The news scimitar. (Memphis, Tenn.) 1907-1926, 1920-08-17
Public Discussion
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3 HOW eoNzI MADE MILLIONS {.
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To The News scimitar:
For weeks the name of Charles Ponzi
has featured the headlines on the front
pages Of the press The authorities
| seem to admit his claims to making
millions by dealing In foreign exchange,
but profess themselves unable TO de-
termine how no operated.
From the first IL has been apparent
70 the writer how he could have OPP
| Grated and the only mystery to him
Ms that others have not suggested II.
Assuming that Ponzi has really made
money and is not consummate fraud as
the latest disclosures Indicate, his meth
cd Is simplicity Itself in design, but in
execution requires a closely knit organi-
zation Of trained. intelligent and loyal
coworkers, operating in both Europe
1 and America.
As everyone knows. who has been
abroad or has read the widely discussed
matter Of foreign exchange, the Ameri-
can dollar commands premium when
exchanged for the currency Of almost
every other nation. Among our recent
allies the Fpench fVanc and ltali0n lire
in particular haze been greatly depEe-
ciasei, Mt times to the extent of so per
cent ar more with relation to Che dol
lar. EvcA the British pound sterlinE has
been ~ . Discount ~ almost g. per
cent.
The nationals ~ ALMOST svesy Coun-
tSy have been VsNurninE to th"iS NNtlGe
land 10 LARGE numbers since the aSlnl-
stice. Thousands, Tens ~ thousands of
1talians haze Joined this home-Go'hs
movement
What is more simple than 90 supply
these home going italians With he cur :
renCy of their oEn county, taking ad-
its eNchangeable value?
Through his European agents IonHl
would convert dollars into lire or their
paper token, bring the exchanged cur
agents in America exchange it with
outward bound Italians Sor American
money,
The average ltalian, oS course knows
that the par value of lire Is about i've
for one. He also, perhaps, knows that
il cIrculates has not declined very
much more than the dollar at home.
When he is, therefore, offered ten,
twelve or more lire for dollar, what
ia more natural than to grab the sup.
posed bargain, ignorant OF the laCt
that he could upon arrival in Italy
exchange his American money for 49,
is or 20 lire?
Ponzi agreed to pay 50 per cent In
30 days 1t would not be necessary
for MIN to make such profit on u
single transaction. Allowing ~ Gays
for successive shipments to cross the
ocean. or two weeks, he could in 80
DAYS make from s to 10 turnoVers ana
dealing as the dispatches say in mn
lions Of dollars, his total transacttons
could aggregate many millions. Only, a
small percentage Of profit would De
niece ssary on such volume TO give nun
the immense sums he Is credited with
winning. It'll, r,o,,i
There is another way in which Ponzi
could have made so per cent on
large volume of money, but he coulu
not have done Il in 80 days, unless the
rate ON foreign exchange was constant
" in one direction, declining. IIte ,,
wise his principal would become lleu up
and he could not pay 1t back on de,
dand in 90 days, or any other Specllitso
time, However, he could easily MAKE
20 per cent a year, or even more, III
view of the violent fluctuatiohs III IN
eign exchange, provided only ne co GUY
keeD his capital constantly .empioyeu'
This is on the principle of chain store
operation, involving quick turhoVerS'
big volume and small profits.
Some years ago l discovered a methou
by which this principle OF chain store
operation could be applied 70 ssoCh al, t,I
yestment or persaps thought l hau us
covered such a method. o,,o,,
AS it required a large sum OF money
IN operate the plan | sought 70 organ
ize a company one OF the ITst men I
approached. after pumping from ne me-
he InOukHlt All NiiN
plan. decided to play a lone mana "a
tbaref0re went into the market anu
in less than 10 days dropped over w.
600 In fact | soon touha tha' We
meeting with very much more SuTSess
in encouraging prospective St"cN tl,on in
10 gamble on the stock market lnhh III
nersuading them to cooperate WIN me
In what | considered a clean cut pusl-
ness proposition. The plan was there-
fore dropped. :. ~ sa,, that
In this connection iet lne Soy IL &c
any man or woman who imagmes IL 10
noSsible to make permanent profit by
hating on the rise and fall or prices
~ stocks, grain, cotton, provisions or
what not, is simply chasing WHO LIN ,ieh
len he continued pursuit OF WhlCn
MiSpii M, viii land them In the boys
~ n1cral and financial disaster:
1abp Moody. editor of Moody,s man
uai than whom there is no better au-
thoritv on finance and lnNeSttinent ~.
America, says that OF the nhuoIis "ro
have tried IL, he knows OF oniy on ON,
ran who made and kept money through
stock speculation, and that tnlS , ,,Ia,,
js comparatively young ana muCh may
happen before he dies; ,-.,,, tho
II would be interesting to know i nv,
exact status of the more tllan - q ,,,,,nitv
of oil stocks floated IN TINS Co''''iiu"'''
during the past two years, ,a,,.i ono
u avnrting TO the story or fohEl p"e
v.aIl believe that when his Sc
ret" Is revealed 1t Will pare ai .'orice
sordd story OF man g gree S'if when
ana a. NAN ave he duped in seeking to crafty IT.
ne ~" no sweat of thy brow shalt thou
90, IN mead rne wa was the decree made Ito to
man ma in creations dawn, ana taf m rro9
being curse man mas .i,s PIo'tfe ew there here
as as H who va" wish 10 believe it, Very Truly
Corinth, Miss.