THE GUILLIBLE PUBLIC.

Taranaki Daily News, 4 December 1920, Page 3

THE GUILLIBLE PUBLIC.

THE BOSTOX FRAUDS. A few weeks ago the cable told us something- of the downfall' of Mr. Charles I'onzi, who was described as a Boston millionaire. American newspapers containing accounts of the sensational developments associated with Ponzi's career as a wizard of finance are now available. It appears that he is a young Italian, suave and of agreeable personality. Arriving from nowhere, he opened an office in the financial district of Boston, and advertised that he would pay 50 per cent, interest every 00 days on money deposited with hitc. He employed agents to go out and spread the glad tidings of this '-get rich quick" scheme among the Italian workers who abound in the neighborhood of Boston, and before long clients were crowding in tp place they savings in the wonderful 'bank established by their philanthropic compatriot. The realisation of their dreams of wealth was speedy, for JPonzi. returned the first, denosits, plus the .¥> per cent, interest, in 45 days instead of no. The news of this miracle spread, and the young Italian financier simply sat 'back and watched the money llqw in. Branches of his beneficent institution were opened in Massachusetts and neighbouring .States, and the thousands of dollars that had been pouring in gave place to millions. Some people, of coure, wondered how Ponzi was doingit, lmt_ thousands evidently did not trouble to think: it was enough for them that they were promised an opportunity of making .money more quickly than even the war profiteers had done. Their awakening came when they began to find that even after !)l> days their money was not forthcoming. Then the wizard financier's scheme was exposed. ITe had discovered that the international replypaid coupon, which it, much used Ivy United -States people, was exempt from foreign exchange. He used the money deposited with him to purchase coupons, worth live cents each, sent, them abroad, converted them into foreign currency and then exchanged the the process in four or live countries an<7. making 'a prolil on each exchange, 'ju the favorable exchange market that, 'existed I'onzi was able for a time to make fabulous profits, but the supply of. coupons was not iiicKlianlstible 'and the exchange, lliuictiiiat.ed. The "United States (Jnvernment. officials declared that the number of coupons in existence was not large enough to provide a quarter of the sum of money hamdled by the Young' Italian, and it was not long, l fortunately for the foolish depositors, before he reached the inevitable end, I He is n'W in prison, and not for thte

first time. So long as the coupons lasted Pouzi was making money, but the basis of his system was an old one: he used the money that was deposited on_ Tuesday to pay off Monday's liability, and kept on repeating the process. He was certainly daring in his method of exploiting the credulity of the gullible public, but experience indicates that the boldest swindle is generally the most successful. It is estimated that what an American paper calls the gold brick and allied industries are worth from fifty to sixty millions sterling a year to people who understand the weaknesses of human nature. Cavlylc's bitter satire was if%t without a substantial measure of justification.