CHAPTER 11

REPORTING ON THE ROARING

1920–1929: Ponzi’s Scam and an Ohio Editor’s Murder

The Jazz Age had had a wild youth and a heady middle age … the most expensive orgy in history…. It was borrowed time anyhow—the whole upper tenth of a nation living with the insouciance of grand ducs and the casualness of chorus girls.

—F. SCOTT FITZGERALD, THE CRACK-UP

The Pulitzer Prizes for journalism entered the new decade like a child prodigy in that period of early, awkward adolescence. As an institution it had its brilliant moments—certainly one was the choice of the New York Times for the 1918 gold medal—but it was still quite immature.

Again, no award was voted in the public service category for 1920. (The board would skip the category in 1925 and 1930 too.) But the board took one step that was to have great long-term significance for the prize process, adding the thirty-five-year-old St. Louis Post-Dispatch editor Joseph Pulitzer II to its ranks. Together Ralph Pulitzer and his idealistic younger brother, Joseph, would infuse the prizes with their father’s principles, as well as the benefactor’s ambition for the prizes to become part of the national scene. Public service stories that displayed real courage in the telling would get extra attention on the board with these New York and St. Louis newspaper executives in the room. So would any coverage that brought about significant benefits to society. JP II especially launched a flurry of personal correspondence with other board members before each meeting, seeking their thoughts about how that year’s awards were doing, encouraging nominations, and seeking their thoughts about how the Pulitzer Prizes were doing in general. He was frustrated by the lack of response from newspapers around the country and hated for the board to have to pass over a category for want of good candidates.¹

The board started to take its job seriously. More members showed up to select prize winners, and they began strenuously debating the nominations that were forwarded from the Columbia journalism faculty members. Frequently the board reversed the jury recommendations.

Further, the board began to see that if it found a truly exemplary work to honor—particularly with a Public Service Medal—it could provide a much-needed model of excellence for the industry and could also boost the image of the Pulitzer Prizes themselves. This was an important development, coming at a time when the prizes still had almost no public image at all. The number of entries began to grow slowly, often because jurors and editors brought candidates to the table that they had seen during the prior year. The time when newspapers clamored to nominate their own best work was still in the future.²

Meanwhile, as the war began to fade as a dominant story, front pages reflected the emergence of disturbing social problems: the tenacity of racial hatred and the flourishing of political graft and corruption. Battling these evils would become central for Pulitzer board members selecting the gold medal winner.

A Story for the Jazz Age

The national mood was also undergoing a swift, if not altogether clear, transformation as the 1920s began to roar. For many people, the former idealism about the turn-of the-century world veered toward cynicism. A strange, frantic self-indulgence took hold. After the horrors of the battlefields of Europe, immediate gratification made more sense to some than did sacrifice. But it was also a time filled with paradox. Newspapers often saw themselves as standard-bearers for old national ideals, even as they began to reflect the new era’s hedonism in their pages.

There could not have been a better newspaper story for the Jazz Age—or one that grew more powerfully from the anything-goes spirit in America—than the one that the Pulitzer board cited in its 1921 public service award. For once, the board had a real choice in the category. Meeting in early April, a jury of three Columbia journalism professors offered the board two possibilities. One nomination was for the New York Evening Post, which had brought attention to “the shortcomings of the Government work for the relief and rehabilitation of the soldiers of the World War,” according to John W. Cunliffe, the new director of Columbia’s journalism school and the leader of each of the juries. It was, the jury had noted, a project benefiting “a great number of deserving men to whom the country owed a debt that was being neglected.” The stories had been written by Harold Littledale, who had won a Reporting Pulitzer in 1918. Indeed, the jury helpfully suggested that when the board compared it with the other nominee, “in case of performances of equal intrinsic merit, it may perhaps be good policy to broaden the scope of the School’s relations to the newspaper world and especially not to confine its awards too closely to metropolitan papers.”³

The remark was something of a slight to Boston, home to the other nominated newspaper, the Boston Post. That city also thought of itself as metropolitan, and the Post, its largest paper at the time, actually sold more copies than even the New York World.⁴ The Post’s nomination was “for the pricking of the Ponzi financial bubble, in investigating his claims to be operating in foreign exchange and throwing doubt on him at a time when the public officials were inactive and other newspapers were either ignoring him or treating him as a genuine financial wizard.” The work was undertaken “at great risk of incurring heavy damages.” If the jurors saw a negative in this story winning the Public Service Prize, it was that—unlike the veterans who were helped by the New York paper—“the persons chiefly benefited by the exposure of Ponzi were foolish persons who were seeking something for nothing and who were entitled to little sympathy.”

