6998. Old Colony Trust Company (Boston, MA)

Bank Information

Episode Type
Run → Suspension → Unsure
Bank Type
trust
Start Date
August 13, 1920
Location
Boston, Massachusetts (42.358, -71.060)

Metadata

Model
gpt-5-mini
Short Digest
11a15412a5211c3d

Response Measures

None

Description

Articles (Aug 13, 1920) describe a frantic run on Old Colony Trust Company after tips that federal officers were investigating operations tied to Ponzi. Payments were suspended for three or four days by advice of counsel and offices were closed and guarded. The record shows a run followed by a suspension; reopening is not documented in these articles so outcome is unsure.

Events (2)
1. August 13, 1920 Run
Cause
Bank Specific Adverse Info
Cause Details
Tip that federal officers were investigating the company's operations in connection with Ponzi; investors feared loss and rushed to withdraw funds.
Measures
Payments suspended for three or four days by advice of counsel; offices closed and guarded.
Newspaper Excerpt
A frantic mob today started a tremendous run on the officers of the Old Colony Trust Company ... When a tip was passed out that federal officers were investigating operations of the company, the gullible stock holders rushed as determinedly back to regain possession of their money.
Source
newspapers
2. August 13, 1920 Suspension
Cause Details
Payments suspended temporarily by advice of counsel amid crushing crowds and investigation of Ponzi-related operations.
Newspaper Excerpt
Charles M. Brightwell... told those who demanded the return of their investments that payments had been suspended for three or four days by advice of counsel. Early in the afternoon the offices of the company were closed and in the crush of people the glass in the doors was broken. After that an armed guard stood inside the locked doors.
Source
newspapers

Newspaper Articles (2)
1. August 13, 1920 The Log Cabin Democrat Conway, AR
Article from The Log Cabin Democrat, August 13, 1920

Click image to open full size in new tab

Article Text

FRANTICRUN MADE ON PONZI'S RIVAL (By United Press) Boston, Aug. 13.-A frantic mob today started a tremendous run on the officers of the Old Colony Trust Company, organized recently to "out Ponzi Ponzi" by offering investors 100 per cent profit within six months. When the offer was made, investors rushed in swarms to place their money in the coffers of the company. When a tip was passed out that federal officers were investigating operations of the company, the gullible stock holders rushed as determinedly back to regain possession of their money.

2. August 13, 1920 The Brattleboro Daily Reformer Brattleboro, VT
Article from The Brattleboro Daily Reformer, August 13, 1920

Click image to open full size in new tab

Article Text

# PONZI UNDER GUARD. (Continued from Page 1.) direction. The Oliver street branch is in a room on the third floor. Bank Commissioner Allen, by whose order the Hanover Trust Co., Ponzi's chief depositary, was closed Wednesday, expressed the opinion today that depositors would lose nothing. "Nothing has developed yet," he said, "which leads me to believe that any depositor in the Hanover Trust Co. will lose a dollar. I believe the assets of the company together with the liabilities of the stockholders will produce a sum sufficient to pay every depositor in full." Charles M. Brightwell, treasurer of the Old Colony Trust Foreign Exchange Co., told those who demanded the return of their investments that payments had been suspended for three or four days by advice of counsel. Early in the afternoon the offices of the company were closed and in the crush of people the glass in the doors was broken. After that an armed guard stood inside the locked doors. Bank Commissioner Allen said today that so far as he knows there is no foundation for reports that other banking institutions besides the Hanover Trust Co. may be involved with the Ponzi collapse. Legal steps to protect Ponzi's noteholders continued to be taken today, another bankruptcy petition being filed in the federal court. United States District Attorney Gallagher issued the following statement yesterday afternoon following receipt of a partial report from Edwin L. Pride, who has been auditing Ponzi's acounts for the government: "Mr. Pride made a partial report to the United States today that Mr. Ponzi's liabilities are upward of $7,000,000, and that Mr. Ponzi has made a statement to Mr. Pride that his assets will not exceed $4,000,000. "Mr. Pride further states that owing to the fact that a great many notes are being sent to his office of which he had no record that such notes were ever issued, and the fact that there are more cancelled notes to be returned, for which he should give Ponzi credit, it will be some time before a more accurate statement can be prepared of the liabilities. Mr. Ponzi's admissions, which are deemed to be particularly significant, were made to Mr. Pride yesterday." Mr. Pride declined to make any further statement in regard to the audit.