Photograph of an oil portrait of a teenage Rose Gnecco.
Albin O. Kuhn Library & Gallery, University of Maryland, Baltimore County
CHAPTER SIX
“AN AMERICAN BEAUTY”
In 1915, two years before Ponzi’s return to Boston, construction began on a mansion that came to symbolize the spoils within the reach of poor men who were bursting with ambition, gifted with charisma, and unburdened by scruples.
The Georgian Revival manor would be the home of Boston’s mayor, James Michael Curley, an up-from-the-slums force of nature who viewed politics as a sure path to wealth and power. Clad in brick and roofed in slate, the house sat on a two-acre lot facing a park that was part of Frederick Law Olmsted’s “emerald necklace” around Boston. Past the park was Jamaica Pond, where hand-holding couples and raucous families skated in winter and picnicked in summer. The location was within the borders of Boston yet seemed light-years from the inner city.
Even more magnificent than the site was the house itself: more than twenty-one rooms, including an oval dining room paneled in mahogany, fireplaces framed in white Italian marble, fixtures plated with gold, and a curving staircase lit by a two-story chandelier bought from the Austro-Hungarian embassy in Washington. The only signs of the owner’s humble beginnings were the festive shamrock cutouts in all thirty of the white shutters, placed there as much to annoy the Yankee neighbors as to display Hibernian pride.
Curley was born in 1874 in Boston’s poor Roxbury section. Fatherless by age ten, imbued with resentment of the Brahmins, and blessed with prodigious energy, Curley devoted himself to the punch-in-the-nose, pat-on-the-back world of Boston Irish politics. At twenty-six he won election to the Boston Common Council, a raucous body that was the stepping-stone for every young would-be Democratic politico in the city. He soon became boss of Roxbury’s Ward 17, which along with his council seat gave him the power to barter jobs and other goodies for loyalty and votes. He launched a political organization called the Tammany Club, defiantly named for the New York machine. Curley insisted it was a tribute not to the New Yorkers’ corruption but to their commitment to constituents in the absence of government aid programs. But the Boston Tammany Club soon emulated its New York cousin in graft and scandal, with Curley larding the public payroll and dipping his fingers in every slice of municipal pie. The club’s mascot was a crouching tiger. The public treasury was its prey.
To raise money for its activities, the Tammany Club sponsored all sorts of promotions at its summer festivals, known as “powwows.” Men would struggle to catch greased pigs for a prize, vie for the title of “ugliest man,” and pay ten cents to take an ax to a piano, with a five-dollar reward to the man with the mightiest swing. Only a few years had passed since Massachusetts was atwitter over the trial of Fall River’s Lizzie Borden, so the ax-swinging spectacle was certain to send shivers down spines. Speakers at the powwows included local celebrities, including Curley’s pal John L. Sullivan, the former heavyweight champion known as “the Boston Strong Boy.” In spirit, Curley borrowed Sullivan’s familiar cry, “I can lick any man!”
From the Common Council, Curley rose to a seat in the Massachusetts legislature. But in 1903 his rise was nearly derailed when he became the first member of that body arrested for a crime. He and a fellow leader of the Tammany Club had taken civil service exams for two Irish immigrants who wanted jobs as letter carriers. Curley and his cohort were charged with “combining, conspiring, confederating and agreeing together to defraud the United States.” The maximum penalty for each was two years in prison and a ten-thousand-dollar fine. Curley admitted to the scheme in the face of overwhelming evidence. He was convicted of the charges and sentenced to two months in jail.
Refusing to slink away quietly, he appealed the conviction and sought a seat on the Boston Board of Aldermen, a step up from the state legislature in the pecking order of Massachusetts politics. Incredibly, he won. The state supreme court ultimately declined to hear his appeal, and Curley was sent to the Charles Street Jail, where his friend the warden made sure he had an extra-large cell, good food, salt baths, a steady stream of visitors, and a ready supply of books.