The nomination did not have to identify the “Ponzi” involved. It was celebrated huckster Charles Ponzi. During an exhilarating summer the previous year, the bombastic Italian immigrant had devised a get-rich-quick scheme that had captivated the nation’s attention—and made Ponzi a cult figure. In a Ponzi scheme, as such enterprises are now known, early investors receive hefty payouts from the funds provided by subsequent investors, although the schemer puts in place no fundamental profit-making machinery. The success of early investors builds publicity for the investment ruse, although it ultimately peters out when not enough later investors can be found to pay off earlier ones. Investors demanding their money back find that there is no cash.

The Boston Post work already had a powerful supporter on the board in Robert L. O’Brien, who called it “a piece of newspaper enterprise of the first importance.” That opinion carried extra weight because O’Brien edited the rival Boston Herald—which had been thoroughly whipped on the story by the Post. And he was far from alone as a fan. Calvin Coolidge, then the Massachusetts governor, praised the stories, as did a host of local politicians, many of whom had been flat-footed in their enforcement role while the Post unmasked Ponzi’s duplicity.

The jury wrote in its nomination letter that the jurors were “in doubt which of these enterprises was more deserving of the Prize”—the New York Post or the Boston Post—but the board saw a clearer choice. The Ponzi reporting was simply the perfect Joseph Pulitzer–style campaign: great reporting of hard-to-get information, helping protect the “common man” from scams, and taking the form of shocking front-page news that stirred terrific controversy. The investigation had also required editor Richard Grozier, son of publisher Edwin A. Grozier, to face serious financial risk from the brazenly litigious Ponzi and from legions of adoring followers who saw the Post as out to hang their innocent hero. These fans were ready to drop the Post as a result, especially as rival papers were proclaiming Ponzi a financial wizard well into the Post’s investigation.

The Post’s work also drew on the expertise of Clarence W. Barron, who had started the successful Boston News Bureau in the city’s financial district. In 1902 he had spread his influence south to New York by buying a company called Dow Jones and its main product, the Wall Street Journal. Barron, whose name lives on in the weekly Dow Jones paper Barron’s and whose descendents controlled Dow Jones for 105 years (until 2007), was to be both an expert source for the Post and something of a guest columnist as the paper broke the news in the Ponzi case.

Clipped by Coupons

Edwin Grozier, after working for a time under the Boston Globe’s Charles H. Taylor, had actually served the first Joseph Pulitzer at the World in the pre–yellow journalism years. Grozier loved Pulitzer, describing his mind as “like a flash of lightning, illuminating the dark places.” But eventually Grozier left the editorship of the Evening World to return to Boston and buy the troubled Post, asking Taylor’s permission in that age of gentlemanly exchanges. “If you have even the slightest objection,” he told Taylor, “I won’t consider purchasing the paper.” Taylor responded that if Grozier “can gather up any of the crumbs that fall from the Globe’s table, you’re welcome to them”—to which Grozier retorted: “If I can, I shall go after the cake, too!”

FIGURE 11.1 After first disclosing Boston financial scam artist Charles Ponzi’s criminal record in Canada under the name “Ponsi,” the Boston Post on April 11, 1920, shows how Ponzi would look with a moustache painted on his mug shot. Below the clean-shaven Ponzi is another big news story for Boston, about a New York Yankees ball player familiar to locals. The headline says “Ruth Injures Knee Sliding.” Source: Used by permission of the Boston Globe, courtesy Boston Public Library.

Grozier saved the paper with a series of Pulitzer-like stunts and promotions, printing the names of every child that contributed to the Post’s campaign to buy elephants for the local zoo. Like Pulitzer, he played up crime stories, winning subscribers with the heavy coverage of Lizzy Borden and other grisly crime stories. He also promoted Irish causes, which stuffier Boston papers did not, and he cut the price to one cent from three. In time, the paper’s circulation actually exceeded that of the World, with its much larger market. When Grozier took ill in 1920, though, it was his son Richard who proved himself by challenging the Ponzi phenomenon as it swept his city.

