Raising the Wind

1895

I must now make a disgraceful confession. Among the letters in the postmaster's office were a number from firms in England and America which deal in postage stamps, some of which had inclosed considerable sums of money. The treasury was in dire straits, and a sum of £200 was well worth a sacrifice of self respect. We determined to change our stamps. The change could be effected for 40, and the sale of our old stamps, thus enhanced in value, would bring us in £200 or more.

I have since heard that a year later the government of Costa Rica descended to the same disreputable expedient, but believe I may fairly take to myself the discredit of being the first to devise the scheme. — "The Discoveries Of a Prime Minister," Basil Thomson.


One Thing She Can Drive

They met by a strange chance.
"A woman is driving me," moaned the Horse.
"I know just how uncertain you feel," sighed the Nail.
"I don't understand you at all," observed the Bargain frankly.
The Horse and the Nail contemplated the Bargain enviously. — Detroit Tribune.


New Shoes

New shoes can be worn with as much ease as old ones if they are stuffed to the shape of the foot with cloth or paper and patiently sponged with hot water, or if they pinch in some particular spot a cloth wet with hot water and laid across the place will cause immediate and lasting relief. — New York Dispatch.

Ran Six Cents To 15 Millions In Few Months

1920

Charles Ponzi, "Coupon Wizard," Defies U. S. to Learn Secret of His Alleged Legal Scheme.

1920

BOSTON, Mass. — "It is my secret. Let the United States find it out if it can."

This is the challenge of Charles Ponzi, the "coupon wizard," who leaped into international fame over night when the world discovered that he had run 6 cents into $15,000,000 in less than a year by an astoundingly simple — yet astoundingly mysterious — scheme. Ponzi insists that his business is perfectly legal and so far has paid off every investor who demanded his money back. He declares that he has neither fear of a financial crash or of punishment.

Ponzi's remarkable business is, so far as is known, based on the use of the international reply coupon, authorized under the international postal agreement as the medium for taking advantage of the difference in rates of exchange.

"I simply buy international coupons," explained Ponzi to the district attorney. "They are exchangeable into stamps and I take care to buy them where the rates of exchange are such that $1 of American currency is really worth $4 or more in the native currency. I therefore get $3 clear on the transaction and can well afford to pay back the original $1 and 50 cents additional as interest to the investor. My margin of profit is enormous, but I have the system and the offices abroad. The investor's margin of profit is tremendous in proportion and he has no responsibility and is entirely certain of his money.

Hit on Scheme Year Ago.

"I hit upon the scheme just a year ago in August, when I thought of issuing an export publication on a small scale. I wrote to a friend in Spain regarding it, and in reply received an international coupon, which I was to exchange for stamps to send a copy of the publication to my friend.

"The coupon cost about 1 cent in United States money in Spain and I could get 6 cents in stamps for it here.

"My secret is how I cash the coupons," says Ponzi. "I do not tell it. Let the United States Government find it out if it can. I do not think that it can."

Will Make $40,000,000 More?

The "wizard" asserted that he intended to open an office in New York city immediately and probably in other big cities. He coupled this declaration with the assertion that "there is thirty or forty million dollars more, to be made out of his scheme, but it must be made quickly." And since difficulties have arisen here he says he will have to go outside New England for the money he needs to use. He said he "feared the postal conference in October would formulate an effective check" to his operations.

All day long clerks in the modest office of Ponzi poured cash into the hands of customers who had lost faith in his international postal exchange scheme.

It was after 4 o'clock when one of Ponzi's attaches stuck his head out the door and shouted inquiringly to the crowd:

"Anybody else today?"

Nobody answered and no one else entered the open door. The door was shut and locked.

Paid Back $500,000 in Day.

It is estimated the total returned to clients in one day was in the neighborhood of half a million dollars. The cash was brought from the banks by the "wizard's" employes, under heavy guard, and a huge businesslike revolver rested at the elbow of one of the clerks who "stood guard" over the paying-teller.

Ponzi's secretary, Miss Lucy Meli, says the office has paid back $2,000,000 to investors this week. About forty per cent of this amount, however, was on accounts that had "matured," meaning that the customers were returned their own money and the promised 50 per cent profit agreed within ninety days, but which had been paid steadily in forty-five days.