Instead of destroying his career, the jail term invigorated it. He was renominated as the Democratic candidate for alderman while still behind bars, then boasted of his criminal record in a campaign slogan that appealed to the us-against-authority culture of the famine Irish: “He did it for a friend!” Soon he was back to his old tricks—a few months after his release Curley was accused of selling his aldermanic vote to a shipping company that wanted to build a rail line through the streets of East Boston. A grand jury refused to issue indictments, but that luck would not hold. In 1907 Curley was indicted for pressuring New England Telephone and Telegraph to hire phantom workers as an apparent cover for the payment of bribes. Fearing that his ambitions would not survive a second conviction, Curley hired lawyer Daniel Coakley, a thoroughly unscrupulous ex-reporter and boxing referee who relied more heavily on blackmail than legal briefs. Coakley worked his magic, and the indictments were dropped.
In 1909 Curley rose to the newly formed Boston City Council, which replaced the Board of Aldermen as well as the Common Council. From that perch he won a seat in the U.S. Congress in 1910, was reelected two years later, and set his sights on the plum job of Boston mayor. His main obstacle was a fellow Irish-American: John “Honey Fitz” Fitzgerald, who was enjoying his second term as mayor and considering running for a third. Fitzgerald had come up in a fashion similar to Curley’s, from ward politics to the Boston Common Council to the Massachusetts senate to Congress, where he’d served three terms and won a reputation as a staunch supporter of immigrants. His nickname was a tribute to his honeyed rendition of “Sweet Adeline” at every public event save wakes. Fitzgerald’s diminutive stature and acquisitive nature earned him another sobriquet, “the Little Napoleon.”
By 1913, Curley was eager to become mayor—the job paid better than being a congressman, and there were more opportunities for pocket lining. But he loathed the idea of having to face a sitting incumbent Democrat with a similar following. Once again the lawyer Dan Coakley proved useful. Coakley shared with Curley a scandalous piece of information about Fitzgerald: The mayor had made a spectacle of himself with a buxom roadhouse gal named Elizabeth “Toodles” Ryan. Curley had just what he needed to squeeze the family man Fitzgerald from the race. A letter soon arrived at Fitzgerald’s house threatening exposure of his public flirtation with Toodles. Fearing for his reputation, Fitzgerald ended his candidacy, giving Curley the opening he needed to take control of Boston City Hall. The episode was eventually memorialized in a classic bit of Boston doggerel: “A whisky glass and Toodles’ ass made a horse’s ass out of Honey Fitz.” Fitzgerald’s only consolation was the wedding soon after of his beloved eldest daughter, Rose, to Joseph P. Kennedy, the son of an Irish politico-cum-saloon-keeper-cum-rumrunner. Rose would pay special tribute to her father by naming her second son after him: John Fitzgerald Kennedy.
Curley claimed the mayor’s office in the name of honest government, ironically suggesting that he was just the man to clean up the mess of graft, patronage, and incompetence that Fitzgerald had left behind. At first, he seemed true to his word, but soon he returned to form: ethnic warfare, intimidation, and a level of graft unparalleled in Boston history. The nadir was the palace he was building on the parkway.
The big question was how he could possibly afford such a mansion. Curley had no declared savings, yet he had also recently purchased a seaside summer home in Hull. His mayoral salary of ten thousand dollars was not enough to pay for the land, much less the building and its sumptuous furnishings.
An investigation by the city Finance Commission led to a recommendation that Curley face prosecution for an array of criminal charges. But action depended on the local district attorney, Joseph C. Pelletier, a political ally of Curley’s who, years earlier, had rejected calls to prosecute him for the New England Telephone and Telegraph bribe allegations. Beyond their political ties, Curley shared with Pelletier a link to Dan Coakley: Coakley had served as Pelletier’s campaign manager, and Pelletier and Coakley were in league on a sexual blackmail game. At Coakley’s urging, Pelletier rejected the call for prosecution. That was how it worked. Once again Curley had caught a break.
