7923. Hanover Trust Company (Boston, MA)

Bank Information

Episode Type
Run → Suspension → Closure
Bank Type
trust company
Start Date
August 9, 1920
Location
Boston, Massachusetts (42.358, -71.060)

Metadata

Model
gpt-5-mini
Short Digest
315caf60

Response Measures

Full suspension, Books examined

Other: Bank was closed/taken over by state bank commissioner; associated institutions (Polish Industrial Association) also taken over. Receiver appointed for Ponzi, not explicitly for the bank in the provided clippings.

Description

A run on Ponzi's Securities Exchange company and heavy withdrawals on Ponzi checks at the Hanover Trust occurred in early August 1920. The state bank commissioner ordered the Hanover Trust closed (suspension) and later federal receivers were appointed for related Ponzi affairs. Closure appears permanent; bank was taken over/closed and implicated in receivership processes.

Events (3)
1. August 9, 1920 Run
Cause
Bank Specific Adverse Info
Cause Details
Run driven by collapse of Charles Ponzi's scheme and large withdrawals on Ponzi-related accounts and checks; federal/state investigations sparked withdrawals.
Measures
Bank paid out large sums on Ponzi checks during the run (paid out $5,900,000 on Ponzi checks during the run per testimony); later the state bank commissioner forbade the bank to honor Ponzi's checks and placed seals on safe-deposit boxes.
Newspaper Excerpt
For the last two days the Hanover Trust has paid out $300,000 a day on Ponzi checks.
Source
newspapers
2. August 12, 1920 Suspension
Cause
Government Action
Cause Details
State Bank Commissioner ordered the Hanover Trust closed / suspended after examiners found excessive loans and impaired capital; commissioner forbade honoring Ponzi checks and took control actions.
Newspaper Excerpt
the Hanover Trust company ... was closed. Bank Commissioner Allen said his was due to findings by his examiners that the capital ... was seriously impaired and probably wiped out.
Source
newspapers
3. August 17, 1920 Receivership
Newspaper Excerpt
Receivership proceedings against Charles Ponzi ... began in United States District Court today ... The attorney general argued ... that the State had special cause for wishing appointment of a receiver because Ponzi had done business through the Hanover Trust Company.
Source
newspapers

Newspaper Articles (22)
1. August 10, 1920 The Evening World New York, NY
Article from The Evening World, August 10, 1920

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PONZI IS BOASTFUL OF HOW HE FOOLED STATE AUTHORITIES (Continued From First Page.) and part of the $1,500,000 is assigned to çover his shortage. For the last tw odays the Hanover Trust has paid out $300,000 a day on Ponzi checks. "Hot air, all hot air, I gave him hot air and I shall give him more of it if he wishes; I shall ball him up more and more." Thus spake Charles Ponzi as he sat in a weaklegged chair-the only one in "the vacated office of the E. and E. Construction Company on the tenth floor of the Hanover Trust Building, at No. 268 Washington Streetwhen commenting on the alleged facts he had give to Attoreny General Allen of Massachusetts. Concerning his transactions in foreign exchange Joseph C. Allen, Bank Commissioner of Massachusetts had just ordered payments on all Ponzi checks stopped, and newsboys below were yelling: "Ponzi fails!" "Ponzi fails!" "Ponzi bankrupt!" "After what I have told Mr. Allen, he stops my business and all the poor people who have given me their money cannot get it back because he ties up my money not only here, but in New Hampshire, New Jersey, everywhere," continued the financial wizard. "My genius it is not appreciated. You gentlemen all know whatever else I am, I am not a damn fool. I give them bull-much bull. And I say if I could not meet my liabilities I would have what you call in English flew de coop two weeks ago." "Yes," said a reporter, "you wanted to 'flew de coop,' but you couldn't get your passports." "What!" gasped the little Italian waiter dishwasher banker financial wizard as his jaw dropped. He started. "Yes, yes. Oh, yes, I wanted to go La Bella Italia to see my old mother. near Parma, now that I was rich, but the business was SO good-oh, so many hundreds of thousands of lira. They come every day easy, easy-like-a dat. You know I could not go. Now the Government it spoil the trip, and I have my old mamma come to me. It is so nice to have her. "The public officials they are not ethical at all. They try to find out all about me. It is not fair." "Was it ethical to 'bull' the Attorney General?" "Ah, signor, that is another question. This is a free country. He try to ball me up and I ball him up. Is it not fair? I shall do it again. Yes, I give him 'bull'-plenty of it. And I give bull any time it suits me when they try to ball me up. "But I am solvent, gentlemen," he continued' after a slight pause in which he blew the cigarette butt from the holder and slowly snuffed it out under the toe of an immaculate buckskin Oxford. He reached to the floor for a cold bottle of ginger ale, but as he did so a deferential hanger-on gently took it from his hand, opened it for him and handed the drink in a glass. He was the picture of a vaudeville actor sitting in the wings between acts. On his right ring-finger flashed B. gaudy diamond. His shirt proclaimed itself silk and the Palm Beach suit was not smart but natty. INSISTS HIS ASSETS EXCEEDS HIS LIABILITIES. "My obligations are $500,000 and my assets are much more," he continued. "Right here in this bank (he pointed downward with his fore finger to the Hanover Trust Company on the first floor) I have $1,500,000 in cash, but they will not let me touch 1t. I have now on my person in this little bag another $1,500,000 in securities." "Then why don't you pay your claims with that was asked. "Ah, signor, that is my secret. I have my reasons. Charlie Ponzi is no damn fool, what?" "That you are not," a reporter answered. "You bet. Nobody knows Charlie Penzi's business better than himself. Don't you fool yourself about that, signor. You treat me nice-I treat you nice. When I open my business again you put all your money with me. And I make it grow, grow, grow millions. That is Charlie Ponzi-me and the newspaper boys are for the people. We are not the autocracy. "The autocracy stop my business becau % I earn big money for the people, and they cannot. Is it not so? They are what you call Jealous of Ponzi. Some day the people will rise." Here one could not help thinking of the early days of his notoriety when he passed along Washington and Tremont Streets and threw kisses to the yelping mobs that followed and lined the sidewalks to have a glimpse of the new wizard. "And now what will Signor Ponzi do since the autocracy has put its