The thirty-eight-year-old, slight-of-build Charles Ponzi, nattily dressed in his trademark boater hat and cane, had a flair for selling and a wonderful head for business—as long as that business was crooked. Unbeknownst to Bostonians who first heard his get-rich-quick promises in early 1920, he had a past full of fraud and forgery, having served prison terms in Montreal and Georgia. Almost as ardent a stamp collector as he was a con artist, he had devised a plausible-sounding investment plan—with implausible returns of 50 percent in ninety days—based on foreign exchange rates in a post-war Europe of collapsing currency values.

To get those returns for investors, Ponzi pledged that he would put their dollars into humble-sounding instruments called “International Reply Coupons,” or IRCs. These actually did exist; IRCs had been created by a global agreement before the war to help governments fix the values at which their nation’s postage stamps would be redeemed. Countries designed coupons with floating redemption rates reflecting what currency was being used in the transaction to allow the international mailing of letters. Thus mail posted at a certain rate in, say, the United States would be delivered to Spain or Italy, no matter what happened to rates in those countries when the U.S. mail was sent.⁵

In 1919, Ponzi examined one of the IRC certificates that an associate in Spain had sent him and began to think. We know something of his thought process because of accounts he gave about his adventures later in life. As Boston journalist Mitchell Zuckoff writes in his 2005 book Ponzi’s Scheme, “in a flash of insight, some might even say genius, Ponzi saw something more, a global currency whose value fluctuated wildly depending on where it was used.”⁶ Ponzi did some calculations: if one U.S. dollar could purchase five IRCs in Boston, it could buy sixty-six IRCs in Rome once the dollars were exchanged for the severely devalued Italian lira.

It was a moment reminiscent of The Producers’ Max Bialystock plotting with Leo Bloom how they might make more money with a flop than with a Broadway hit. To make money with this kind of exchange himself, Ponzi would have to start with a hoard of original dollars to buy the IRCs in countries with devalued currencies—a hoard he did not have. Then he would have to buy and transport the huge bundles of coupons that would have to be involved if any meaningful profit was to be produced. That’s if it was even legal. “But those critical details would wait for another day,” Zuckoff writes. Ponzi decided instead to use his brainstorm to sell others on investing in Ponzi’s own securities. That would get him his bankroll. He would then deliver the promised returns by paying them off with the investments of later investors.⁷

His international trade in IRCs never began. What did begin was a promotion based on persuading others that Ponzi could manipulate the system to turn a huge profit for them. For fifty cents he registered the name of a new company at the end of 1919: Securities Exchange Company, a name that existed over a decade before a federal government “Securities and Exchange Commission” was to appear to protect the investment community from scams like Ponzi’s. Shamelessly Ponzi began building a foundation for his scheme that was designed to insulate him from the authorities. At the police commissioner’s office, he made a point of putting money in the Boston Police Relief Association and promised more.

Just for fun, he put out feelers with postal officials about whether the exchange he had dreamed up for IRCs might actually be possible. Could he redeem IRCs for cash—a key part of his scheme—if he had them? No, he was told. But by that time the promotion was already going crazy, with ninety-day, 50 percent Securities Exchange Company notes flying out of his downtown Boston shop. The post office began examining his scheme. It would “begin” for many months without result. But Ponzi was bringing in $30,000 per week at the start. Then more and more, both in tiny investments and soon in $10,000 chunks.

He was also digging himself deeper into a hole each day, of course. Each coupon was a debt he had no hope of repaying without plundering later investment dollars. As his secretary kept doling out the company promissory notes, she wrote investors’ names on index cards. The names multiplied quickly with the cash. From 1,525 investors he brought in $40,000 during May. Ponzi bought an expensive house in the suburbs and a fancy car for the commute. His lifestyle was lavish. New ways had to be found to keep drawing investors, but Ponzi’s pitch kept working. He cut the payout time in half and touted that “a little dollar could start on a journey across the ocean and return home in six weeks, married and with a couple of kids.”

“Can It Be Real?”

