In 1921, Earle Dickson, a cotton farmer and Johnson and Johnson employee in New Brunswick, took note of his wife’s nicks, cuts and burns which were caused during housework and kitchen duties, and sought to remedy the poor condition of her injuries.
The notion struck him to use ordinary cotton gauze held down by a piece of surgical tape to protect the cuts on his wife’s hands, but soon discovered that they were little use for Josephine’s busy fingers. And so he took a smaller piece of gauze, place it in the center of the tape, and wrapped it in crinoline to keep the wound both sterile and safe. According to Wikipedia.org;
“James Wood Johnson, his boss, liked his idea especially because without any fuss, it could be put together in 30 seconds, and so he decided to put it into production. In 1924, Johnson & Johnson installed machines to mass-produce Dickson’s one-time homemade bandages. Following the commercial success of his design, Dickson was promoted to Vice President of the company.”
Sylvia Plath’s work is notorious for the recurring themes of contemplation, self-reflection, and, as noted in ‘A Disturbance in Mirrors’ (a review of Plath’s work) glass, reflections, and mirrors. Altogether a resounding paradigm of the world surrounding her constantly returns to dark roots, with brief glimpses at brighter, sweeter descriptions of the surrounding atmosphere before returning to the consistent notes of struggling, darkness and conflict in one’s self.
Along with any biographical information widely known among poetry buffs, the first detail brought to both thought and expressed verbally is the fact of Sylvia Plath’s suicide when she was hardly 30 years old. Sylvia struggled with depression for most of her short life, and rumors have flown about that she had had bipolar disorder; although, her personality was often described as being ‘cheerful’, ‘optimistic’ and altogether happy. Many photographs of Plath are actually of her smiling, and several of her with Ted Hughes show Sylvia looking up at him with beaming admiration.
Her husband, whom she met while visiting Cambridge in 1954, is actually the topic of this post.
Ted Hughes never directly referred to Sylvia’s suicide in his works, or mentioned their rather complex relationship except hints in his last poetic work, ‘Birthday Letters’. The months, and even years following Sylvia’s death were days of silence for Ted Hughes, at least in regards to the public. He refrained from any debate regarding why Sylvia killed herself, and has never publically spoken of it to anyone…
But a poem has arisen from the ashes of the burning questions, the contemplations, the simplest musings. The poem that was never intended to be published or seen by any other eyes, entitled “The Last Letter”, finally explains what Hughes felt when he heard of his estranged wife’s death. The first and only work where Hughes directly addresses Sylvia’s death:
What did happen that Sunday night? Your last night? Or what I remember of it.
Double exposed to my last sight of you. Burning your farewell letter to me, as if you had not meant it.
Yet with that strange smile, as if you had meant something different.
Had it reached me sooner than you planned? Had you thought out a plan? If it had reached me Saturday morning- by then you would have vanished from me.
Behind those simple loving words on your farewell note… What happened that night, inside your thoughts?
It is unknown, as though it never happened.
What accumulation of your whole life, like effort unconscious, like birth. Pushing through each slow second to the next, happened as only it could not happen…
And I had started to write when the telephone jerked awake, in jabbering alarm, remembering everything. It recovered in my hand. Then a voice like a selected weapon/ or a measured injection/ carefully delivered it’s four words deep into my ear. “Your wife is dead.”
–“The Last Letter”- Ted Hughes
A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going. (Source; wikipedia)
Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi (aka, Charles Ponzi) was born in Lugo, Italy in 1882. In between his birth and four years at University of Rome La Sapienza, not much is known about one of America’s greatest con men other than he was said to have oftentimes headed out to bars and cafes with his friends at college, and had referred to his years at the university as “a four-year vacation.” Part of the reason that an accurate biography on one of the greatest swindlers of all time is nearly impossible, is because of Charles’ large tendency to create and embellish facts with spectacular flourish and zeal, a trait that made him the sucessful fraud he was. On November 15, 1903, he arrived in Boston aboard the S.S. Vancouver. By his own account (and in turn, a somewhat unreliable account), Ponzi had $2.50 in his pocket, having gambled away the rest of his life savings during the voyage. “I landed in this country with $2.50 in cash and $1 million in hopes, and those hopes never left me,” he later told The New York Times.
