Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1920-08-11
SPECTATORS WORRY

- l. l.
Boston. Aug. 10-speeula1ors who
bought up many of the notes of the
Securities Exchange Company dur
ing the recent rush of investors to
withdraw funds from the custody Of
Charles Ponzi. appeared today 70 be
the persons most disturbed by the
suspension of payments resulting
from the order OF State Bank Com
missioner Joseph {. Allen. prohibit
ing the Hanover Trust Company
from honorlng PonZl's checks.
Says viii Resume Friday
The Spectators N many cases had
been holding the notes for the ex-
piration of 10 days. at the END of
which time they had expected 20 COL
lect 30 per cent interest and Il was
claimed that many OF them would
be hard hit if Ponzi did not resume
payment. This POM, insisted he
would do on Friday.
100 Answer "Ad"
Approximately 100 persons holding
PonzIs notes appeared at the office
Of Attorney General J. Weston Allen
during the forenoon In response to
his advertisement IN the newspapers
asking for information regarding
outstanding notes. II was said Al
Mr. Aliens office that a considerable
number of those who called were
persons VINO had taken up notes Of
not TO hold them for maturity, There
also were some spectators.
The highest amount IN notes held
by one person was S1a06 represented
by four notes. the largest of which
was 5000. Many of the other notes
submitted to the attorney general
were for $500 each and generally
were dated around July 10
One man who came 10 give in
formation the attorney general said
had sold his home for $1,000 IN the
hope Of a big return that would en-
able him to purchase a better home.
Allen Denies Manchester Deal
Mr.. Allen denied today i state
ment credited 70 Ponzi 70 the. effect
that SO. 600 IN d Manchester. \ H.
bank. had been transferred from
PonZl's account TO the account of
PonZi's New Hampshire agent. ar the
attorney generals suggestion. The
irsf I knew of this said the ator-
ney general. was when l read il IN
the newspapers. PonzI had told
him recently. Mr.. Allen added that
he had substantial deposits IN
Manchester bank.
Bank commissioner Allen issued
statement IN which ne explained the
status of a time certificate OF deposit
Ponzi having declared that ne held
suCh certificate from the Hanover
Trust Co. for $500. goo a. proof ttlat
he was not insolvent. Mr.. Allen said.
Some misrepresentation seems To ex-
Isl N the minds of some people regard
ing the certificate of deposit for ST.
500 900 issued by the Hanover Trust
Co. n the name OF Charles Ponzi That
certificate requires so days notice Of
withdrawal Ii is known as a time
certificate Of deposit The law ON the
subject reads as follows:
" No trust COMPANY shall allow d
time deposit TO BE withdrawn before
the time specified in the certificate or
agreement and when such certificate
or agreement does not specify any def
mite date for withdrawal. no trust
company shall allow such deposit 10 he
Withdrawn without receiving II writ
Ing~a notice of al Least 80 days. Org
mas or duplicates of al agreements
IN reference to time deposits shall
be kent an file nv the trust cor1rar1v
ana submitted 10 the bank commission
er upon his request.
Trust Co.'S Limitations
with regard TO 1 trust company
lending money TO It's own certificate of
deposit a case similar 70 this was sub
rnitted TO the attorney general n 1911.
There * on file IN this office the opin-
ion rendered by him. which states that
such a proceeding would he N violation
of the statute referred TO. In view OF
the law and the opinion OF the artor-
ney general there IS 40 question but
that the Hanover Trust Co. has no
right 70 lend upon this certificate Of
deposit or allow il 10 be Withdrawn
until the expiration of 80 days notice
Of such witildra wal"
Il previously had been stated that
PonZi nled notice Of his Intention 70
Withdraw the $500. 900 represented
by MS certificate of deposit on July y.
Bank Fully Protected
William : McNary, wee president
of the Hanover Trust Co said that
Ponzi's account with his bank had been
II