he wanted. Seven or more million dollars, they said. Anyway, he did not stay there much longer. He was doing a 15-year stretch. But he had no intention of serving it in full.

It is a matter of public knowledge that he had hired Harry M. Daugherty, of President Harding's cabinet fame, as his lawyer. Nobody knows how much he paid him. But, years later, according to the newspapers, Daugherty still claimed that Morse was indebted to him for $50,000.

Daugherty looked after the Washington end of Morse's case. Charlie began to eat soap and other stuff and soon developed the symptoms of locomotor ataxia or of Bright's disease. I don't remember which. And it does not matter after all. But he was certified in a hopeless condition and in immediate danger of his life. They transferred him to Fort Oglethorpe, Ga. A few months later, he was pardoned by President Taft, having served all together, a little over two years on a 15-year sentence. Once released, naturally he declined to die. He must've lived another dozen years or so.

I remained in Atlanta till the expiration of my full term and served an extra month for the fine. I was not paroled. In fact, for some reason or other which I do not remember, I did not apply for a parole, notwithstanding my good behavior. I was released unconditionally in July 1912. No effort was made to deport me.

CHAPTER VII

"PAGE MR. INSULL!" ON THE PONZI POWER, LIGHT & WATER COMPANY OF BLOCTON, ALA.

My meeting in Peachtree Street with the two Secret Service men convinced me that Atlanta, as the gag goes, was "no place for a minister's son." As a matter of fact, like the rest of Georgia, it was no place for anybody except a native "cracker." The Ku Klux Klan was very active. The streets of Marietta were still splattered with the blood of Leo Frank.

I made myself scarce p.d.q., and even quicker than that. "When the midnight choo-choo blew for Alabam," I was on it. Why Alabama of all places? For no other reason than that Alabama was in a western direction. "Go West, young man, go West!"

A few years later, astrologers told me it was all wrong. I should never have gone West. My stars pointed to the East, they said. And they were right. To become enlightened, a man ought to travel always in the direction of the sun. Every yap knows that. But, on the other hand, the eastern routes are so crowded with blue lodge members that a traveler must sit up all night to get to a railroad ticket-window ahead of them.

Be that as it may, I landed in Birmingham. I could not miss it. That is unless I catapulted from the train. And I wouldn't have missed it if I had missed it. The only thing of interest I found there was a "quack". An old acquaintance of mine from Providence.

This quack had an infirmary. Whether or not he had a license to practice is a horse of a different color. Maybe he did and, yet, maybe he didn't. Away back in Providence he did not have one. In fact, he had to leave in a hurry on account of that. But in Birmingham he might have had one. If he did, I don't know how he got it, because the only "medicine" he had ever taken in was castor oil when he was a kid.

I saw his sign over the infirmary and was attracted by the name. It was familiar. Out of curiosity, I went in to find out whether it was a case of two practitioners with an identical shingle or of two shingles for one and the same "doctor." The moment I saw the man, the recognition was mutual.

We talked. He was very frank about his activities. Couldn't very well have been anything else with me. The infirmary was a "racket," he explained. A good racket. He was cleaning up! With what? With fake claims against the coal companies!

This is how it worked. He had agents scattered all over. In every mining camp. They were on a commission basis. As soon as a miner was the victim of some accident, especially a minor accident, he would be coached by the quack's agent to exaggerate the injury, to make it appear an internal injury, and to decline any settlement that may be offered by the company.

Right away, or in due course of time, according to the nature of the injury, the victim would end up at the quack's infirmary. He would stay there weeks or maybe months, leading the life of Riley. Nothing was too good for him. The quack would report his condition to the company and vouch for any sort of internal injury. Eventually, a settlement had to be discussed. This invariably included doctor's fees and infirmary bills at figures that would have staggered even a Johns Hopkins or Mayo clinic's patient. Plus this, the company had to pay some damages to the man himself. The quack cut in 50-50 on the damages too.

The infirmary was always full. And why wouldn't it be? When genuine accidents were scarce, fake accidents were resorted to. A miner would get his "buddy" to throw a few lumps of coal at him. They would pile up some "slack". Summon help. And report a "cave in". The miner would claim minor injuries. The quack would certify to them and collect. And that goes to show that Barnum was right. There is a sucker born every day, and they make him a claim adjuster for a coal mining company! It surely is "a great life if you don't weaken!"

I had a splendid chance to get in that accident racket. I was offered a job. Not for my superficial knowledge of medicine. Rather, for my intimate knowledge of the quack's methods and past. But I am no blackmailer. I live and let live. Besides, that infirmary looked to me as if it might lead me to a relapse. That is, to one of those Alabama chain-gangs. And I gave it a wide berth.

I went to Blocton, instead,—a mining town with a sizable number of Italians where I figured that my knowledge of English might come in handy. In fact, I managed to eke out a living, sometimes acting as interpreter; others, helping the local storekeepers out with their books; occasionally as a male nurse to some battered miner.

Life was far from dull in that small community. Between christenings, weddings and other celebrations, we had more good times than we would have in a large city. It was like one big, happy family. A real brotherhood of common interests and endeavors and of neighborly love. Men, women and children were all banded together by a uniform hope in and fear of their lord and master, the capricious King Coal. Gaiety ebbed or flowed in that camp at the king's whim, according to whether he was lavish or the other way, with tons of precious black mineral or with his frightful destruction of human lives!

It was in my capacity of male nurse that I soon discovered something was amiss in that community. There was no running water. No electric current. The water was toted from wells and springs. Candles and kerosene furnished the light. To administer first aid under those handicaps was not a cinch. Yet, it had to be done because the hospital was two miles away and the only way to get there was walk.

I made up my mind that the camp must be provided with both light and running water. "To decide" with me is "to act." Even at those days I was no slouch at promoting. For the very good reason that money with me is always the last consideration instead of being the first. Why should I worry about the money? The money is always around to be had. The main thing is to have an idea. A plausible idea which can be dressed up and sold.

All I needed for that water and power plant were a gasoline engine, a pump, a dynamo and a tank. The camp was on the slope of a hill. On top of the hill and down part of the other slope, there was another small, but more exclusive district for the native population. At the bottom of that slope was a creek. The whole community was organized under a charter and had some sort of a town council.

It didn't take much to get a town meeting called. A notice was posted. Word passed around. And one Sunday afternoon we all gathered in the town hall. I was introduced and took the floor.

"Gentlemen," I said, "let's not waste any time in idle words. We are all here to discuss the ways and means and expediency of providing every house in this community with running water and electric light. I have made a superficial survey of the proposition and found that it would be practical to pump the water from the creek to a tank on top of the hill and distribute it from there. The same engine which runs the pump, could also run the dynamo for the electric current. I have no figures to submit at this time as to the cost of the plant, the piping and the wiring. I have no money to pay for it.

"What I propose to do is to get an estimate of the cost. Then I will form a corporation asking each member of this community to subscribe to one or more shares of its preferred stock. Enough of it to pay for the cost. I intend to retain a controlling interest of the common stock for my own services and sell the balance to cover overheads and other emergency expenses of the corporation.

"The rates for water and electric current will be determine by the town council as soon as I shall be able to submit figures for the running cost of the plant and the amortization of the preferred stock. I expect those rates to leave a reasonable margin of profit for the common stock. While I am desirous to promote the welfare of this community, I feel that I am entitled to some returns for my time, energy and services.

"Just now, I ask that a resolution be put to a vote of this meeting endorsing my activities and endeavors and directing the town council to give me a deed to the land needed for the power plant and water tank and a franchise to run pipes and wires. I thank you."

The resolution was unanimously adopted. A few days later, I was given the franchise at a special meeting of the town council. I had a power equipment company send down a couple of engineers to lay out the whole thing and give me some figures. In another month or so, the plant would have materialized.

But … something happened to upset my plans. Something always happens! It never fails. Something so entirely unexpected that it catches me unaware. Like a flower pot that lands on a man's head from a three-story window.

That time, it was an accident. Not to me. To one of the nurses at the company's hospital. Pearl Gossett was her name. She had been cooking a patient's meal on a gasoline stove. The stove exploded. She was frightfully burned. The entire left arm and part of her breast and shoulder were actually one mass of charred flesh.

A couple of days after the accident, Dr. Thomas, the company's doctor, came over to the camp. We were very friendly. He never failed to call on me whenever he was at the camp. He did not fail that day. He stopped at the house where I was staying and we drank a bottle of beer. Our conversation drifted to the nurse.

"How's Pearl?" I inquired. "Is she making any progress?"

"Her condition is very serious," the doctor said. "Almost desperate. Gangrene is setting in."

"Can't anything be done to save her?" I asked.

"Skingrafting, perhaps," he replied. "I wanted to try it. But I can't find anybody who will give up as little as an inch of his skin for her."

He told me he had asked everybody around the camp. He had been turned down in each instance.

It did not seem fair that a young girl like Pearl should be permitted to die such a horrible death. That nurse had been so kind to her patients that it seemed inconceivable that she should meet with such ingratitude. It made my blood sizzle to think that any person could be so selfish, so cowardly as to refuse a mere inch of his own skin to save a human life.

"How many inches of skin do you need altogether, doctor?" I asked him.

"Forty or fifty, I guess," he said. "But I can't find even ten in a community of 2,000 or more people."

"You're all wrong, doctor," I said. "You have found them. I will give you all the skin you need."

"You?" he said as if he was afraid he had misunderstood." You? You will give the whole of it?"

" Yes, doctor," I confirmed, "I will. When do you want me?"

"We cannot put the thing off very long," he answered. "But I don't want to hurry you either. You might want to prepare for it. Sort of brace up. When can you be ready?"

"I am ready now," I told him.

Dr. Thomas took a good look at me before he replied. He wanted to make sure I wouldn't flinch. Evidently, what he saw in my eyes decided him.

"All right then. Come along," he said. "But you better put your coat on," he added with a twinkle in his eyes, noticing that in my eagerness to follow him, I was going in my shirt sleeves.

That evening, I was put on the operating table.

Before they gave me the ether, I wanted to know from what part of my body they were going to peel my skin.

"From the thigh," said Dr. Thomas. "By the way, from which leg shall we take it?" he asked.

"It's all the same to me," I told him. "Take it from both, if you need it."

And he did. When I came to, both of my legs were bandaged, from hip to knee. And sore! Oh, boy! But what's a couple of sore legs more or less between friends? Just a trifle! In fact, I was in the hospital the best part of the next three months. Convalescing? No. Shedding more skin on the installment plan. Enough to make a couple of suit-cases. But I say that with no regret. It was probably instrumental in saving that nurse's life. If not her life, her arm. In either case, I am glad to have done something to help a fellow being. Regardless of what it may have cost me.

Undoubtedly, I suffered physically. The ordeal was quite painful. Also, I incurred some danger from complications. Pneumonia, for instance. But I did not get anything worse than pleurisy. Economically, it just blew my power plant to smithereens! But again I may say: What's a power plant more or less in the land of Insull? A trifle! A mere trifle! He did not miss it! And neither did I. Not much.

CHAPTER VIII

MR. PONZI'S MEDICAL CAREER IN MOBILE IS ABRUPTLY CUT SHORT BY A UNIVERSITY PRESIDENT

It was around the Spring or Summer of 1914 that I made my appearance in Mobile, Ala. I had come from Pensacola on the coast-wise steamer Tarpon. Not as a passenger. Only as a painter. On a contract job to paint the deck structure.

I did what I was supposed to do. But had some trouble collecting what was owed to me. I quarreled with the Captain. Told him to go to blazes. He went back to Pensacola, instead. I remained in Mobile.

In those days, one place was just as good as the next. I had discovered that I could paint—more or less. Signs were my specialty. Any kind of signs. But I could figure on a house painting job, too, and manage to make a living almost anywhere. I would work one town and shift to the next one without any trouble.

In Mobile I did fairly well at the beginning. Then things slacked up a bit. But as I was ready to move on, I noticed an ad in the local papers.

"Librarian wanted at the Medical College. Apply in person," it read. I applied. Knowing the Greek language, those big medical words were not exactly "all Greek to me." They were something I understood. So I landed the job. Which did not pay much, but I took it because it was dignified and congenial, so to speak. Not many would cherish it like I did, eating their noon lunch in an anatomical room full of corpses pickled in formaldehyde, with possibility of picking up a slice off someone's thigh, instead of a slice of boiled ham.

Speaking of congeniality, I had all sorts of pranks played on me by those medical students. Some of the boys were really cute in their ways! They would just as soon as not drop a test-tube full of typhoid germs into my soup. Or turn loose in the library a whole cage of guinea pigs injected with cholera morbus. Anything to provoke a laugh. One night, after a storm which had put the lights out of commission, I turned in, in the dark. My room was on the ground floor of the building. The moment I got under the sheets, I felt the presence of someone else in my bed. A drunken student, I thought. But it wasn't. It was a "stiff"—a dead negro—embalmed, too. As I could not carry him alone up to the second floor where he belonged, I laid him on the floor in my room. We both slept peacefully, but I woke up first. Such was the life at the college. One prank after another. But it worked both ways.

My duties as librarian were the least of all. I catalogued the ten thousand or more books in the library, and the periodicals, too. I observed regular hours and issued books. I collaborated also on the college publication. Typed the whole of it. Showed visitors around the building. And, nights included, I was tied up with the free out-patient obstetric service.

In this connection, when a call came in from an expectant mother, it was up to me to hunt up the two students assigned to the case—who, by the way, might be anywhere except home,—prepare their satchel, send them on their way. Sometimes it happened that one of the two students could not be found, or would not be found. Then I would turn into a mid-wife and go along myself. There was nothing to it. Nearly all were ordinary deliveries, not "special" deliveries. And, between attending classes, reading up text books, watching operations and postmortems, etc., I knew as much about deliveries as any of the boys, in fact, as much as any mail carrier. After all, it was only a question of waiting. I could not improve upon nature. It would have to take its course. And it usually did, sooner or later. And the waiting was not half as hard on me as it was on the expectant mother.

All considered, that job suited me fine. I got along capitally with the faculty and the boys. I liked Mobile, its bay, the well known Mobile Bay, its climate, everything. But my contentment did not last over a year. I should have known it wouldn't last. If it had, it would have interrupted a long circle of bad breaks.

Before I proceed to narrate the events. I must explain that the Medical College was a part of the University of Alabama. The university itself was located at Tuscaloosa. The Medical College was located at Mobile, instead of in the campus, because a medical college always needs to be where it may have easy access to a fairly large hospital. Mobile, being a larger city than Tuscaloosa, afforded better hospital facilities.

I do not recollect what had caused the Medical College to locate in Mobile instead of in Birmingham. All I know is that it was there and that, in my time, a bunch of Birmingham doctors were trying their darndest to have it removed from Mobile to their city. The Mobile M. D.'s were pulling their own political wires just as hard to have the college stay down there.

The moment I became connected with that institution, my loyalty to the faculty, naturally, led me to side with them. But it was not within the scope of my job to take an active part in the controversy, except in my capacity of collaborator in the college publication. As such, I worked hand in hand with one of the faculty.

He and I were real "buddies" in that fight. He was the most rabid opponent the Birmingham bunch ever had to contend with. At least, that's what we all believed. We banked on him. We had implicit confidence in his loyalty and sincerity, until something happened to shake our confidence in him.

It was the night before he was leaving for his summer vacation. He and I were alone in his office. He was straightening out his papers. Giving me some instructions; arranging things in general. And when he got ready to leave the building, he handed me two letters to mail.

"Be sure to mail them tonight," he told me, "because I am leaving on the morning train in the same direction and I want them to get to the destination before me."

