The Barre daily times. (Barre, Vt.) 1897-1959, 1920-07-27
PROMISES so PER CENT
EVERY As DAYS
Charles Ponzi of Boston, Doing Rushing
Business, is Held Up Until His
Accounts are Audited.

Boston, July PA bar was placed
yesterday on the rush of people to give
their money to Charles Ponzi, head of
the Securities Exchange CO., on his
promise to repay their investment
with so per cent profit in 45 days.
After a conference with District At.
torney Pelletier, Ponzi, whose business
is described as the exchanging of in
ternational reply coupons from one
country to another, agreed to accept
nc further deposits until an auditor Sc.
lected by the district attorney has ex-
amined his accounts, which are said to
run into millions Hundreds Of persons
we're turned away with their money in
their hands, after Ponzi issued the or.
der to his Office force.
District Attorney Pelletier said he
was acting under no specific statute in
bringing about the halt in receipt of
funds by Ponsi which have been esti-
mated at 100000 day He suggest.
ed the action, he said, on the ground Of
broad, public policy because the
operations of the company have grown.
so much and have received such wide
spread notice. Ponxi, he said, was en-
tirely willing to stop receiving funds
until after an auditor had determined
whether the company could meet all Of
its outstanding obligations and was
functioning in safe and legitimate
manner"
The action taken is ain no sense a
final closing down Of the business"
the district attorney said. "Mr, Ponzi
desires me to state that he will not
only redeem as usual notes which have
matured, but also those not matured
for the principal invested. just how
long the examination will take can.
not say, but it will be done thoroughly
and | feel | will have every co.opera-
ton to this end
For several weeks past crowds OF
persons have ffoeked to Ponzi's offices
and given in their savings in exchange
for notes of the Securities Exchange
Co for the principal plus 80 per cent
payable in 90 days. Invariably he is
said to have paid of the notes in IS
days and there has been no complaint
that any person has failed to receive
money when due. Many are said to
have reinvested their money with the
profit several times.
Ponzi, a relatively poor man short
time ago. now holds stock TO considera-
bic amounts in a local bank, a con-
struction company, and business
houses, is reputed to have deposits
running into hundred thousands with
other banks here, and is accredited As
the owner of large blocks of stocks in
substantial public utility corporations.
His estimate Of his wealth at present
is $4,000. 900, but at his offices it was
said that the estimate was necessarily
hasty, and that the audit, if il covered
both the company and his personal
accounts would show holding in excess
OF 10 millions.
Ponzi describes his exchange system
in a general way as being based on the
use of the international reply coupon,
authorized under the international !
postal agreement, as the medium for
taking advantage of the abnormal diff
ferences on rates Of exchange. With de-
posits received from a customer, he |
says he converts American dollars into !
Italian lire or other foreign money |
which stands 10 his credit in the coun-
try where purchased Then, through |
agents located in several countries
abroad, international reply coupons are
purchased redeemable under the reg
ulation at the normal and not the pre- |
yailing rate of exchange. The cou-
pons then are transmitted BY agents |
from one European country to another. |
gathering profits through succeeding |
differences in rates Of exchange, with |
assured normal payment for redemp.
ticu, until the transaction is completed |
and the proceeds are reconyerted into !
American dollars. This usually takes
a. DAYS. according TO Ponzi, who says |
his profits have reached 800 per cent in |
some transactions, hence the payment }
to depositors in IS days instead Of
20 as called for By his notes.
pouzi's operations have been under /
Investigation by federal, state and /
county officials fer some time. without /
unoovering any violation Of law.
A statement by United States At
torney Gallagher. issued an hour or
two after that BY District Attorney /
Pelletier. said that P0nEi had an
nouneed the probability that he would |
not resume the Acceptance Of deposits ]
from the public after the audit was