Still, Curley had to answer to voters if he wanted to win a second term in 1917. When graft was doled out in small doses or tucked in secret bank accounts, it could be hidden, denied, or downplayed. It surprised no one in Boston when a man with a hand on the tiller of government had his other hand in the government till. But the mansion was too much, a ten-thousand-square-foot gorilla climbing to the roof of Curley’s City Hall with his future in its grasp.
The newspapers had a field day. Edwin Grozier’s Post was especially disgusted with Curley, despite the paper’s Democratic leanings and the fact that Grozier actually agreed with the mayor on a number of key issues. In his race for reelection, Curley ran not only against his opponents but against the Post, at one point holding a rally on Washington Street across from the offices of “that foul sheet.” Pretending to be a David among Goliaths, he shouted, “With every corrupt boss and rotten newspaper against me, with all of these powers of rottenness and corruption against me, they can’t beat Jim Curley.”
Awash in scandal and distrust, and with old enemies like Honey Fitz working behind the scenes against him, Curley persevered in his bid for a second mayoral term. The Post endorsed Congressman James A. Gallivan of South Boston for mayor, enabling Gallivan to take a big enough chunk of Curley’s core constituency to deny him reelection. With Gallivan and Curley splitting the Irish vote, the winner was Andrew J. Peters, a thoroughly forgettable Yankee. Peters’s only lasting mark on the city would be a dark one: his debauchery with an eleven-year-old girl who had been placed in his care.
From the moment Curley lost the 1917 election, no one doubted he would engineer a return to the political stage. But the lesson was clear, and it applied to every ambitious man in the city: Boston would tolerate, even celebrate, a rogue who made his own rules and lined his own pockets, as long as he knew the limits. If he grew too bold or too flashy, or if his spoils became too big to ignore, he would be made to pay.
Ponzi arrived in Boston just in time to watch the Curley house scandal play itself out in the newspapers and the streets. Ponzi found himself rooting for Curley, whom he admired for his moxie and sense of style, and whom he considered a “likeable chap.”
While the mayor was fighting for his political life, Ponzi went dutifully to work as a clerk and stenographer at the J. R. Poole Company, named for its owner, John R. Poole. Ponzi’s workplace was on South Market Street, in the shadow of the new Custom House Tower, a thirty-story, peaked-roof wonder of Italian renaissance architecture that was Boston’s first skyscraper. All around the area were bright colors and the wafting smells from the stalls of produce vendors, dairy merchants, and fishmongers. On his way to work Ponzi could hear the screams of gulls and see the masts of ships along Central and Long Wharfs. If he listened hard enough, he might hear his mother tongue carried on the wind from T Wharf, where the Italian fishermen congregated. A few steps away was Faneuil Hall, the Revolutionary War meeting place where Sam Adams had inflamed his compatriots upstairs and merchants sold their wares in a marketplace downstairs.
For months Ponzi toiled to keep track of Poole’s extensive foreign businesses, only to be disappointed by his pay of sixteen dollars a week. At first, Ponzi considered the job a gamble in the futures market—the company was doing well and lavished its employees with promises of eventual rewards. He won a raise to twenty-five dollars a week, but still he struggled. “By starving one day and eating a little less the next one,” he complained, “we employees always managed, more or less, to keep handsomely in debt.”
His only consolation was his certainty that he had established a firm foothold on the ladder up from manual labor. He had painted his last sign, washed his last dish, begged his last bowl of macaroni. Never again would he seek a menial job. But he was far from satisfied. It remained a long, unsteady climb to the top rung, and at thirty-five Ponzi was impatient about getting there. His impatience grew exponentially at the end of May 1917.