I had no intention of disregarding his wishes. As soon as he left the building, I got ready to do the same thing and to go to the post-office. But I happened to glance at the envelopes. I noticed that one was addressed to a doctor in Birmingham notoriously active in the projected removal of the Medical College from Mobile. The other was addressed to the President of the university, whom we had reason to suspect was antagonistic to the Mobile crowd. I was thunderstruck. From what I knew, that faculty member was the last one who should ever have anything to do with such people. He and they were supposed to be at logger-heads.

I was a bit perplexed. There was something before me which did not look right. Yet it seemed inconceivable to suspect him of treachery. I did not know what to do. But my loyalty to the institution prevailed. I decided to open those letters. I could always seal them again and mail them if they contained no treasonable matter.

I opened them. Read them. And there, before me was the evidence that he had been double-crossing the college right along. He was working hand-in-hand with the Birmingham bunch.

My course was clear. I could not suppress that evidence and remain loyal to the college. I saw no reason for suppressing it anyway. Since he was a double-crosser, I owed him nothing. Let him face the consequences.

I called up Dr. Frazer, then acting-dean, and told him to come right over to the college. He did. I showed him the letters. He asked me to make copies of them, and took the originals. The following morning the derelict faculty member was asked to resign. He did not and could not decline to do so, under the circumstances.

Within a few days, the matter was reported to the President of the University. The faculty, of course, did not fail to express their chagrin at having discovered that he was siding with the Birmingham crowd. They felt that he should have been neutral. I don't know what he replied, but he made it a point to direct that I be fired.

Dr. Frazer showed me his letter. I laughed. Told him not to pay any attention to it, that the man who wrote it was crazy with the heat.

"But he is my superior in the University," said Dr. Frazer, "I must obey him."

"Not in this instance. But go ahead if you want to," I told him. "Only you'd better warn him that if I am fired I'll bring suit and let the world know the reason I am being fired."

"I can't tell him that," protested Dr. Frazer. "He expects me to tell him that I have fired you."

"Well, it's just too bad about him that I am not fired and that I won't be fired. On second thought, I believe I will spare you even that trouble. In the morning I will give you a letter from me to send along. If after that, he still insists that I be fired, it will be time enough for you to act."

I did write the delinquent faculty member of the University a letter. And what a letter! Insulting? Of course, not. Only diplomatic. But I had him in a corner and I let him have it. He had it coming, anyway. The result was that I was not fired. Not right away. He got rid of me in another way, though. That is, by failing to appropriate any more for my salary. And so, before summer was over, I was out of that job, after all.

CHAPTER IX

MR. PONZI PULLS A FAST ONE ON THE NEW ORLEANS CITIZENRY AND DUCKS NONE TOO SOON

From Mobile I went to New Orleans just in time to witness the terrible hurricane of September 1915. "Witness" is no word. I was right in the midst of it! Everything was flying but the birds! Store-signs, shingles, tiles, tree-limbs, galvanized iron-roofs! In Esplanade Avenue the trees were bending like blades of grass! I never saw the like of it before or since. It remained the worst storm in the history of the city until Huey Long struck New Orleans. His antics made it look like a breeze in comparison. As a political twister, Huey couldn't be beaten on this side of hell by either man or elements!

In New Orleans, Tulane did not need a librarian. They could have used me as a score keeper. But I could not keep myself, much less a whole score. As a half-back, it was entirely out of the question. I wouldn't have known what to do with the other half while one half was playing.

So, I reverted to painting. The good old reliable vocation. The only steady and permanent job. More permanent than a permanent wave.

Most store-signs had been blown by the storm to Baton Rouge and points North. It was cheaper for the store-keepers to have new ones painted than to move their stores up there after the old ones. I worked, they worked, we worked. And, by Mardi Gras, New Orleans again looked the same as it had for the past couple of centuries, only a little more spic and span on account of the fresh paint. I had those signs as flashy and bright as a Creole.

So far as appearances went, everything was normal by Spring. Only, the storm seemed to have kindled old feuds along the water front and around the market district. Hardly a week passed without some shooting, or some stabbing, or both. Blood flowed more freely than water. Life in New Orleans began to look like one murder after another. Things were so bad that people were selling their houses to buy cemetery lots.

It was after the wholesale slaughter in front of the Monteleone Hotel that an Italian Protestant minister and I were commenting on the situation, at his house, over the supper table. We were both very indignant. Such a state of affairs put the entire Italian colony in a bad light. The press was yelling blue murder as usual, and demanding action. The Mayor was pulling his few stray hairs and wishing his constituents would behave themselves until after election. The police were following imaginary clues which led nowhere. Chasing rainbows. Chasing everything but the culprits. And the killers were nonchalantly oiling their guns and honing their stilettos.

The Italian minister and I were in complete accord that something ought to be done. But who was going to do it? Huey Long wasn't there yet. And nobody else knew where to start from or what to do. Except burying the dead. The mortality was so great that National Casket shares soared out of sight on the exchange. Insurance companies were on the verge of bankruptcy, while undertakers were buying apartment houses. We decided to step into the fray and throw a monkey wrench into the feudists' ranks.

The two of us, in size and weight, could not have licked more than a couple of sheets of postage stamps without running out of breath. We were no Cameras. However, what we lacked in muscular development and boxing technique we possessed in ingenuity and practical psychology. We knew the killers were bold because they felt secure from detection. And why wouldn't they be? The cops, as cops go, couldn't detect a wisp of smoke even if they were sitting on a bon-fire. Informers were scarcer than flying elephants. Nobody dared to squeal. Not even the pigs. But let the fear grow among the killers that they might secretly be denounced by persons whose identity they could not establish, and they would undoubtedly slow up. That's what the minister and I thought, because nothing deters a man from evil more than the certainty or a strong possibility of being caught at it and punished for it.

With all of our wisdom, the minister and I were a couple of nuts, so to speak. Full of crazy ideas. We were about the same age and had much in common. He knew I couldn't paint any better than he could preach. He knew he couldn't preach any worse than I could paint. Our religious views did not clash. He was a Protestant. I was a Catholic. But he didn't give a "darn" what I believed in. And I didn't give a "damn" what he believed in. All considered, we were like two peas in a pod. Two bodies with one soul.

Having reached unanimous conclusions on the subject of the killings, we decided to act. We pulled one of the craziest stunts ever conceived. Actually took our lives into our own hands. No doubt about that. If word had got around in that community connecting us with what we did, we would have been stuffed with more lead than a fisherman's sinker.

We constituted ourselves as a committee of two, allegedly the spokesmen of a newly organized secret society which only existed in our fervid imagination. On the stroke of midnight, we slipped mysteriously into the city editor's office of the New Orleans States and whispered to him to lead us somewhere where we could converse in all privacy. It was a matter of life and death, we told him. He believed it. A matter of his own life and death, he thought perhaps, by the looks of us two. But he decided that the safest way for him was to humor. us. To gain time until he could find out whether he was dealing with a couple of lunatics on a furlough from the bug-house, or with a couple of murderers, or with two good men with a real story.

He led us to a little room. Made us sit down.

"Spill it," he said, using a verb that would cover the situation from all angles. It was clear that we were there to "spill" something. But he didn't know for sure whether it was a story or his blood. And he felt that the quickest way to find out was to use a verb which would compel us to show our hand.

"Not so fast, my dear sir," I warned him. "Before we speak we must have your word that you will never disclose our identity under any circumstances. If it became known that we have come to you, we would be killed in no time. Will you give us your word?"

"Yes. I can do that. I will give you my word that I will never divulge your identity to anyone," he promised. "But what's the story?" he asked.

"The story is this," I told him. "The better element of the Italian colony have decided to take matters into their own hands and put an end to all these killings. They have organized a secret society and pledged every member to gather information about every person suspected to be connected with any murder. The information will be turned in daily to the executive officers of the society, pieced together and transmitted to the police. The secret society will have spies everywhere."

"Who are the members of the society?" the editor asked.

"That, we cannot disclose. A fairly large number of Italians attended the first meeting and took the pledge. They came a few a time and at different hours so as to not arouse curiosity. They conferred with the leaders. Took their pledge. Learned the pass words. And left a few at a time as they had come. This is as much as we can tell you," I replied to the editor.

"What about yourselves?" he inquired.

"We have been delegated to represent the society and communicate with the press, the authorities and the police. Our first call has been for you. We will arrange later to meet the Mayor and the Chief of Police. We have brought a copy of a resolution adopted at the first meeting of the society. Here is the copy," I said handing it to him. It was a resolution the minister and I had drafted after supper. The editor took it and read it.

"That's swell!" he said. "I am going to print it as it is on the front page of tomorrow's morning edition. Who is it signed by?" he asked looking at the signatures.

"By us," I answered. "The Reverend here is the executive secretary of the society. I am its executive director. But you must not publish our names."

"Of course not," he agreed. "I'll cut the signatures off before the copy leaves my hands."

We lingered in the editor's office long enough to be complimented for our high spirited sense of civic duties. And make a few arrangements too. We told the editor we would be glad to meet both the Mayor and the Chief of Police. But could not risk being seen either at City Hail or at headquarters.

"You ring me up in the morning," he suggested, "I'll speak to the Mayor and the Chief and have them meet you anywhere."

The following morning the New Orleans States came out with a front page article on our midnight call. It painted us as two potential martyrs for the cause of "law and order." Only, that they did not exactly use the same words that make Cal Coolidge as famous as the beer did Milwaukee. They said something to the same effect. Praised the predominantly law-abiding element of the Italian colony. Published the entire resolution, minus the signatures. Thank God for that! The minister and I had been up all night waiting for a copy of the States to make sure that we were not named. If our names had been mentioned, dawn would've found us en route for parts unknown.

The story was a scoop which made the city editors of the Times-Picayune and other papers sizzle in their editorial chairs. There was more swearing around their offices that morning than at an atheist congress.

Reporters were aroused from their slumbers and rushed to the Italian district. Told to come back with a story or not at all. Promised all sorts of bonuses if they brought in a real whopper. But where could they land a story? They might as well have gone down to the sea shore and interviewed a whole clam colony. The Italians, as a rule, are very tight lipped. But on that occasion, the New Orleans Italians were ever more so. In the first place they had nothing to say, because they didn't know anymore about the whole thing than the reporters did. Then, they were scared to death to open their mouths.

In fact, they were in a pickle. They couldn't deny to be members of the secret society without permitting inference that they sided with the criminal element. They could not admit of being members without risking their lives. They were in a jam no matter which way they turned.

To make matters worse, every darned one of them believed in the existence of this imaginary society. Yes, everyone realized that he had been left out. If he was a good citizen, he was worried. He felt he had been left out because he was suspected to be bad. If he was a bad citizen, there was no question in his mind that he was also under suspicion. And, not only was he worried, but he was scared.

The reverend and I didn't realize what it was going to be like until we took our usual walk down the Italian district. It was almost pathetic to watch some of these people. Men ordinarily talkative and sociable had shut down like clams and were rude. Or, they spoke in whispers. Constantly, they were looking over their back, perhaps. With a sober look in their face, they would meet in the street and exchange signs. Signs that were soundless questions and answers. Peculiar of the southern Italians. But which spoke volumes. Volumes of fear and anxiety over a situation beyond their comprehension.

The minister and I did not hang around the district very long. We couldn't. Knowing what we knew, it was an awful strain for us to keep from bursting out laughing. But a mere smile would have been fatal. It would have doomed us. That district had lost all sense of humor. We had to go home to relax. And to phone our friend the editor.

We called him up. The Mayor wanted to see us, he said. Wanted to thank us for what we had done. And the Chief likewise. He was very anxious to confer with us. Both wanted to know when and where they could meet us. We suggested an appointment. The editor picked us up in his car and drove out of the city somewhere. There we met another car with the Mayor and the Chief. The Chief was driving it.

The cars turned into a side road and stopped. We all alighted and were introduced. Then we talked. The conference lasted about an hour. It was mostly with the Chief. We had to arrange with him so that we could make daily reports of the society's activities. He gave us a phone number and some sort of pass-word to identify ourselves. He said there would always be someone on their other end of the wire to take our messages. He offered us police protection. But we refused it. We couldn't very well give the police a chance to find out that we were a couple of fakes.

The Mayor didn't say much. Except promising his full cooperation. And we were willing to let it go at that. But the editor butted in. He suggested that the city appropriate some money to help the society in its investigations. The Mayor jumped at the suggestion. It did not involve any of his money, anyway. He said he would have $30,000 available for it right away. Just think of it! He was ready to throw 30,000 bucks right in our lap! The minister and I thanked him effusively for his generosity. But, actually, we got sort of panicky. To accept money under those circumstances would have been entirely too dangerous.

The conference broke up. We went home to talk things over. They had gone too far, we decided. What were we going to do with it? We did not want that money or any money.

We were just a couple of madcaps. Not swindlers. But how could we refuse the money and still appear genuine?

The more we discussed the situation, the more we became convinced that it was fraught with danger. One little slip and we would be sunk.

"Let's scram," I suggested. "This burg is getting uncomfortable."

"Together?" the reverend asked.

"Not on your life!" I replied. "I like you and all that. But you and I are just like nitric acid and glycerin. If you keep them separate, they are harmless. But if you mix them, there is hell to pay."

We parted. The minister solicited and obtained an immediate transfer to some other distant pastorate. I accepted a job as a foreign salesman for a motor truck company in Wichita Falls, Texas. The Mayor, the Chief of Police and the city editor of the New Orleans States were left to pull their own chestnuts out of the fire. I have never bothered to find out what they thought of us. Whether they ever discovered that they were duped. If they haven't they know it now. But I might as well tell them that it was done out of mischief and not out of malice. I hope they can take a joke.

CHAPTER X

FROM THE COPIOUS CROP OF AMERICAN BLOSSOMS MR. PONZI PICKS HIMSELF AN EXQUISITE ROSE OF THE AMERICAN BEAUTY VARIETY AS HIS LIFE'S EMBLEM

In Wichita Falls, Texas, I got my first training as a foreign correspondent and salesman. The company I was working for manufactured auto-trucks. Shipped them everywhere. Had agents or users in almost every country in the world. Except, of course, Germany and her allies.

All of our foreign business was transacted by mail or by cable. In the English, French, Italian, Spanish or Portuguese language. And it required us to keep posted on shipping routes and rates. On custom tariffs abroad. On foreign currencies and exchange. On postal and telegraph rates. All knowledge which, later, played such an important part in the most spectacular episode of my career in America.

Life in Wichita Falls was not very exciting. The factory was about two miles from the city itself. On the edge of a prairie section, typical of the South-west. Not far from the Oklahoma state line. I boarded a stone-throw from the office. And, often, I worked after hours because I had no place to go.

The only exciting thing about the place was a bear. Not of the Max variety, either2. Just a big, grown bear. I don't remember whether it belonged to the watchman or the manager. But I know we had a cage for it in front of the building. And I know that after hours the watchman would turn it loose for a while and let it roam around. That bear never failed to walk right into my office, upstairs, and scare the wits out of me. It would sneak in without making any noise. As it it wore rubber shoes. Then, all of a sudden, I would hear its breath right in the back of my chair or catch a glimpse of it as it was rounding the corner of my desk. And I would jump. And swear.

I couldn't argue with it, or shoo it away. I would just duck and shut the door. I have no use for that kind of pet, for overgrown pets that can slap me from one end of the room to the other. There is nothing cute about that sort of animal, except the smell. In that respect, a good size bear can shame a dozen pole cats.

The Wichita Falls Motor Truck Company was owned by Kemp and Kell. I don't know this day who Kemp and Kell were. Off hand, I would say they were an alias for Wichita Falls. They owned everything in sight. What Kemp did not own, Kell did. And vice versa. But I can't say for sure whether they were humans or just a myth. I never saw either one. On the other hand, I have never seen "America's Richest" either. Yet, there is plenty of evidence of his presence in the States. Gasoline stations, A & P stores, the National City Bank, and so forth. Anyway, whenever dimes get scarce, you can bet he has been around your neighborhood. That man keeps the mint working overtime to restock the dime supply. They claim he gives them out as souvenirs. But it looks as if for every one he gives away, he sinks a hundred for himself.

