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By Root 399 0

Ponzi did significant business. If Ponzi were overwhelmed by investors turning in their notes, he and his clerks might write checks for more than he had on deposit. However, because Ponzi was a powerful board member at Hanover Trust and a valued depositor elsewhere, the banks might continue to honor his checks in the expectation that he would deposit more money as soon as possible. But by the time the accounts were settled, Allen suspected, Ponzi’s reserves might be exhausted, and the banks would have to dip into their own reserves to balance the books. Given the amount of money Ponzi was dealing with, a small bank that honored Ponzi’s checks after his account was overdrawn might find its own capital fatally depleted. When word got out, depositors would likely descend on the bank demanding their money, but there would be nothing left for them. The run would destroy the bank and potentially trigger panic throughout Boston as nervous depositors elsewhere did the same. The result, Allen knew, could be a complete meltdown of Boston’s banking system, with banks failing left and right. Bank regulators love nothing better than orderly, even boring operations. The risk that Allen believed Ponzi posed was nothing short of a bank commissioner’s greatest fear.

To allay his concerns and lessen the danger, Allen had notified Chmielinski and the Hanover Trust treasurer, William McNary, that, beginning immediately, they were required to report daily to him on the bank’s financial status, including how much it had in reserve, the amount of all deposits, and whether any depositors had overdrawn their accounts. Though Ponzi didn’t yet know it, that kind of scrutiny would make it far more difficult, perhaps impossible, for him to pull off his temporary heist from the Hanover Trust vault. He would need another way to prove that his assets exceeded his liabilities.

When he finished speaking with the reporters, Ponzi stepped outside Hanover Trust. He had offered Lucy Meli a ride home on his way to Lexington, and she was already in the back seat when chauffeur John Collins pulled up. It had been the longest, most trying day of Ponzi’s financial career, but he would not show it. When Collins parked the Locomobile outside the bank office, Ponzi walked to his shiny limousine, put his foot on the high running board, and pulled open the door with his left hand. With his hat tipped back slightly on his head, his tie perfectly in place, Ponzi turned to a waiting Post photographer and flashed his best showman’s smile.

Ponzi woke the next morning, Wednesday, July 28, and saw that the run on his office was bigger news in the Post than the final triumph of Resolute over Shamrock IV in the America’s Cup race series. He could also see that one of his enemies was looking to score points with the public. Simon Swig had taken a front-page ad in the Post that did not mention Ponzi by name but might as well have. “Our dividends are paid out of our earned and collected income, and not out of the other fellow’s principal,” it read, wooing depositors to Tremont Trust. To drive home the point, the ad continued: “Save and grow rich. Plunge and grow broke.”

More ominously, the Post printed another cutting attack by Clarence Barron, who had weighed in again on Ponzi in his latest Boston News Bureau circular. Barron posed a series of questions designed to undermine trust in Ponzi. His most incisive question was why Ponzi kept large deposits in local banks paying 5 percent interest, or in the stodgy stocks of banks and companies like J. R. Poole, when he supposedly could use the money to turn huge profits quickly and easily with postal coupons. Barron also hit Ponzi on a question of ethics, suggesting that if Ponzi’s claims were true, he would be “sticking” the governments where he bought the coupons or, worse, the United States government.

But if Swig and Barron were hoping to sway public opinion, they failed to recognize that Ponzi, despite his fancy clothes and expensive motorcar, had made himself a man of the people. When the Locomobile pulled up in front of 27