7890. First State Bank (Boston, MA)

Bank Information

Episode Type
Run Only
Bank Type
private
Start Date
August 19, 1920
Location
Boston, Massachusetts (42.358, -71.060)

Metadata

Model
gpt-5-mini
Short Digest
b5a689f1

Response Measures

Accommodated withdrawals, Public signal of financial health

Description

Multiple contemporaneous wire stories (Aug 19, 1920) report a continued run on the First State Bank (North End, Boston) triggered by rumors linking the bank or its president to losses in the Ponzi/Hanover Trust collapse. The bank was paying all comers and the president said the reports of closing were false. No suspension, receivership, or reopening/closure is reported.

Events (1)
1. August 19, 1920 Run
Cause
Rumor Or Misinformation
Cause Details
Depositors alarmed by indefinite reports/rumors that the bank would close and that President Thomas Nutile had suffered losses connected to the Hanover Trust/ Ponzi collapse.
Measures
Bank paid all comers at usual opening hours; president stated funds available (could produce three times needed).
Newspaper Excerpt
A run on the First State Bank, a private institution in the North End, doing business principally with members of the Italian colony, was continued today. Payment was begun at the usual opening hour to a long line of claimants. President Nutile said he could produce three times as much money as was necessary to pay off the $1,000,000 of deposits and that the report that the bank was going to close was false.
Source
newspapers

Newspaper Articles (10)
1. August 19, 1920 Evening Star Washington, DC
Article from Evening Star, August 19, 1920

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Article Text

PONZI IS CHARGED WITH MAIL FRAUD Throng Gazes at Him as He Gets Brief Respite From Jail Cell. BOSTON, August 19 (by the Associated Press).-Charles Ponzi, discredited prophet of a high finance which, instead of large profits, has turned into considerable losses the investments of thousands of persons, running into millions of dollars, again was the object of the attention of crowds today. In a brief respite from the East Cambridge jail, where he has been a prisoner since he surrendered himself a week ago, he was taken before a federal commissioner here for a hearing on the charges that he used the mails in pursuit of a scheme to defraud. The crowds, which had fallen in behind the man when they thought he was making millions for them, in the heyday of his scheme, were again out to see him in his fall, many of them investors in his supposed international postal exchange business. But they had barely a glance at the changed figure, as Ponzi waived examination and was whisked out of the courtroom and back to jail, in default of $25,000 bonds. Trial was set for September term of the federal district court. Run on First State Bank. A run on the First State Bank, a private institution in the north. and doing business principally with members of the Italian colony, was continued today. Depositors were said to be alarmed by indefinite reports that the bank was going to close and that President Thomas Nutile had suffered losses in the closing of the Hanover Trust Company, which was involved in the collapse of Charles Ponzi. Payment was begun at the usual opening hour to a long line of claimants. President Nutile said he could produce three times as much money as was necessary to pay off the $1,000,000 of deposits and that the report that the bank was going to close was false. He added that he had not been a stockholder in the Hanover Trust Company for several months, a published list containing his name being an old one. $15,000 Is Located. Attorney General Allen announced today that $15,000 of the funds of the Old Colony Foreign Exchange Company had been located in a bank in New York and that this brought the total of the company's funds accounted for to $150,000. He estimated that this represented 60 per cent of the amount received by the company from investors. Returns of note holders in the Securities Exchange Company, conducted by Charles Ponzi, had reached today a total of $4,200,000, this amount including the 50 per cent profit promised by Ponzi. Arrested on Fraud Charges. George L. Ware of George L. Ware & Co., dealers in investment securities, with offices in this city, was arrested by federal officers late today on a charge of using the mails with fraudulent intent in connection with the advertising of Mutual Divide, an oil stock. He was released in bail of $5,000 and will be given a hearing before United States Commissioner Hayes tomorrow. The complaint alleges that circulars and literature which had been sent through the mails set forth that Mutual Divide had control of "valuable oil lands in Texas" from which had been produced a high-grade oil in "sufficient quantities to pay dividends on each share of the stock of the Mutual Divide." The complaint said that "the said association had no such property and said association would not and could not pay dividends on each share of stock of the Mutual Divide."