He quickly learned English, and spent the next few years doing odd jobs along the East Coast. Eventually Ponzi took a job as a dishwasher in a restaurant, where he slept on the floor. He managed to work his way up to the position of waiter, but was fired for shortchanging the customers and theft. In 1907 he moved to Montreal, and became an assistant teller in a newly opened bank started by Luigi Zarossi called Banco Zarossi. The purpose of the bank was to service the influx of Italian immigrants arriving in the city. Zarossi paid 6% interest on bank deposits ( that would be double the going rate at the time ) and grew rapidly as a result. Ponzi eventually rose to bank manager. However, he found out the bank was in serious financial trouble because of bad real estate loans, and discovered that Zarossi was funding the interest payments not through profit on investments, but by using money deposited in newly opened accounts. The bank eventually failed and Zarossi fled to Mexico with a large portion of the bank’s money.
Ponzi stayed in Montreal and, for some time, lived at Zarossi’s house helping the man’s abandoned family, while planning to return to the United States and start over. Ponzi was penniless, and so this aspiration proved to be difficult. Eventually he walked into the offices of Canadian Warehousing, owned by a former Zarossi customer. Upon finding no one there, Ponzi wrote himself a check for $423.58 in a checkbook he found, forging the signature of a director of the company, Damien Fournier. Confronted by police who had taken note of his large expenditures just after the forged check was cashed, Ponzi supposedly held out his wrists and stated simply, “I’m guilty.” He spent three years in St. Vincent-de-Paul, a prison near Montreal. Rather than inform his mother of this development, he posted her a letter stating that he had found a job as a “special assistant” to a prison warden.
After being released in 1911, Ponzi was still determined to get to the United States, but got involved in a scheme to smuggle illegal Italian immigrants across the border. He was caught and sent to an Atlanta penitentiary (hey, he got to the U.S, didn’t he?) He became a translator for the warden, who was intercepting letters from mobster Ignazio “Lupo the Wolf” Saietta. Ponzi actually ended up befriending Lupo, but it was another prisoner who became a true role model to Ponzi: Charles W. Morse. Morse, a wealthy Wall Street businessman and speculator, fooled doctors during medical exams, poisoning himself by eating soap shavings, toxins that left his body as quickly as the doctors left his bedside. Morse was soon released from prison. Ponzi completed his prison term the summer following Morse’s release, having an additional month added to his term due to his inability to pay a $500 fine.
A few years after Ponzi was releaded from prison, he made his way back to Boston. And it was there that he met Rose Maria Gnecco, a stenographer, whom he ended up marrying. a;though Ponzi did not tell his fiance about his years in jail, his mother sent Rose a letter telling her of Ponzi’s past. Nonetheless, she married him in 1918. The next few months he worked at a number of businesses, including his father-in-law’s grocery, before deciding to sell advertising in a large business listing to be sent to various businesses. Ponzi was unable to sell this idea, and his company failed soon after.
A few weeks later, Ponzi received a letter in the mail from a company in Spain asking about the catalog. Inside the envelope was an International reply coupon (IRC), something which he had never seen before. He asked about it and found a weakness in the system which would, in theory, allow him to make money.
The purpose of the postal reply coupon was to allow someone in one country to send it to a correspondent in another country, who could use it to pay the postage of a reply. IRCs were priced at the cost of postage in the country of purchase, but could be exchanged for stamps to cover the cost of postage in the country where redeemed; if these values were different, there was a potential profit. Inflation after World War I had greatly decreased the cost of postage in Italy expressed in U.S. dollars, so that an IRC could be bought cheaply in Italy and exchanged for U.S. stamps of higher value, which could then be sold. Ponzi claimed that the net profit on these transactions, after expenses and exchange rates, was in excess of 400%. This was a form of arbitrage, or profiting by buying an asset at a lower price in one market and immediately selling it in a market where the price is higher, which is not illegal.
Seeing an opportunity, Ponzi quit his translator’s job to set his scheme in motion. He borrowed money and sent it back to relatives in Italy with instructions to buy postal coupons and send them to him. However, when he tried to redeem them, he ran into an avalanche of red tape.