In spite of close search the nature of Ponzi's business remains a secret to public officials, and he stoutly maintains that he will continue. While he is busy paying off an army of claimants the authorities are searching the files of the telegraph offices to determine if Ponzi has cabled orders of purchase or sale to representatives in Continental Europe.

Scheme May Soon Be Known.

Uncle Sam has set in motion every Federal governmental investigating agency.

Uncle Sam has called to work with him the United States embassies and consulates in Europe and in all the countries that are included in the international postal agreement and deal in international reply coupons.

"I came to this country seventeen years ago and landed in Boston with $2.50. My family is a fine old Italian family and I am university educated.

"Landing in Boston with such a small sum of money, I was downcast I didn't have a friend in the city nor a relative in the country, so I went on where my ticket carried me — to New York. There I did manual labor. Then I moved on to Pittsburgh in search of some friends who I believed were there. I didn't find them, so I went on from place to place, working now as a clerk in a business office, next as a grocery clerk and often at more menial tasks.

"Back to Boston I came again in January, 1917. I went to work for the J. R. Poole Company, merchant brokers. My salary was $16 a week. It might interest you to know that I own the company today, and intend to incorporate it for $10,000,000.

Insists Business Is Legal.

"I insist that my business is entirely legal, even tho it may not be strictly ethical. It will continue as long as there is a marked difference in the rates of exchange among the governments of the world. As the rates 'close up' the interest I will be able to pay will decline. But there cannot be any loss, I insist, for I have provided against loss to investors by the creation of a large reserve in stamps and foreign currency.

"My operations are now going on in nine different countries. None of the foreign stamps are now being redeemed in this country, nor do I intend to do so.

I buy international coupons in immense quantities — by hundreds of thousands, by millions — and exchange them for postage stamps.

"I looked around for some connections here and abroad. I explained my plan to a certain party and he was interested. I had a one-room office where I began doing a little exporting business on a small scale, and there, with a few thousand dollars, I began the present concern, the Securities Exchange Company.

Began Last December.

"We really began operations in December. I began as I am still doing; I gave investors a note guaranteeing payment with 50 per cent interest in ninety days. However, I made all payments in forty-five days. I was safe in giving the notes and I am safe in giving them now, for I have built up a reserve.

"Within a month the few thousands had grown to nearly ten thousand dollars. Persons who received their first profits immediately told their friends, and they told their friends — and then the deluge. Everybody wanted us to take their money.

"When the volume of business increased I took three rooms in the building and recently I acquired a large interest in a trust company — really a controlling interest.

"The peak of my business was reached in May, just two months ago. Now my receipts are about two hundred and fifty thousand dollars a day in the Boston offices, and a total of $250,000 daily thru branches in other cities. What I pay out varies from day to day. I have just given my cashier in Boston $200,000 with which to make tomorrow's payments."

—The Saturday Blade, Chicago, Aug. 7, 1920, p. 1-2.

Note: Unfortunately my copy of this newspaper is missing a couple sections, interesting bits, and I can't figure out entirely what they are. After the paragraph where Ponzi says, "Let the United States Government find it out if it can. I do not think that it can," there is a paragraph, and take into consideration the words of nearly an entire line are missing, "While refraining from giving any clew —— [tran]saction, Ponzi —— said. —— is all very simple. First, the psychology of greed. Then, the psychology of fear. Men and women are children a few years older." Drop down to the paragraph that has the sentence, "Uncle Sam has called to work with him the United States embassies," etc. There is an entire line missing. But the sentence starts off, "It will —————- is a veritable bonanza king or something else." Then that leads into all the Ponzi quotes.

No More Stamp Taxes.

1916

Washington, Sept. 6. — Elimination of all stamp taxes in the emergency revenue bill, seriously objected to by the House, was agreed upon late tonight by the conference committee, House conferees yielding in exchange for this concession their demand for restoration of a tax on refiners of copper.

To make up for the loss of about $5,000,000 revenue in sacrificing the stamp taxes, the conferees are expected to agree to a suggestion of House members that the net profit tax of manufacturers of munitions of war be increased from 10 to 12 1-2 per cent.

Sacrifice of the proposed stamp taxes gets the revenue bill back in accord with the original determination of the administration leader and the House ways and means committee to repeal all those provisions in the existing war revenue law which were generally regarded as annoyances by the public. The proposed stamp taxes which are now eliminated included bonds, debentures and certificates of stock, agreement to sale, conveyances, warehouse and custom house receipts foreign steamship tickets and Pullman car tickets.