Enter the newspapers. On June 9, the Boston Traveler was the first to promote Ponzi in the news columns, with an all-capital headline saying: “WE GUARANTEE YOU 50 PERCENT PROFIT IN 45 DAYS.” The postal inspector that a Traveler reporter questioned failed to signal any problem with the investment and added a tantalizingly mysterious note: “We haven’t figured out how they make their enormous profit, but they seem confident of their ability to do so.” That triggered more investor interest. But basically newspapers didn’t pay much attention for a few more weeks. There was lots of news cramming the front pages: Prohibition had gone into effect nationally in January. States were also debating a constitutional amendment to give women the right to vote. In Massachusetts, a murder in a Boston suburb was being blamed on two Italians, Nicola Sacco and Bartolomeo Vanzetti. Governor Calvin Coolidge was considering a run for vice president. Further, notes journalist Zuckoff, sports pages were full of Babe Ruth “pounding home runs for the New York Yankees after his stunning sale the previous winter by the Boston Red Sox. The Babe’s move fueled the question of whether New York City might eclipse Boston as the ‘Hub of the Universe.’ Most Bostonians doubted it.”⁸

It was July 4 before the Boston Post got involved, beginning a two-month flurry of stories about Ponzi. It started with a courthouse reporter’s piece about a million-dollar lawsuit that a Ponzi associate had filed against him. The plaintiff couldn’t be found to comment but Ponzi, as usual, had plenty to say. It was just a case of someone wanting money from him because he was so wealthy, he said, and any legitimate claim would be “satisfied because I have got two million dollars over and above all claims of investors against me in this country.” The article then went on to note that Ponzi “is today rated as worth $8,500,000—purchaser of business blocks, trust companies, estates and motor cars.” To the question of “Can it be real?” posed by the story, federal, state, and city authorities were said to be answering “that they have been unable to find that he is doing anything illegal.”⁹

Richard Grozier was incredulous at the 50 percent profit claim though. He asked the Post city editor Edward J. Dunn to have some reporters look into Ponzi and his company more closely. One worry on his mind was that a number of Post employees, mostly in the press room, were investors with Ponzi. Various other investigations had also started to go with the postal investigation and bank examiners were talking with Ponzi’s bankers. Using investor money, Ponzi set up a $1.5 million short-term certificate of deposit at the bank to placate inspectors.

City editor Dunn had two reporters, “P. A.” Santosuosso and Herbert L. Baldwin, on the case. They turned to Clarence Barron as a source. Barron, short, bearded, and weighing 330 pounds at age sixty-five, had established himself as quite a Boston character. He had a reserved suite at the Ritz Carlton across from the Boston Public Garden to go with his Beacon Hill home and an estate in the posh South Shore community of Cohasset. The page of news his Boston News Bureau provided was aimed for Boston’s high-finance readers, who paid the princely sum of one dollar for it. Yet Barron had strong views about Ponzi and his popularity, and he was a great interview. It ran under the headline “QUESTIONS THE MOTIVE BEHIND PONZI SCHEME: Barron Says Reply Coupon Plan Can Be Worked Only In Small Way.” Identified as being “recognized internationally as among the foremost financial authorities of the world,” Barron was quoted as saying: “No man of wide financial or investment experience would look twice at a proposition to take his money upon a simple promise to pay it back with a 50% increase in three months.” Barron further raised the question of whether there could possibly be enough supply of postage to soak up the millions that Ponzi said was being invested.

The public reaction to all this cold water on the hot investment? The biggest rush yet from people wanting to buy. When Edward Dunn walked around the corner from the Post to check on the scene, his observation was: “Pigs being led to the slaughter.” The scenario was to play out for several more weeks, each new skeptical story seeming to stimulate business rather than stifle it. On July 30, New York’s postmaster was quoted as saying that the small number of postal reply coupons in existence made it “impossible” that a multimillion-dollar fortune could be created from them. Barron sharpened his old charges about it being a case of “robbing Peter to pay Paul,” adding some sarcasm about the possibility that Ponzi could apply his investment formula to solve all of Europe’s woes. “Surely,” he said, “the allies could spare him a million and within three years clean up that debt tangle.” The Post cartoons pictured a worried-looking Ponzi trying to keep his “pot of gold” boiling. An editorial by Grozier said, “It Cannot Last.”¹⁰