2. August 10, 1920 Norwich Bulletin Norwich, CT
Article from Norwich Bulletin, August 10, 1920

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of Boston, Aug. 9.-The response Charles Ponzi, who claims to have made millions through dealing in international postal exchange, to bankruptcy proceedings brought against him and to orders issued by the state bank commissioner today forbidding the Hanover Trust company to cash checks signed by him or his agents, was his declaration tonight that he would "not pay out one cent of money tomorrow" at his offices. Will Not Pay Notes. "Though I anticipate there will be a small run on my company after today's developments," he said, "I will not pay the notes that have run 45 days. Neither will I pay those which the depositors desire without any interest. But I will tell my depositors that the Hanover Trust company would gladly honor these checks and cash them, but the bank commissioner says that this cannot be done. "In the Hanover Trust company I have two accounts, my own personal account and another one. My personal account is over a million and a half, more than six times the amount I have out in notes. But the bank commissioner has refused to permit me to transfer my personal account to the other one, by what authority I do not know." In a statement to newspaper men earlier in the evening Ponzi discussed the statement issued today by Attorney General J. Weston Allen, which charged that inquiries by state officials had so far failed to confirm his statements that he had made his profits through the purchase of international reply coupons. "When Attorney General Allen starts in to ascertain what my liabilities are, I will give him all the help possible," he said. "And when he is finished I will show him the money to cover them. But he is endeavoring to find out my assets, where they are and how I made my money, and nobody knows that but Charley Ponzi, and nobody else is going to now. I will die before I disclose these facts to anybody. Maintains Solvency. "I have played fair with everybody. I have paid all regardless of the attack and the impediments thrown in my way by the state authorities. That I am solvent there is not the slightest doubt in anybody's mind. Why, then, should my investors be delayed in receiving payments which are rightfully theirs when I have cash available to do so? I am not going to run away. That is what the officials would like to have me do. I am a fighter and I am going to fight them to the end. and I am going to win my fight." Attorney General Allen tonight sent to Boston newspapers the following advertisement: Call to Holders of Notes. "All persons holding unpaid notes of the Securities Exchange Trust company or of Charles Ponzi are requested to notify, in person or by mail, the department of the attorney general, giving the number and date of the note, the amount

3. August 10, 1920 Richmond Times-Dispatch Richmond, VA
Article from Richmond Times-Dispatch, August 10, 1920

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FORBIDS BANK TO HONOR CHARLES PONZI'S CHECKS Wizard Also Denied Right to Transfer Personal Account to Trust Fund. EXPECTS SMALL RUN TODAY Declares He Has in Hanover Trust Company More Than Six Times Enough to Meet Outstanding Notes-Will Fight to End. [By Associated Press. BOSTON, Augus: 3.-The response of Charles Ponzi, who claims to have made millions through dealing in International postal exchange, to bankruptcy proceedings brought against him and to orders issued by the State Bank Commissioner today forbidding the Hanover Trust Company to cash checks signed by him or his agents, was his declaration tonight that he would "not pay out 1 cent of money tomorrow" at his offices. "Though I anticipate there will be a small run on my company after today's developments," he said, "I will not pay the notes that have run forty-five days. Neither will I pay those which the depositors desire without any interest. But I will tell my depositors that the Hanover Trust Company would gladly honor these checks and cash them, but the bank commissioner says that this can not be done. Claims Big Balance. "In the Hanover Trust Company I have two accounts, my own personal account and another one. My personal account is over a million and a half, more than six times the amount I have out in notes, but the bank commissioner has refused to permit me to transfer my personal account to the other one, by what au thority I do not know." In a statement to newspaper men earlier in the evening. Ponzi discussed the statement issued today by Attorney-General J. Weston Allen, which charged that inquiries by State officials had SO far failed to confirm his statements that he had made his profits through the purchase of international reply coupons. "When Attorney-General Allen starts in to ascertain what my liabilities are. I will give him all the help possible." he said. "And when he is finished I will show him the money to cover them. But he is endeavoring to find out what my assets are, where they are, and how I made my money, rContinvel on Second Page )

4. August 11, 1920 The Laurens Advertiser Laurens, SC
Article from The Laurens Advertiser, August 11, 1920

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of Boston, Aug. 9. The response Charles Fonzi, who claims to have made millions through dealing in in( ternational postal exchange to bankruptey proceedings brought against him and to orders issued' by the state bank commissioner today, forbidding the Hanover Trust Company to cash checks signed by him or his agents, was his declaration tonight that he would "not pay out one cent of money tomorrow" at his offices. "Though I anticipate there will be a small run on my company after today's developments," he said, "I will not pay the notes that have run 45 days. Neither will I pay those which the depositors desire without any interest. But 1 will tell my depositors that the Hanover Trust Company would gladly honor these checks and cash them, but the bank commissioner says that this cannot be done. "In the Hanover Trust Company I have two accounts, my own personal account and another one. My person. al account is over a million and a half, more than six times the amount I have out in notes. But the bank commissioner has refused to permit me to transfer my personal account to the other one, by what authority I do not know." In a statement to newspaper men earlier in the evening Ponzi discussed the statement issued today by Attorney General J. Weston Allen, which -charged that inquiries by state officials had SO far failed to confirm his statements that he had made his prof1 its through the purchase of international reply coupons. "When Attorney General Allen starts in to ascertain what my liabilities are, I will give him all the help possible," he said. -And when he is finished I will show him the money to cover them. But he 1. is endeavoring to find out what my as). sets are, what they are and how I made my money and nobody knows 1that but Charles Ponzi, and nobody else is going to know. I will die betfore I disclose these facts to anybody L. "I have played fair with everybody I have paid all regardless of the at J. tacks and the impediments thrown in my way by the state authorities. The 1I am solvent there is not the slightest V. doubt in. anybody's mind. Why then, should my investors be delayed in reB. ceiving payments which are rightfully theirs when I have the cash available 1, to do so? I am not going to run away r, That is what the officials would lik to have me do. I am a fighter and -am going to fight them to the end fAnd I am going to win my fight." Attorney General Allen tonight sen J. to Boston newspapers the following iladvertisement: "All persons holding unpaid note E. of the Securities Exchange Trust Com pany or of Charles Ponzi, are request A. ed to notify in person or my mail, the k, department of the attorney general giving the number and date of the irnote, the amount loaned and M. amount due, the place where the loar was made and the address of the hold M. er. A copy of the note should be fur nished where possible. This informa tion is desired in completing the in vestigation now being made by th department." alls ies.

