Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1920-12-01
UP GOES PoNZl


PlCH men, poor men, beggar men and
~ thieves, doctors, lawyers, newsboys,
public officials, old women and young, boot :
blacks and managers of big industries focked
to Ponzi's Offices in Boston while the flock
ing was good and poured their savings into
the hands Of a man who claimed to be able
to get wealth out of the thin air through
which the ships pass on their way from
European to American ports. Bankers said
It couldn't be done. officials Of the United
States Treasury Department took the trouble
to prove that no secret method of wringing
enormous overnight profits out of the for
eign exchange system could possibly exist.
But the flood of money continued to pour
into the Ponzi Golfers, and men who knew
all that can be known about finance began
to wonder whether there really was some
thing that they hadn't learned. Other cap
italists' were said to be getting ready to
put similar schemes afoot when federal
agents strolled down to the banking district
and put Mr.. Ponsi in Jail.
What did it all mean2 Merely that people
can always believe what they desire pas
sionately to believe, and that good looking
lie with bells on IL and the ability to make
people happy and comfortable for a heeting
interval before disaster arrives will always
have a large following, while the simple and
unpretent10uS truth is ignored.
In any final analysis it must appear that
Ponzi didn't deceive the credulous investors
Of Boston. They deceived themselves. They
refused to look facts in the face or to be-
lieve folk who talked more honestly but not
so picturesquely as Ponti. Life is like that.
There are truths that n great many people
recognize only when they have to and after
hard experience has shown that nothing else
matters or gets YOU anywhere,
The case that closed yesterday when Ponzi
was sentenced to five years in Jail was as
tonishing because Of its very simplicity.
Ponzi was not even original. His methods
were not new. They were antique. What
was done in Boston has been done hundreds
Of times before by the snides of finance, and
done more subtly than Ponzi did it. Ponzi
took your money and promised 100 per cent
dividends. He actually paid the dividends
out of other peoples money. He might have
gone on in this simple fashion for years, get
ting deeper into the hole, but paying divi-
dends nevertheless. So long as millions
flowed in 1t was easy to hand thousands out.
Inevitably there would have been a smash,
but the scheme might have widened and in
volved investors everywhere In the country
before it came.
1t is too much to expect that the mex
perienced investor will be much wiser or
much more careful because of Ponzi. Ponzi
was caught. Other Ponzis, less reckless but
no more honest than he, are to be found in
the fringes of financial districts in most
American cities. They are the people who
guarantee 25 and 80 per cent returns from
money invested in faraway properties and
concessions. They seek people of relatively
small means and they make a special appeal
to widows who, for the benefit Of their de-
pendent children, are eager to put limited
insurance funds to the best possible use.
The equipment of these outlaws of the
financial world consists usually of u sucker
list" and colorful vocabulary. But
good many Of them manage to live we'll and
to ride in speedy motorcars. Reputable
newspapers refuse their advertising, they are
barred out Of the better Office buildings and
they keep just inside the limits of legal tech
ncalty. Yet they find people who will
cheerfully invest in their paper mines and
their paper inventions.
If you have money to invest, 60 to
banker for advice. Remember that prop
erty that can pay returns above normal will
not need to wait for the help of small in
vestors. There are few such properties, and
the men who make a business of speculative
investment are the first to find them out.
Put your money-if you are lucky enough to
have any--in established industries and utili-
ties. Leave 80 per cent stocks to the people
who can afford TO lose.