On Memorial Day weekend, Ponzi accompanied his landlady, Myrtle Lombard, to a Boston Pops concert. Ponzi played mandolin and considered himself an aficionado of fine music, and Mrs. Lombard taught piano to neighborhood children. Afterward, music still in their ears, they made their way to the Boylston Street station to catch an electric streetcar to Mrs. Lombard’s house on Highland Avenue in nearby Somerville, home to a growing colony of Italian immigrants.
As midnight approached, they stood on the platform waiting for the train. Looking around at the postconcert crowd, Ponzi noticed a lovely young woman. She was tiny, at four foot eleven just the right size for him, with rounded curves that defied the stick-figure fashions of the day. She had luxurious brown hair, lively dark eyes, and skin as smooth as Gianduja cream. An oil portrait painted of her as a teenager portrayed her in Mona Lisa–like pose, with a faint smile and a billowing silk blouse pushed low on her shoulders. In the eyes of the painter, a Somerville neighbor, Rose bore a striking resemblance to Lillian Gish, the ethereal beauty of silent film.
Ponzi watched her intently, ignoring the young man who was her escort. Eventually Mrs. Lombard noticed that her normally talkative tenant had dropped his end of the conversation. She searched for the source of Ponzi’s distraction.
“Why, there is Rose!” Mrs. Lombard said, spotting the young woman. “I want you to meet her, Mr. Ponzi. She is one of my pupils.”
Mrs. Lombard led a delighted Ponzi down the platform and made the introductions. Rose Gnecco was twenty-one, the youngest of six children of a fruit merchant and a homemaker who had emigrated from Genoa. Born in Boston, she had spent two years in high school but dropped out to take a job as a stenographer and bookkeeper for a Somerville contractor. Rose liked the work, but her fondest dream was to fill a small, happy home with a husband and children.
“How do you do?” she asked Ponzi in a voice he found as sweet as her looks.
An accomplished flirt, normally quick with a quip, Ponzi could do little more than repeat the phrase back to her. The streetcar arrived, and Rose and her escort took a seat a few rows ahead of Ponzi and his landlady. As the trolley clacked and rattled along the steel rails embedded in the street, Ponzi stared at the back of Rose’s head. He spent the entire twenty-minute ride that way, his eyes locked on her curls. He would remember the moment his entire life: “Time, space, the world, and everything else around me, except that girl, had ceased to exist.”
When they got home, Mrs. Lombard asked Ponzi what he thought of Rose.
“I think she is wonderful,” he replied. “I am going to marry her.”
“Why, Mr. Ponzi!” Mrs. Lombard said. “You must be crazy!”
A few days later, Ponzi telephoned Rose to invite her to a moving-picture show. His failure to ask her father’s permission was a breach of accepted courting etiquette, but she had a mind of her own, and she was attracted to the older, worldly suitor. Rose accepted. That night, they sat side by side in the darkened theater, and Ponzi knew he never wanted to be farther apart. He told her he wanted to marry her. She laughed.
But Ponzi was serious. After so many rootless years, he was ready to settle down. Rose fit his every dream of a loving, beautiful wife, and he pursued her as ardently as he had money and success. Nearly every day he sent sodas or flowers to her office, and whenever she accepted his invitations he would treat her to a night at the movies or the symphony. If she begged off by saying she was taking her nephews and nieces to the beach at Nantasket, Ponzi would show up unannounced on the ferry. He was relentless, and she relented. He told her about his boyhood in Italy and his adventures in the United States, though he left out his years in prison. Whenever he described his activities during that period, he said only that he had been involved in “investigations.” At times he would suggest mysteriously that he had been working on behalf of the Italian government.
Not long after, Ponzi’s immediate supervisor died and he was promoted to a position that doubled his salary to fifty dollars a week. Flush with his new job, he felt ready to make good on the vow he’d made the night he’d met Rose. A glistening, full-carat stone in a Tiffany setting would have cost perhaps three hundred dollars, but that was out of his league. So he bought what amounted to a diamond chip. This time when he told Rose he wanted to marry her, she did not laugh. She accepted the ring.
