40 lb., $70

Fifteen years ago a man in Boston started a loose leaf information service for exporters and importers. He received from Spain a request accompanied by return postage in the form of an international reply coupon. This coupon issued under the terms of the Universal Postal Union, had cost 30 centesimos in Spain and was exchanged in the Boston post office for 5-c- in U. S. stamps. The Bostonian was a shrewd man. He knew that with post-War exchange it would cost him just about 1 1/2 U. S. to buy 30 Spanish centesimos and with it he could get 5-c- in U. S. stamps -- a profit of 233%. He thought of doing that on a grand scale and making huge profits, but he lacked capital. So in December 1919 he borrowed $1,000 offering to pay 40% interest and repay the money in 90 days. He actually repaid it in 50 days. In February he was able to borrow $5,000, in March $28,000, in April $141,000, in May $440,000, in June $2,500,000, in July $6,500,000. Bankers and charwomen stampeded his ramshackle office in Boston's Pie Alley to lend him money. On the July day that he took in $1,000,000 in three hours, the Federal Government stepped in and stopped one of the most notorious swindles in the country's history -- a swindle that took some $8,000,000 from 40,000 ignoramuses who supposed that Charles Ponzi had found a new formula to fortune. The only part of his financial scheme which Swindler Ponzi had carried out was the borrowing of huge sums of money and the paying of huge interest with fresh borrowings. So little foreign exchange did he buy that his actual profits were less than 1 1000 of 1%.

Ponzi served a five year sentence (less good behavior time) in Plymouth Jail for using the mails to defraud. When freed, he was snapped up by Massachusetts and put on trial for theft--but not before he had taken a flier in the Florida land boom and tried to escape to Italy. He was convicted and sentenced to a seven year term in the Charlestown Prison.

Last week Swindler Charles Ponzi marched out of the prison a free man. He was 51 years old and practically bald. He weighed 150 lb., 40 lb. more than when he went in. He had $70 in pocket--his savings from work in prison. Also the receivers of his defunct enterprises had paid off 37 1/2% on the dollar to creditors.

Not as debonair as before, he smiled at newshawks who met him at the prison gate, announced "I have no plans whatever. I hope that I might now be forgiven for what I did which I believe was due more to my bad judgment than any intent to do wrong." Then he turned to say good-by to a young prisoner. "Joe, let's shake hands. You be a good boy now and get out of here as soon as you can."

From nowhere a dozen U. S. immigration inspectors closed around him, to protect him from physical violence in case any of his onetime "investors" still harbored wrath against him. They carried him off to the East Boston immigration station and booked him for deportation to Italy because he had been twice convicted of crimes involving moral turpitude. He was allowed 90 days freedom if he could raise $1,000 bail. Expecting his wife Rose to bring the bail at any moment, he refused to take off his coat and hat, refused to eat lunch. His next meal, he insisted, was going to be chicken with rice, and he was going to spend the night with his wife at Boston's best hotel. When she failed to appear with the bail he declared: "It is nothing. It is a small matter. One more night after all these years makes no difference. There has been a misunderstanding. ... In prison I learned humility. . . . Good night, gentlemen."

It was more than 24 hours before the bail was raised and he was free. Meantime a Negro attorney was preparing an appeal to Madam Secretary Perkins against his deportation. The grounds: he was twice convicted but only one act of moral turpitude was involved.

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