But the charming Ponzi, now identified as a man of the people, was past criticism to many. In fact, the heavier the attack, the more his cult-figure status seemed to grow. He milked it unmercifully. In one of his frequent impromptu speeches to crowds he said: “Now please don’t think that I’m boasting, but I have forgotten more about foreign exchange than C. W. Barron ever knew.” When someone in an audience suggested he was the greatest Italian in history he said: “No. I am the third greatest.” He rated Columbus and Marconi higher. Finally, to shouts of “Ponzi for mayor” and “Ponzi for governor,” he suggested in a comment sure to win him fans that he might throw his support to an anti-Prohibition candidate. The Boston Traveler, ever the Ponzi supporter, ran a sports column comparing him with Babe Ruth. The bankers are trying to retire Ponzi “with the banks full,” the writer said. “Just like trying to retire you with the bases full, hey Babe?” The New York Times observed that in the city to the north, “public distrust seems to be shifting from Ponzi to his critics and assailants.”

But the Post wasn’t finished. Its reporters were still gathering information, and sources were starting to step forward in response to its stories. It delivered a one-two punch. First, when Ponzi’s own public relations man, William McMasters, a former Post reporter, became suspicious of his boss, he did some snooping around the office and found incriminating information—offering it to Grozier. The Post editor paid $5,000 for it, something the ensuing article did not disclose. Under McMasters’s own byline, the article said that Ponzi had earned nothing from investments outside the United States and was at least $2 million in debt. His article ran on Monday, August 2, under the page-one headline: “DECLARES PONZI IS NOW HOPELESSLY INSOLVENT: Publicity Expert Employed by ‘Wizard’ Says He Has Not Sufficient Funds to Meet His Notes—States He Has Sent No Money to Europe nor Received Money from Europe Recently.” Why had McMasters chosen to speak up? “As a publicity man,” he wrote, “my first duty is to the public.” While that statement might have stopped a few readers in their tracks, more than a few believed the rest of his claims. At last investors lined up outside Ponzi’s office with withdrawals in mind, pulling out $400,000 on Monday alone. But some Ponzi fans still weren’t convinced.¹¹ That would take one more Post story.

On August 8, Ponzi was comfortable at home in his bathrobe as he settled in for two hours with Post reporter P. A. Santosuossa. The questions were about his life before coming to Boston. There were holes in the story—holes that Santosuossa was looking for because he had heard rumors that Ponzi had a criminal record in Canada. Still, the reporter didn’t have enough to confront Ponzi about it. After the interview was over, though, the Post’s Montreal correspondent provided the tip the paper had been itching for: that someone named Charles Ponsi, spelled with an “s,” had been imprisoned there a decade earlier for forgery. The charge had stemmed from his employment at Banco Zarossi. Santosuossa called Ponzi back at home with his follow-up. Ponzi laughed off the direct question of whether he was the same Ponsi, who also used the alias Bianchi. Had he been in Canada at that time? Yes. Had he worked at that bank? “I might have.”

For the Post, the next step was to immediately dispatch a reporter to Montreal—it was Herbert Baldwin—to nail down the report once and for all. His interviews were successful, bringing numerous confirmations from the Ponzi photo Baldwin displayed. With the addition of a mustache, he was told, it was the same man: the forger Ponsi, alias Bianchi. Or, as one said, “Bianchi, the snake!”

Being Ponzi, the trader still made efforts to deny it even after a story bylined by Baldwin ran on August 11, with its headline—“Canadian ‘Ponsi’ Served Jail Term”—and with details of the forgery conviction. When he was told what the story would say and was asked to comment, Ponzi told the Post reporter: “Then you are going to get the presses ripped out of your building.” But the bravado didn’t last. Just over a month had passed since the unquestioning July 4 story in the Post.¹² Now Ponzi’s life unraveled fast.

“It was this revelation that finally burst the bubble,” said the Post in its nomination letter to the Pulitzer board. “Practically the last doubts were swept away.” From the arraignment on through trial, conviction, and sentence, any remaining doubts certainly vanished. As the authorities swarmed, Ponzi admitted to having served the Georgia prison term as well.