During their engagement, Rose received a letter from Ponzi’s mother, welcoming her to the family and sharing some difficult news. Imelde Ponzi suspected her son would not tell his bride-to-be all the stories of his past, and Imelde wanted to be sure Rose knew that her betrothed had spent time in prison. The letter explained the cases in the same innocent light that Ponzi had used when describing them to his mother—he took blame for the forgery to spare the Zarossi family, and he was duped into pleading guilty to the immigrant-smuggling charge. Rose accepted her mother-in-law’s explanations and admired Ponzi even more for his chivalry toward Zarossi and the Italian immigrants. It fit perfectly in her mind with his donation of skin to Pearl Gossett, a story she had heard from Ponzi himself. At Imelde’s suggestion, Rose did not tell Ponzi that she knew of his prison past. Both women believed it would damage his ego if he thought Rose viewed him as an ex-convict.
On February 4, 1918, Rose Maria Gnecco and Charles Ponzi—he had dropped Carlo altogether—stood before the marble tabernacle inside the basement sanctuary of Saint Anthony’s Church on Vine Street, in the heart of Somerville’s Italian district. As rays of winter sunlight angled through ground-level stained-glass windows, the Reverend Nazareno Properzi pronounced them husband and wife. Rose’s sister Theresa was her maid of honor, and Ponzi’s friend Lawrence Avanzino, a grocer, stood as best man. The wooden church pews were filled with Gneccos, extended family members, and friends. Ponzi’s joy was tinged only by his mother’s absence: He could not afford to bring her over from Italy.
The newlyweds moved into a tidy five-room apartment a few miles from the church, near Tufts College, on tree-lined Powder House Boulevard. Their apartment was the upstairs half of a two-family house owned by Anders Larsen, a Danish immigrant factory worker and his wife, Karen, who lived on the first floor. Ponzi leapt happily into married life—the devil-may-care boy who’d gambled and drunk away his nights in Rome had matured into a devoted husband who hurried home after work at J. R. Poole. He made certain he and Rose were never apart for even a single night. Rose stopped working to care for their home, so there was little money for extras. They went to dinner and the theater once a week—it thrilled Rose to have a night out with no cooking—but most often they stayed home, ate a meal Rose prepared, and listened to music. Sometimes Ponzi would serenade his young wife by strumming a song on the mandolin. Afterward, Rose would gingerly put away her few prized belongings. One, a sterling silver ladle that was a wedding present from a coworker, was tucked into its chamois bag after every use.
Not for Rose the ways of the flapper girls who smoked cigarettes and haunted speakeasies. She believed in old-fashioned domesticity. All she wanted was a husband who loved her, children to love, and a home she could keep to her immaculate standards. She would be happy to stay in Somerville, near her parents, John and Maria Gnecco, and her large extended family of two sisters, three brothers, and assorted cousins, in-laws, nieces, and nephews. With Ponzi, she figured she was well on the way to fulfilling that modest dream.
The new Mr. and Mrs. Charles Ponzi rarely quarreled, but there was occasional tension over their different approaches to money and his endless puzzling over how to obtain it. Rose wanted them to be economical, living carefully within their means “in a cozy little place where we can pay our bills.” Ponzi, she despaired, “had the air and the tastes of the millionaire.”
Rose craved his attention, and grew peeved at times over her husband’s dedication to a stamp collection he had kept throughout his years of travel. For some men it would be an idle hobby, but it seemed more for Ponzi. He would pore for hours over the colorful little pieces of paper he had lovingly pressed into several books, as though the different denominations printed on their faces held a secret he was desperate to unlock. It was a fitting hobby for the son of a postman who had died young.