—The Fryeburg Post, Fryeburg, Maine, Sept. 12, 1916, p. 6.

Postage Stamps In Winter Garb Oct. 1.

1916

HEAVY COATS FOR WASHINGTON AND FRANKLIN.

George and Ben to Doff Summer Attire and Appear Well Clad for Cold Season.

Some people prefer to change to their winter things later, but on October 1 George Washington and Ben Franklin will put on their heavy gum coats. It's their wish and the Government respects it.

Whether the first frosts of winter come in September or November, these two old sticklers for convention put on their heavy gums Oct. 1, and keep them on until the 1st of next May. If they didn't they would never be able to stand the climate, the Government stamp doctors say.

The next time the man who somehow "never seems able to keep any stamps of his own" asks for the loan of a 2-cent pale-pink lithograph of George Washington you will be absolutely within your rights as an American citizen If you reply:

"Sure thing. How will you have George — summer or winter style?"

The same also applies to that other popular favorite, Ben Franklin, whose profile now appears almost as many times as George's on the all-steel art work turned out by the Government presses.

If your query does not stump the perennial stamp-borrower he will be one of the very few American citizens who know that George and Ben are being turned out in two styles — to catch the winter and summer trade — but with no tempting reductions in prices. A 2-cent stamp still costs 2 cents.

Educated people are supposed to know that in spring a young man's fancy lightly turns somewhere or other; that the hardest-shelled crabs turn soft-shelled, and that one's heavy winter flannels are put away in camphor and one's light summer affairs are made ready for one to put on. But ever so many well educated and patriotic persons are totally ignorant of the fact that George and Ben are built on the crab pattern and need a change of wearing apparel in the hot sultry days.

Notables In Summer Attire.

Just at present George and Ben are wearing their summer weight clothing. They made the change along about May 1, when the warm days set in and the crabs began to shed their armor plate and shop windows were decked out in the latest things in hot weather toggery. George and Ben suffer terribly from the heat. Keep them in their winter things beyond the May 1 limit and Whole sheets of Georges and Bens will curl up and crack and stick to the furniture and otherwise make eloquent protest against the cruel disregard of their feelings and the dictates of fashion.

Kind-hearted souls in the Postoffice Department down in Washington were the first to discover this little human failing on the part of George and Ben. Gum experts were called into consultation and the problem was soon solved. What George and Ben needed was a change of glue. And so, you buy — or borrow — your Georges and Bens done summer style these days, and you will continue to do so until Oct. 1.

No Change in Flavor.

The difference between the summer and winter coats worn by George and Ben is one entirely of weight. Suggestions that the flavor of the gum be varied also, so as to appeal more to the taste of those who go in for crushed fruit and chocolate concoctions in the warm days, have never been seriously considered by the attending physicians of the Postoffice Department. Their concern is solely with the general well-being of George and Ben.

As one of the visiting nurses in the cashier's department of the old postoffice explains it, George and Ben have become inordinately fussy in their old age and won't stick to their jobs — or to letters — unless their whims are attended to.

"You see," he said, "the winter gum is so heavy it soaks up all the moisture in summer and stamps curl up and crack and spoil on our hands. The summer gum, being lighter, keeps better during the hot season and sticks just as well. The stamps don't curl up and there is less waste. But this light gum won't do in cold weather. It dries up and the stamps won't stick, no matter how hard you lick them. So we go back to the winterweight gums."

Winter Weights Being Made.

All of which works out very well here in Chicago, where Ben and George are in such great demand that the postoffice officials have to send to Washington every week or ten days for a fresh supply. The Government bureau of engraving and printing is already beginning to manufacture winterweight Bens and Georges, and along toward the end of September, when the local office calls for more, it will get its Bens and Georges with their new heavyweight gum coats.

But out in the rural districts the law of demand and supply works less smoothly and there is intense suffering for Ben and George when the cold snap comes. In these places supplies of Bens and Georges are ordered at longer intervals — enough to last three or four months sometimes — and it frequently happens that Oct. 1 finds the supply still going strong. Thus Ben and George are obliged to enter upon their winter labors wearing their last summer's garments, which is tough on Ben and George, to say nothing of the home folks who have to do the licking.

—The Saturday Blade, Chicago, Sept. 16, 1916, p. 9.

Note: It seems odd, but 'post office' was spelled as one word back in those days.