The "run" had resulted in a bit of publicity. But that hadn't hurt me a bit. With the general public. Just the opposite. It had served to swell my daily receipts.

In financial circles, however, the publicity stirred up some jealousy. You know how it is. Bankers hate competition. They fear it. Especially the kind of competition I was responsible for. The best they could offer to their depositors was about 4% a year. While I was not only offering, but actually paying, my investors 50% in 45 days. Or, 400% a year.

Withdrawals of deposits from banks grew in proportion with my cash receipts. The more I took in, the more the banks had to pay out. And the money, once in my possession, would be redeposited only in banks in which I already had an account. Particularly, in the Hanover Trust Company. Because it was my intention to drain several of the banks of liquid cash so as to compel them, eventually, to sell out to me at my own price. All is fair in love and war.

I had it all figured out. The banks could not continue to pay money out and survive. Some might have lasted longer than others. But, sooner or later, all would reach the point where they had either to sell out or close.

A closed bank is generally a total loss to the stockholders. Not only don't they get back what they originally have paid for the stock, but, usually they are assessed for an additional amount equal to the par value of the stock they hold. In other words, a man who has paid $125 for a share of bank stock, loses not only the $125, if the bank goes into liquidation, he is often required to cough up another $125.

I reasoned that, in a pinch of that sort, any bank stockholder would have been tickled to death to sell out to me for about fifty bucks a share. He would have been a fool, if he hadn't. And I was prepared to do just that. Because for every $50 so invested I would have made a profit of $75. Or, 150% in less time than it takes to say Jack Robinson.

How? Why? That's easy! People had confidence in me at that time. They would have rather deposited their money in banks owned by me than banks owned by somebody else. But, even without new deposits, I could have straightened a bank out by redepositing there, to my name, the money which had been withdrawn by those of its depositors who had invested with me. Since I was not dealing in coupons any longer, since I was not dealing in anything, since money was coming in faster and in larger amounts than I was paying it out, I was in a position to keep my funds idle. Anywhere. And for any length of time. Even if they earned me only 4% a year.

My profit would have come from a different source, from the increased value of the bank stock, after I had bought it at a knocked down price. There was absolutely nothing to it. It was a cinch. I could have bought a bank today at $50 a share and sold a 49% interest in it, a week later, at $125, or better, per share. The public would have gladly bought shares in anything I might own. Not because they were worth more. But because of my name. Of my credit. The same as they were buying my notes.

That would have been one way out of my difficulties. An opportunity to switch, gradually, from the coupons venture into a more conservative line of business.

To reduce, a little at a time, the 400% rate of interest I was paying; to get out from under all together, in a non-distant future, and retire a multimillionaire. But I didn't make it. For any number of reasons which I have never bothered since to analyze fully.

Anyway, the publicity I got from the "run" came to the notice of one of my depositors. It would. I couldn't help it. For a couple of months they hadn't heard anything else but my name. Over the phone. Over the counter. They had seen it in the mail. In telegrams as if it was actually haunting them.

The fact was that, whenever anybody asked me for references, which was often, I gave the name of the bank. Sometimes, I even went into detail. And told how I had a substantial deposit in that bank Not only, but also how the bank had accepted to be the beneficiary in trust in the matter of my life insurance policy.

From president to messenger boy, everyone in the bank was tired of answering questions about Ponzi. Especially, because they couldn't very well say what was in their mind. And so, one day they sent for me.

I went. I was ushered into some private office. Whose office, I don't know. Whoever the man in that office, was, he came right to the point.

"Mr. Ponzi," he said, "we are besieged by requests for references as to your standing. I am sorry, but we are unable to give any. We don't know a thing about your business."

"Of course, you don't," I told him. "And I don't expect you to tell them what you don't know. But you can tell them that I carry a substantial account here."

"The trouble is that they seem to derive the impression that this bank is in some way associated with your activities," he complained.

"There is nothing I can do to correct that impression," I explained. "What people may think or believe is beyond my control."

"Certainly," he conceded. "But we are placed, nevertheless, in an embarrassing position. For our own protection, I would suggest that you close your account with us."

"It's all right with me," I replied. "Let me have my balance and that will be the end."

"Thank you, Mr. Ponzi," he said. "I shall write you a check right away."

"A check?" I inquired. "Why a check? Let me have the cash, if you don't mind."