Ponzi’s uncommon interest in the foreign stamps might have had something to do with a recent conversation he had had with Roberto de Masellis, manager of the foreign banking department at the Fidelity Trust Company, where Ponzi kept an account. Ponzi had met de Masellis when he’d strolled into the bank one day to exchange some dollars for Italian lire. De Masellis, who had been deputy Italian consul to the United States in Naples before immigrating to Boston, was a loquacious authority on foreign exchange. Unprompted, he launched into a tutorial about fluctuations in the values of European currencies after the Great War. Looking at Ponzi through pince-nez glasses, his banker’s paunch restrained by his suit coat, de Masellis explained that Italian lire, once worth five to the dollar, had been so devalued that lately it took eighteen or twenty to equal one dollar. The wild fluctuations created the possibility of hugely profitable speculation for anyone smart, daring, and lucky enough to figure out a way to buy one currency for a low price and sell it when its value increased.
Rose, meanwhile, considered his persistent focus on the stamp books unwanted competition. “Charlie, for heaven’s sake drop it and talk to me,” Rose implored him. “What do you think I want to do after I’ve worked all day? Darn socks?”
Sometimes Ponzi would smile and put down the book, but more often he would gently tease her: “Well, why don’t you get hold of something that’s worth spending your own time with?”
“Oh well,” she would answer coyly, “if you don’t think my husband is important enough to spend some time with . . .” And they would laugh.
To anyone who would listen, Rose would boast about her good fortune in finding him. “When a man is always a gentleman to his wife,” she would say, “behind closed doors as well as in front of them, he’s absolutely certain to be, at heart, a good man.” Ponzi, she was sure, was just such a man.
Ponzi was equally delighted by his wife—“An American beauty. My Rose!” he called her. But the rest of his life left him unsatisfied. Ponzi wanted to drape Rose in finery, lavish her with servants, own a home big enough to get lost in. How could they start a family without financial security? “I want you to be able to throw away a hundred dollars,” he told Rose, though he must have known she could never be so extravagant. As they sat together at the small table in their kitchen, Ponzi outlined one intricate moneymaking scheme after another. Once she took a photograph of him sitting there, his feet up on the stove as though he already owned the world. He turned the camera on her and captured a more modest image, of Rose sitting demurely in her nightgown.
When he spun his web of dollar dreams, Rose listened politely. Then she would remind him again that she did not need money to be happy. He went on dreaming. But it was not only about the money, Rose knew. Her husband wanted the world to take notice of him, to celebrate his ingenuity and be dazzled by his charm.
Six months after they married, Ponzi got a chance to prove his financial acumen at Gnecco Brothers, the wholesale fruit business Rose’s father and uncle ran near Faneuil Hall. The company was failing, and John Gnecco turned to his bright new son-in-law for help. In September 1918, Ponzi quit J. R. Poole to work full-time on an effort to save Gnecco Brothers. He took the titles of president and treasurer and threw himself into the work, but his efforts proved fruitless. An end-of-the-year accounting showed that the company’s assets were worth about six thousand dollars and its liabilities were about eleven thousand. No one faulted Ponzi—the company had been in a hole before he’d gotten involved. But at the very end, Ponzi thought he could wrangle a dramatic way out. He appealed to the company’s lawyers to allow him to borrow the six thousand dollars in assets, promising he would use his knowledge of exporting to repay the money plus all the debt within a year. The lawyers said no, and on January 4, 1919, Gnecco Brothers went into bankruptcy.
The same month Ponzi quit J. R. Poole to join Gnecco Brothers, his home life came under stress when Rose’s mother died. As much as she loved her husband, Rose’s one question when they’d married had been whether she could love him as much as she did her mother. Rose went deep into mourning. Ponzi was pure patience. He lavished her with kindness. He gave her gifts and offered to buy whatever she wanted, though she asked for nothing. She already had what she wanted. Her love for him deepened.
After the collapse of Gnecco Brothers, Ponzi found himself without a job. He had no interest in going back to J. R. Poole or seeking similar work. He was “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.” He and Rose had saved enough to carry them for a while, and she had inherited some money from her mother, so Ponzi figured this was his chance to put his dreams into action.