Undaunted, Ponzi went to several of his friends in Boston and promised that he would double their investment in 90 days. The great returns available from postal reply coupons, he explained to them, made such incredible profits easy. Some people invested and were paid off as promised, receiving $750 interest on initial investments of $1,250.
Soon afterward, Ponzi started his own company, the “Old Colony Foreign Exchange Company,”to promote the scheme. He set up shop in a building on School Street. Word spread, and investments came in at an ever-increasing rate. Ponzi hired agents and paid them generous commissions for every dollar they brought in. By February 1920, Ponzi’s total take was US$5,000, (approximately US$54,000 in 2008 dollars). By March, he had made $30,000 ($328,000 in 2008 terms). A frenzy was building, and Ponzi began to hire agents to take in money from all over New England and New Jersey. At that time, investors were being paid impressive rates, encouraging yet others to invest. By May 1920, he had made $420,000 ($4.59 million in 2008 terms).
He began depositing the money in the Hanover Trust Bank of Boston (a small bank on Hanover Street in the mostly Italian North End), in the hope that once his account was large enough he could impose his will on the bank or even be made its president; he did, in fact, buy a controlling interest in the bank (through himself and several friends) after depositing $3 million. By July 1920, he had made millions. People were mortgaging their homes and investing their life savings. Most did not take their profits, but reinvested.
Ponzi was bringing in cash at a fantastic rate, but the simplest financial analysis would have shown that the operation was running at a large loss. As long as money kept flowing in, existing investors could be paid with the new money. In fact, new money was the only way Ponzi had to pay off those investors, as he made no effort to generate legitimate profits.
Ponzi lived luxuriously: he bought a mansion in Lexington, Massachusetts with air conditioning and a heated swimming pool, and he maintained accounts in several banks across New England besides Hanover Trust. He also brought his mother from Italy in a first-class stateroom on an ocean liner. She died soon afterward.
Ponzi’s rapid rise naturally drew suspicion. However, when a Boston financial writer suggested there was no way Ponzi could legally deliver such high returns in a short period of time, Ponzi sued for libel and won $500,000 in damages. As libel law in those days placed the burden of proof on the writer and the paper, this effectively neutralised any serious probes into his dealings for some time.
Nonetheless, there were still signs of his eventual ruin. Joseph Daniels, a Boston furniture dealer who had given Ponzi furniture which he could not afford to pay for, sued Ponzi to cash in on the gold rush. The lawsuit was unsuccessful, but it did start people asking how Ponzi could have gone from being penniless to being a millionaire in so short a time. There was a run on the Old Colony Foreign Exchange Company, as some investors decided to pull out. Ponzi paid them and the run stopped. On July 24, 1920, the Boston Post printed a favorable article on Ponzi and his scheme that brought in investors faster than ever. At that time, Ponzi was making $250,000 a day. Ponzi’s good fortune was increased by the fact that just below this favorable article, which seemed to imply that Ponzi was indeed returning 50% return on investment after only 45 days, was a bank advertisement that stated that the bank was paying 5% returns annually. The day after this article was published, Ponzi arrived at his office to find thousands of Bostonians waiting to give him their money.
Despite this reprieve, Post acting publisher Richard Grozier and city editor Eddie Dunn were suspicious and assigned investigative reporters to check Ponzi out. He was also under investigation by the Commonwealth of Massachusetts, and on the day the Post printed its article, Ponzi met with state officials. He managed to divert the officials from checking his books by offering to stop taking money during the investigation, a fortunate choice, as proper records were not being kept. Ponzi’s offer temporarily calmed the suspicions of the state officials.
By this time, Ponzi was seeking another deal to get him out of the golden trap he had built for himself, but time was running out. On July 26, the Post started a series of articles that asked hard questions about the operation of Ponzi’s money machine. The Post contacted Clarence Barron, the financial analyst who published the Barron’s financial paper, to examine Ponzi’s scheme. Barron observed that though Ponzi was offering fantastic returns on investments, Ponzi himself was not investing with his own company.
Barron then noted that to cover the investments made with the Old Colony Foreign Exchange Company, 160 million postal reply coupons would have to be in circulation. However, only about 27,000 actually were. The United States Post Office stated that postal reply coupons were not being bought in quantity at home or abroad. The gross profit margin in percent on buying and selling each IRC was colossal, but the overhead required to handle the purchase and redemption of these items, which were of extremely low cost and were sold individually, would have exceeded the gross profit.