5. August 12, 1920 The Richmond Palladium and Sun-Telegram Richmond, IN
Article from The Richmond Palladium and Sun-Telegram, August 12, 1920

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PONZICANNOT KEEP PROMISE; HELD BY U. Financial "Wizard" Arrested at Boston, Admitting, it is Said. He Cannot Make His Agreement Good. "RUINED?" HIS BANK (By Associated Press) Mass., Aug. 12.- Charles surrendered authorities, the Ponzi BOSTON, federal today defraud. charged himself with to using the mails to At the time Ponzi gave himself up hearing was being held before Judge sitBennett, a of the municipal court, ting in chambers on a police applica- was tion for arrest. The hearing secret. District Attorney Gallagher said Ponzi has surrendered because out himself unable to carry rehe that felt for the promises he had made demption of his notes tomorrow. Federal Auditor Edwin L. Pride stated today that Ponzi's liabilities Ponzi were upwards of $7,000,000. claims assets of $4,000,000. With state action against him, the young Italian turned a trick the by put- fedhimself in the custody of ting authorities at the moment thay were eral petitioning a municipal court judge. Ponzi apparently was alert as his to what was imminent and, leaving to home early this afternoon, hurried the office of the marshal. Pleads Not Guilty arraignment followed. Ponzi in His not guilty and was held 19. bail for a that he would the pleaded $25,000 He said hearing furnish deter Aug. surety. The surrender did not state authorities from their purpose that obtain his arrest. It was said the their to charge would be larceny and hearing continued while Ponzi waited for bail. Disposition of the Hanover Trust shared in the public interest company the fate of himself and his company, the securities exchange. A creditor's petition asking for the in appointment of a receiver, was filed the federal court today. Bank Commissioner Allen announced that the capital of the Hanover Trust company probably had been completely The wiped bank out. was closed yesterday Charles Ponzi had been a director up to yesterday. Guards were posted around Ponzi's away home to insure that people kept from him early this morning. Investigating officials forecast fur ther developments today to follow Pon- the disclosures made yesterday when zi admitted he had served terms of imprisonment in Montreal and Atlansome years ago. ta It was while Ponzi was dictating this statement the Hanover Trust company, in which he was a director which and shareholder, and through , had done a large checking busi(ness, was closed. Bank Commissioner Allen said his was due to findings by his exthat the bank action aminers had and made beloans "which were excessive yond the legal limit' and "many loans that are either bad or of doubtful value.' Ponzi resigned from the bank's directorate immediately after the institution was closed. The aduit of the company's books conducted by who was appointed by that Pride, is being Edwin expect- United L. States Attorney Gallagher, is ed be by tomorrow. to Attorney Allen's Replies to completed General in many holders of advertisement Ponzi's newspapers notes to with Mr. communicate requesting Allen quantities, continued to be received in large it was said. Since speculators brought notes from many persons in the crowds which made the run on Ponzi's office last week and said that they would hold them until maturity. it is believed that this class holds a substantial amount of the financier's outstanding obligations. In Ponzi's statement he admitted having served three years imprisonment at Montreal. Canada, for forgery claiming. however, that while connected with a banking instituion, he took the blame for acts that properly belonged on the shoulders of his employer. He again was sentenced to Atlanta for smuggling five Italthe country from of the immigrant ians violation for two into years Canada laws. He in this offense was due to the when released fact said that that from and the prison he was to do what he could to get had Montreal penniless a new start. Asks for a Chance. He declared that he was entitled his chance in the world despite the to "sins" of his former life, pointing to such men as Morse, who, released from Atlanta, now occupies a high position in the banking world. He said he felt he ought not to be the object of persecution by newspapers federal and state agents and others who were striving dilligently for his downfall. EVEREOO COMPANY

6. August 12, 1920 Daily Kennebec Journal Augusta, ME
Article from Daily Kennebec Journal, August 12, 1920

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much they amounted to. That is Mr. Ponzi's business. He has got them. They were simply held at our bank for safe keeping, so I will not say how much they are valued at. Neither do I know what Mr. Ponzi's liabilities are. but I will say his assets are very large. in my opinion." The Hanover Trust Company which took its name from its earlier location on Hanover Street was one of the depositories of the Securities Exchange Company. Ponzi became a shareholder and was made a director. His deposits made under the name of Lucy Martelli. trustee. had been considerable when recently they were augmented by withdrawals from other banks Ponzi. throughout a run that began when the federal authorities undertook an investigation of his business to determine whether he was solvent. paid all comers whose notes were due and many who wished their funds before the maturity of their notes. The run ended last week when Ponzi claimed that he still had abundant reserves. Toward the end he had been paying with checks drawn on the Hanover Trust Company. Monday Bank Commissioner Allen, notified the bank not to honor any more checks drawn by Ponzi or his agents. It was admitted that the trust company held a certificate of deposit from Ponzi of $1,500,000 but the examiner explained that this could not be drawn against or withdrawn except after 30 days notice of intention to do so. Ponzi. after learning of the closing of the Hanover Trust Company, issued the following statement through his attorneys: "I learn with regret that the bank commissioner has ordered the Hanover Trust Company to close its doors. I feel that this action on the part of the bank commissioner Is merely a new attempt on his part to prevent me from gaining possession of the $1,500.00 which I have in that institution. in the hope that I will not be able to meet my obligations to hmy note-holders. "I put my money in a state trust company approved year after year by the bank commissioner. examined, I understand. within three months. and received a certificate of deposit for $1,500,000 good any where in the hands of any individual. bank or trust company. but not good now that the bank commissioner has taken charge suspended payment of all trust company's obligations. What merchant or banker could stand the strain of being compelled to by the public autrorities to meet obligations due them. to pay notes upon which I was merely an endorser and at the same time be deprived of all liquid assets" This evening Ponzi retired to his home in Lexington and refused himself to all newspapermen. saying that he intended to take a rest and would not appear in Boston for several days.