Speaking of millionaires, in Wichita Falls I had a chance of becoming a multi-millionaire like him. A perfectly good chance. Hundreds of millions of dollars were made in that section after I left. Oil deposits were discovered. Wells drilled. Gushers set off and harnessed. But the oil deposits were there in my time too. Amply in evidence. Only, I was too blind to notice the evidence.

In fact, we used to spend some week-ends in that section which is known today as the Burke Burnett Oil Field. A truck load of us clerks would drive there Saturday afternoons with a good supply of bottled beer and eatables. We would spend the night in the open air. On the prairies. In day time, we would hunt cotton-tail rabbits and bull frogs to add to our bill of fare.

The frogs were in the many pools of water which were scattered all around the prairies. The water of those pools was streaked all over with oil. The iridescent patches of floating oil were everywhere. And where else would that oil come from, but from underground deposits? But I never stopped to think of it. If I had, I could have bought that whole section at five dollars an acre! Yes, that land covers enough oil to make it worth the price of real estate in down-town New York.

I left Wichita Falls, minus the millions, in January 1917 to go to Boston as a foreign correspondent for an export Company. A sort of gamble on futures, because the job didn't pay much. But the prospects looked good. The company was doing very well, for itself. And it was quite lavish with its employees. With promises. The only trouble was that its promises did not pay our living expenses. But, by starving one day and eating a little less the next one, we employees always managed, more or less, to keep handsomely in debt.

Although my job with the company was not what you may call a bonanza, it was a source of some satisfaction to me. It made me realize that, after 13 years in America, I had reached the point where I needed no longer to turn to menial job by I was in every respect equipped to fill an office position. Especially with a firm engaged in foreign trade. So, even if my job didn't pay much, I kept at it to acquire additional experience, to meet new people, to build myself up a wide acquaintance. Eventually, I intended to branch out for myself.

By then I was 35 years old. A soft of happy-go-lucky fellow with a penchant for good times. A little lonesome now and then. When I realized that I had no home of my own. But otherwise care-free. And rather partial to good looking girls. I liked them all, God bless them! In a sort of good fellowship way. You know how it is. Never giving a thought that in the same community, within a few blocks from where I was rooming, lived the girl whom a kind fate—kind to me—had destined to be my wife …

It was the night before Memorial Day. Around midnight. I had been to the Pop's and was waiting for a street car at the Boylston Street subway station. An elderly lady was with me.

A beautiful girl, escorted by a young man, was, like us, waiting for the same car. She could not have been there long, because I know I would have sensed her presence. The same as I felt myself drawn to turn and glance in her direction she set her foot on the subway platform.

One glance at her, at that picture of loveliness and kindness and clean vivacity … One look into her deep, dark, smiling eyes … At that pretty, round face, framed in a background of gorgeous curls … At her whole fascinating ensemble … And I was no longer able to remove my eyes from her. I remained there, staring so intently that, for my unre-pressed and evident feeling of respectful admiration, I might have appeared rude.

I have no idea how long I stood there looking at that girl. Probably, only a matter of seconds. But they could have been hours and I wouldn't have known the difference. Time, space, the world and everything else around me, except that girl, had ceased to exist.

The lady who was with me must have noticed my state of blissful reverie and followed the direction of my glances, because not only did she see the girl, but recognized her too.

"Why, there is Rose!" she said to me. "I want you to meet Mr. Ponzi. She was one of my pupils."

We walked up to the couple.

"Rose," said the lady speaking to her." I want you to meet Mr. Ponzi." Then turned to me. "This is Miss Gnecco," she said.

"How do you do?" the girl acknowledging the introduction with a voice as sweet as her looks.

"How do you do?" I returned, but I made no effort to conceal how I felt. I didn't care who knew how I felt. In fact, I wanted the whole world to know that I had met the girl of my dreams and surrendered unconditionally to her charms.

She lived in Somerville. Not very far from where I lived. So, we were in the same street-car for the next twenty minutes or so. She was with her escort a couple of seats ahead of us, on the right. All the way to Somerville, my eyes did not leave her a minute.

When we got home, the lady I was escorting asked me what I thought of that girl.

"I think she is wonderful!" I replied. "I am going to marry her."

"Why, Mr. Ponzi!" the lady said. "You must be crazy!"

"I am! I am crazy about that girl," I admitted and that was no exaggeration.

Eight months later, Rose and I were married at "a little church around the corner" in Vine Street, Somerville. She has been my companion ever since. That faithful, loyal, little wife who has never faltered in the many days of sorrow and adversity. The one inspiration that has enabled me to face the most crucial crises of my life with a heart steeled by our reciprocal love.

Rose is the most precious gift America could have tendered me. She was born and raised in the United States. In Boston. I am grateful and thankful to America for the gift. My wife is ample reward for everything I have suffered, justly or unjustly, during the 31 years in the United States. I cannot bear any grudge, any malice, against a country which has been so lavish and generous as to place within my reach to pick, from a whole garden-full of beautiful flowers, such as American girls are, what has been for me the most exquisite of all blossoms. An American Beauty. My Rose!

CHAPTER XI

SCHOOL STREET, BOSTON, SCENE OF THE EXPLOSION THAT WAS HEARD AROUND THE WORLD

"The shot that was heard around the world," was fired on the bridge between Lexington and Concord. Some shot! I hope to tell it was some shot! If the bullet had gone all the way around the world with the sound, the man who fired that shot would've been killed backwards by his own bullet. That's going some. Even for a Lucky Strike radio sketch. "Vas you dere, Charlie?" No, baron. I must admit I wasn't there. And nowhere near it.

That shot has no immediate relation to this story. It was fired away back. At the time when Paul Revere could still make his morning canters, minus the entourage of every city or town official from the North End to Lexington. At the time when the Dawes boys were still smoking their corn-cobs upside up. Instead of French briars upside down. And were filled them with tobacco that didn't come from the R. F. C.

But, if the shot that was heard around the world has no immediate relation to this story, it has a remote relation to it as a question of acoustic range. Because the explosion of what is known as my "financial bubble" was also heard around the world. It was recorded by every seismograph beneath the stratosphere. And it made history for School Street. The same as the shot made it for Lexington and Concord.

School Street is one of Boston's oldest landmarks. It has been there ever since houses were built on both sides of it. Until a few years, ago, it was short, narrow and congested. Now, it is still short. And congested.

But not quite so narrow, from the waist up. That is, toward Tremont Street. It has been widened. Pot-bellied politicians, in transit to and from the City Hall, couldn't get by without being squeezed. And there is nothing a politician hates more than being squeezed.

Once upon a while, School Street was famous. For its historical buildings. The Parker House, for instance. At the corner of Tremont Street. Noted for its Boston "Tea" parties. Past, but not remote. And present. But whereas tea was tea in the days gone by, it's just plain whiskey today. Or gin. Or both.

Ever since the demise of the old Copley Square Hotel and of brother Spraklin's regime, the Parker House has become the political headquarters of Greater Boston. All shades of Democrats and Republicans can be found there, in the various stages of ascent or descent. And in some awful combinations too.

Other venerable buildings in School Street are the little church, on the opposite corner from the Parker House, the Five-Cents Saving Bank, and last, but not least, the City Hall. I can't say much about the church. I don't know enough about it. I have never been in it. But it's sort of exclusive. Maybe, on account of its denomination. Like a $10,000 bill.

The Five-Cent Savings Bank is there and yet it isn't. It was there in my time. With a School Street frontage. Today, it's around the corner in Province Street. Someone said it moved there out of pure snobbery. On account of too much riff-raff across the street; where I had my office. The officials used to get heart failure regularly, watching the long line of people who were bringing to my office the savings they had just withdrawn from the bank. And they turned the building around and made it face the other way.

The City Hall is what it has always been. A bone of contention for the Democrats. It has been responsible for more caeserean inclusions in the democratic party than any other political plum. Usually, there are from a dozen to a score of candidates for the Mayor's job. Accordingly, the odds are from 1 to 11 to 1 to 19 in favor of the Democrats. The lone warrior is always the Republican candidate. He never fails to get his party nomination at the primaries. But he stands no more a chance than a snow ball in hades on election day.

Of course, now and then a miracle will happen. Ex-mayor Nichols made it. Once. But not on his own power. Nor the elephant's either. He just sprawled in on democratic roller skates. While the rest of the boys, those playful Irish youngsters, were having a free-for-all. And Dan was watching it with a satanic grin. But, outside of Nichols, the only other Republican who ever sat in the mayor's chair went in in disguise. A straddle of a baby elephant, camouflaged under a donkey's skin. At the tail end of a parade made up 50-50 of Demoblicans and Repucrats with a B.L. degree from 53 State Street.

As far back as my recollection goes, His Honor, now His Excellency James Michael Curley, has been the only chronic mayor Boston has ever had. He has been as unavoidable as the flu. As regular in his four-years as the Pharaohs' seven-lean-year cycles. But nobody begrudges him his regularity. In his own rough-and-tumble way, he has been a darned sight better mayor, a more likable chap, than some of his predecessors or successors. The only bad feature about him is his permanency. If he hangs on to the governor's office as long as he did hang on to the mayor's office, he'll have the boys on Beacon Hill praying for an earthquake. For any sort of calamity that may pry him loose from the gubernatorial throne.

If School Street was famous in the old days, it is positively notorious today. On account of recent events. The glory of its ancient buildings has almost faded away. Sight-seeing busses no longer stop before them. Not even before the City Hall. They go a little further down. Toward Washington Street, they pull up at the curb in front of a narrow doorway, between Posner's and Purcell's. At 27 School Street. The Niles Building.

In fact, they don't need to go any further to get their money's worth. For the Niles Building, in its modest simplicity, has a history. A past. A past with a thrill. But a greater thrill than it can derive from its associations with the Eben D. Jordan's estate. What's the history? The past? The guide of a tourist bus will tell you. He will point to the Niles Building with reverence. Listen to him.

"This is the Niles Building, ladies and gentlemen," he will megaphone to his audience. "The baby mint which has coined more money for the New England folks than all of the national recovery acts put together. The building which has seen more real dough than the Ward System of Bakeries. The building which has given more heartaches to the boys of State Street and Federal Street than the panic of January and February 1933.

"Gaze at that building, ladies and gentlemen, for there stands before your eyes the eighth wonder of the world. The former headquarters of Charlie Ponzi, the "Wizard" of finance who made $15,000,000 in nine months out of a six-cent coupon. Just think of it, ladies and gentlemen! Fifteen millions of golden simoleons! More money than you or I can ever hope to see! Can you picture what the bambino could do for the forgotten man in these depression times with a lone thousand dollar bill, instead of a six-cent coupon? He could pay the national debt half a dozen times, even after this administration gets through piling it up. He could pay it without batting an eye and still have more money left over than all the Morgans, and the Rockefellers, and the Mellons and the Fords put together!

"Take one last look, ladies and gentlemen, and let us move on. I am feeling dizzy."

What the guide may tell the tourists does not explain, however, how I happened to locate in School Street. Not that it matters in the least. But it dove-tails with the story. Especially that, if I hadn't moved to School Street, I would have remained over the Tremont Trust Company, in Court Street. And brother Simon would have thrown one thousand and one fits at having me for a tenant.

This is what took place. It was Spring of 1919. Several months before, I had eased myself out of the job I had. Tired of working for expectations that didn't pay either my rent or my grocery bills. Tired of making money for my employers in general and none for myself.

I had a few dollars. Very few. Just enough to humor the family budget for a while. And I was undecided whether to get myself another job at $20 or $25 per, working for others, or shoot the works in a business venture of my own. But sound judgment did not prevail. I went and hired a room over the Puritan Trust Company. An inside room.

The room had a roll-top desk and an arm chair. It could have been called an office, if there had been any business attached to it. But there wasn't. All I used it for was to spend a few hours in privacy and concentration. Filling pads full of figures. Big figures. Something like Charlie Dawes' at the German Reparation Conference. Only mine dealt with dollars and cents. His with marks. Yes, easy marks.

It is hard to say whether my dollars and cents were actual. Or just mere hopes. But I know that by the time the building was taken over by the Tremont Trust Company, with an extensive plan of alterations, I had reached the conclusion that, if I was an asset to any employer, I was a greater asset to myself. Never figuring that I might be one of those assets which are spelled without the final "et". So, I took my pencils and pads, as the furniture did not belong to me, and moved into the Niles Building in School Street. There, I took possession of a dingy, little office on the fifth floor.

The necessary furniture and equipment, such as desks, chairs, typewriters, files and even a multigraph, came from instalment houses. Books, directories, etc., some from my house and some from secondhand book stores. I put in a phone. A supply of engraved stationery. And had a sign painted on the door serving notice to the world that Charles Ponzi was an exporter and importer.

That's how I happened to locate in School Street. Without premeditation. Without malice aforethought. Without any intention of snooping upon the boys across the alley from me. At the City Hall. And if from my windows I could look right into theirs, neither the Watch and Ward4, nor the Finance Commission had anything to do with the arrangement. For a wonder. Because those birds haven't missed a single sure bet yet. And they have been in the habit of digging up more dirt than a steam shovel.

CHAPTER XII

MR. PONZI PROMOTES "THE TRADER'S GUIDE" WITH A 3,000,000 CIRCULATION RIGHT OFF THE BAT

When I rented the School Street office, it was my intention to become a commission agent for domestic and foreign firms. A sort of foreign department, especially for those who could not afford to maintain one of their own. And I can say that I possessed the qualifications to give satisfaction. But I had no connections. Either in the United States or abroad. So I set about to make them. Through the medium of circulars. Only to realize that between the cost of overheads, stationery and postage, they stood me from five cents for the domestic to eight cents each for the foreign circulars. Entirely too much money. At that rate, my limited resources would have faded away to nothing before I had obtained any appreciable returns.

I looked around for a less expensive way to reach my prospects. I studied the expediency of advertising. Especially in foreign trade publications. And soon I became convinced the field was inadequately covered. The leading foreign trade publication had, at that time, a circulation of barely 50,000 copies per month. Its advertising rates were utterly out of proportion to the services it rendered. Evidently, what was needed was a new publication which could offer a greater circulation at lower rates. So, I devised such a publication. In all of its details. I called it "The Trader's Guide". And undertook its promotion under the name of "The Bostonian Advertising & Publishing Company". A long name which only meant an additional sign on the door and new letterheads.

The first problem was that of attaining a wide circulation. World wide. Free distribution was the answer. People never refuse what does not cost them anything. It's human nature all over. But they would have no earthly use for my publication, unless they could read it. Therefore, it would have to be printed in various languages. Not in all of them. English, French, Italian, German, Spanish and Portuguese would have been enough.

The matter of mailing lists was easily solved. Directories, both domestic and foreign, the U. S. Bureau of Foreign & Domestic Commerce and the U. S. Consular Service, gave me all the names I wanted. Classified in every possible way. But I couldn't undertake to mail millions of copies of each issue. The cost and the amount of work would have been prohibitive. I decided, therefore, to mail 100,000 copies every six months. And to reach each time a different set of readers. Until my mailing lists were exhausted. But it was a "Long Way to Tipperary" because I had three or more millions of names.

There is where I had to call all of my ingenuity to the rescue. In the first place, I had to keep alive the interest in the copies of The Trader's Guide already distributed. Other publications did that by publishing a new issue each month. But they covered always the same limited number of subscribers. While I had an almost unlimited number of readers to reach.

Secondly, since The Trader's Guide contained both some reading matter and some advertising of regional interest only, I had to find a way to mail into each section only what might be of local interest. For instance, an Eskimo would no more be interested in refrigerators or electric fans, than a Congo coon would be in fur coats and heating appliances.