He rented a windowless, one-room office over the Puritan Trust Company on Court Street at the edge of Scollay Square, the heart of Boston’s commercial district and home to risqué entertainment at the Old Howard Theater. Ponzi was hungry for the former and ignored the latter. Since his marriage, Ponzi had become immune to all temptations except those with dollar signs. He sat in the office’s lone armchair for hours on end, hunched over the rolltop desk scribbling figures on pads of paper. As hard as he tried, his endless reams of calculations did not add up to profits. So Ponzi tried to become something of a commodities broker. His chief mistake was trying to do so with someone else’s commodities.
On May 10, 1919, Ponzi was served with a warrant charging him with stealing 5,387 pounds of cheese valued at forty-five cents a pound. Two days later, he pleaded innocent in Boston Municipal Court. Then he received a rare stroke of good luck. The clerk who wrote out the warrant misspelled his surname, substituting a u for the n, listing the defendant as “Charles Pouzi.” The mistake frustrated efforts by authorities to follow up on the purloined cheese, and the case was continued several times before finally being dismissed for lack of prosecution. Ponzi never told his side of the story—he surely would have claimed it was an innocent misunderstanding.
Best of all, the collapse of the case meant it would not be revealed that he had already served two prison terms, a circumstance that might have triggered deportation proceedings. He had never moved to become an American citizen, knowing that his felony convictions might make him an undesirable alien. Also fortunate for Ponzi, the misspelling would make the cheese incident almost undetectable in the future if anyone tried to check into his background.
That same month, the Court Street office building changed hands, coming under ownership of the Tremont Trust Company, known throughout the city as “Simon Swig’s bank.” Swig was a leader of Boston’s Jewish community who treated Tremont Trust as a personal piggy bank. Swig fancied himself a political player, doing business with kingmaker and blackmailer Dan Coakley. To Ponzi, though, Swig was simply a landlord who wanted him out; Swig planned to renovate the building and charge higher rents.
Ponzi moved around the corner to a couple of dingy rooms on the fifth floor of 27 School Street, the Niles Building. It was unfurnished, so he went to Daniels & Wilson Furniture Company in the city’s increasingly Italian North End. Ponzi picked out $350 worth of used desks, chairs, a typewriter, filing cabinets, and a small rotary printing press called a Multigraph. He could not afford the full cost, so he struck a deal with the store’s owner, Joseph Daniels, a deceitful man who had anglicized his name from Giuseppe Danieli. Under their agreement, Ponzi would pay fifty dollars down and five dollars a month. Once the furnishings were in place, Ponzi had an optimistic sign painted on his office door: CHARLES PONZI, EXPORT & IMPORT. The world took no notice.
Ponzi’s original plan was to work on commission as an import-export agent, acting as a broker for domestic and international companies hoping to trade across borders. He thought he would be especially attractive to companies too small to hire such agents outright. Unfortunately, he had no contacts of his own at companies that might need his services. To attract business, Ponzi thought about printing circulars and sending blanket mailings to potential clients. But that would cost him a nickel per circular for domestic companies and eight cents each for international firms. Ponzi realized he would be wiped out by mailing fees before he collected his first commission. Instead, he decided to advertise in foreign trade magazines, but again he was stymied by the cost. That led to a new plan: He would start his own foreign trade publication, one whose huge circulation would allow him to charge lower advertising rates for budding entrepreneurs like him. Inspired, he had a new sign painted on his door—THE BOSTONIAN ADVERTISING & PUBLISHING COMPANY—and set about launching a publication he called the Trader’s Guide.
