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By Root 360 0

deposits, the greater his leverage over the bank’s officers. A bank with $5 million in assets might have access to only one-tenth that amount at any given time. The reason is that money accepted as deposits—which are liabilities on a bank’s books because the bank has to pay interest on them and the principal on demand—is not kept in vaults but is put to work making money as loans. Banking in 1920 was not a lot more complicated than that. Some bankers joked about how easy it was, describing their work as governed by the “rule of threes”: Pay 3 percent interest on deposits, charge 6 percent interest on loans, pocket the 3 percent difference as profit, and be on the golf course by 3:00 P.M. But that apple cart would be upset, perhaps irreparably, if a large depositor like Ponzi suddenly closed his account and withdrew his money without advance notice. At the moment, none of that was on anyone’s mind at Hanover Trust. Chmielinski and the bank’s other officers—none of whom remembered the poverty-stricken Ponzi who had come to them barely a year earlier—were plainly thrilled to have such a prosperous new depositor. And Ponzi knew it.

One afternoon in early June, he walked around the corner from his office and into Hanover Trust’s main branch on Washington Street. This time, Ponzi was ushered into Chmielinski’s private office, where bank officials buzzed around him like yellow jackets at a honeysuckle shrub. Chmielinski was a bull of a man, with a large head mounted on a thick neck. At thirty-seven he was almost the same age as Ponzi but twice his size. Chmielinski had emigrated from Poland in 1898. He’d run a Polish-language newspaper, the Daily Courier, before getting started in the banking business several years earlier by his brother, a Catholic priest. Father John Chmielinski headed the Polish Industrial Association, a combination bank, steamship agency, and all-purpose service center for Boston’s Poles in the North End.

With little preamble, Ponzi promptly offered to buy all two thousand shares of the bank’s soon-to-be issued stock. As eager as they were to please, the Hanover Trust officials recognized the danger.

“We cannot do that,” said one, “because we would be selling you the control of the bank.”

“That’s just what I want,” said Ponzi.

“We are sorry, but we cannot consider anything like that.”

They went back and forth awhile, but neither side would budge. Ponzi had expected as much, so he played his trump card.

“It seems to me that our differences cannot be bridged,” Ponzi said. “Let’s drop the subject. Keep your bank and I’ll look for another one.” He slid his checkbook out from his jacket pocket. “Can you tell me what my balance is today?”

Blood drained from the bankers’ faces. Fearing the sudden loss of Ponzi’s account and the havoc it would play with their books, the bankers hastily offered a compromise.

“We will sell you one thousand shares of the new stock,” one said.

“Nothing doing,” answered Ponzi. With some more prodding, he got the bank’s officers to acknowledge what he already knew: Collectively, they controlled roughly fourteen hundred shares. If the votes attached to those shares were added to the votes of the Italian shareholders, who had until then always supported the bank’s officers, the current Hanover Trust regime would continue to control a majority. Thinking their reign was safe, the bank officers made another proposal: “We will sell you fifteen hundred shares.” They also agreed to make him a director of the bank, in the belief that he could do no harm. But Chmielinski was unaware that Ponzi had already courted the Italian stockholders. With fifteen hundred shares of his own, Ponzi would effectively control the majority he needed.

“Fine,” said Ponzi, swallowing his excitement to avoid tipping his hand. “I’ll take the fifteen hundred shares.”

At the bank’s annual meeting of stockholders on June 8, Ponzi was elected a director of Hanover Trust. The next day, at a meeting of the directors, he won election to the bank’s powerful executive committee. A week later, Ponzi paid $187,500 for