The only way out of my difficulties was through a loose-leaf device. In fact, I picked out a cheap expansion cover with a couple of screw binder posts. I planned to mail one to each reader with only those pages of reading matter and advertising that would be of interest to him. From time to time, as new pages would be published, I intended to send them to him so that he might add them to his book. Keep it up-to-date. Each new set of 100,000 readers would receive, of course, the same cover already sent out to others and all of the pages published up to then. Such a scheme of distribution would have placed a complete and up-to-date copy of The Trader's Guide in the hands of 200,000 readers the first year, and of 200,000 new readers each year after that.

How was I going to pay for all that, if the publication was being distributed free? Easily enough. By selling advertising space. The proportion of reading matter to advertising space was 1 to 3. That is, for every page of reading matter, I would sell three pages of advertising. Could I sell it? Certainly! If other publications did, there was no reason why mine shouldn't. I had more to offer than they had, for the same money. For less money, in fact.

The leading publications at the time were asking—and getting—about $500 a page for advertising space. For each monthly issue. It reached only 50,000 subscribers. The Trader's Guide, for the same amount, would have placed the same ad before 100,000 readers. Not only this, but the loose-leaf feature gave the advertisers the means of reaching only the readers they wanted to reach, excluding all others.

Again, each issue of a monthly publication has only a 30 day existence. An issue is current until the next one is published. Then it becomes obsolete. It is usually thrown away. Or sold to the junk-man. To keep, therefore, the same page ad before the same 50,000 subscribers for one year, it would cost the advertiser $6,000. But The Trader's Guide, instead, never became obsolete. It was a book of permanent reference which had to be kept year after year, in order to put and classify the newly published pages under the same loose-leaf cover. Therefore, between paying $500 for a 30 day display, or the same amount for a permanent display, while reaching a number of readers twice as large, the advertisers could not hesitate. They would have given preference to The Trader's Guide. Because my selling arguments could not be beaten. Or even matched by my competitors.

All figured, an issue of The Trader's Guide, including cover, 50 pages of reading matter, 150 pages of advertising and postage to destination, would have stood me about 35 cents a copy. Or, $35,000 for 100,000 copies. The 150 pages of advertising would have brought in over $75,000. Advertising on the cover, probably another $5,000. The net margin of profit should have been around $15,000 for the first six months. And progressively more after that.

The Trader's Guide was a good thing. I thought so. I still think so. I said so. Everybody agreed with me and said so. Yet, nobody seemed to think enough of it to help finance it.

Among others, an ex-governor of Massachusetts. He was extremely liberal with interviews. And encouragement. But tighter than a drumhead otherwise. I could not persuade him to buy half an interest in the Guide for $5,000. I suppose he would've declined even the Boston Common at $5 an acre.

I looked for money everywhere. Found it nowhere. Nevertheless, I kept up the struggle to the end. Pawned the family jewels. Mortgaged the household furniture. I didn't sell my soul to the devil, because he found he could get it for nothing if he waited long enough for it.

In a moment of despair, I decided to apply for a loan from a bank. I must have been desperate. Or I would have known better. I applied for a $2,000 loan at the Hanover Trust Company. For several months I had carried a checking account there. Really, it was more of a pain in the neck than an account. The bank thought so. I differed. Yet, every other day, I had to race to the receiving teller's window on the stroke of nine A.M. to cover some checks which I had given out after banking hours. Although I always managed to get to the bank ahead of my checks, the bookkeeper must have had an awful time to keep up with them.

When I applied for the loan, I tried to look unconcerned. I asked for 2,000 dollars with the same inflection I would have asked change for a nickel. My application did not get very far. It never reached the loan committee, as the bank's president heard of it, and disposed of it between a couple of puffs of his cigar. The note I offered the bank as collateral failed to impress him. So did my statement that I was a depositor in his bank.

"Sorry," he said frigidly, "but I cannot approve the loan. While it is our policy to accommodate our depositors whenever we can, your account is more of a bother than a benefit to us. Good day, sir."

His last remark made me so mad that I could have spat poison. I watched him re-enter his private office. Then I left the bank muttering to myself: "Some day I'll have that bird eat out of my hand!"

A few months later the prophecy materialized. By then, I owned the Hanover Trust Company. Lock, stock and barrel. I had a $5,000,000 balance in that bank. I was only the largest stockholder, the chairman of the board of directors, and a permanent member of the executive committee.

At one of our weekly meetings, the treasurer introduced a motion to raise the president's salary. One of my men—the executive committee was just padded with them—opposed the motion. I sat there indifferently. The treasurer, peeved, suggested that the question be put to a vote. The suggestion was accepted. We voted on the basis of our stock holdings. The treasurer figured that between what he and the president owned and the proxies they held, plus the stray independent votes, they would carry the motion. But I owned 1,625 shares and controlled, by agreement, 600 more. Out of a total issue of 4,000 shares. My vote was "no".

"I am licked!" said the president after the votes were counted.

"Of course, you are!" I told him. "You licked yourself when you refused me a $2,000 loan about six months ago. Do you remember?"

"Probably not. But I have not forgotten," I went on. "You told me then that my account was more of a bother than a benefit to this bank. But you showed a deplorable lack of tact for a bank president. That small account shows today a $5,000,000 balance. More than all of the other deposits put together. After your remark of six months ago, I would have been justified in closing my account. And this bank would not have me today as a depositor. Today I am refusing your raise because I don't believe you are much of an asset to this bank."

"Then there is nothing else for me to do, but hand in my resignation," he said.

"Your resignation?" I retorted. "You can do as you please about that. But I don't see where you are in a position to resign. I own this bank. You are one of my employees. Just now, you can keep on as president. If I should at any time decide that I don't want you around, I'll fire you."

But, after this digression, let me resume the narrative. Back in my office—which, by the way had been moved to larger quarters on the second floor—from my call at the Hanover Trust, I summoned my help. Two stenographers and a boy. I informed them that their services would no longer be required after the coming Saturday. Because I could not pay their wages. They offered to remain. To work for "expectations". I could not and did not consent to it. But I was deeply touched by their loyalty.

My next step was to insert a small ad in the papers. Desk space to sublet, or something to that effect. This brought some immediate results. In less than a week I had several tenants. My rent money was taken care of. The glass door which formerly read: "Charles Ponzi, Export & Import" and "The Bostonian Adv. & Publ. Co.", with addition of new names, began to look like a directory. My dignity, perhaps, suffered somewhat. But what I lost in dignity, I gained in peace of mind.

I dismissed The Trader's Guide from my mind. Another house of cards had collapsed. That did not matter. I was getting accustomed to chasing rainbows. As one would fade away, I would pursue another. For a dreamer, I certainly was persevering. I never was a quitter. Undaunted by failure, I transferred my attention from The Trader's Guide to international reply coupons. A new rainbow had come within my range of vision. The most spectacular I ever saw. With renewed energy and enthusiasm, I chased after it. I caught up with it. When I did, I found fifteen million dollars at the end of it. I should have called it a day. And quitted while the quitting was good. I didn't. Hence, this story.

CHAPTER XIII

MR. PONZI FINALLY DISCOVERS AN UNTRODDEN PATH TO FABULOUS WEALTH AND TAKES IT

The "racket" of international reply coupons actually fell in my lap like a ripe apple. I did not have to shake the tree to get it. I just reached over, where it had fallen, and took it. It looked good. Luscious. I examined it for flaws. Found none. I had to bite. I wouldn't have been human if I didn't.

Sorting my correspondence, I noticed a letter from Spain. It had an international reply coupon pinned to the corner. The letter had been on my desk for several days. I read it. It did not say much. It merely asked for a copy of The Trader's Guide. And the coupon had been enclosed in prepayment of postage. I had seen and used coupons before. I knew what they were. I knew their exact function.

The coupon before me was identical in appearance to others I had handled before. It had been issued by a Spanish post office. But corresponded in every detail with the coupons issued by other countries. The only minor difference was that, at the bottom, it had the word "Espana" (Spain), instead of the name of some other country. Likewise, at the top, the value appeared in Spanish and read: "30 centavos".

The main legend appeared on the face and the reverse of the coupon in several languages. It said: "This coupon may be exchanged at any post-office of any country in the Universal Postal Union for a postal stage of the value of 25 centimes, or its equivalent."

The coupon came to my notice accidentally. At a time when my mind was extremely alert. But it was entirely due to what I already knew about coupons and foreign exchange rates that I saw in it an opportunity for speculation. An untrodden path shortcut to some easy money. And it may seem strange, almost amazing, that my path might have been overlooked until then by the financial wizards of Wall Street. But it so happened. And those birds have never forgiven me since. For having caught them napping. When you steal a march on them, you can bet your bottom dollar they are going to be on your trail until your beneficiary collects on your insurance policy.

My discovery didn't involve much scientific study. In fact, it did not involve either science or study. It was a good deal simpler than the Einstein theory of relativity. So simple, really, that it took me less than five minutes of figuring on a scratch pad to realize its possibilities.

The coupon itself told a brief story. It had been purchased at a Spanish post-office for 30 centavos. Nominally equivalent to 6 cents United States. It could be exchanged, in the United States, for a postage stamp of a denomination equivalent to 25 centimes, or 5 cents. It remained to be ascertained whether the coupon could actually be exchanged in the United States. A call at the Boston post-office would have settled that question in no time. But there was no hurry for it.

What set me thinking was the knowledge that the peseta—the Spanish monetary unit—was then quoted 15 cents in American money, instead of 20 cents, its par value. A little figuring disclosed that, at that rate, six and two-thirds pesetas could be bought for one dollar. Since a peseta was made up of 100 centavos, six and two-thirds pesetas were equal to 666 centavos. It didn't take much to find out that with 666 centavos, I could have bought at any Spanish post-office 22 couples exactly like the one before me. Coupons which I could exchange in the United States for a 5 cent stamp each. Or, $1.10. The transaction showed a 10% profit.

A 10% margin wasn't much of a speculation. But one thought led to another. Some foreign currencies had suffered even a greater depreciation than the peseta. The Italian lira, for instance. It was quoted then about 5 cents instead of 20 cents. One lira was equal to 100 centesimi. A dollar would have brought 20 lire, or 2,000 centesimi. With 2,000 centesimi, I could have obtained 66 coupons at 30 centesimi each. Or enough coupons to obtain in exchange for them at the Boston post-office $3.30 of 5 cent stamps. A gross profit of 230%.

Just then I was dealing only with theories. In my own heart, I felt sure of my figures and conclusions. Had I owned as little as a few hundred dollars, I would not have hesitated to play a lone hand. My financial circumstances made it impossible. As usual. When I had a good thing I could never swing it alone.

Faced with the necessity of borrowing from others, I found that I needed something more substantial than my own theories and beliefs. I could not approach any prospective lender until I possessed unimpeachable evidence that my assertions were absolutely accurate.

First of all, it was important to ascertain whether the depreciation of paper currencies had in any way affected the selling cost of the coupons. To this end, I sent out three letters. Each with a dollar bill enclosed. One went to Spain, one to France and the third one to Italy. In each case, I requested the recipient to exchange the dollar bill into paper currency of his own country. Then to purchase with it as many coupons as he could obtain and mail them to me. In the course of a few weeks, I received my replies and the coupons. The results coincided with my expectations.

In the meanwhile, inquiry at the Boston post-office had satisfied me that the coupons could be exchanged there without trouble.

A copy of the United States Postal Guide and any newspaper with current quotations on foreign exchange completed the chain of evidence necessary to support my statements. In all, it had cost me less than four dollars to lay the foundation of a venture, nine months thence, had an outstanding indebtedness of $15,000,000.

The peculiar feature about the whole thing was that the laws and the treaties involved in the purchase and redemption of coupons protected the user of such coupons and not the various governments concerned. They could not refuse to sell or to redeem the coupons without adequate advance notice. Even though they might be aware of the fact that a speculation in them was in progress. And that they stood to lose money by it.

The coupons were a commodity like postage stamps. They were a part and parcel of that postal service which, being a government monopoly, the government guaranteed and had to perform satisfactorily.

Regardless of whether it showed a profit or a deficit. The post-offices of any country could refuse to sell me stamps. They could not limit the number of coupons I wanted to either buy or redeem. They could not decline to increase their normal supply, if it became burdensome to meet an increased demand. In other words, the burden of living up to the terms of the contract was entirely on the government's side and not on mine. All I could be expected to do was to tender cash in payment of coupons. Coupons in exchange for stamps. But what I did with the stamps afterwards, was nobody else's business but my own.

There was no law or rule or regulation I could possibly violate by a traffic in coupons, carried on as described here. The most that could be said was that such traffic might have been unethical. But a breach of ethics was not an infraction of the law. Anyway, environment had made me rather callous on the subject of ethics. Then, as now, nobody gave a rap for ethics. The almighty dollar was the only goal. And its possession placed a person beyond criticism for any breach of ethics incidental to the acquisition of it.

My early attempts to borrow substantial sums failed utterly. People wanted to know too much about my plans. More than was safe to tell. Had I been too liberal with information, somebody might have used it himself. And left me out in the cold. So I told just enough to whet the people's greed and curiosity. No more.

I wasted very little time and effort in my question for capital in lump sums. I soon gave it up as a bad job. Because I know I could borrow ten dollars each from ten different persons much easier than I could borrow one hundred dollars from one. But in order to borrow even small amounts from strangers, I realized that I needed a certain prestige. Such as a firm name lends. Because it has the appearance of greater stability. And so, I decided to form a company. And I adopted for it the name of the Securities Exchange Company. Convinced that I was on the right track, I was determined to see the whole thing through to the end. And didn't I though! But what a different end than I had anticipated!

CHAPTER XIV

MR. PONZI ORGANIZES THE SECURITIES EXCHANGE COMPANY ON THE PATTERN OF A ONE-MAN-BAND

The organization of the Securities Exchange Company was a very simple matter. In those days, there were no blue-sky laws to contend with. Not in Massachusetts, at any rate. Because the socalled Securities Act was not enacted until 1921. Which, by the way, insofar as I was concerned, was like locking the stable after the horse had been stolen.

Simple as it was, the matter of organization presented a few minor problems. A corporate form was out of the question. I did not know how to draw up the articles of incorporation. I did not care to take the usual run of lawyers into my confidence. Those I might trust, I couldn't afford. Those I might afford, I couldn't trust. Then, the incidental cost of the corporation was more than I cared to incur.

Since I had decided not to operate under my own name, a partnership was found to be the only alternative. After a little study of the situation, I found it inadequate. Desirable partners were beyond my reach. Undesirable ones, I did not want. There was nothing left for me to do, but to devise some new form of organization. Something that would fill the bill and cost no money. A "partnerless" partnership was the outcome.

The legal status of such a partnership may be a debatable question. However, that point was never raised during the litigation that followed the collapse of my venture. The Securities Exchange Company was treated as a "one-man-company". Evidently, it must be technically possible at law for a man "to keep company with himself". Honestly, there are more freaks at law than in a dime museum. And they are not all on the bench, either.

When an obliging clerk at the Boston City Hall furnished me with the necessary registration blank, I discovered that I was required to fill in the names of the various members of my company. I put myself down as manager. So as to gain time. And do some quick thinking. Had I hesitated, what would the clerk have thought?

The name of John S. Dondero came to my mind. He was my uncle by marriage. A reputable man. The registration was only a formality after all. I did not anticipate any consequence. So, I put him down as one of the partners. Confident that he would never know. If he did, I could explain the unauthorized use of his name.

The second name which occurred to me was that of a man I had known in Italy. A man I thought dead. But it developed later that the report of his demise had been "slightly exaggerated". Like Mark Twain's death. He was very much alive. Not knowing that, I put his name down with a chuckle. He, at least, would never know or care!

