The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1920-08-13
SECOND BOSTON
BUBBLE BURSTS
New Concern Opened When
Ponzi Closed Doors.
OutpOinted "Wizard." Offering
100 Per Cent on All Money.
BANKERS FEAR SITUATION
Financial UneaSiness May
Spread to Old Institutions.
Hanover Trust, POnzi'S Backer,
Declared Solvent.

Boston. Aug. 13-The second get
rich-quick scheme to blow up here
within a few days collapsed today
when c. NJ. Brightwell of the Old Col
ony Foreign Exchange company. Of
fering investors 100 per cent profit in
six months. admitted his concern was
insolvent.
The Old Colony company opened
when federal authorities took over
the business of Charles Ponzi. arrested
on charges of using the mails to de-
fraud and larceny.
Brightwen admitted insolvency
when doors OF his concern were be-
sieged by hundreds of investors seek
ing to regain their money. The run
started when Ponzi was arrested.
New Bank Run Starts.
>. A tremendous run began on the Of
change company here today. The
company which recently organized,
sought to "out-point'' Ponzi by offer
ing investors 100 per cent profit on
their money in six months.
Investors who are said to have
poured hundreds Of dollars into the
new scheme which began operations
when Ponzi suspended business sew
eral weeks ago, rushed to the firm to-
day to demand return of their money.
The authorities began an investiga-
ton al once.
GDF OIncF
The financial district of the city was
especially concerned lest the investi-
CATION disclose operations that would
involve institutions other than the
Hanover Trust company, Ponzi's larg
est depositary which was closed by
State Bank Commission Allen.
Ponzi is free under bail of $35. 5000,
of which $25.0O0 was for his appear
ance before the federal governBent on
charge of using the mails in
scheme to defraud, and $4,000 for his
appearance before the municipal court
on a three count larceny charge.
Edwin l. Pride, auditor for the fed
eraI authorities of Ponzi's account. is
nearing completion of his tabulation
Of the 1atter's liabilities. Mr. Pride
has said that the liza bilities already are
shown at S7.eO0,O0O. Ponzi claimed
assets of not more than $4,000, 600.
POnzI Tried to Borrow.
Henry H. Chmielinski. president of
the Hanover Trust. declares the insti-
tuition is solvent and announced that
Every depositor would get back dol
lar for dollar with interest" State
Treasurer Burrell has announced that
the commonwealth has $125.O00 de-
posted in the Hanover Trust com
pany.
That Ponzf. during the time he was
assuring the public with convincing
force that he had enough money to
settle all accounts. was making des-
perate efforts to get money from other
sources. is known.
He is said to have tried to interest
Thomas W. Lawson. of "frenzied
finance" fame, in his whirlwind busi-
ness.
Only the bare facts OF Ponzrs great
bubble have been disclosed. When the
whole story is told. officials believe it
will be the most startling disclosure
of financial manipulations in the his
tory of the United States
His Life Threatened.
Ponzi today received a letter threat
ening his life, he told police officials.
The letter was written by a man who
said he had been trailing Ponzi for
twelve years. Police believed the writ
er may have been one who suffered as
result of Ponzis financial opera
tons in Montreal just twelve years
ago.
Ponzi soon.
of the hundreds who came to the
attorney generals office today with
Ponzrs notes, many were working girls
of from Is to 25 years old. Most of
them told officials that they had in
vested every cent they had with