7. August 13, 1920 Daily Kennebec Journal Augusta, ME
Article from Daily Kennebec Journal, August 13, 1920

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Liabilities Many Millions Developments followed thick and fast today. As Ponzi was being arraigned before the United States commissioner, Edwin L. Pride, who is examining the books of the Securities Exchange Company for the federal authorities. announced that it had already shown that Ponzi owed $7,000,000. State Attorney-General J. Weston Allen, who is conducting a separate investigation made known his opinion that Ponzi's liabilities would run into the millions. State Bank Examiner Joseph C. Allen issued a statement declaring that the capital of the Hanover Trust Company of which Ponzi was until yesterday a director, was seriously impaired and probably wiped out. State Treasurer Fred J. Burrell attacked the bank commissioner for not having given him opportunity to withdraw state funds before the Hanover was closed and Gov. Coolidge demanded that Burrell make known how much of the state money had been tied up by the closing of the trust company. Later Burrell notified the governor that the state deposits was $125,000. Field of Operations Ponzi's field appears to have included New England and New Jersey. The line that formed daily in Pi Alley at the rear of Ponzi's School street office seems to have been far from representative of his clients. This was made up largely of foreigners who were more interested in getting their (Continued on Page 4-Col. 5)

8. August 13, 1920 The Bennington Evening Banner Bennington, VT
Article from The Bennington Evening Banner, August 13, 1920

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PONZI AND HIS BANK HAVE BOTH "GONE BROKE" Financial Wizard Under Arrest and $3,000,000 Shy CHARGED OF MAIL FRAUD Capital of Hanover Trust Company Disappears with Bursting of Easy Money Bubble. Boston, Aug. 12.-Some 40,000 investors intrusted a total variously es timated at from $15,000,000 to $20,000,000 to Charles Ponzi in a moneymaking scheme which postal officials today declared to be absolutely impossible of fulfillment Ponzi surrendered to the federal authorities this afternoon, explaining that he was unable to meet his obligations because of the closing yesterday of the Hanover trust company, where the bulk of his funds were deposited. He was arrested, charged with having used the mails to defraud, arraigned and held in bonds of $25,000 for a hearing the 19th. Morris Rudnick, a real estate dealer of the Roxbury district, furnished the sureties. Meantime a warrant charging the Italian with larceny had been obtained by the state police in the municipal court and upon leaving the federal building Ponzi was re-arrested and held by the city court in $10.000 for appearance the 23d. Rudnick again went on Ponzi's bonds and the latter was released. Developments followed thick and fast today. A/s Ponzi was being arraigned before United States Commis sioner Hayes, Edwin L. Pride, who is examining the books of the Securities exchange company for the federal authorities announced that it had already been shown that Ponzi owed $7,000,000. State Attorney J. Weston Allen, who is conducting a separate investigation, made known his opinion that Ponzi's liabilities would run in 10 the millions. State Bank Commissioner Joseph C. Allen issued a statement showing that the capital of the Hanover trust company, of which Ponzi was until yesterday a director, was seriously impaired and probably wiped out. State Treasurer Fred J. Burrell attacked the bank commissioner for not having given him opportunity to with draw state funds before the Hanover was closed and Gov. Coolidge demand ed that Burrell make known how much of the state money had been tied up by the closing of the trust company. Later Burrell notified the governor that the state deposit was $125,000.

9. August 13, 1920 Every Evening, Wilmington Daily Commercial Wilmington, DE
Article from Every Evening, Wilmington Daily Commercial, August 13, 1920

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with larceny had been obtained by the State police in the municipal court and on leaving the federal building Ponzi was rearrested and held by the city court in $10,000 bail for appearance August 23. Rudnick again went on Ponzi's bonds and the latter was released. Developments followed thick and fast. As Ponzi was being arraigned before United States Commissioner Hayes, Edwin L. Pride, who is examining the book of the Securities Exchange Company for the federal authorities announced it had already been shown that Ponzi owed $7,000,000. State Attorney-General J. Weston Allen,, who is conducting a separate investigation, made known his opinion that Ponzi's liabilities would millions. a run aminer into Joseph the C. Allen issued of State the Bank statement Hanover Exdeclaring the capital Trust Company, of which Ponzi was until yesterday a director, was seriously impaired and probably wiped out. State Treasurer Fred J. Burrell attacked the bank commissioner for not having given him opportunity to withdraw State funds before the Hanover was closed, and Governor Coolidge demanded that Burrell make known how much of the State money had been tied up by the closing of the trust company. Later, Burrell notified the governor that the State deposit was $125,000. Ponzi's field appears to have included New England and New Jersey. This was made up largely of foreigners who were more interested in getting their money than in protecting their reputations as wise speculators. Anxious inquiries at itn newspaper offices and feverish COL orgations in downtown restaurants indicated that the proprietors of small businesses, professional men and women, clerks and stenographers by the thousand accepted the bait of "50 per cent profit in 45 days." Among the amazing disclosures wasthat the bulk of Ponsi millions were gathered in after the Postoffice Department had begun its investigation last February. In discussing the Ponzi case tonight, Chief Postoffice Inspector Hal P. Mosely said as far as their investigation had gone Ponzi had never done any business in International reply coupons. He said of to he against had Ponzi warned when hundreds inquiries began people come in last February that no man or set of men could manipulate or speculate in international reply coupons in any such manner as they alleged Ponzi had explained to them Further legal steps to protect Ponzi's note holders were taken today. In the Federal Court another bankruptcy petition was filed, this one being directed against "Charles Ponzi of Lexington, John S. Dondero of Medford, and Guglielmo Bertollotti of Parma. Italy, co-partners, doing business under the firm name and style of the Securities Exchange Company. Two similar actions already are pending, one a bankruptcy petition and the other seeking the appointment of a receiver In the earlier petitions no mention is made of Ponzi's partners. The actions are directed against Ponzi alone.