That was my conception of a "partnerless" partnership. A most ideal form of organization. Silent. Unobtrusive. Yet, sufficient to cover the law. Had I known then what was to come, I would have made it still more ideal. By putting another dead man in my uncle's place. That would have saved him a lot of undeserved trouble. And given me greater security. Dead men cause no dissension. Neither are they reached by court writs. Nor cited for contempt.

The Securities Exchange Company began its business career under the most favorable auspices. True, it had no capital. But it had no black eye either. And no liabilities. For a wonder. The total cost of organization had set me back a trifle. Only about the price of three and one-third packages of cigarettes and a coupon for the same price.

After the registration, my company was officially existent. But that was about all. It had an address. Some furniture and equipment. But no letter-heads and other essential stationery. I still needed about 50 bucks to be actually ready for business. With a budget showing a steady deficit, like the national budget. I could not have saved fifty dollars in fifty months. In fact, I couldn't have lasted that long, anyway.

Things looked bad. It seemed as if there were no fifty dollars in the whole of Boston. Except, perhaps in some of the big banks where they generally have on hand at least fifty bucks. To make matters worse, some of my creditors began to pester me for installments due, past due and over-due. I couldn't plug a hole fast enough that another one would spring a leak. It was the most diuretic situation I ever met with.

One of the creditors made his appearance quite regularly. He was a furniture dealer from the North End. His specialty—everything in household goods for newlyweds. From non-squeaking bedsprings to rolling pins. I owed him for my office furniture. Some white-pine desks and chairs they had palmed off on me for quartered oak.

He was in an ugly mood when he called that day. But for his size, he might have looked dangerous. Since he was only a little runt, like me, I didn't get alarmed. I invited him to sit down and he hesitated.

"For the love of Mike, sit down!" I urged him. "That chair is still yours and won't place you under any obligations."

He sat down and started to pull some papers out of his pocket. Mortgage, bills, receipts, and so forth. I waived the presentation of the evidence. None was necessary to remind me of what I couldn't forget. Namely, what I owed him.

He was determined to get some money out of me that day. Either that or the furniture. The money was not worrying me. I didn't have it and that settled it and he couldn't draw blood out of a turnip. But I didn't want to lose the furniture. The idea of having to sit on the window sill, did not appeal to me at all. I am sort of funny that way.

I had to capitulate. Having no cash, I offered him the next best thing to it. A promissory note.

"Of what good is your note to me? he asked with a certain inflection of contempt. "I have your mortgage now."

"I know you have," I told him, "but this is something else. Listen." I kept on trying to be convincing, "I am going to make you a proposition, but first you have to answer me a few questions. You have a bank account, of course?"

"I have," he admitted.

"Is your credit standing at the bank good enough so that you can discount some notes now and then?"

"It is," he answered.

"Would you have any trouble in discounting, let us say, a 200 dollar note?" was my next question.

"No I don't think so," he said.

"Well, now," I insisted, "if I should give you a 60-day note for 200 dollars, you could take it to the bank and get your money on it, couldn't you?"

"I could," he acknowledged.

"All right. Not then, if you could apply that money, or any part of it, to the payment of my bill, it wouldn't make a particle of difference to you where the money came from, would it?" I pressed on.

"No. Of course, not. So long as the note was paid at maturity," he conceded.

"Exactly. Now, my proposition is this," I stated. "I will give you a 60-day note for $200. You will discount it at your bank and credit my account for $100. The balance you will hold at my disposal. I will draw against it as I need."

"You will have to show me first how you are going to take that note up at maturity," he said.

"Certainly," I agreed. "I shall do that right now."

For the next fifteen minutes I talked to him on international reply coupons. I gave him the whole story. From the treaty of Rome in 1907 to date. I showed him a coupon. Told him to keep it and exchange it at the post-office. I made him read the United States Official Postal Guide at page 37. Then I explained to him to him the market quotations on foreign exchange. In other words, I gave him the works. And when I got through, he was entirely sold on the proposition. He accepted the note.

Incidentally, my only agreement with him was to redeem that note at maturity with the usual interest. I kept my part of the agreement. Not only had I redeemed that note, but I also settled his bill in full. And dismissed the matter from my mind.

Five months later, out of a clear sky, I found myself the defendant in a million dollar suit brought by the same fellow. On the strength of that promissory note, he claimed a half interest in the Securities Exchange Company. He sued. And it cost me $50,000 to get out of it. But, more of this later.

With sufficient money for the printing of stationery and other minor expenses, I completed my plan of operation. I decided to borrow from the public at large. In amounts from $10 up. Against the promissory notes of the Securities Exchange Company. The proceeds were to be used in the purchase of coupons. The notes were to be payable in 90 days and carry a 50% interest. Actually, I adopted the practice of taking up my notes at 45 days from date. Thus paying interest at the rate of 400% a year.

The moment I found myself equipped for business, I began to look for investors. Calling here and there. Talking about my company. Its notes. The coupons. But never really soliciting investments. I knew that curiosity would eventually lead to further inquiry and to my office.

In fact, one day I had a caller. My first caller. He had heard about my proposition and wanted to know more about it. I told them all there was to know.

I can't say that he was convinced by my representations. He understood the thing, allright. But he appeared more impressed by the 50% feature than by the technique of my plan. Evidently, he was no "connoisseur" of art. I could see from the expression on his face that he was doing some mental figuring. Probably, pyramiding some imaginary investment. Whatever passed through his mind left him enough caution to resist temptation. He did not invest. Said he could not afford it.

The realization that I was about to lose my first sale, and with it, probably a certain amount of confidence in myself, urged me to offer him an agency. It was a brand new idea. The result of impulse. Rather than of sober consideration. But impulse and nerve constituted then about nine-tenths of my assets.

When I told him that, by explaining my proposition to his friends, he could earn a ten-per-cent commission on whatever money they might invest, he accepted the agency. I gave him no credentials. He needed none. But I gave him a one-lesson course in salesmanship and psychology. He needed that. Especially, in view of my new ideas on the subject.

I had a good thing. There was no doubt in my mind about that. Being a good thing, it needed no high pressure salesmanship. No unnecessary stress upon its advantages. I was selling my dollars for 66 cents. That's all there was to it. And they were good dollars. Any attempt to force them upon a prospective investor would have been to create suspicion, rather than confidence. Therefore, I told him that, in order to be successful, he should never crowd a prospect. Never go beyond the mere details of the coupon transaction. Once those were grasped, people could not fail to invest.

And they didn't fail. Later events proved I was right. That I knew human nature. That I was a better salesman by instinct than others by training. In those days, any proposition connected with foreign exchange was more popular than a gold mine. I counted upon that to obtain attention. To give me an opening for further details. The 50% feature would have done the rest. It would have struck a responsive chord in the heart of every man and woman. And it did. Because we are all gamblers. We all crave easy money. And plenty of it. If we didn't, no get-rich-quick-scheme could be successful.

My proposition was decidedly tempting. Apparently, fool proof. It could be tested with a ten-dollar bill. It might have looked economically unsound as an investment. But it was extremely attractive as a gamble.

People gambled with me as I thought they would. They gave me ten dollars as a lark. When they received fifteen at the end of 45 days, all sense of caution left them. They plunged in for all they were worth. They brought their friends along. The legion of my investors grew by leaps and bounds. Each satisfied customer became a self-appointed salesman. It was their combined salesmanship, and not my own, that put the thing over. I admit that I started a small snow ball down hill. But it developed into an avalanche by itself.

My first salesman was the snow ball. Up to January 1, 1920, he rounded up exactly 18 investors. For a total amount of $1,770. The snow ball had started its way down hill. It gained momentum when, about the second week of February, I paid to my early investors $2,478 on their original investment of $1,770.

From then on, the number of investors grew rapidly and steadily. By the end of July, there were exactly 30,219. They held notes of the Securities Exchange Company for nearly $15,000,000. The snow ball had attained the proportions of an avalanche. Which might have travelled much further before striking bottom. But for my own excess of confidence in men and fate. And caused a different story to be written.

CHAPTER XV

MR. PONZI'S LIFE BECOMES ONE NIGHTMARE OF POLICE AND POSTAL INSPECTORS

The first salesman missed his vocation in life when he became a storekeeper. He should have been a missionary. He certainly could spread the gospel! His activities cannot be measured by his success. They can, by their effect. Within a week, his propaganda had reached the keen ears of one of Boston's guardians. And I was honored by the official call of one of its representatives.

He was a bespectacled gentleman. Of that indefinite age between senility and dotage. Such as might be expected from such an ancient institution. That's Boston all over, bless its heart! Within a radius of half a mile from the Custom House Tower, you can run across more mummies at large than you find walled in King Tut's Tomb.

My caller wasted no precious moments in idle conversation. He came right to the point. He said that the institution he represented was very much disturbed. Over the discovery that I was offering a 40 or 50 per cent return in 90 days to my investors. The illustrious remains of the Pilgrim forefathers, he stated, were getting restless in their graves. I believe he said "graves." Maybe, it was "gravies." At any rate, it was natural for them to get restless. Like the old 4% foggies in State Street.

I flashed my most disarming smile on the old gent. And set about to show him that the world, after all, had made some progress in three centuries. I exhibited to his gaze an international reply coupon. Explained to him what it was. He inspected closely. For any picture of General Lee or "Stonewall" Jackson. He found none. And heaved a heavy sigh of relief. He was satisfied that the coupon, at least, was not a piece of confederate wall paper.

When I told him the coupon was a product of the Universal Postal Union, he was puzzled. He did not know whether the Postal Union was a merger of the Postal Telegraph and of the Western Union. Or just a member of the American Federation of Labor. I came to his rescue. And told him all about the International Postal Congress of Rome in 1907. He was still a little skeptical. Until I opened up the United States Official Postal Guide at page 37. Then he stood up and saluted. As he would at the strains of the Star Spangled Banner.

Once he was convinced "beyond a reasonable doubt" that my wares were guaranteed by the Great Seal of the United States (or, was it that of Great Britain that impressed him most?), it was an easy matter to acquaint him with the delightful mysteries of foreign exchange. His beaming countenance followed me all the way up into the realms of seven figures. Until he almost sprouted wings. Gazing at a universe of eternal sunshine!

The institution he represented never disturbed my peace of mind since. In fact, I believe I became later an "honorary" member thereof. Upon the payment of a $200 admission fee. It's always an honor to be touched by them for the price of a membership. But where that institution's investigations stopped, others started.

In no time, I had a speaking acquaintance with every police and postal inspector in Boston. At the height of my career, there were more inspectors working for me than for the city, and cops too. I had so many of them around, that my office looked like police headquarters at roll call.

In fact, if headquarters were not moved earlier from Pemberton Square to Berkeley Street, I have a suspicion it was on my account. The new location would never do. Both Commissioner Curtis and Superintendent Crowley knew they couldn't even get quorum up there. It was too far from School Street. They probably felt that the logical thing to do was to move the sign from Pemberton Square down to School Street and plank it over my office. It would have been cheaper.

It must not be assumed from what I say that I actually invited advances from the police. I am not that kind of person. The advances were forced upon me. But I was too polite to turn them down. To resent them. I just flirted back, so to speak. Like the man who flirts with death. Because he knows he can't duck it.

In fact, one afternoon, as I was leaning backwards in my swivel chair, with my feet propped against the radiator, the phone rang. I reached over for the instrument and was greeted by a familiar voice.

"Charlie," it said. "There is a warrant out for your arrest." Just like that!

Whatever else it said, did not and does not matter. That one sentence was enough to bring my feet down from the radiator. A threat of arrest is always a shock. A man may look at himself in the mirror in the morning. And discover that he has developed small pox over night. He may take that philosophically. But let the same man know that he is about to be arrested and his first impulse will be to chase around in circles. Looking for a hiding place.

That tip over the phone actually disturbed me. There was a perfectly good supper at home in danger of going to waste. And I didn't even know what the bill-of-fare at the Charles Street Jail called for. For a moment I was on the verge of calling up Sheriff Kelliher and asking him. Tell him to keep it sort of warm. But other thoughts came to mind. Was I going to sit in my office and wait for the warrant to be served, or what? No. I decided I would not wait.

I put on my hat and coat and walked over to Pemberton Square. To Police Headquarters. I inquired about the "warrant." And was directed to the basement. I was not surprised. I had been in department stores before. And knew my geography. Probably, I thought, they were running a bargain sale in warrants. And I might get one marked down.

Below, I walked over to the warrant "counter." Perhaps, it was a desk. The "saleslady" in charge was … a cop. For a wonder, he was almost polite. He asked me what I wanted.

"I have come for a warrant," I told him.

"All right," he said. "Let's hear the complaint. Who is the party you want to have arrested?"

"I don't want to have anybody arrested," I started to explain.

"Then, what in hell do you want?" he asked working up a temper.

"A warrant that you are supposed to have against me," I stated.

"Do you mean to say that you have come to accept service of it?" he inquired with astonishment. "That you want to surrender?"

"Well, something like that," I admitted. "What's the use of putting you to a lot of trouble looking for me when it's just as easy for me to come over here?"

"I don't know what it's all about," he confessed, "but you certainly deserve to be commended for your attitude. Let's see, what is your name?"

"Charles Ponzi," I replied.

"How do you spell the last name?" he asked.

"P-o-n-z-i," I spelled for him.

He scanned through a big book, the blotter, until he came to the proper entry. Then he informed me that there was no warrant.

"We have been asked to look you up," he said, "and your coming here, of your own free will, is a point in your favor. Do you mind hanging around until I locate the inspector who has charge of the case?"

"No; go ahead," I said good naturedly. Knowing there was no warrant, I felt good natured.

Within a few minutes, I was introduced to an inspector. With him was one Joseph Merenda. I forgot in what capacity the latter was there. Probably, as an interpreter. But he was not needed. He, the inspector, and myself walked over to a desk and sat down. It developed that the police department had heard of the 50 per cent racket. And were interested. They would be.

The inspector was rather uncertain in his knowledge of postal matters. And of foreign exchange. To him too it had to be explained that the Universal Postal Union was not a "Local." Like the Hod Carriers'. And that the coupons were not clippings from Liberty Bonds. But I found him positively prejudiced against foreign exchange. Just because it was "foreign". He couldn't get through his noodle why it had not been included in the exclusion clauses of the immigration laws. Ten or more years later, I couldn't get it through my noodle either. In some instance, on which the ink isn't dry yet.

All together, the inspector was well impressed by the general outline of my plan. He pronounced it legitimate (subject to further corroboration by the postal authorities.) On many points it appeared to him as clear as mud. But on all of the others he did not understand, he was thoroughly in accord with me.

In the meanwhile, since New Year's day, my salesman had become scarcer that Orangemen at a St. Patrick's Day parade in South Boston. He didn't come near me. He hadn't sent me any investors. He hadn't even called me up.

Now, I know that he was ducking. And why. After causing a few friends to invest, he felt it might be wise to keep out of sight until the payments materialized. If they didn't he would have a better start. I can't blame him for wanting to be a few lengths ahead, in the event of a race.

In fact, I was not entirely at ease myself. I had given the money to buy coupons to a friend5 who was working on board a transatlantic liner. I did not fear any act of dishonesty on his part. But I was afraid something might happen to him. He could have taken sick. He might have jumped overboard. Or met with an accident. That would have been just "two" bad. Yes: he and I.

With the lapsing of each day, my suspense grew keener. Until I was greeted by his unheralded appearance around the first week in February. The story he told me was gratifying. The coupons were obtainable everywhere. Even the smallest post office carried a reasonable supply. With sufficient notice they could be procured in larger quantities. Official co-operation could be had. Through the wise distribution of small gratuities. What music could have been sweeter to my ears?