"You certainly don't mean to imply that our check is not acceptable to you?" he asked with considerable astonishment.

"I will not go into details," I replied non-committally. "But if you want me to close my account, you will kindly hand over my balance in one-thousand-dollar bills. Forty-five of them, I believe."

He didn't like my attitude at all. But he couldn't refuse me, either.

So, he gave me the cash, and I left. Account or no account. I could still use the bank as a reference, because it was the beneficiary under the insurance policy, although that reference was no longer necessary. By then, I had subscribed to Dun and Bradstreet's. And I was rated by them $8,000,000!

The law suit which had resulted in the "run" was taking its course. I had retained Arthur D. Hill to represent me. And I was sure to win out. But, in the meanwhile, I had about three quarters of a million tied up by the attachment. Which, by the way, was not drawing any interest.

That's what set me thinking. Those banks in which my money was tied up, had the use of the funds, without paying for it. The longer the suit lasted, the better it was for them. They were actually the gainers, regardless of how the suit ended.

One of these banks was a small institution in the North End, hardly justifying the name of bank.

I had $10,000 in that bank. I had put them there to help it. The President had begged me on his knees, and as I thought he was a deserving fellow, I had given him the account, which I would have left there indefinitely. But it was subject to my check. And it would have practically ruined the bank if I had asked for my balance, suddenly, and without notice. The attachment afforded him an ideal protection.

As to a larger Trust Company, I had $190,000 tied up there. But they had permitted me to withdraw about half million from the attachment, and it was one of the gainers from the suit, yet, to a smaller extent than it could have been.

In another Trust Company, I had $190,000 tied up. The president refused to release any part of it. And I knew he needed the money. Only a short time before he had come to my office and begged me to open an account with his company.

"Mr. Ponzi," he had told me. "You are ruining me."

"How's that?" I had asked him.

"All of my depositors are closing their accounts to invest with you," he explained.

"I am sorry," I had assured him. "I did not think it was as bad as that."

"It is," he insisted. "For the past week, we have cleared checks to your credit for about $100,000 a day."

"What do you want me to do?" I had asked him.

"Give me a deposit," he had pleaded.

"But I have my own bank," I had argued.

"I know," he had rebutted, "but do you want to ruin all of the others just for that?"

"No," I had assured him. "I don't want to ruin anybody. I will give you a deposit. I will re-deposit in your bank all of the checks drawn against your bank by any one of my investors."

I had done that. But the president was no man of principles. But, of course, I didn't know the kind of man he was, when I gave him my deposit.

I put him down with others as another who justified suspicion. And I wasn't far from wrong when I did. The attorney for the man suing me was a friend of the president of the bank.

As I was gradually piecing together my clues and bits of evidence, a police inspector from headquarters paid me a visit.

"The president of one of the trust companies was up at headquarters yesterday," he informed me.

"Yes? What was he up to?" I inquired.

"He was raising the devil about you," he said.

"About me?" I asked.

"Yes," he confirmed.

"I thought he was my friend," I remarked.

"Well, he isn't," the inspector assured me. "He says that you are ruining him."

"Of all the nerve!" I exclaimed. "I have about $400,000 tied up indefinitely in his bank and drawing no interest. What more does he want?"

"He wants to have you arrested," he told me.

"Is that so?" I was painfully surprised.

"Yes," the inspector went on. "He raved at headquarters and said that we ought to arrest you."

"And what did you tell him?" I asked.

"We told him that we could not arrest you because we had nothing to arrest you for," he replied.

"And what did he say?" I kept on quizzing the inspector.

"He said that you should be arrested," he answered.

"Is that straight?" I wanted to make sure.

"You know me, Charlie," the inspector remarked.

"All right," I said. "I'll fix that skunk."

"For God's sake, keep me out of this," he begged.

"Don't worry," I assured him. "You have nothing to fear from me."

"I trust you all right," he said. "The boys at headquarters and myself would go to hell for you because we know you are on the level and a regular guy."

What the inspector told me was all I needed to jump right into action. I sent for the man suing me, much as I hated to do it. I dickered with him. I paid him $50,000 in cash to drop the suit. He signed a release. With that, I went right down to the president of the trust company.

"I have come to withdraw my balance," I told him, showing him the release.

"It's too late now," he said. "It's after banking hours. Come back in the morning and I'll have my lawyer examine the release."