2. August 19, 1920 The Evening World New York, NY
Article from The Evening World, August 19, 1920

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RUN CONTINUES ON BANK IN BOSTON The First State Pays All Comers and President Says It Won't Close. BOSTON, Aug 19.-A run on the first State Bank. a private institution in the North End, doing business principally with members of the Italian colony, was continued to-day. Payment was begun at the usual opening hour to a long line of claimants. President Nutile said he could produce three times as much money as was necessary to pay off the $1,000,000 of deposits and that the report that the bank was going to close was false. Attorney General Allen announced to-day that $15,000 of the funds of the Old Colony Foreign Exchange Company had been located in a bank in New York and that this brought the otal of the company's funds accounted for to $150,000. He estimated that this represented 60 per cent. of the amount received by the company from investors. Returns of note-holders in the Securities Exchange Company conducted by Charles Ponzi, had reached to-day a total of $4,200,000, this amount Including the fifty per cent. profit promised by Ponzl.

3. August 19, 1920 Perth Amboy Evening News Perth Amboy, NJ
Article from Perth Amboy Evening News, August 19, 1920

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Run on Boston Bank. By The Associated Press. BOSTON, Aug. 19-Returns of note holders in the Security Exchange Company has reached teast of $4,200,000. This amount ing the fifty per cent profits promised. A run on the first state bank, a private institution doing business in the north end with the Italian col. oncy continued today. Depositors were alarmed by a report that the bank was to close. Payments were begun at the usual opening hour.

4. August 19, 1920 The Caledonian-Record Saint Johnsbury, VT
Article from The Caledonian-Record, August 19, 1920

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and back to jail in default of $25,000 bonds. Trial is set for the September term of the Federal district court. Ponzi told Deputy U. S. Marshals who had charge of him during his trip to court that his downfall was due to the withdrawal of support by a man prominent in the city's financial circles. If given his liberty under guard for six months he said he would prove his solvency. "There is likely to be a big blowup within a few days," Ponzi was quoted as saying to the deputies. "If I tell what I know about a certain man prominent in Boston who poses as a philanthropist and public benefactor, there will be a change of sentiment. This man promised to stand by me and was under agreement to support me financially, but he wanted the lions share of the profits and because he did not get enough he drew out." In the throng which filled the court room to the limit of its seating and standing space was John S. Dondoro described as a partner of Ponzi in his Securities Exchange Co., in papers filed at city hall and named with him as a joint defendant in suits brought against Ponzi. Dondero has been missing several days but service of the subpoena was made today. In stead of the white flannels and the cane which had made his figure familiar Ponzi wore dark clothing and carried no stick. He was a bit paler than before, but when a friend how he km was inquired plied 'pretty good" and feeling, when he-re- asked of his treatment at the jail said he had 'no kick." Attorney General Allen's tabulation of Ponzi's liabilities today passed the $4,000,000 mark. Attorney General Allen announced today that $15,000 of the funds of the Old Colony Foreign Exchange Co., had been located in a bank in New York and that this brought the total of the company's funds accounted for to $150,000. He estimated that this represented 60 per cent of the amount received from investors. A run on the First State bank, a private institution in the North End, doing business principally with members of the Italian colony, was continued today. Depositors were said to be alarmed by indefinite reports as to the bank's assets and that the president had suffered losses in the closing of the Hanover Trust Co.