With enthusiasm, I set about to effect my first payments. I got as much thrill out of each note redeemed, as a high school girl gets out of her first kiss. It didn't matter that each of my investors drew his money out. I knew they would either come back, or send their friends. Did they? Of course, they did. They began to show up within a week or two. And up to the last of the month, they left exactly $5,290 for another spin of the wheel. I spun it for them.

CHAPTER XVI

MR. PONZI DISPROVES THE THEORY THAT THERE CANNOT BE A PROFIT WITHOUT A CORRESPONDING LOSS

My receipts had reached $1,000 per day mark. My friend was on his way back to Europe. And everything was going along smoothly. When somebody threw a monkey-wrench in the works.

The trouble started down the North End. I had given a couple of coupons to an Italian prospect. And told him to experiment with them at the post-office. They were United States coupons. He took them to the sub-station at the corner of Hanover and North Bennett Streets. Presented them for exchange. The man in charge refused to accept them. The Italian came back to me convinced that I was trying to gyp him.

The situation called for action. Not diplomacy. My reputation was at stake. I could not afford to ignore the incident. So I reached for the phone and called the postmaster in my client's presence. Since I talked principally for the latter's benefit, I tried to be impressive. More so than considerate.

The postmaster's argument was that a reply coupon issued in the United States could be redeemed only in a foreign country. My argument was that, no matter where issued, a coupon could be redeemed at the post-office of any country belonging to the Universal Postal Union. Including the one of issue. Nothing short of a bulletin from the Third Assistant Postmaster General could have convinced the man. Our conversation did not settle the question. But the Italian was satisfied that I must have been right. Or I wouldn't have talked the way I did.

The incident was not closed by the hanging up of the receiver. I dismissed it from my mind. But that postmaster didn't. He reported the matter to his superiors. And I received an unexpected call.

I was in my private office talking to a prospect when the call came. My uncle Dondero and my wife were in the anteroom, waiting for me to get through. The tramping of "flat feet" warned me of the approach of my callers. I don't know whether they entered through the anteroom with thumbs in the armholes of their vests. So as to exhibit their badges. Very likely that they did. I could not see them from where I was sitting. But I heard them.

"We want to see Mr. Ponzi," one of them said in an arrogant voice.

My uncle's face, blanched by fear, appeared at the door of my private office. The poor man was scared stiff. He said, in Italian, that there were three inspectors to see me. He would not have been more awed if he had announced the Father, the Son and the Holy Ghost.

"Tell them to wait," I told him. "I am busy with this gentleman now. I'll see them when I get through."

My uncle looked at me in amazement. He could not grasp the effrontery of anyone telling a cop to wait. He was so darned law abiding himself that he looked upon a cop as he would upon Frederick the Great in full regalia.

The fact is that I didn't exactly mean to be disdainful. But I knew the cops. It's a second nature with them to be gruffy. They like to assert authority. Their favorite method is to try intimidation first. If they can get away with it. Failing in that, they retrench and try subtlety.

I kept the officers waiting for several minutes. I did that to collect my thoughts, more than anything else. I knew the next interview was going to tax my wits. And I wanted to be prepared for it.

I escorted my caller to the door when he left. As soon as he was gone, I turned to the three officers and asked them who they were. And what they wanted. The questions were not really necessary. One of them was the inspector whom I had met before. He spoke for the others.

"I am inspector from Police Headquarters," he said. "We have come to question you."

"Oh, I see," I remarked. "You are paying me an official visit. In that case, show me your warrant."

"We have no warrant," interposed the postal inspector. "We did not come to make an arrest. Just to ask you some questions."

"In that case," I observed, "you must be aware of the fact that you are on my premises entirely at my own tolerance. I don't have to answer any of your questions, unless I want to."

"But you would not refuse to answer our questions?" he asked.

"Wouldn't I? I certainly would," I informed him. "You cannot assume an attitude of proprietorship around my office and get away with it. You may take me in custody. With a proper warrant. And I will not resist that. But, without it, I have a right to resent your presence here."

The postal inspector must have realized that I could not be intimidated. He changed tactics. He acknowledged my rights in the matter. But suggested that a brief conference, in a friendly spirit, might prove more advantageous all around. I agreed with him. And invited them into my private office.

The conversation opened like a fencing bout. With a series of feints and parries. Apparently, the inspector wanted to hear my version of the argument with the postmaster of the Hanover Street sub-station. Actually, they didn't give a rap about that. What they were after, was evidence of fraud in my reported activities in coupons. But I was on guard. And declined to be led into any admission of fact.

"I believe we are wasting a lot of precious time," I urged. "This postmaster's report of his alleged conversation with me is not evidence that the conversation itself occurred. If it did occur and you have reason to believe it constituted a violation of the law on my part, bring charges and the matter will be thrashed out in court. But it is extremely naïve of you to come to me for any statement which you hope to use against me."

"We are not contemplating action against you, Mr. Ponzi," answered the postal inspector. "But we are interested in some of the things you told that postmaster."

"Just a moment, inspector," I interrupted. "You mean that you are interested in some of the statements "attributed" to me by that postmaster. There is no evidence I ever said anything to him."

"Oh, all right," he conceded, shrugging his shoulders, "have it your own way. I suppose you will not admit knowing anything about international reply coupons either?"

"You are wrong again, inspector," I said. "I have no objection in telling you whatever little I know about coupons. If it can be of any help to you."

Right there we launched into an extensive discussion of that particular subject. We analyzed it from every angle. And finally agreed upon the theory that a profitable speculation in coupons was possible. The inspector, however, was of the opinion that a large number of coupons could not be either bought or redeemed.

"I differ with you, Mr. Inspector," I said. " You know that there is no limit to the number of stamps a person can buy from the government. Well, then," I went on after he had agreed with me on that point, "do you know of any good reason why a person should not be able to buy any number of coupons?"

He did not know of any reason. Nor did he know why any number of them couldn't be redeemed, if one could.

"They may be counterfeits," he suggested.

"We are not discussing that kind of coupons, inspector," I remarked. "We are talking about coupons which are genuine beyond all doubts."

"Well," he insisted, "the government may decline to redeem them."

"No," I stated. "The government cannot do that. Not so long as it is party to the international postal treaty."

"I don't know a thing about international law," he confessed.

"Neither do I," I said, "but I use common sense and reach my own conclusions."

"You seem to know a whole lot more than I gave you credit for at first," he blurted out.

"Now, don't make me blush, Mr. Inspector," I pleaded. "Really, I don't know enough to get out of the rain."

The inspector did not consider himself check-mated yet. He argued that if a speculation in coupons resulted in a profit for someone, it must result in a loss for someone else.

"If it does, I have been unable to discover who is the loser," I told him. "In fact, I am inclined to believe that everybody makes a profit."

"That's absurd!" the inspector contended.

"And so is a giraffe," I retorted in my own fresh way.

"Do you remember the story about the old rube who had never seen one? When one was shown him, he said; 'There ain't no such annual!' Now inspector, if you don't mind, I am going to show you a giraffe."

This is the way I put it to him: "Let us assume," I said, "that France needs fifteen million dollars of francs. I borrow in this country one million dollars at 50% interest, as I am doing now on a small scale. The million dollars, at the current rate of exchange, is equal to fifteen millions of francs. I send a draft for it to the French government with the understanding that France will issue to me 50,000,000 of international reply coupons. France can obtain the coupons from the Universal Postal Union on open account. As soon as I receive the coupons, I exchange them here for stamps. Then I sell the stamps at a 10% discount. Let us assume that I pay also a 10% commission to the agents who have been instrumental in obtaining for me one million dollars from the public. The transaction, in so far as I'm concerned, would show the following balance:

Cash on from sale of 50,000,000 U.S. 5c stamps

(less 10% discount)....................... $2,250,000.00

Principle due to note holders.....$1,000,000.00

50% interest......................................$500,000.00

10% commission to agents...........$100,000.00

Gross profit for myself...................$650,000.00

___________________________$2,250,000.00

"On the other hand, the ledger of the Universal Postal Union would show the United States a creditor to the extent of $2,500,000 and the French government a debtor to the extent of $3,000,000. Why three million dollars? Because the coupons cost the French government 15,000,000 francs payable in gold, at their gold parity of 5 francs to the dollar. While they didn't cost me but one million dollars, at the current exchange rate of 15 francs to the dollar. The difference between what France must pay and what the United States can collect, represents the charges of the Universal Postal Union for the service.

"I will now assume that France is called upon to settle that indebtedness. Since it has received only one million dollars and owe three millions, it faces a loss of $2,000,000. The loss cannot be avoided so long as the franc remains at the ratio of 15 to the dollar. But, if that ratio should decrease, the loss would decrease in proportion. It would entirely disappear if, and when, the franc sold at its gold parity of 5 to the dollar. However, as a general rule, depreciated currencies require a number of years to recover.

"The settlement with the Universal Postal Union cannot be deferred by France. The payment must be effected. And the best way to finance it is through a bond issue. An issue of $3,000,000 of twenty-year 3% bonds, payable in dollars. The carrying charges for the bonds will amount to $1,800,000 in twenty years.

"But it must be remembered that France already has on hand 15,000,000 francs derived from the sale of the coupons to me. The 15,000,000 frances, if loaned by the French government to private or public self-liquidating enterprises, for a period of twenty-years, and at an annual interest of 5% would in twenty years, amount to 30,000,000 francs and would then be equal to 6,000,000 dollars. They would be sufficient to retire the bond issue, with interest charges of $1,800,000, and, in addition, leave a profit of $1,200,000 for the French government.

"As you can see, the public invests a million and makes a profit of $500,000 in six weeks. My agents give their time and services and earn $100,000. The Universal Postal Union collects another $500,000 for their services. The United States post-office sells $2,500,000 worth of stamps and, presumably, makes a profit. The firms or individuals who buy the stamps from me at a discount, split among themselves a profit of $250,000. France makes a profit of $1,200,000. The holders of French bonds earn another $1,800,000. The enterprises launched with 15,000,000 frances loaned by the French government, presumably, earn a profit. Not only that, but they provide work for a number of people, who also earn a living. Last, but not the least, I make roughly, $65,000 on the deal. If you can show me where the entire transaction results in a loss to anyone, I'll buy each one of you a Stetson hat."

The inspector was flabbergasted. He wasn't prepared to dispute my figures. But he was a hard loser.

"Am I to assume, Mr. Ponzi," he asked, "that you are the unofficial representative in this country of some foreign government?"

"No, Mr. Inspector," I replied with amusement. "Ponzi does not represent anybody but himself. And, furthermore, please bear in mind that we have been discussing only theories and not facts."

The interview at an end, my callers departed much the worse for wear and tear. Personally, I had much to be gratified for. I had won the third round with hardly a scratch to my debit. I felt liberal and exultant. I turned to my little wife. She was pitifully upset. For her, the interview had been a trying ordeal.

"Never mind, dear," I said to her. "Cheer up and give us a little smile. There is no longer any reason for you to be anxious. Let's forget the business and relax. You and I are going to have a nice little supper somewhere, by ourselves, and act like a couple of kids."

CHAPTER XVII

MR. PONZI OPINES THAT, IF GAMBLING IS A SIN, HE'D BETTER HAVE THE CHURCH ON HIS SIDE

The average man is never satisfied with what he has. He does not realize when he is well off. If he has a shirt, he wants two. If he is single, he wants a wife. If he is married, he wants a harem. (I hope wifey does not read this). He is always reaching for the moon and stepping off into space. Just like I did.

My affairs were then in fairly good shape. No, I won't say that, either. They were in a bad shape. I was heading toward bankruptcy with the speed of a cannon ball. But I did not know it. Ignorance is bliss.

At any rate, they were not so bad, but that they couldn't be worse. I had plenty of money. And, apparently, the opportunity to clean up a few shekels for myself. But I lacked judgment and caution. I thought I'd reach for more. It was there in plain sight. I did not look beyond it. If I did, I did not see. I must have been blinded by ambition and conceit.

Boston was then coming through gorgeously. Just like a little drum major. The returns were exceeding expectations. That was flattering. But it was becoming a dangerous flattery. It made me vain and reckless. It made me dream of wealth, power, popularity and what not. Oh, what fools we mortals be!

I decided to expand and open branches. In my mind, my venture certainly justified expansion, if any venture did. I was dealing in the most essential commodity of all. I dealt in money. The world was my market. The whole of mankind my clientele.

A contributing factor to my decision to expand, was the obnoxious presence in my office of an old acquaintance. He was in my employ.

Apparently we were friends. Actually, I was in his power. And he was my most dreaded enemy. I feared him. I feared him not for what he could do to me. But for what he might have led me to do to him. Yes. He fully deserved to be "taken for a ride." And I was surely tempted to buy him the ticket for the journey.

He and I had met before. We had met in a past of which I could never think with either pride or pleasure. We had met in prison. In Canada. In the St. Vincent de Paul penitentiary. Where he was doing a three year stretch.

When we met again in Boston, several years later, he knew me at once. And remembered. I did too. But he had the drop on me. I was going straight. He was still going crooked. Under the circumstances, I had to capitulate. And, later, give him employment.

The whole thing came about without the least indication of blackmail. He knew better than to make any open, or even veiled threats. His friendly interest in my affairs conveyed to me a clearer message than words. It would have been folly on my part to give him an opportunity to show his hand. That would have precipitated a situation from which I could not possibly have emerged the victor. So, I did the next best thing. I posed as a philanthropist. As a retriever of lost souls. I gave him advice and a job. A pension would have suited me better. But that would have been an acknowledgement of fear.

My employee was a crook by inclination and pursuit. He was one of those prowling, petty, sneaky thieves, whose counterparts in the animal kingdom are the hyenas and the jackals. He would pilfer a poor-box in a church. Pick a drunkard's pocket. Lift anything that wasn't nailed down. Occasionally, with some confederates, he would play a "con" game on some unsuspecting foreigner. The envelope or the handkerchief switching trick.

At the time I offered him a job, he had just returned from New Jersey, where he had "swindled" a Polish immigrant. The deal had proved somewhat of a financial boomerang. Everything had gone smoothly up to the division of the spoils. These gave him and confederates heart failure. When they opened the envelope supposed to contain their victim's wealth, they found bank notes of various denominations. … But all in German Marks, Russian rubles and Austrian crowns! The whole thing wasn't worth 25c a ton! While the envelope they had substituted on their victim contained a few genuine green backs.

He was fit to be tied. In the peaceful atmosphere of my private office, he cursed a blue streak. He cursed the victim, the war, the foreign mints. And everything that was cursable, except himself. He was broke, disgusted and despondent. Perhaps, he was even on the verge of making some rash request. But I anticipated him. I offered him work and a modest salary. Sugar-coating the offer with some fatherly advice as to the errors of his ways. The offer upset his plans, whatever they were. He accepted.

His acceptance may have put an end to his problems. But it only marked the beginning of mine. From then on, I had to find excuses to keep him away from the office as long as possible. A close contact with him was the last thing I wanted. I would rather have hugged a high tension wire any day.

Between fool's errands and wild goose chases, I managed, somehow, to engage his attentions elsewhere than School Street. Once I even sent him to New York to buy me some choice Hennessy "Three Stars" off the French Line. The "noble" experiment was on.6 My cellar was dry. And I wanted the stuff badly. But, badly as I wanted it, my fondest wish was that he might get caught with it and "sent up." No such luck! I even bought him a car. Hoping that he might break his neck. He never did. But he did smash the car occasionally. And I footed the bills. That man was as everlasting as sin!

He became my "advance agent" by force of circumstances. I did not want him around. I had to send him somewhere. The further he went and the longer he stayed, the better I liked it. So, I used him to open branches.

People have often commented about the dinginess of my offices. Wondered at the absence of display. At the utter lack of pretentiousness. Some have argued that there was method in my madness. Some have attributed the modest appearances to super-salesmanship. To a keen sense of psychology. But they were all wet. He was my chief reason.