Ever chatty, Ponzi said to the Post’s Baldwin at a moment toward the end of the trial: “You did a fine job on me. If it hadn’t been for that story in the Post, maybe things would have been a lot different for me today.” Much later, Ponzi was to detail the entire scam. “My business was simple. It was the old game of robbing Peter to pay Paul,” he said. “The whole thing was broken.”¹³

The Public Service Pulitzer was to be the highlight of the next three decades for the Post. A long period of decline began. Edwin Grozier died in 1923 and Richard Grozier died in 1946. The next gold medal to a Boston publication would be the Globe’s Pulitzer, won in 1966. That was ten years after the Globe had bought the Post’s library and the rights to its name.

1921—The Boston Post for its exposure of the operations of Charles Ponzi by a series of articles which finally led to his arrest.¹⁴

Swope’s World

If Charles Ponzi was the perfect charlatan for the Jazz Age, the New York World’s Herbert Bayard Swope may have been the perfect journalist to represent the forces of truth, justice, and the American way. The winner of the very first Pulitzer Prize—in 1917, for his reporting on the German empire from Europe in the early years of the war—Swope was thirty-eight when he returned to the United States in 1920 and became a key player for Ralph Pulitzer’s paper. With all his gifts, Swope was in a good position to help keep the World competitive in the changing mix of New York City newspapers. In post-war America, the World occupied much the same place that the New York Times does today, attracting many of the best journalists from around the country. And Swope was one reason. The tall, red-haired reporter had moved to New York from St. Louis and the Post-Dispatch much earlier. But even as a young man he had approached the status of legend for his driving desire to get a story, solving crimes ahead of the police and putting his personal mark on every story he covered. In Europe, besides winning the first Pulitzer Prize, he was best known for having donned tails and top hat to crash the Versailles peace talks—to which no reporters were invited—getting crucial, exclusive details for the World. He brought that same outrageous flair to editing once he returned to New York.¹⁵

“What I try to do in my paper,” Swope once said, “is to give the public part of what it wants to have and part of what it ought to have, whether it wants it or not.”¹⁶ One Joseph Pulitzer aphorism that Swope favored was “Every reporter is a hope, every editor a disappointment.”¹⁷ But Swope attacked editing with the eye of a reporter, albeit it one who knew how stories should be packaged for the front page. Under his guidance, the paper would win two public service awards for the World in three years. The first gold medal, however, was the greatest. When the board approved it in 1922, it started a pattern that would prevail for decades—honoring stories for the Public Service Prize that pointed out racial injustice. Swope had decided that the World would take on the Ku Klux Klan.

The Klan of that day had risen to a level of prominence very quickly. The groups of hooded vigilantes that fought Reconstruction in the South and border states after the Civil War, making the lynching of freed blacks and cross-burnings their symbols, had died out before the 1870s. But seemingly from out of nowhere, a national KKK revival had occurred just before World War I. Among racists, the rituals and mysteries of the organization made it attractive in an almost romantic way. It was estimated to have half a million members in both cities and rural areas around the country, spewing hate at Catholics, Jews, and other minorities, as well as blacks. Little had been written about the new rise of the Klan, however.

Swope himself tracked down the individuals who had created the new KKK. As it turned out, the Klan’s twentieth-century origins were largely a money-raising scheme, although as World War I approached, it also grew by building its isolationist appeal. It was actually formed in Georgia in 1916 as a chartered secret fraternal organization. Swope began to strip the mystery away.¹⁸ The first of the World’s twenty-one straight days of articles began with an eight-column banner headline proclaiming: “SECRETS OF THE KU KLUX KLAN EXPOSED BY THE WORLD; MENACE OF THIS GROWING LAW-DEFYING ORGANIZATION PROVED BY ITS RITUAL AND THE RECORD OF ITS ACTIVITIES.”¹⁹ For the World, it was a phenomenal circulation booster, adding about 60,000 readers during the run of the series. New Yorkers stood in line to wait for copies that rolled off the presses just after midnight. Swope also arranged for wide syndication, reaching two million readers through eighteen papers, mostly in the North and West.²⁰ The Klan series was also the unanimous choice of the Pulitzer jury, again a group of three Columbia faculty members led by John Cunliffe. The board enthusiastically approved and chose the World for the 1922 gold medal.²¹

The next year, the Memphis Commercial Appeal won the Public Service Prize largely for its cartoons challenging the Klan in Tennessee. (And two more papers in the 1920s—Columbus, Georgia’s Enquirer Sun in 1926 and the Indianapolis Times in 1928—would win wholly or in part for campaigns involving the Klan in their areas.) In 1924, the World won again for a Swope-led campaign to expose the evils of involuntary servitude through the case of a young North Dakota man who was cast into “peonage” in Florida.