10. August 14, 1920 Evening Public Ledger Philadelphia, PA
Article from Evening Public Ledger, August 14, 1920

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Bank, Allied With Ponzi Trust, Closed Continued from Page One orous examination of Ponzi's affairs will speak for themselves. Referring to the possible transfer Mr. of large sums by Ponzi to his wife. Pride said be taken away from her her. and "It can be. It does not belong to that was pretenses. to be it fraudulent It fraudulent will is money purposes. In obtained going concealed used under after for may be called Ponzi's what we shall reach the large amount transferred assets to or deposited in the name of Mrs. Ponzi. Wife Still Loyal from his wife the surrender by his Ponzi of his withheld before bondsman. going to news telephoued to her He he was remaining in Boston books jail night to go over Mrs. Ponzi in her during with that the auditor. reasserted his she said, will her He faith an is honest, husband. end. "and I by him to the stay second of the two petitions that The been filed to have Ponzi adjudged have bankrupt was pending in the Federal Court today. three latest petitioners. holders The notes for a total of $2625. of two partners John S. Dondero, of asked namely Ponzi's that of of Medford, Parma, Ponzi, Guglielmo Bertollotti. and also be adjudged A petition bankrupt. filed Italy, for a receiver to administer by Ponzi's affairs also has been creditors. Examination of the books of the Co., which was Ponzi's and in a chief Hanover depositary Trust which continued he was and director, was by members of staff. Mr. stockholder today Allen's Bank Allen, Co. Commis- who sioner Hanover Trust last in a statement to reassure in that closed Wednesday the depositors intended institution said and in other trust companies, lead Nothing has developed so far to me to believe that the depositors Hanover will lose one dollar. The In Trust Co. is the only trust company in New England that is involved Ponzi's failure." Run on Trust Companies district was concerned when a run was trust companies. yesterday The several financial small financial due. was it made in on to reports that other t n stitutions said. would be involved in Ponzi's today There was no indication in of affairs. continuance of withdrawals other a than normal quantities. has caused the state seal f on all safe to Trust Co. used He Mr. the be Hanover placed Allen deposit bank. by Ponzi boxes in or employes of the or was done as a the possible removal the valuables against said officers this pending precaution of securid ties of the institution's general's office been settlement The or attorney other affairs. has in a study of the be whether engaged determine action legal who statutes may had to compel all persons notes on unmatured. to turn cashed and taken to their Ponzi. the for matured money equal back a common fund among all d of Brightwell his distribution The into arrest noteholders. the and came as part of extensive of by the and of other investigation associates Ponzi's affairs authorities companies in offering high rates of interest on vestments. The Old Colony Foreign 10. h Exchange Co. was organized July under a deed of trust. with Brightwell, Raymond Meyers and Funnar E. R. Lindblad, of Sweden. as trustees. They six offered to pay 100 per cent in months on investments and claimed At- to dealing in foreign merchandise. be General Allen said that he knew torney that the company had sent large sums abroad. Brightwell Threatened The office here was closed after of a run vesterday. the like not seen during the the run on Ponzi's which frenzied of was offices. wildest Doors days were smashed. threats against a and were windows made Brightwell handle and . of police was required to e when the announcement was the company that on detail made the crowd by payment Mon notes would be suspended until day Brightwell was ordered by the of the building on Devonshire in which one of to vacate an offices street. trustees was located. the company's within hour and a half. Shortly afterward the offices were closed and the arrests were made. from Philadelphia. Provi II Springfield, dence. Dispatches Fall River. Haverhill Law- told New Bedford and in those cities d of the company. or offices rence. of the closing investigations of branch them. under way with a view to closing 0 Lynn. Mass. Aug. 14 By A. P.) The local office of the Old Colony d Foreign Exchange Co. was surrendered by the management today to Assistant District Attorney Edward F. Flynn im and Inspector John T. Curry. who of d mediately started an examination the accounts They acted by direction of Attorney General Allen. PROBE CAPITOL FIRMS

11. August 14, 1920 The Union Daily Times Union, SC
Article from The Union Daily Times, August 14, 1920

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commonwealth on a blanket warrent issued in the municipal court, charging him with larcency in 53 counts, totalling $24,000. The authorities were said to be determined that the sensational financier should remain in custody, the principal reason for this being a desire to preserve for his creditors whatever assets he may have and the fear that Ponzi might seek to dissipate or trans_ fer them if out on bail. Edwin L. Pride, federal auditor of Ponzi's accounts has placed the latter's known liabilities at $8,000,000 and Ponzi claimed assets of about $4,000,000. Boston, Aug. 14.-Referring to the possible transfer of large sums by Ponzi to his wife, Mr. Pride said: "It can be taken away from her and it will be. It does not belong to her. It is money that was obtained under fraudulent pretenses, to be used for fraudulent purposés." Ponzi withheld from his wife the news of his surrender by his bondsmen. He telephoned to her before going to jail that he was remaining in Boston during the night to go over his books with an auditor. Mrs. Ponzi reasserted her faith in her husband. "He is honest," she said, "and I will stay by him to the end." Examination of the books of the Hanover Trust Company, in which he was a stockholder and director was continued today by members of Bank Commissioner Allen's staff. "Nothing has developed so far to lead me to believe that the depositors will lose one dollar," Mr. Allen said. "The Hanover Trust Company is the only trust company in New England that is involved in Ponzi's failure." The financial district was concerned yesterday when a small run was made on several trust companies, due, it was said, to reports that other financial institutions would be involved in Ponzi's affairs. There was no indication today of continuance of withdrawals in other than normal quantities. Mr. Allen has caused the state seal to be placed on all safe deposit boxes in the Hanover Trust Company used by Ponzi or officers or employees the bank He said this was donotary precaution against the moval of securities or other pending the authorient tution's affairs.