I didn't need branches. I did not want them, I wanted him still less. Since the branches furnished me with a good pretext to keep him out of town, I had to have the branches. But I didn't care to pay for the pretext more than was necessary, hence the dinginess. That is the whole thing "in a couple of nutshells," as between Andy and the King Fish.

Incidentally and accidentally all my branches turned out to be "gushers." Their very dinginess contributed to their success. Psychologically their modest appearance was a stroke of genius. But I claim no credit for it. I never thought of it in that light. It just happened. Like everything else.

My methods, of course, made State Street see red. Some "buccaneers" of finance are still burning up today at the thought that I stole a march on them. With all of the millions they had invested in the paraphernalia of the "paper hanging"7 trade, they had to play second fiddle to a "damned little wop" who used ten-penny nails for a coat-rack!

Some of my branches were "knock-outs" right from the start. Others had to be coaxed. From a financial standpoint. I didn't care whether I got any returns or not. But from the standpoint of personal pride, I couldn't stand defeat. If a branch was recalcitrant, it was my job to give it a push.

My pain in the neck had dropped in one day to tell me that he had landed one of such lemons. The exact locality does not matter. It was a fairly large community. Within the range of a "Big Bertha" from the Boston Common. Fight that out, if you can!

A branch had been opened there. Everybody in the neighborhood knew it was there. Yet, nobody went near it, and my employee was at his wits' end. So, I drove up there with him to look things over.

I paid a few calls and soon discovered the trouble. Nothing serious. Just a case of the "badger game." "Big Business," in the form of a few storekeepers, wanted a "cut in." They had decided that if my proposition was a racket, it should pay for protection. These storekeepers were Genovese. And we have a saying in Italy that it takes seven Gentiles to get the best of a Jew and seven Jews to get the best of a Genovese. The odds were therefore 49 to 1 against me that I would have to come across. I did. I appointed each one of them a sub-agent on a 5% commission. Since they wanted a finger in the pie, I saw to it that they stuck it in up to their knuckles. The deal did not cost me a dime.

My salesman and I finished the day with a social call. I was parched from talking. Dry. "Nobody knows how dry I was!" I was drier than a Methodist conclave.

"Let's go and have a soda," he suggested.

"Nothing doing," I said shaking my head. "I have too much respect for my palate."

"Get yourself a glass of water, somewhere, then," he said.

"Water?" I repeated horrified." No. I guess not. I see enough of it on Saturday nights. I want some beer."

"Go to Milwaukee," he wisecracked. "It's the nearest place I know of."

"Go to Hades. Do you mean to tell me that you have been in this town a whole month without running across a 'blind pig8' yet?" I asked him.

"Well," he stated. "I haven't come across any 'blind ones,' if you want to know."

"What have you been drinking all this time?" I inquired.

"Coffee," he said.

"Oh, yeah?" I sneered. "You look it. What's more I wouldn't believe you if you were under oath. You are holding out on me."

"Holding out nothing," he denied. "The only glass of wine I have tasted here, I got it at the rectory."

"You mean from the priest?" I asked.

"Sure," he admitted. "Who else would be at the rectory? A rabbi?"

"Listen, boy," I told him. "If you know what is good for you, you lead me to him. Who is he, anyway?"

"Father … So-and-so," he replied, mentioning a name I immediately associated with my boyhood.

We called at the rectory. We experienced no difficult in being admitted. In fact, we were received with open arms. The priest and I had never met. But an exchange of data on our respective families disclosed that we were almost related. From then on, we got along first rate. A bottle of the choicest wine made its appearance to help celebrate the event.

In the course of the conversation, it became evident that Father X… (let's call him that) was interested in my proposition. Even a priest is not above temptation. He wasn't. He pressed me for details and I gave them to him. I described to him the process through which a little dollar could start on a journey across the ocean and return home in six weeks, married and with a couple of kids.

Father X… was an educated man. What was Greek to others, was just plain English to him. In fact, while I was talking, he was even a step ahead of me. He almost made me gasp for breath with an unexpected remark.

"That would make it exactly $1,350 in three months," he said out of clear sky.

"Would make what?" I asked, not knowing that he had been doing some mental figuring of his own.

"Thirteen hundred and fifty dollars," he repeated.

"As yet, I could not see any connection in his remark. I did not know what he was driving at. I looked at him. He appeared perfectly normal.

"Hold on a minute, Father," I urged him. "You seem to be exceeding all speed limits. Where are you at?"

"I am about a mile ahead of you," he replied with a grin. "I have been figuring that with an initial investment of $600 I could make a profit of $750 in three months."

I nearly swallowed my Adam's apple when I heard that.

"You! You mean that you want to invest some money with me?" I asked him, still refusing to believe my own ears. A side kick on the shins from my troublesome employee was not even enough to bring me back to earth.

"Is there any reason why I should not invest with you?" Father X… asked blandly, while I was still struggling to recover my balance.

"No … none at all," I assured him promptly. "We have investors in all walks of life."

Further conversations disclosed the fact that Father X … did not have any ready cash of his own. But his church had a little nest egg of $600. The fund had been collected for painting and repairs. It was not to be used for three or four months. So, reasoned Father X … , why leave it idle, while Ponzi was around to duplicate the miracle of the fishes and the bread?

"You understand that I cannot afford to gamble that money," Father X… said to me. "I can only invest it in a safe thing."

"Of course," I agreed with him.

"But that is not all," he continued. "Supposing I need that money before maturity of the note, what could you do for me?"

"I would return you all the principal upon surrender of the note at any of my offices or through a bank," I assured him. "That is my standing agreement with all of my note-holders."

My assurance proved convincing. Father X … handed over the $600. No one can blame him for that. The temptation was too strong, even for a clergyman. Errare humanum est!9

What happened to that money … I am not telling. Maybe it multiplied! Maybe it dwindled! What difference does it make now? Sooner or later, the church was repaired and painted anyway. If it had to wait, it could wait. Besides, Father X … and I are still good friends. Amen.

CHAPTER XVIII

MR. PONZI TAKES IT INTO HIS HEAD TO CLEAN UP A FEW BANKS WITHOUT DUTCH CLEANSER

Years ago, and even now, the surest way to get my Nannie was to slight what I call my dignity. I am not stuck up. Never was I welcome familiarity. Of the right kind. But when somebody tries to put on airs and make me feel like thirty cents. I am off on a rampage.

A rampage does not necessarily mean trouble, I am not troublesome. Not much. Outside of poking a stick in a hornet's nest now and then, I am really not vicious. But I have a tongue modeled after the rear-end of a bee. It can sting with a vengeance. When I let loose one of my hypodermics, whoever gets it, knows he has been jabbed, "Touche," as they say in France.

Speaking of dignity, that reminds me of the young lady who was catapulted from her saddle over the horse's head. She fell in a heap of disarranged clothes. Jumping to her feet, she was gratified to find herself whole and unobserved.

"Thank goodness!" My dignity hasn't suffered!" she said voicing her thoughts with relief.

"I guess it hasn't, ma'am. Not much," remarked a farmhand who had witnessed the performance from behind a pile of hay, "but you've sure ripped the seat of your pants!"

My dignity was considerable ruffled one day when a small out-of-town bank insisted that I should furnish references before my account was accepted. That made me hot under the collar. So hot that I actually fumed.

"Gentlemen:" I wrote them. "Your request for references is noted and hereby denied. Evidently, our agent has either misunderstood or disregarded our instructions when he offered you our deposit. We deal only with substantial institutions. The size of our accounts is such that we make it a practice to never entrust our money to banks the total resources of which, including building, may be packed into an ordinary club-bag and caused to vanish overnight." â€”Yours truly, etc."

Eventually, I cooled off and got to think about references. I had a dozen or more of the garden variety. But not one with real background. You know what I mean.

True enough, I had a substantial balance in the Tremont Trust Company. Around half a million. But it was like a ten-carat ring in a pawnshop window. It lacked surroundings.

As a reference, the Tremont carried some weight with the common run of people. With the right people. But it enjoyed very little prestige among the blue-bloods. Its president, Simon Swig, was Jewish and very much despised by the scions of Mayflower forefathers.

It was a case of State Street versus Salem Street. The two could not mix. Just like oil and water. And the worst part of it was that Simon Swig was persistently stepping on the Puritans' toes. And making them like it. Because of his strong political connections.

But, in his own way, Simon Swig, was somewhat of a snob himself. He was of the opinion that a Jew was better than a wop any day. I could not agree with him. In my own mind, nothing could be better than a wop. Except two wops. However, we never clashed on racial issues. But, from his attitude, it was evident that he did not care for me beyond the exact figure of my balance. Personally, I didn't give a hoot whether he loved me or not. What I expected from him was service. Not kisses. So, I got none of the latter. And not much of the former, either.

Whenever I gave the name of the Tremont Trust Company as reference to some supercilious investor, I could read a message on his countenance: "Birds of a feather, etc." And I would wince. But I grew tired of wincing. So, I looked around for more flattering connections.

Now, there was, for instance, one of the old aristocratic banks in town. A most exclusive institution. A sort of step-sister to another similar institution, both old timers. Very substantial. But also considerably rapacious. It had a finger in every activity in the State. Controlled both business and politics.

I began casting longing glances in its direction. But I have always been very impulsive and sudden in my courting. Faint heart never won fair lady … Haven't I married a blue-ribbon? So, one day, I slapped twenty-five one-thousand-dollar bills in my pocket. And went to call on the Old Lady to win her favors. She had a reputation of being very distant with strangers. But I discovered that she was a real "coquette" with prospective depositors.

A spotless, speckless and manicured vice-president, with a camel-hair-pencil moustache, noticed me hanging around uncertainly.

"Are you being waited upon?" he drawled with an Oxford accent.

"Not yet," I told him.

"May I assist you, sir?" he volunteered.

"I guess so. I only wanted to open an account," I explained.

"I will be delighted to wait upon you, Mr.… er… I don't believe I got your name," he said.

"My name is Charles Ponzi," I said handing him my card.

He looked at it for a while. Trying to connect the name either with ancient history or modern success. He failed. He set me down as an insignificant.

"What kind of account do you wish to open, Mr. Ponzi?" he inquired. "Savings or checking?"

"Checking," I replied.

"A business account?" he asked.

"No. Just a small personal account." I answered.

The word "small" made him pause and think. I kept on puffing away at my cigarette. He was nervously tapping his desk with a pencil.

"I must be frank with you, Mr. Ponzi." he stated, "but it is the policy of our bank to accept only desirable accounts. We endeavor to give the best of service. We maintain an expensive organization. For that reason, we require checking accounts to show a substantial balance. Are you prepared to meet our requirements?"

"I sincerely hope so," I replied. " By the way, what do you consider a substantial balance?"

"Two or three hundred dollars and up," he said.

"Oh that's reasonable enough …" I admitted. "You almost had my scared. You may put me down for an initial deposit of twenty-five …"

"Hundreds?" he asked.

"No. Thousands." I replied.

"Twenty-five thousands" he repeated. "Why … I thought you said you wanted to open a small personal account?"

"So I did," I acknowledged. "This is about the smallest of my bank accounts."

"Have you any objections to furnish us with the names of your other banks?" he inquired.

I had no objections. I named a few. He took my deposit and left. Apparently, to get me a pass-book. Actually, to check up on me. The moment he came back, I knew he had been doing some telephoning. He was all smiles and attentions. He must have called up the Tremont Trust, among others, and learned of the half a million dollar balance there.

"Here is your pass-book, Mr. Ponzi," he said. "Would you like to have a check book especially printed with your name on it? We will be glad to send you one. If there is anything we can do for you, please command us."

Had there been a whisk-broom handy, that man would've brushed my clothes! And that goes to show that money is yet the best credential of all.

The matter of references satisfactorily disposed of, I began to look around for something to occupy my mind. Just as if taking in money from morning till evening wasn't an occupation. Well, it wasn't. It had gotten to be sort of monotonous to watch my clerks fill the waste baskets with green-backs after the cash drawers were full. The money itself meant nothing to me. What I wanted was to test its power. To derive from it the thrill incidental to the accomplishment of things called impossible.

I decided to buy banks. It was the logical thing for me to do. I had accounts in a number of them. All over New England and abroad. And those accounts were surely profitable to others. Earning dividends for others. So, why not make them profitable for myself by owning some bank?

My first choice fell upon the Hanover Trust Company. Not because it was better than the rest. But because I had a score to settle with its president. I figured it was a good chance to catch two birds with one stone.

The control of the Hanover could not by bought with much diplomacy. And the control of it could only be had at a price which I had no intention to pay. The stock was not worth more than its market value of $125 a share. And, perhaps, not even that. So, I had to go at it stealthlike.

First of all, I opened there for sixty thousand dollars. I permitted it to grow from day to day up to $500,000 or more. Without drawing against it. I wanted to create the impression that was what is known as a "dormant" account. So that bank officials might feel reassured that there would be no sudden and substantial withdrawals. And might, therefore, invest my balance. Instead of keeping it liquid.

In the meanwhile, through Charles Pizzi, an employee of the bank, and others, I began to buy up small lots of the Hanover Trust's stock. One hundred and twenty-five shares. By paying a few dollars above the market price. But, instead of having that stock transferred to me on the books of the corporation, I merely had it endorsed over to me by the stockholders of records, whose voting proxies I also held.

My next step was to arrange a meeting with the Italian stockholders of that bank. Stabile, Locatelli, Badaracco, Di Pietro and one or two more. I told them that I wanted to buy control of that bank. And to get rid of practically all the officers. Whom they had been backing until then. The Italian stockholders were not in a position to buck me just then. It paid them better to have me on their side than against them. We reached an agreement by which all of our shares were pledged to be voted in block on any issue. As I may decide from time to time. That gave me voting control over 600 or more additional shares.

It was not until then that I called upon the officers with a trump card up my sleeve. I strolled down to the bank one day, shortly before 3 o'clock. And stepped into their private office. They invited me to sit down and asked me whether there was anything they could do for me.

"Yes. I think there is," I said. "I have dropped in to buy a block of stock in the Hanover and a directorship."

"I believe we can easily accommodate you," one said. "Would you care to buy as many as one hundred shares?"

"A hundred would hardly interest me at all," I replied. "I would like to buy 2,500 or so."

"But the whole capitalization of the bank calls only for 2,000," interrupted the other one.

"The original capitalization, you mean." I corrected. "Are you not offering for sale 2,000 shares of new stock?"

"We have not offered it for sale yet," said one, a bit surprised, perhaps that I knew of the projected increase of capital, "but we are ready to do so."

"Well, then why not issue it all to me?" I asked.

"We cannot do that because we would be selling you control of the bank," replied the other.

"That's just what I want," I admitted.

"We are sorry," said one, "but we cannot consider anything like that."

"We are willing to make you a director," added the other.

"Of what good is that to me?" I asked. "A minority stockholder in a corporation is like nothing at all."

"Do you expect us to surrender that control we have worked so hard to get?" asked the one.

"Do you expect me to place within your unchecked control what my investors entrust to my care?" I retorted. "My millions mean as much to me as your control means to you. My financial standing entitles me to be trusted by you with the control of the bank."

My arguments were not getting me anywhere. They were adamant in their determination to keep the control. But I was equally determined to take it away from them. I looked at my watch. It was about ten minutes to closing time. It was my chance to play trumps. And I led one.

"It seems to me," I said, "that our differences cannot be bridged. Let's drop the subject. Keep your bank and I'll look for another one."

I pulled out my checkbook and started to make out a check.

"Can you tell me what my balance is today?" I asked and they understood right away what I was after.

"You are not going to withdraw your balance, Mr. Ponzi?" The officers asked considerably perturbed.