Swope would leave the World in the late 1920s, frustrated with how poorly Ralph Pulitzer and his brother Herbert were managing the paper. The paper would fold in 1931.

1922—The New York World for articles exposing the operations of the Ku Klux Klan, published during September and October, 1921.²²

A Martyr for the Truth

In 1926, the Canton Daily News editor Don R. Mellett had been doing the nitty-gritty work of dedicated editors everywhere. A newcomer to the eastern Ohio town, he decided to keep track of local underworld figures and to try to make their operations known. It was work in the tradition of watchdog journalism. For a criminal with a house to plunder, however, the first step is often to kill the watchdog.

Mellett, one of seven sons in an Indiana newsman’s family, arrived in Canton in 1925 as the business manager and then moved on to become the publisher of the paper. Its owner, former Ohio governor (and 1920 Democratic presidential candidate) James M. Cox, had wanted Mellett, then thirty-four, to help the paper narrow the circulation gap with the leading Canton Repository.²³ Mellett proceeded to do just that with a series of promotional stunts like hiring the “Marvel Man,” a lip-reader, to go from place to place and listen in on conversations. (One story reported that the words actually spoken by Douglas Fairbanks in a silent film were “What the hell is the matter with you?” and not the subtitled “Anyway, I love you.”) In one story, though, the Marvel Man discovered an ugly truth about Canton. He lip-read a drug deal between an addict and a pusher. A headline appeared that said “Traffic in ‘Dope’ Uncovered.”

Crime was no stranger to Canton, as Mellett found in pursuing stories about various unsavory characters in town. While not a crime center like Chicago, Cleveland, Detroit, and Pittsburgh, Canton was considered a “hideout” for criminals on the lam from those cities. And Canton had its own bootlegging, gambling, and prostitution underworld, managed by a character named Jumbo Crowley.²⁴ With the combination of visiting thugs hiding out and local crooks running their rackets, Canton was a nest of vipers.

On January 2, 1926, Don Mellett stepped right into that nest. His editorial started:

It is the opinion of The News that Canton needs cleaning up. Bootlegging, gambling, and houses of prostitution are running wide open, in flagrant violation of the law. If [Police] Chief [Saranus] Lengel denies this, proof is available to him. If he states he cannot clean up these vice conditions upon proof of their existence he should step aside and permit someone who can to do so.

The final suggestion was, “Get busy or get out.” He could have been tougher, but Mellett was still getting to know the town. But Chief Lengel was kicked out by the reform mayor the paper had supported. (He was later reinstated by the civil service commission.) And as the publisher’s knowledge grew, so did the boldness of his editorials. The March 1 paper carried an editorial with the headline, “Vice Cleanup Only Started; Climax Coming.” It began:

Canton’s clean-up of vice conditions has only just started. The dismissal of the chief of police was necessary, it appears, as the first step toward building a more militant aggressive police department. With a determined police department on the job organized liquor, and dope traffic cannot operate, nor can gambling. Without protection, directly or indirectly the underworld cannot exist. And already the slight changes made in the police department are beginning to bear fruit. The fear of God is beginning to creep into the hearts of the law violators and a break-up is on the horizon….

Jumbo Crowley must be put out of business. His every place must be stopped and kept dark….

He went on, naming names—a dozen more in this editorial and in later ones—for four and a half months. While the Daily News did sell more papers, the attack on graft didn’t make him popular in much of the town of 107,000. Mobsters were upset, of course, to see themselves identified by name, with their supposedly shadowy exploits spread across the front page for all to see. But town leaders were also displeased that their town was portrayed as crime-ridden. It was bad for business.