The stories caused a panic run on the Old Colony Foreign Exchange Company. Ponzi paid out $2 million in three days to a wild crowd outside his office. He canvassed the crowd, passed out coffee and donuts, and cheerfully told them they had nothing to worry about. Many changed their minds and left their money with him. However, this attracted the attention of Daniel Gallagher, the United States Attorney for the District of Massachusetts. Gallagher commissioned Edwin Pride to audit the Old Colony Foreign Exchange Company’s books—an effort made difficult by the fact his bookkeeping system consisted merely of index cards with investors’ names.
In the meantime, Ponzi had hired a publicity agent, William McMasters. However, McMasters quickly became suspicious of Ponzi’s endless talk of postal reply coupons, as well as the ongoing investigation against him. He later described Ponzi as a “financial idiot” who did not seem to know how to add.
The denouement for Ponzi began in late July, when McMasters found several highly incriminating documents that indicated Ponzi was merely robbing Peter to pay Paul. He went to his former employer, the Post, with this information. The paper offered him $5,000 for his story. On August 2, 1920, McMasters wrote an article for the Post declaring Ponzi hopelessly insolvent. The article claimed that while Ponzi claimed $7 million in liquid funds, he was actually at least $2 million in debt. With interest factored in, McMasters wrote, Ponzi was as much as $4.5 million in the red. The story touched off a massive run, and Ponzi paid off in one day. He then sped up plans to build a massive conglomerate that would engage in banking and import-export operations.
However, trouble came from an unexpected quarter—Massachusetts Bank Commissioner Joseph Allen. An initial investigation into Ponzi’s banking practices found nothing illegal, but Allen was afraid that if massive withdrawals exhausted Ponzi’s reserves, it would bring Boston’s banking system to its knees. When Allen found out a large number of Ponzi-controlled accounts had received more than $250,000 in loans, he ordered two bank examiners to keep an eye on Ponzi’s accounts. On August 9, they reported that enough investors had cashed their checks on Ponzi’s main account there that it was almost certainly overdrawn. Allen then ordered Hanover Trust not to pay out any more checks from Ponzi’s main account. He also orchestrated an involuntary bankruptcy filing by several small Ponzi investors. The move forced Massachusetts Attorney General J. Weston Allen to release a statement that there was little to support Ponzi’s claims of large-scale dealings in postal coupons. State officials then invited Ponzi note holders to come to the Massachusetts State House to furnish their names and addresses for the purpose of the investigation. On the same day, Ponzi received a preview of Pride’s audit, which revealed Ponzi was at least $7 million in debt.
On August 11, it all came crashing down for Ponzi. First, the Post came out with a front-page story about his activities in Montreal 13 years earlier—including his forgery conviction and his role at Zarossi’s scandal-ridden bank. That afternoon, Bank Commissioner Allen seized Hanover Trust after finding numerous irregularities in its books. Although the commissioner did not know it, this move foiled Ponzi’s last-ditch plan to “borrow” funds from the bank vaults after all other efforts to obtain funds failed.
With reports that he was due to be arrested any day, Ponzi surrendered to federal authorities on August 12th and was charged with mail fraud for sending lettersto his marks telling them their notes had matured. He was originally released on $25,000 bail, but after the Post released the results of the audit, the bail bondsman withdrew the bail due to concerns he might be a flight risk. The news brought down five other banks in addition to Hanover Trust. His investors were practically wiped out, receiving less than 30 cents on the dollar. The Post won a Pulitzer Prize in 1921 for its exposure of Ponzi’s fraud.
In two federal indictments, Ponzi was charged with 86 counts of mail fraud. At the urging of his wife, on November 1, 1920, Ponzi pleaded guilty to a single count before Judge Clarence Hale, who declared before sentencing, “Here was a man with all the duties of seeking large money. He concocted a scheme which, on his counsel’s admission, did defraud men and women. It will not do to have the world understand that such a scheme as that can be carried out … without receiving substantial punishment.” He was sentenced to five years in federal prison.