5. August 19, 1920 New Britain Herald New Britain, CT
Article from New Britain Herald, August 19, 1920

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PONZI WAIVES EXAMINATION Discredited Financial Wizard Sent Back to Jail in Default of $23,000 Bonds-Rin on Another Bank. Boston, Aug. 19.-Charles Ponzi, discredited prophet of a high finance which instead of large profits ha3 turned into considerable losses in .11vestments of thousands of persons running into millions of dollars. was taken from the East Cambriage jail today and arraigned before a reueral commissioner on the charge that he used the mails to defraud. He waived examination and was sent back to ja 1 in default of $25,000 bonds. Trial was set for the September term of the federal court. A run on the First State bank. a private institution in the north end doing business principally with menibers of the Italan colony. was co.tinued today. Depositors were alarmed by reports that Presid nt Thomas Nutle had suffered losses in of the closing of the Hanover Trust Co., which was invived in the collapse 1 Ponzi. Nutli said he could produce three times as much money as was necessary to pay off the $1,000,000 deposits and that he had not been a stockholder in the Hanover Trust Co. for several months.

6. August 20, 1920 Bisbee Daily Review Bisbee, AZ
Article from Bisbee Daily Review, August 20, 1920

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PUNZI SAYS MAN PROMINENT IN BAY Y STATE IS ACCOMPLICE Boston Philanthropist Slated for Expose by Italian WAVES EXAMINATION AND IS SENT TO JAIL Run Starts on Banking Concern Said to Have Suffered in Collapse (Associated Press Leased Wire) BOSTON, Aug. 19.-Charles Ponzi, discredited prophet of high finance, again was the object of the attention of crowds today. He was taken bea fore a federal commissioner for hearing on charges that he used the mails to defraud. Ponzi waived examination and was taken back to jail in default of $25,000 bonds. Trial was set for September. In the throng which filled the court room was John S. Dondero, described of Ponzi in his ,Securicompany in papers ties as a Exchange partner with filed at the city hall, and named a defendant in cy brought by him proceedings as joint bankrupt- creditors ago. Dondero has been for several days several sought days and service He was not made on him until today. was arraigned, charged with larceny of $600 in connection with the Ponzi He pleaded not held for was scheme. ordered hearing guilty Sep- and Bonds were set at $5000. no outward totember There 10. was indication day of attempt by Ponzi or his obtain his on council any to freedom States bail. Ponzi told deputy United his downfall was of support by a man prommarshals withdrawal due to the financial circles. If under given inent in his liberty city's guard for make 60 Ponzi asserted he could dollar for dollar on days, good every promise and prove his solvency. is to be a "There likely big quoted blowup within a few days," he was as "If I tell what I man promient a saying. certain know in Boston about who poses as a philanthropits and pub lic benefactor, there will be a great change of sentiment." Money Flow Continues Ponzi remarked as an instance of received a that continued he had public confidence check in for him $5. 500 for investment before he left jail today, which he turned over to the sheriff. Attorney General Allen announced that $15,000 of the funds of the Old Colony Foreign Exchange company had been located in New York and that this brought the total of the company's funds accounted for to $150,000. Further Liabilities Ponzi's liabilities, as uncovered by general $4,438,807. night the state attorney representing totaled the the to- 50 10,200 investors plus interest claims per cent of promised. A run insti- on the First State bank, a private business tution doing principally colony, contin- with members of the Italian Depositors were said to indefinite be ued alarmed today. by reports suffer- that President Thomas Nutile had in the closing of over ed losses the Han- inTrust company which was the Ponzi said he volved ident Nutile in collapse. could produce Presithree times as much money as was necessary to pay off the $1,000,000 of deposits. Ponzi said tonight that he was "content to remain in jail" after being ar raigned. Crowds in the court room gathered around him in an effort to grasp his hand and he smiled broadly in appreciation.