After he and his wife returned from a dance, Mellett was putting his car in the garage when he was shot three times, once in the head. He died instantly. Newspapers around the country ran the story of this new martyr to the cause of using the newspaper to speak out for the community. Under the page-one headline “We Carry On,” the Daily News ran an editorial saying: “Like a captain in battle leading his forces Don R. Mellett, publisher of the Daily News, has fallen—a sacrifice to the cause he waged against vice, and what he believed [were] efforts to corrupt the city government. Wanton murder stalked at midnight into his home.”²⁵ Wrote Cox in a tribute to Mellett: “How foolish were the assassins and those who goaded them on! The taking of a single life in the present circumstances is of no avail. When a general falls at the head of his army, the spectacle of sacrifice moves his followers onward to increased devotion in the cause.”²⁶

The local police, not surprisingly, were lax in their investigation of the crime. Chief Lengel had been reinstated earlier and a local grand jury failed to bring any indictments. It took the intervention of a special investigator from Chicago to get five men arrested, tried, and convicted. One was Chief Lengel, and another was an out-of-town mobster named Patrick (Red) McDermott, both eventually convicted of first-degree murder. McDermott said that a plan to beat up the publisher had escalated into a shooting. Chief Lengel, however, was eventually granted a new trial and freed when a witness against him at the first trial refused to repeat his story. Even now, there is uncertainty about who fired the fatal shot and who else might have been involved in the killing.

Of course, there was no Don Mellett to hammer away at the need for results. And soon there was no Daily News either. While the gold medal was sealed in the cornerstone of a new building for the paper, Cox sold both the Daily News and the building three years later, and it was combined with the Repository, which took over the new building. To the nation’s journalism community, though, the Canton Daily News’s Pulitzer will always be a stark reminder of the ultimate risk editors and reporters can take on behalf of the public.

1927—Canton (Ohio) Daily News for its brave, patriotic and effective fight for the ending of a vicious state of affairs brought about by collusion between city authorities and the criminal element, a fight which had a tragic result in the assassination of the editor of the paper, Mr. Don R. Mellett.²⁷

“Pulitzer Prizes for Pulitzer Papers”

When the New York Evening World won the gold medal in 1929 for a series of criminal justice–related campaigns, it was the third Public Service Prize awarded to Pulitzer-owned newspapers and their twelfth Pulitzer Prize overall. Only forty-one journalism prizes had been awarded, making the Pulitzer papers in New York or St. Louis owners of more than a quarter of them. Beyond that, most of the prizes had gone to eastern newspapers.²⁸

FIGURE 11.2 The Canton (Ohio) Daily News front page on July 16, 1926, carries news of editor Don Mellett’s murder. Source: Reprinted by permission of the Canton Repository. Page provided courtesy of the Stark County District Library.

The board members—and especially the Pulitzer brothers—certainly had not intended for the prizes to favor the Pulitzer newspapers. Joseph and Ralph were very sensitive about the appearance of favoritism when the World and the St. Louis Post-Dispatch won. They also wanted the awards to be accepted more nationally.²⁹

In November 1929, the Pulitzer advisory board’s executive secretary took a thirty-two-city tour of newspapers outside the East and made a disturbing report. The “indifference and apathy encountered are too generally prevalent,” he said. “Many frankly admitted that they had ceased making nominations because they had concluded that the awards were generally made to the metropolitan newspapers of the east. Frequently allusions were made to the regularity with which the prizes were given to the Pulitzer newspapers.”³⁰ The Pulitzer brothers quietly agreed that their papers would withhold making any entries for the 1930 prizes. They then withheld entries again in 1931 and perhaps in later years as well.³¹

Another way to approach the problem was to encourage nominations from outside the East and then to make sure the board gave them due consideration. In the 1930s, many more midwestern and western papers would be honored as winners in public service and other categories as well. The Pulitzer Prizes benefited from the diversity.

For all the perceived questions about favoritism, the Public Service Prize had at least been defined in the 1920s. No longer did editors wonder what kinds of stories the Pulitzer board would recognize with gold medals. Unfocused collections of articles, no matter how good, went out of favor as Public Service Prize candidates as the 1930s approached. By its acknowledgment of the Canton murder case, the Ponzi exposé, and campaigns against the Ku Klux Klan, the board showed that physical courage and financial risk-taking were qualities it prized, along with success in bringing about positive changes in the community. And the board clearly liked a powerful investigative story.