Bubble, Bubble No— Toil, No Trouble


Ponzi was born in Parma in 1882. His family was upper-class and his father a general in the Italian army (or so he said). As a boy he attended a boarding school founded by Napoleon’s ex-empress, Marie Louise. When he was eighteen, he became a student at the University of Rome, but spent more time in cafés and at theatres and fashionable parties than in libraries and at lectures. In November, 1903, after three years of this gay nocturnal existence, his Roman uncle sent him to America with a oneway ticket and a thousand lire (then worth about two hundred dollars).

Having lost all but two and a half dollars to a cardsharp on the voyage over, Ponzi wandered from Boston to Pittsburgh, New York, Providence, Montreal, and various points in the South, passing fourteen years in such employments (when he was working at all) as dishwasher, waiter, clothes presser, shop clerk, and Italian interpreter. His English had become almost glib by the time he turned up in Massachusetts again in 1917.


In Boston he took a job typing and answering foreign mail for the J. R. Poole Company, merchant brokers, at sixteen dollars a week. On February 4, 1918, he married Rose Marie Guecco of Somerville, a secondgeneration Italian-American half his age, the daughter of one of the Guecco brothers, fruit dealers in Boston’s Italian North End. He quit his job with Poole in September to go to work for his father-in-law. But in January of 1919 the fruit firm went bankrupt, with liabilities of eleven thousand dollars and assets of six thousand dollars. Ponzi tried to convince the Gueccos that if he could have the use of the six-thousanddollar assets, with his knowledge of importing and exporting he could double the money and more than pay all their debts in a year. The dubious Gueccos refused. Ponzi at that time had a little upstairs back room in the School Street building of the Tremont Trust Company, where he liked to tuck himself away and scheme his schemes. There it was, in August, 1919, that he received his letter from Spain and evolved his Great Idea.

As the summer of 1920 wore on, the lines to School Street lengthened. The persistent and impatient crowd that blocked off School Street traffic all day long was made up of people from the city fringes—the Italian North End, the lodging-house South End, and the small suburbs. Periodically Ponzi distributed free coffee and doughnuts to them. Whenever he saw a pregnant woman or an elderly one in the hot sun, he would take her inside ahead of the others through a side door. Tucked visibly behind the twin-pointed handkerchief in his coat pocket he carried a certified check for a million dollars. With that sum, he told people, he could live in all the comfort he wanted for the rest of his life. Anything he got above that million he intended to use to “do good in the world.” The money now came into his office so fast that it filled all the desk drawers and spilled over into a dozen wastebaskets. Sixteen clerks, hired to do nothing but sort out the cash, tallied it and stacked it in closets until it reached the ceiling. When Police Commissioner Edwin U. Curtis sent three inspectors down to Twenty-seven School Street to investigate, Ponzi talked two of them into buying his notes. Others were investigating, too: the chief post-office inspector, state and federal attorneys, and Suffolk County’s District Attorney Joseph C. Pelletier, who was later disbarred for his part in a blackmailing scandal. Ponzi welcomed them all, and none could see anything illegal in the Security and Exchange Company.


Ponzi now brought his mother, Imelda, over from Italy and provided her with a French maid. As his finances expanded he bought into the Hanover Trust Company, where he had first deposited his money, and became a director. As an ironic reminder of his clerical days he took over the J. R. Poole Company. He invited a group of New York financiers to the Copley Plaza at his expense and conferred with them about his newest plan to organize a $200million corporation with a chain of “profit-sharing banks” in which depositors would share with stockholders in the net profits. His earnestness was convincing, contagious. A highly respected judge, Frank Leveroni of the Boston juvenile court, became his lawyer. With what would seem redundancy he hired a long-time Boston advertising man, William H. McMasters, as a publicity agent.

The bubble expanded, glittering, iridescent, irresistible now even to the covetous from State Street and Beacon Hill. Some plungers put down as much as $25,000, though most people bought a few hundred dollars’ worth of Ponzi notes in return for handfuls of small bills. By the last week in July Ponzi was taking in several hundred thousand dollars a day. His name was in headlines in newspapers all over the country; he became something of a national hero. Newsreel cameramen flocked to his Lexington home and recorded him strolling across the lawn with his wife and his mother. There were armed guards at the mansion entrances and rumors of millions locked away in vaults in the cellar.