12. August 15, 1920 Amarillo Daily News Amarillo, TX
Article from Amarillo Daily News, August 15, 1920

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FURTHER CLOSINGS OF EASTERN BANKS ARE NOT EXPECTED NO OTHER CONCERNS KNOWN TO BE AFFECTED BY PONZI'S DEALINGS TWO INSTITUTIONS HURT Definite Clarification of Money Wizard's Tangled Affairs Locked For if Receivers Are Granted By Associated Press. BOSTON, Aug. 14.-Assurance that no further bank closings are likely RS a result of the collapse of the financial dealings of Charles Ponzi was given tonight by Joseph C. Wallen. State bank commissioner. "The Hanover Trust company and the Polish Industrial Association are the only banking institutions in New England known to be in any way at. rected by the Ponzi failure" Mr. Allen said. Company Taken Over. "The Polish Industrial Association, conducting a private bank. steamship agency and other accomodations for immigrants, was taken over by the commissioner today. Henry H. Chratelinski. president of the association is also president of the Hanover Trust company. closed by the commissioner early in the week. Affairs of the two institutions are hopelessly interwoven, the Polish association had exhausted virtually all its cash. and that its loans are either bad or of doubtful value." No bondsmen Appear. No honds were fortheoming to. day for Ponzi or for the three officers the three officers of the Old Colony foreign exchange company, the "100 percent in six months" concern. who were arrested yest rday. Samuel Zorn, an agent of the exchange company. was released in $2,000 bond. Definito clarification of Ponzi's tangled at. fairs is looked for If petitions for re. ceivers for his Securities exchange company are granted by the federal court. A hearing will be given on these potition Tuesday File Bankruptcy Petitions Bankruptcy petitions were filed against the Old Colony foreign exchange company today. Branch offices in several New England cities were closed by county authoraties. The offices of Attorney General J. Westen Allen at the state house were crowded throughout the day with note holders. Presentation of these notes already has disclosed liabilities on Ponzi's company to the extent of $2,000,000.

13. August 15, 1920 Pine Bluff Daily Graphic Pine Bluff, AR
Article from Pine Bluff Daily Graphic, August 15, 1920

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PONZI'S VICTIMS CROWD OFFICES OF ATTORNEY-GENERAL Holders of Notes for More Than Two Millions Seek Aid ONLY TWO BANKS ARE INVOLVED IN SCHEME Ponzi and Others Arrested in Collapse of Banks Unable to Furnish Bonds Boston, Aug. 14. Assurances that no further bank closings are likely as a result of the collapse of the financial dealings of Charles Ponzi was given tonight by Joseph C.'A1len, state bank examiner. "The Hanover Trust company and the Polish Industrial association are in the only banking institutions New England known to be in any way affected by the Ponzi failure," Mr. Allen said. No bondsmen were fforthcoming today for Ponzi or for three officers of the Old Colony Exchange company, the "100 per cent in six month' concern, who were arrested yesterday. Samuel Zorn an agent, off the foreign exchange company, was released in $2,000 bonds. 7 Bankruptcy petitions were filed against the Old Colony Foreign Exchange company today. Branch offices in several New England cities were closed by county authorities. S The officers of Attorney General J. Weston Allen at the state house were crowded throughout the day with note holders of the Securities Exchange company and the Ild Colony Foreign Exchange company. Presentation of these notes already has disclosed liabilities on Ponzi's company to the extent of $2,000,000. The possibility of a shake-up in the police department as a result of the bursting of the Ponzi financial bubble was seen in a statement issued by Police Commissioner Edwin U. Curtis. The commissioner said it had been called to the attention of departofficials that members of the department including superior officers had invested with Ponzzi, and that it was reported that some policemen had even acted as agents and received commissions. Work of Salvage Begins. The financial ship that has been piloted by Charles Ponzi was high and dry on the rocks today and federal and state officials made determined efforts to salvage the cargo of millions of dollars entrusted to Ponzi by thousands of investors in his "50 per cent in three months." This morning Ponzi ate his breakfast in the Middlesex county jail in East Cambridge, a prisoner of the United States government, in default of $25,000 bond. Three officers of the Old Colony Foreign Exchange company, a rival concern of Ponzi's Securities Exchange company, had their morning meal in the Charles Street jail, prisers of the commonwealth in default of $50,000 bonds each. Samuel Zorn. said to be an employe of the Old Colony Foreign Exchange company, was at headquarters awaiting a hearing on a charge of larceny of $500, also from persons unknown. He had spent the night in jail. The three officers of the company who were held are Charles M. Brightwell, president and treasurer of the concern; Raymond Meyers, office manager, and Fred Meyers, sales agent. The Meyers are brothers. The men were held on technical charges of larceny of $500 from persons unknown. Upon representation of Albert Hurwitz, assistant attorney general, that the company's be transactions probably would shown to have amounted to hundreds of thousands of dollars; the bonds were set at a high figure. Edwin L. Pride, federal auditor of Ponzi's accounts, has placed the latter's known liabilities at $8,000,000 and Ponzi claimed assets of about $4,000,000. In this connection Mr. Pride said: a "I am inclined to believe that great deal of money collected by Ponzi and his agents has been deposited in the names of others." Wife is Loyal. Ponzi withheld from his wife the news of his surrenderer by his bondsmen. He telegraphed to her before going to jail that he was remaining in Boston during the night to go over his books with an auditor. Mrs. Ponzi reasserted her faith in her husband. "He is honest," she said, "and I will stay by him to the end." The second of the two petitions that have been filed to have Pong zi adjudged bankrupt was pending in the federal court today. The three latest petitions, holders of Pond zi's notes for a total of $2,625, asked that two partners of Ponzi, John S. Dondero of Medford and Guglielmo Bertollotti of Parma, Italy, also be adjudged bankrupt. A petition for a receiver to administer Ponzi's affairs also has been filed by creditors. Examination of the books of the Hanover Trust company, Ponzi's chief depositary and in which he was h a stockholder and director, was continued today by members of Bank Continued on page Six