7. August 20, 1920 New-York Tribune New York, NY
Article from New-York Tribune, August 20, 1920

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Court Will Name Receiver to Guard Ponzi's Interests Financier Asks Sixty Days' Freedom to Prove He Can Meet Obligations; Gets More Cash Through Mail BOSTON, Aug. Charles Ponzi said to-night he was content to remain in jail, after being arraigned in Federal court to-day on a charge of using the mails to defraud in connection with his plan to pay 50 per cent in forty-five days on all investments. He waived examination and was held in $25,000 bail for the September session of the court. Federal Judge Morton announced tonight that he would appoint a receiver to-morrow to conserve Ponzi's interests. Crowds in the court room gathered around Ponzi in an exort to grasp his hand, and he smiled broadly in appreciation. "All that I ask," he said, "is that I be given sixty days in the custody of two guards, and I will be able to meet all of my obligations. This morning I received $5,500through the mails, which shows the confidence the public still reposes in me." He added that he had turned the money over to a sheriff. Ponzi's liabilities, as uncovered by the state Attorney General, totalled $4,308,874, representing the claims of 10,200 investors, plus the 50 per cent interest promised. The Attorney General said his investigation showed the liabilities of the Old Colony Foreign Exchange Company, a concern which ran as a rival to Ponzi's Securities Exchange Company, to be $300,000, with available assets of $150,000. John S. Dondero, described as a partner of Ponzi in his Securities Exchange Company and named with him as a joint defendant in a bankruptcy proceeding brought by creditors several days ago, was served with a subpœna to-day. He surrendered to local police and was arraigned in the District Court charged with larceny of $600 on three counts. He pleaded not guilty and was ordered held for a hearing on September 10. Bonds were set at $5,000. There was no indication of any attempt by Ponzi or his counsel to obtain his freedom on bail. With $25,000 again set as the amount required by Federal officials, and the Attorney General willing to accept $100,000 to cover all state warrants to date, the aggregate of $125,000 was apparently beyond the means of the man of recently reputed millions. A run on the First State Bank, a private institution in the North End, doing business principally with mem'bers of the Italian colony, appeared to have ended to-day. Depositors were said to be alarmed by indefinite reports that the bank was going to close and that President Thomas Nutile had suffered losses in the closing of the Hanover Trust Company, which was involved in the collapse of Ponzi.

8. August 27, 1920 The Fayette Falcon Somerville, TN
Article from The Fayette Falcon, August 27, 1920

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PONZI CRASH CAUSES RUN ON ANOTHER BANK Boston, Mass-A run on the First State Bank, a private institution In the North End, doing business principally with members of the Italian colony, was continued. Depositors were said to be alarmed by Indefinite reports that the bank was going to close and that President Thomas Nutlle had suffered losses in the closing of the Hanover Trust Company. which was involved in the collapse of Charles Ponzi. Payment was begun at the usual opening hour to a long line of claimants. President Nutile said he could produce three times as much money as was necessary to pay off the $1,000,000 of deposits and that the report that the bank was going to close was false.

9. September 3, 1920 The North Mississippi Herald Water Valley, MS
Article from The North Mississippi Herald, September 3, 1920

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PONZI CRASH CAUSES RUN ON ANOTHER BANK Boston Bank Depositors Are Alarmed Over Rumors of Failure of First State. Boston, Mass.-A run on the First State Bank, a private institution in the North End, doing business principally with members of the Italian colony, was continued. Depositors were said to be alarmed by indefinite reports that the bank was going to close and that President Thomas Nutile had suffered losses in the closing of the Hanover Trust Company, which was involved in the collapse of Charles Ponzi. Payment was begun at the usual opening hour to a long line of claimants. President Nutile said he could produce three times as much money as was necessary to pay off the $1,000,000 of deposits and that the report that the bank was going to close was false.

10. September 4, 1920 The Concordia Sentinel Ferriday, Vidalia, LA
Article from The Concordia Sentinel, September 4, 1920

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PONZI CRASH CAUSES RUN ON ANOTHER BANK Boston Bank Depositors Are Alarmed Over Rumors of Failure of First State. Boston, Mass.-A run on the First State Bank, a private institution in the North End, doing business principally with members of the Italian colony, was continued. Depositors were said to be alarmed by indefinite reports that the bank was going to close and that President Thomas Nutile had suffered losses in the closing of the Hanover Trust Company, which was involved in the collapse of Charles Ponzi. Payment was begun at the usual opening hour to a long line of claimants. Président Nutile said he could produce three times as much money as was necessary to pay off the $1,000,000 of deposits and that the report that the bank was going to close was false.