He was released after three and a half years and was almost immediately indicted on 22 Massachusetts state charges of larceny. This came as a surprise to Ponzi; he thought he had a deal calling for the state to drop any charges against him if he pleaded guilty to the federal charges. He sued, claiming that as a federal prisoner he could not be tried by the state. The case, Ponzi v. Fessenden, made it all the way to the Supreme Court. On the 27th of March, 1922, the Supreme Court ruled that plea bargains on federal charges have no standing regarding state charges. It also ruled that Ponzi was not facing double jeopardy because Massachusetts was charging him with larceny while the federal government charged him with mail fraud (even though the charges implicated the same criminal operation).
In October 1922, he was tried on the first ten larceny counts. Since he was insolvent, Ponzi served as his own attorney and, being as persuasive as he had been to investors, the jury found him not guilty on all charges. He was tried a second time on five of the remaining charges, and the jury deadlocked. Ponzi was found guilty at a third trial, and was sentenced to an additional seven to nine years in prison as “a common and notorious thief.”
After word got out that Ponzi had never obtained American citizenship (despite having lived in the United States for most of the time since 1903), federal officials initiated efforts to have him deported as an undesirable alien in 1922.
Ponzi was released on bail as he appealed the state conviction. He went to the Springfield neighborhood of Jacksonville, Florida and launched the Charpon Land Syndicate (“Charpon” is an amalgam of his name), offering investors in September 1925 tiny tracts of land, some under water, and promising 200 percent returns in 60 days.In reality, it was a scam that sold swampland in Columbia County. Ponzi was indicted by a Duval County grand jury in February 1926 and charged with violating Florida trust and securities laws. A jury found him guilty on the securities charges, and the judge sentenced him to a year in the Florida State Prison. Ponzi appealed his conviction and was freed after posting a $1,500 bond.
Ponzi traveled to Tampa, where he shaved his head, grew a moustache, and tried to flee the country as a crewman on a merchant ship bound for Italy. The ship, however, made one last American port call; he was caught in New Orleans and sent back to Massachusetts to serve out his prison term. Ponzi served seven more years in prison. In the meantime, government investigators tried to trace Ponzi’s convoluted accounts to figure out how much money he had taken and where it had gone. They never managed to untangle it and could conclude only that millions had gone through his hands. Ponzi was released in 1934. With the release came an immediate order to have him deported to Italy. He asked for a full pardon from Governor Joseph B. Ely. However, on July 13, Ely turned the appeal down. His charismatic confidence had faded, and when he left the prison gates, he was met by an angry crowd. He told reporters before he left, “I went looking for trouble, and I found it.”
Rose stayed behind and later divorced him in 1937, as she did not want to leave Boston. Rose, who later remarried, eventually became the bookkeeper for the New Cocoanut Grove Inc, the parent company of Boston’s Cocoanut Grove nightclub. In Italy, Ponzi jumped from scheme to scheme, but little came of them. He eventually got a job in Brazil as an agent for Ala Littoria, the Italian state airline. During World War II, however, Brazil sided with the Allies, and the airline’s operation in the country was shut down.
Ponzi spent the last years of his life in poverty, working occasionally as a translator. His health suffered. A heart attack in 1941 left him considerably weakened. His eyesight began failing, and by 1948, he was almost completely blind. A brain hemorrhage paralyzed his right leg and arm. He died in a charity hospital in Rio de Janeiro, the Hospital São Francisco de Assis of Federal University of Rio de Janeiro on January 18, 1949.
Supported by his last and only friend who spoke English and had notions of Italian, the barber Francisco Nonato Nunes, was how Mr. Ponzi granted one last interview to an American reporter, telling him, “Even if they never got anything for it, it was cheap at that price. Without malice aforethought I had given them the best show that was ever staged in their territory since the landing of the Pilgrims! It was easily worth fifteen million bucks to watch me put the thing over.” He also admitted, after years of maintaining his innocence, that he had engaged in a swindle.
Until Next Post,
Alright, so, I do believe since this is the verrrrry first post of I.O.T.Q I should explain what this blog is about.
Throughout history there are the famous, the notorious, and the unique. What this blog does is bring to light the specifics of these people, and tells the tale of their lives in every post. Everyone from Zac Efron to Franz Mesmer. Looking forward to posting with you all,