"I will do nothing of the kind," I shot back at him. "I have come here to get my money and I am going to get it. The man suing me is here. My attorney is here. And the papers are O.K. I will not leave here until I have my money. There are 2,000 people outside who want to see how well you can honor your obligations."

"It's after banking hours," he insisted.

"I don't give a darn if it were bed time," I shouted. "You will either give me my money or you will never open in the morning."

"All right," he agreed. "I will give you a check."

"You will give me none of your checks," I threw back at him. "Your signature couldn't find credit for a plugged nickel with me. I want cash. All in ten-thousand dollar bills. Thirty-seven of them and a five."

I had to wait perhaps two hours before I finally got my money. And, in the meanwhile, I exchanged a few more pleasantries with both him and the attorney for my suing friend, who had also joined the party. But I walked out of the bank with the money. And in the morning I went right over to the Tremont Trust to get the other $190,000. There, my visit was anticipated. I wonder why? At any rate, I found 19 ten-thousand-dollar bills awaiting me. I stuck them in my pocket, together with the other 37. And I went back to my office. What I nice picking I would have made for some of the stick-up boys of later days. Can you imagine it? A man going around dear old Boston with 56 ten-thousand-dollar bills in his pants-pocket! With six certified checks of $200,000 each in his wallet! With enough smaller bills and gold pieces to buy himself an apartment house! And with only a 25 Colt automatic in his vest pocket!

Even after withdrawing my funds from these banks, I was still mad as a wet hen. And I wasn't given a chance to cool down. Instead, another bank jumped in the fray. This time, one of the national banks. And my temper went to fever heat.

"What's the matter now?" I asked them.

"Our drawing bank has notified us that it will decline to do our clearings unless we induce you to place part of your balance on a certificate of deposit."

"What's the idea?" I wanted to know.

"They do the clearings for us," one explained. "You might draw a check on us for several millions and they would have to clear it. This, they claim, they cannot do."

"Ha, ha! I see!" I remarked sarcastically. "So, the highbrows haven't got cash enough to clear my checks? Wouldn't I love, though, to have them turn down one of my checks! Wouldn't I hang their hide up a tree to dry! I am glad of it. Tell them to go to the devil and we will give the story out to the newspapers."

"No, no. We can't do that," said he.

"And why not?" I asked. "Can't we do our own clearings?"

"Not yet," he replied. "We would have to join …"

"Well, join whatever it is you have to join," I told him.

"But in the meanwhile we would be left without clearings," he pointed out. "Please don't force us into that situation."

"But you are asking me to tie up my balance," I rebutted. "And I cannot do that because I may need my money at any time."

"You don't have to tie up the whole balance," he said. "Only a part will do. Let's say one million and a half."

I resisted their pressure for a while. But finally I gave in. It seems I couldn't do anything else just then. I walked out of the bank with a certificate of deposit for a million and a half. But madder than ever. And determined to take it out on the whole banking crowd.

The moment I got back to my office, I called up the Bank Commissioner. Made an appointment with him. And went up to the State House.

"Mr. Allen," I said to him, "I have a plan to boost deposits in the Hanover Trust Company, but I desire your approval before I go ahead with it."

"What is your plan?" he asked.

"My plan is to run a sort of contest," I explained to him. "I am going to offer a prize of $1,000 each month to the person who will be instrumental in bringing the Hanover Trust the largest number of new deposits."

"How are you going to work it out?" he inquired.

"I'll have thousands of cards printed," I told him. "Some sort of introduction cards. The contestants will give them out to their friends. Each card will bear the name of the new depositor and the signature of the contestant. It will be turned in with the initial deposit and the bank will pass it along to me or file it. At the end of each month, the cards will be counted and sorted. The contestant with the larger number of cards to his credit will get the $1,000."

"I don't see anything irregular with the plan," admitted the Bank Commissioner. "As a private citizen, you can give out your money as you see fit. But you cannot use the Hanover's funds for it. Or promote the contest in the bank's name."

"I will abide by your directions," I assured him, and left.

I sent for a printer and told him what I wanted.

Ten or twenty thousand cards to begin with. And right away. Then I stuck up a couple of notices in my office with the rules of the contest. The war between myself and the banks was on. I had thrown the gauntlet. And I was going right into action to deliver the first blow.