"Certainly, I am going to withdraw it," I replied. "Right now."

"But it is hardly fair for you to do that," the other remarked. "You have a large balance and should give us notice."

"Why? My money is on a checking account. Is there any reason why I shouldn't write checks to the extent of my balance?" I inquired.

"No. You have a perfect right to do that," they agreed. "But a bank does not usually keep such a large amount of liquid cash on hand. We would have to dispose of some securities, probably, at a loss to honor your check."

"That does not concern me," I insisted.

"Why can't we get together and compromise?" it was suggested by one.

"What have you got to offer?" I asked.

"We will sell you 1,000 shares of the new stock," he replied.

"Nothing doing," I told him. "That would be like throwing good money after bad money. We cannot get together on that basis."

"But we don't own that many shares ourselves," pleaded one of them.

"Perhaps, not," I conceded, "but you control more than you own."

"We are willing to sell you as many shares as we control," said one. "An equal number. No more. No less. The independent stockholders will vote with whatever side they see fit."

"How many shares do you think you control?" I demanded to know.

"Not over 1,500 all told," he stated. "We will sell you 1,500 shares."

Both were banking on their control of the Italian stockholders, who, in the past, had always voted with them. They didn't know that those stockholders were now pledged to me. While I knew that 1,500 shares would have given me a substantial majority.

"Do you also agree to make me a director?" I asked them.

"Yes," it was affirmed. "We will call a special meeting so that you may be elected director and a permanent member of the executive committee."

"I have also a couple of friends I want on the board of directors," I stated.

"All right, we will concede that too."

"Fine!" I said. "I'll take the 1,500 shares."

Half an hour later, I left the Hanover Trust with certificates for 1,500 shares of the stock. The bank was mine! With everything that stood in its name. Including the 12 or 14 story building—the Journal Building, so called,—at the corner of Water and Washington Streets. In which the Hanover Trust was located.

With a little over $2,000,000 I had gained control over resources amounting then to about $5,000,000. Not only that, but I had the officers by the small of their neck. Those same officers a few months before had refused me a $2,000 loan because my account "was more of a bother than a benefit." Oh Boy! Didn't it feel good to know that I could now tell them a thing or two!

CHAPTER XIX

MR. PONZI GOES SHOPPING AND BUYS A MILLION DOLLARS WORTH OF SUNDAY PARCELS

To buy a bank is no trivial incident. Even a comparatively small bank. Like the Hanover Trust Company. A man, after he gets to the point where he owns a bank, calls it a day and quits. If he is an average man. Of course, topnotchers don't quit. They never do. But you wouldn't call them average men. They are out of the ordinary. Professional, in their line. They gobble up banks faster than a turkey does mush. And their gizzards never feel congested.

I don't know anything about the condition of my own gizzard. After I bought the Hanover. It didn't feel congested. Just the opposite, rather. It felt as empty as if it was missing. In fact, I developed an awful appetite. I wanted to buy everything in sight.

I put my hooks out for the Prudential Trust Company. Its president thought he could give it to me for the price of the Custom House Tower. He didn't get to first base. I knew he was heading for a crash. And all I had to do was to stretch out my arms, to catch him before be struck the ground. Nevertheless, I made him a liberal offer. He turned it down. And crashed. Only, I wasn't there to catch him when he did.

In rapid succession, I bid on the Lawrence Trust Company, of Lawrence. On the Carney Building, in Tremont Street. And other properties. I bought myself a house in Lexington. One in Winthrop. A small apartment building in the West End. I took a half-dozen mortgages here and there. Purchased a substantial interest in the C. & R. Construction Company. A few in the Fidelity Trust Company. In the Tremont Trust Company. I even bought myself the Napoli Macaroni Company. So that I wouldn't run out of spaghetti at home.

The more I bought, the more I wanted to buy. It was a mania. A frenzy. I almost bought the Niles Building. The one in which I had my office. It seems the other tenants had been kicking. They claimed they couldn't get to their offices. Because my investors blocked the entry, the elevator, the stairs and the corridors. O'Brien, superintendent of the Niles Building, sent for me.

"I am sorry, Mr. Ponzi," he said. "But if you can't regulate the crowd that comes to your office, I have to give you notice to move."

"I am equally as sorry, Mr. O'Brien," I told him. "But I shall not move."

"You can't expect me to lose the other tenants on your account," he protested.

"I should worry about them!" I replied, "Let them move. I'll take the entire floor."

"But your people are blocking also the entry and the stairs," he complained.

"Oh, all right. Let's not argue over it," I said, "Name your price and I'll buy the building."

The superintendent could find no words in reply. He knew I had the money. And was crazy enough to go through with the deal. Just to win my point. I don't know how he managed to satisfy the other tenants. But I didn't move.

The day I couldn't buy something, I felt actually disappointed. An auto salesman caught me in that mood one afternoon.

"I have a car," I told him.

"A good car?" he asked me with a bit of sarcasm.

"What do you think?" I retorted. "Do you suppose I drive around in a wheelbarrow?"

"I have been told you own a Hudson," he said.

"It's very true," I admitted. "And I am very much satisfied with it."

"But you need a much larger and more expensive car," the salesman urged.

"What, for instance?" I asked. "What are you selling, anyway?"

"Locomobiles," he replied, spreading an open folder in front of me.

I looked through it. Found the picture of the car that caught my fancy.

"How much for that?" I inquired point out to him the one I wanted.

"$12,600 delivered," he replied.

"All right," I said. "Send it right over. I'll take it."

"But I cannot deliver that car now," he said.

"When can you deliver it?" I wanted to know.

"In about three months," he answered.

"Too late," I told him. "I want that car right away."

"That car isn't even finished," he said. "It's being made to order for a New York millionaire."

"When will it be ready?" I asked. Knowing by then that the car was hard to get, I wanted it. Just to put something over the New York millionaire.

"In about two weeks," he told me. "It must be delivered by July 1st."

"Fine!" I exclaimed. "Have it downstairs, in front of the door, by July 1st."

"But that car is already sold," he tried to persuade me.

"Listen, young man," I warned him. "I want that car. And when I want something, I am prepared to pay for it. Have that car here by not later than one o'clock, July 1st, and I will give you $1,000 more for it."

That particular car was delivered to me on schedule. At 15 minutes to one o'clock, July 1st, 1920.

Things like that were common. They happened every day. Some involved little money. Some were more expensive. Like the car. Like anything else. Because it gave me a thrill to pose as a Count of Monte Cristo. To be able to walk in anywhere and tell the man in charge: "Wrap it up, please. I'll take it." Regardless of whether the item was a box of candy or a building.

One day I walked down to the market district. I went in. Where I had been working less than two years before. I wanted to see the boys and girls. My former co-workers. I stopped to chat with each of them. Then I walked into Poole's private office. He was not expecting my visit. And much less what I had in store for him. Nor did he know that I was a millionaire. He had heard that I was doing pretty well.

"Have a seat, Charlie," he said. "They tell me that you're in business. Dealing in some sort of foreign securities."

"That's right," I admitted.

"How are you making out?" he inquired.

"Fairly good." I replied. "That's what brought me here. To get your advice. I have a few dollars I would like to invest."

"Why don't you buy a few shares of my preferred stock," he suggested. "It pays 7%."

"I would rather have some common," I told him. "It ought to pay more."

"I'll tell you what I'll do," he said. "I will give you 25 shares of each."

"Is that all?" I complained. "It seems hardly enough to bother with it."

Poole looked kind of puzzled. He didn't know whether I was fooling or in earnest.

"How much more stock do you want?", he asked.

"I'll take all you have," I replied indifferently.

Poole laughed. He was amused. Thought it was a pretty good joke.

Coming from an ex-employee of his. But he pitied me a little, at the same time. Thinking I was sort of looney.

"Listen Charlie," he said, trying to break it to me gently, "It takes a lot of money to buy this company."

"I figured it would," I agreed. "That's why I have waited this long to call on you. I was afraid I wouldn't have enough."

"And you may still be short of the mark," he commented skeptically. "However, if you can afford them, you may have 500 shares of preferred for $477,5000 and 200 shares of common for $35,200."

"Do I get with it a directorship in your company?" I asked.

"Yes, you can have the directorship, too," he agreed, still believing in his own heart that I was only bluffing.

"In that case, have the certificates made out," I told him.

"Where is the money?" he asked.

"Right here," I said pulling out a check-book.

I made out the check. Handed it to him. He took it. And looked sort of sheepish. He knew the check was good.

"I didn't think you meant it," he said.

"J. R., I never bluff," I told him, and taking from my wallet six certified checks made out to me for $200,000 each, I spread them before his eyes.

"Good Lord!" he said. "That's $1,200,000!"

"Yes, and there are several more millions back of them," I assured him.

A few days later, I bought from Poole the remaining 550 shares of common stock. Paying for it about $206,000. And I loaned the company another $155,000. Poole and I had agreed to increase its capitalization to one million dollars and open branches in several foreign countries.

The deal added to the variety of my holdings. It gave me a sardine factory up in Maine. And a meat packing plant out of Kansas City. Both owned by the J. R. Poole Company. I must have felt in my bones that the depression was coming. Because with what I took over I certainly made preparations to cope with it.

Not only was I buying right and left. But I was also opening branches all over creation. I had 35 of them in New England. I had large accounts in about 45 banks. I was going like a house afire!

People must have thought I had discovered the buried treasure of the Incas. Or Alladin's lamp. If they gave a thought at all to the coupons, they must have got dizzy figuring how many of them I needed to justify what I was doing. In fact, my visible resources then were in excess of $5,000,000. Assuming I earned two cents on each coupon, I should have had to handle over 250,000,000 of them! It was absurd. There were not that many in the world. There had never been that many. And it would have taken months to print them!

The long and short of it is that, for some time, I had not been getting any coupons at all. In fact, after the first lot, I had not been able to buy any more. Except in small quantities. For no other reason than the existing supply was not sufficient to meet the increased demand. They had to be ordered from the Universal Postal Union. But the moment the postal administrations of the various countries concerned began to notice an unusual activity in coupons, the cat was out of the bag. One by one they took steps to suspend the sale of coupons.

I learned of it soon. Sooner, in fact, than official Washington. But not soon enough to get out from under. Confident that the coupons were on the way, I had redeemed a number of my notes with cash derived from the issuance of new notes. When the coupons failed to arrive, I found myself in the position where I could not have met all my outstanding notes in full. Not only couldn't I pay the promised 50% return. But I couldn't even refund the principal at more than 75 cents on the dollar.

"What was I going to do? Proclaim my insolvency and face prosecution, or keep up the bluff and trust to luck. I kept up the bluff, hoping that I might eventually hit upon some workable plan to pay all my creditors in full. It never occurred to me to pocket all the ready cash and duck out. If I had, I wouldn't have been called the darn fool as many times as I have been.

Fortunately a darned fool had no occasion to be lonesome, anywhere. He generally finds plenty of company, just like I did, in the most unexpected places. That's why I managed to survive a few months longer.

In fact, one morning the postal inspectors paid me a call; one of the regular calls, I should say, because they had been in the habit of dropping in every now and then. The moment I saw them I could tell by their countenances that they had something up their sleeves and they had too. But that something might as well have been "arm-bands," for all the good it did them. However, their buoyancy put me on my guard.

"Mr. Ponzi," said one, "we have found that some of your statements cannot be reconciled with certain advices that we have received from the department."

"Which is equivalent to say that since you would not dispute the department, I must be a liar," I remarked.

"No, no," he hastened to assure me, "but we have come to hear what explanations you may have to offer."

"On what subject?" I asked.

"On the subject of your purchases of coupons," he replied. "Where do you buy them?"

"I am not telling that," I replied, refusing to commit myself, "I will merely say that they can be profitably bought in any country having a depreciated paper currency."

"For instance?" he insisted.

"For instance, Italy, France, Roumania, Greece, and so forth," I answered.

"Exactly," he said. "Now we have information that Italy, France and Roumania have withdrawn from the postal agreement and stopped the sale of coupons since March 31st."

"You are not telling me anything new," I retorted. "That information was sent out some time ago by your department to every postoffice and I have copies of the bulletin."

"Do you admit that coupons can no longer be purchased in those countries?" he asked, trying to pin me down.

"No, I cannot admit that," I answered. "I may admit, if that helps you that they are no longer for sale to the general public. But I have every reason to believe that my orders are not being turned down anywhere."

"If that is so, it is being done without the knowledge of those governments," he stated.

"Perhaps so," I agreed, "but that is no concern of mine. All that I am interested in is in getting them."

"Assuming that you may still obtain the coupons, how are you going to redeem them?" he inquired.

"The same as usual," I replied. "By presenting them at the post-office."

"But all postmasters have been instructed not to redeem coupons issued by those countries after March 31st," he maintained.

"What of it?" I rebutted. "If the coupons are still obtainable in those countries, regardless of all the regulations to the contrary, it would be an easy matter to have them stamped with a date prior to March 31st."

"Do you mean to say that you have connections with some postal officials who are disloyal to their governments?" he kept on, crowding me.

"I don't mean to say anything of the kind," I replied. "I am merely showing you how certain difficulties can be overcome. You may draw all the inferences you want."

Just then Al Ciullo came in the office. A friend. Fate had sent him. He did not know the two men talking with me were inspectors. He had no idea of what we were talking about.

"Charlie," he said, interrupting the conversation and handing me an envelope with about 300 international reply coupons. "I have just received this package of coupons from Italy."

I took them out of the envelope. Looked them over. And smiled. The two inspectors turned upon him like lightning.

"Where did you get them?" they asked him.

"I got them from my uncle in Italy," Ciullo replied.

"Who is he?" the inspector pressed on.

"He is a postmaster in a small town," Ciullo told him.

"When did you receive them?" the inspector fired at him.

"This morning," he stated.

"How?" the inspector went on.

"By mail," said Ciullo.

"Let's see the envelope," the inspector asked me.

I handed the envelope to him. He examined it carefully. Looked at the cancellation mark. It bore a May date.

"Well," I told the inspector with a bit of sarcasm, "I hope you are satisfied now that somebody else besides myself can buy coupons in Italy. Even if it is two months since March 31st."

"I'll be damned!" said the inspector departing with his running mate. He had seen enough to give him a fit.

Regardless of the difficulties that had developed, I did not abandon all together the idea of buying coupons. I knew human nature. I knew the weak point of public officials. I knew that money talks everywhere. And I proposed to make it talk.

The president of the Hanover Trust Company was a sort of unofficial representative of the Polish government. Whether actually or allegedly, I don't know. But he seemed familiar with events in Poland. And in a position to approach officials of that country. In the course of a conversation, he mentioned to me that Poland was trying to negotiate a $10,000,000 loan in the United States.

That, gave me an idea.

"Henry," I said to him, "this is your chance of a life-time to clean up some real dough."

"How?" he asked.

"Get in touch with the right parties in Poland," I told him, "and fix it so that they sell me enough international reply coupons for the equivalent, in their own money, of $10,000,000. I can give them the ten millions inside of two weeks. And I am willing to take delivery of the coupons over a period of six months."

"I may put the proposition to them," he agreed. "But I don't know what success I'll have."

"Listen, Henry," I said to him. "Public officials are very much the same the world over. Go to it. I am no piker."

While he undertook to cover Warsaw's end of the deal, I took care of the Washington's end. It was as important to redeem the coupons as it was to buy them. But the deal involved such a large number that only the Postmaster General himself could handle it.

I instructed my attorney to get in touch with him. He did so. Through Congressman Peter Tague. And in a few days the congressman wired back that the Postmaster General Burleson had pronounced the transaction entirely legal. Not only that, but the congressman, who I met shortly after in the Parker House, told me that Postmaster General Burleson had also agreed to redeem $1,000,000 worth of those coupons a month.