The news scimitar. (Memphis, Tenn.) 1907-1926, 1920-08-11
PONZI EXPLAINS
PART Of SYSTEM
HAS Found No Government
Nor People Who Will
Lose, He Says.

BOSTON, Aug. 11.-CharIos Ponzi.
who claims 10 have Jumped from com
narative poverty to mutmlnionaire' 5
estate in few months. through deal
LOGS in international postal coupons,
told members of the Kiwanis club yes
terday some Of the steps In the process
by which he claims TO have amassed
his fortune
Ponzi, making his first appearance
as an after-dinner speaker since he
became one of the most talked of men
IN the country. was a luncheon guest
OF the club. He was invited some time
ago, before he was compelled to cease
payment in his 80 per cent in 45 days 70
proposition because of the orders is
sued by the state bank commissioner
10 the Hanover Trust company 10 pay
no more OF PonZfs checks.
lie maintained that no government
need lose, because transactions between
governments may be delayed until eN-
change is normal and pointed out that
there has been delay In the payment OF
interest on American loans 10 the
allies.
II haven't found anybody who will
have 10 make il good. he asserted
when somebody wanted to know who
would have to stand the loss.
In opening his remarks, Ponzi rcit-
Grated his claim that he was solvent
and expressed confidence that this
would be suhstantiatod by the federal
and state investigators now in prog
ress and that he would lie able to re-
sumo business in "A few days
He related how he had hired a small
office, used his small capital in Vart
Gus business schemes. and them with
an International reply coupon always in
front OF him on his desk, began TO do
some thinking" He finally obtained Il
nanCial assistance. he said, to develop
his idea, and spent thousands of dnF
lars in foreign correspondence.
.."I found out" he said that tlH
postal coupons were being sold in fof-
eign countries for the equivalent of SIX
cents and could be converted into pos
tage stamps. Then all | had TO do
wPs figure how many nickels make a
million.
Il got In touch with mon--that's as
far as IN go--who were able TO secure
for me large amounts OF coupons In
different countries. They bought them
with our money and used them as col
lateral to be redeemed later. When
conditions We're right | offered to Dor.
row money from the public | offered
so per cent in 20 days and would not
promise to redeem notes in 40 though
/ thought that three weeks was about
the right time To bank the money here.
send II abroad, get the stamps and con-
vert them into cash,
81 started the Securities Exchange
company. ! was everything from presi-
dent to office boy
"The second day after I opened, Il
gentleman from the chamber OF COM
merce came to my office to inVesti-
scheme was possible. Ninety per cent
Of the people didn't know about the
International reply coupons
'"rhen postoffice inspector came,
7 asked him If II was legal to buy an
international reply coupon abroad and
Ia e |
asked him II II was legal TO redeem
millions Of the coupons ana he said
no He would have to decide whether
they were stolen or where they came
from.
However decided that II re-
deemed the stamps In the United States,
the federal government might decide
that II camc# within It's Jurisdiction,
though there was no federal or state
law against IL But the exchange rate
was the same in switzerland and Nor
way and some other countries. so l
decided to redeem them there.
Some one in the audience asked why
the postal authorities had been unable
10 find any evidence OF such large
dealings In reply, coupons. Pon2i re,
Piled that foreign governments realized
a profit on the issue Of these postal
certificates and are not going to DIS
close to other governments how many
coupons they have issued,
And the lHteFuhtpuh' pos.ai UNIV"
Is not going TO do IT,, he added.
Asked II foreign governments had not
stopped this. he replied;
Yves they are stopping-they have
stopped the sale of coupons for public
use. but that does not stop my bust
ness. NV money in Europe is work
ing today, even If 1t Is not here
In the transactions of coupons, ne
insisted. nobody suffers a loss.
III buy today he said "a dollar
worth OF Italian exchange Al the
present rate | at IS lire. | would get
five under normal exchange, With the
rs lire l buy SO International reply
coupons. These coupons can be sold
FOR SO In American money