Ponzi devised an elaborate, impossibly ambitious business plan that envisioned his guide as a permanent reference book. He would distribute it in loose-leaf binders, to allow additional pages to be added as years passed and new editions were printed. To increase the guide’s reach, he intended to print it in English, French, Italian, German, Spanish, and Portuguese. The most audacious aspect of his plan was his imagined method for doubling circulation on a regular basis. First, he would mail 100,000 free copies of the Trader’s Guide to companies whose names he found in directories from the U.S. Bureau of Foreign and Domestic Commerce and the U.S. Consular Service. Six months later, he would mail those same companies an updated edition of the guide, while also sending the original mailing and the update to another 100,000 companies, also for free. Ponzi thought he could do this indefinitely, or at least until his mailing lists were exhausted. By then, he was sure, he would be rich.
The initial mailing, he thought, would cost him thirty-five cents a copy, or $35,000. To meet that cost, he would lard a two-hundred-page guide with 150 pages of advertising. The ads would cost $500 a page, with a $5,000 premium for the cover page, for a total imagined advertising income of $80,000. After expenses, he figured on a profit of at least $15,000 in the first six months. He expected his profits would double as many times as he doubled circulation.
Certain of success, he took larger quarters on the building’s second floor, Room 227, and hired two stenographers and a messenger boy. In his excitement, he began writing letters to acquaintances abroad, making wonderful claims for his soon-to-be-published guide and seeking to interest them in buying or selling ads and writing articles.
Beyond the mountainous logistical challenges of selling so much advertising and producing fifty pages of editorial content of interest to exporters and importers, Ponzi was fast exhausting his limited money supply. He tried to interest investors in purchasing a half interest in the guide for five thousand dollars—a steal if it were possible to yield even a fraction of his anticipated profits—but found no takers. By summer 1919 he was running low on cash and options. Certain he was on the verge of greatness, Ponzi walked around the corner from his office to the Washington Street branch of the Hanover Trust Company, where for several months he had kept a small checking account that frequently approached a zero balance.
Adopting the nonchalant air of a man certain to be approved for any loan he sought, Ponzi walked smartly through the bank’s heavy front door and asked to borrow two thousand dollars. He tried to say the sum “with the same inflection with which I would have asked change for a nickel.” But his faux confidence could not overcome his real lack of collateral. The application never made it to the loan committee. It was dealt with immediately by the bank’s president, Henry Chmielinski.
“Sorry,” he told Ponzi, “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.”
Ponzi seethed as he watched Chmielinski turn on his heel and return to his private office. Bile rose in his throat—“I could have spat poison,” he said afterward—as he made the short walk back to the Niles Building. Anger turned to despair as he opened the door to his office. With a heavy heart, he laid off his small staff and pronounced the Trader’s Guide dead before its first edition.
He swallowed his pride and placed a small newspaper ad offering office space to sublet. His new tenants would help cover the rent, but the added names painted on the door below his own were blows to his dignity. “Another house of cards had collapsed,” he said afterward. But he remained undaunted: “I was getting accustomed to chasing rainbows. As one would fade away, I would pursue another.”
Sitting alone in the office one day in August 1919, Ponzi began idly leafing through his mail. He opened a letter from Spain inquiring about the Trader’s Guide. Unaware that the guide had been permanently mothballed, the letter writer asked to be sent a copy. To pay the postage, the Spaniard had pinned to the corner of his letter a strange piece of paper. It was roughly the size of a dollar bill but nearly square, with intricate watermarks and a fanciful drawing of a woman dressed in flowing robes delivering a piece of mail from one part of the globe to another.
Ponzi held the note in his soft hands. In a spark of inspiration he saw a glittering future spread out before him. Everything up to this point in his life, from major events to chance encounters, from his never-quit persistence to his unquenched thirst for wealth, had led to this moment. It had its roots in his upbringing and his spendthrift youth, his dashed expectations of gold in American streets, and his jobs in banking and exporting. It could be traced to his stretches in prison and the men he’d met there, his acts of generosity, his return to Boston, his passion for stamp collecting, his memories of his father the postman, his chance meeting with foreign exchange expert Roberto de Masellis. All of this made it possible for him to see what no one else could, to dream what no one else dared.