14. August 17, 1920 The Washington Times Washington, DC
Article from The Washington Times, August 17, 1920

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PONZI'SMONEY MAY BE BOGUS Federal Authorities Have Theory "Wizard" Used Counterfeit Exchange. BOSTON, Aug. 17.-Federal authorities, it became known here today, are working on the theory that there may have been counterfeiting ramifications of Charles Ponzi's "get-rich quick" scheme, either here or abroad. Attempts are being made both here and in Europe, the authorities say, to determine whether there has been any wholesale counterfeiting of marks. lire and other foreign money which might account for the vast sums Ponzi claims to have received from his agents overseas. Investigators declare Ponzi hoped to break the plan fostered by President Henry M. Chmielinski. of the wrecked Hanover Trust Company. to establish trust companies all over the country and to have affiliated with them a chain of automobile repair shops where parts of popular makes of cars could be had quicky at standard prices. Chmielinski, still under forty, one of the young American bank presidents. came here as an immigrant from Poland only a few years ago, and has had a meteoric rise. Besides the Hanover Trust Company he organized the local Polish bank, closed here Saturday by" State Bank Examiner Allen. He has successfully backed a number of such Polish financial associations in different sections of the cast. Chimelinski is American representative of the Polish Bank of Warsaw, according to local Polish bankers. Advices today from the West contain proof of Chmielinski's dream of a chain of trust companies across the continent. Receivership proceedings against Charles Ponzi and his $15,000,000 getrich-quick company began in United States District Court today before Judge Morton. The appointment of a temporary receiver is sought by Attorney John Crowley, chairman of the committee named by State Attorney General Allen to look after the interests of the thousands of speculators in Ponzi's notes. Investigation by State authorities today revealed that Ponzi has been defrauded of a large sum, running into the thousands, through the raising and counterfeiting of his notes. It was also learned that the authorities are seeking $250,000 worth of negotiable liberty bonds bought by Ponzi two weeks ago and of which no trace has been found. Mrs. Ponzi reiterated today her intention to surrender her palatial Lexington home, automobile, and everything in her possession which the authorities believes rightfully to belong to her husband's creditors.

15. August 18, 1920 The Washington Herald Washington, DC
Article from The Washington Herald, August 18, 1920

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PONZI RECEIVERSHIP UP IN FEDERAL COURT Boston, Aug. 17.-Judge James Morton in the United States District Court today took under advisement the petition of the State and of creditors for the appointment of a receiver for Charles Ponzi, the "mushroom millionaire." The arguments of the Commonwealth of Massachusetts for appointment of a receiver were presented by Attorney General John E. Crowley. The attorney general argued that inasmuch as Ponzi had done business through the Hanover Trust Company, the State had special cause for wishing appointment of a receiver.

16. September 6, 1920 Grand Forks Herald Grand Forks, ND
Article from Grand Forks Herald, September 6, 1920

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BANK HEADS TELL OF PONZI AFFAIRS Boston, Sept. 6.-The federal receivers of Charles Ponzi, attempting to run down the assets of his broken business, examined Henry A. Chmielinski and William S. McNary, president and treasurer, respectively, of the Hanover Trust company, the bank which was closed when the Ponzi quick rich bůbble was burst. It was testified by Treasurer McNary that Ponzi's maximum deposit for any one day was $2,700,000, instead of the six or eight millions which Ponzi had claimed in public statements, while the run on his Securities Exchange company was on. The bank paid out $5,900,000 on Ponzi checks during this run, Mr. McNary said, Ponzi bringing in new money daily to meet / the demands, The bank now has $1,058,000 of his money in its vaults, for which the receivers. hold a certificate of deposit, and Treasurer McNary said additional assets. were available in Ponzi's holdings of stock in the bank, which, he predicted, will pay dollar for dollar. Ponzi attempted at one time to buy out control of the bank, but was stopped, Mr. McNary testified, by a vote that he be forced to withdraw his account of $2.700,000 unless he ceased the attempt at control. The notes for $20,000 each which Ponzi testified he held for money due him from the two bank officials were disclaimed as obligations by each. They said they were personal notes given by an official of the North End branch of the bank who had received an offer from Ponzi to enter business, Ponzi agreeing to take his notes if they were indorsed by Chmielinski and McNary. Ponzi had assured them, they said, that he would be responsible for the notes, and at his direction, they were charged to his account.

17. September 28, 1920 The Brattleboro Daily Reformer Brattleboro, VT
Article from The Brattleboro Daily Reformer, September 28, 1920

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FIDELITY TRUST STOPS BUSINESS Bank Commissioner Allen Takes Charge of Institution DECLINING DEPOSITS AND SLOW LOANS They Are Responsible for Commissioner's Action - Its Officials Affiliated With Other Financial and Industrial Concerns. BOSTON, Sept. 28.-Bank Commissioner Joseph Allen took over the affairs of the Fidelity Trust Co. here today. His action marked the closing of the sixth banking institution in this city= within two months. The others were the Hanover Trust Co., of which Charles Ponzi was a director and largest individual depositor, the Prudential and Cosmopolitan Trust companies and two private banks. The canital of the Fidelity was $3,000,000 and according to the latest available statement the company had a surplus of $700,000. Its deposits totalled about $18,000,000. James G. Ferguson, its president, is affiliated with several other financial and industrial institutions, as is Edwin T. McKnight, the vice president. The Fidelity Trust Co. was one of three banks which yesterday invoked the 90-day law for withdrawal of deposits. The reasons for the closing of the bank, Commissioner Allen said, are the steady withdrawal of deposits and slow and doubtful loans. 'Only a few persons were on hand when the formal notice announcing the closing was posted on the door of the Fidelity Trust Co. at 9 a. m. A squad of policement were on duty and extra officers patrolled the financial district but there was no excitement. At the offices of the Tremont Trust Co. a small crowd gathered before the opening hour but police had nothing to do. The bank continued to do business as usual in its commercial department but depositors in the savings department were required to file 90 days' notice of intention to withdraw. The same sitnation existed at. the Dorchester Trust Co.

