PONZI

From former Boston Globe reporter Zuckoff (Journalism/Boston Univ.; Choosing Naia, 2002): an entertaining history about the 1920 financial bubble that became a prototype for later business scandals.

Main character: Charles Ponzi, owner of the Securities Exchange Co. In the prior 14 years, he had tramped around North America, twice going to jail (for forgery and for smuggling aliens into the US) before returning to Boston. America was kicking off the Roaring Twenties when, Zuckoff notes, “a new ethos was emerging, one that would reshape what it meant to be an American. No more pennies saved and pennies earned.” A none-too-serious college education in Italy, along with banking and exporting jobs in the New World, boosted Ponzi’s indefatigable self-confidence and his desire for fine living. Noticing fluctuating currency exchange rates, this dapper little man told gullible investors he’d double their money in three months through purchases of international postage stamps. But it was a classic get-rich-quick scheme involving “robbing Peter to pay Paul”—depending on an influx of later investors to pay back earlier clients. When thousands (including an estimated three-quarters of the badly paid Boston Police Department) rushed to put their savings into his scheme, Ponzi became an overnight success. Or so it seemed until the Massachusetts attorney general, a bank examiner, and both the federal and county DA, prodded by the Boston Post and financial journalist Clarence Barron, began to investigate. The jerry-rigged structure trembled, and Ponzi went back to prison. Zuckoff pays attention to Ponzi’s resentment of the blueblood media and business establishment that he assailed as “an autocratic clique which has been able to prey upon the credulity of the people.” Though unquestionably a con artist, Ponzi comes off as more appealing than many of his tormentors: optimistic, generous, devoted to his wife—just a dreamer whose impulses outran his resources and common sense.

A well-told portrait of a would-be titan—and a cautionary history for our own era. (b&w photos, not seen)