18. October 5, 1920 The Barre Daily Times Barre, VT
Article from The Barre Daily Times, October 5, 1920

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PONZI ABLE TO PAY ONE DOLLAR IN THREE Definite Statement of High Finance Man's Resources Announced To-day. Boston, Oct. 5. -Charles Ponzi can pay less than one dollarsin three on the claims of creditors of his shattered scheme of high finance. Instead of the 50 per ceni profits which he promised, those who expected Ponzi to lead them to "quick riches" will lose more than 50 per cent on their investments. The extent to which the millions entrusted to him had been reduced became known definitely to-day for the first time when C.N. Rittenhouse, auditor for the federal receivers of Ponzi, made his report at a hearing on a bankruptcy petition against Ponzi in the federal court. To meet liabilities which he set at $7,500,000, the and itor said Ponzi had total assets of only $2,195,685. This aggregate of assets included as principal items a certificate of deposit for $1,058,221. cash in banks amounting to $150,076, Ponzi's home in Lexington estimated at $110,000 and 1,590 shares of the Hanover Trust Co., which he tried to control and which failed when he fell, estimated at $200, 000.

19. October 6, 1920 New-York Tribune New York, NY
Article from New-York Tribune, October 6, 1920

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Ponzi Assets Less Than One. Third of Liabilities Auditor's Report Shows Creditors Will Get About One Dollar for Three BOSTON, Oct. 5.-Charles Ponzi can pay less than one-third of the claims of creditors of his shattered scheme of high finance. Instead of the 50 per cent. profits which he promised. those who expected him to lead them to quick riches will lose more than 60 per cent. on their investments. C. N. Rittenhouse, auditor for the Federal receivers of Ponzi. made his report at a hearing to-day on a bankruptcy petition against 10121 Federal court. To meet liabilities, which he set at $7,500,000. the auditor said Penzi had total assets of only $2,195,685. Ponzi's assets included as principal items a certificate of deposit for $1,058.221, cash in banks amounting to $150,076, Ponzi's home in Lexington, estimated at $110,000, and 1,590 shares of the Hanover Trust Company, estimated at $200,000. The Hanover Bank failed when Ponzi's business wa3 closed.

20. October 6, 1920 The New York Herald New York, NY
Article from The New York Herald, October 6, 1920

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PONZI HAS $2,195,685 TO REPAY $7,500,000 List of Assets Is Given by United States Auditor. BOSTON, Oct. 5.-Charles Ponzi can pay less than one dollar in three on the claims of creditors of his shattered scheme of high finance. Instead of the 50 per cent. prolts which he promised those who expected him to lead them to quick riches will lose more than 50 per cent. on their investments. The extent to which the millions entrusted to Ponzi had been reduced became known definitely to-day for the first time when C. N. Rittenhouse, auditor for the Federal receivers. of Ponzi, made his report at a hearing on a bankruptcy petition against Ponzi in the Federal court. To meet liabilities which he set at $7,500,000. the auditor said Ponzi had total assets of only $2,195,685. This aggregate of assets included as principal items a certificate of deposit for $1,058,221, cash in banks amounting to $150,076. Ponzi's home in Lexington, estimated at $110,000. and 1,590 shares of the Hanover Trust Company, which he tried to control and which failed when he fell, estimated at $200,000.

21. October 6, 1920 Daily Kennebec Journal Augusta, ME
Article from Daily Kennebec Journal, October 6, 1920

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Ponzi Speculators to Lose More Than Expected Gains Boston Oct. S.-Charles Ponzi can pay less than one dollar in three on the claims of creditors of his shattered scheme of high finance. Instead of the fifty per cent profits which he promised. those who expected Ponzi to lead them to quick riches will lose more than 50 per cent on their investments. The extent to which the millions entrusted to him had been reduced became known definitely today for the first time when C. W. Rittenhouse. auditor for the Federal receivers of Ponzi, made his report at a hearing on a bankruptcy petition against Ponzi in the Federal court. To meet liabilities which he set at $7,500,000 the auditor said Ponzi had total assets of only $2,195,685. This aggregate of assets included as principal items a certificate of deposit for $1,058,221. cash in banks amounting to $150,076. Ponzi's house in Lexington estimated at $110.000 and 1590 shares of the Hanover Trust Company which he tried to control and which failed when he fell. estimated at $200.000.

22. October 20, 1920 The Chattanooga News Chattanooga, TN
Article from The Chattanooga News, October 20, 1920

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HOLD PONZI'S AUTO Receivers Have Difficulty in Collecting Assets, Boston, Oct. 20.-The federal receivers of Charles Ponzi in a preliminary report today said that they have been able to collect to date only $193,038 in cash as assets to meet the claims for millions presented by an army of disappointed investors in his quick rich scheme. In addition, however, the receivers hold property which has not been appraised certificates of deposit aggregating $1,058,221 from the Hanover Trust company. now closed. and $228,000. in notes secured and unsecured. The bank commissioner of Massachusetts has two notes for $20,000 each, which he refuses to deliver, acording to the receivers: there are other notes the status of which is uncertain: a safe deposit box at the Hanover Trust company contains cash amounting to more than $11,000 and the receilvers are holding Ponzi's $13,000 automobile for conversion into cash.