The international reply coupon I had set out to sell was sold And how! There was no doubt as to that. Not only was it sold but I had got a fairly good price for it too. Fifteen million bucks for a six-cent item are not to be sneezed at anywhere. Not even in New England where the average dollar is trained from infancy to breed faster than a guinea pig. However, my day's work was not over yet. Not by a long shot. Because I had to see to it that the coupon might stay sold. And the indications were that it wouldn't.

In fact the outlook was far from favorable. It might have looked rosy to me, for a moment. From the time I alighted from my car and went upstairs to my office, until I emerged again, ten or fifteen minutes later, to go to the Hanover Trust. But after I had a chance to peruse the morning papers, and especially the Boston Post, in the privacy of the bank president's office, it came home to me that the situation was considerably more tense than it had ever been.

The press was unanimous in its condemnation of official laxity. My activities were not openly qualified as fraudulent. Because the newspapers knew better. But they were pictured so far out of the ordinary, magnified to such an extent, as to make them appear absurd. And the officials were blamed for having failed to check up properly the various claims upon which my activities were based.

The situation was especially dangerous because a man in public office generally runs amuck the moment he becomes the target of printed criticism. Under the spur of what he believes to be a public opinion, he is apt to do almost anything. Except be quiet. He will not hesitate to misuse his authority. To misconstrue the law. To lapse from blunder to perfidy. Rather than to come right out like a man and explain that his failure to act is due to circumstances over which he has no control.

After I read the papers, I began to fear just that. Within the day, within the next hour or so, some proceedings might be instituted against me. Whether civil or criminal, I didn't know. But proceedings which might have closed me down. Justly or unjustly. Temporarily, or for good. Such as an injunction.

Without any doubt, I had a battle on my hands. This time with the press, in general.

I reached for the phone.

"Call up the United States Attorney, and District Attorney," I directed the Hanover's switch-board operator, "and tell them I want to talk to them. Give me the calls as they come in."

The United States Attorney was the first one to answer.

"I assume you have read the papers," I told him.

"I have," he admitted.

"It occurs to me," I continued, "that it is rather unfair for them to criticize public officials for their alleged laxity. Personally, I resent the criticism because of its implications. I am going to demand a showdown. I am going to offer you and the other officials an opportunity to investigate my business. Would you be willing to join the attorney-general and district attorney at a conference with me, in order that the details of such an investigation may be arranged?"

The Assistant U. S. District Attorney replied that he would be glad to. Mr. District Attorney sent word for me to go over to his office and he would talk to me. Attorney-General said that a joint conference was not agreeable to him.

"But, Mr. Attorney General," I argued, "I'm a busy man. I can't spend a whole day in conferences. I feel that the consideration I am showing to the authorities should meet with equal consideration from them. After all, you must realize that, under the law, no investigation can take place without my consent."

It was a waste of time to argue with him. I couldn't move him. And I was on the verge of telling him to go to the devil. But, as yet, I didn't know him well enough for that. And so, I agreed to go up to his office later in the day.

"About what time?" he asked me.

"I couldn't say," I replied. "As soon as I get through with the state and federal officials."

"I'll be waiting for you," he said, but he did not know how long I was going to keep him waiting. Since he wanted to be so disagreeable, I intended to make him whistle. And if he didn't know how, he could learn.

The phone calls soon disposed of, I had to do some quick thinking. I stood committed to an investigation. And had to go through with it. I wouldn't and couldn't go back on my word. But it was vital for me to decide upon the type of investigation which might satisfy the officials and the public without disclosing my true situation. By a process of elimination, I arrived at something that looked pretty good.

Acting on the impulse, as usual, I went to the Court House to put my proposition up to Mr. District Attorney. I had never met him before. I did not know what sort of fellow he was. But I found him none too pleasant at the start.

"It is being rumored," he said, "that I have $20,000 invested with you. Under the circumstances, I feel that I ought to investigate the sort of business in which my money is supposed to be invested."

"That's right," I agreed with him, "as an investor it would be your privilege to investigate. At the proper time. That is, before investing. But it so happens that you are not an investor of record. Therefore, it does not seem that you have any interest in the matter."

"I have," he stated. "I am the District Attorney of Suffolk County and, as such, I owe to my constituents the protection of this office in anything that may affect their welfare."

"But there is no indication that the welfare of your constituents is being jeopardized," I argued. "You have no complaints upon which to base any action."

"That's true," he admitted, "but the newspapers are openly hinting that you are perpetrating a fraud upon the public."

"If I am," I remarked, "it seems to me that you should welcome my call, because I have come to offer you an opportunity to investigate my activities."

"Do you mean it?" he asked.

"Certainly," I said. "I wouldn't be here, if I didn't. If I didn't intend to cooperate with you, I would let you take the first step while I would hire half a dozen of the best lawyers to resist your investigations."

"If that is the case," he stated, "I am ready to listen to you with an open mind. What have you got to offer?"

"An opportunity to ascertain whether or not I am solvent," I replied. "What the authorities are interested to know at this time is whether or not I have enough money to meet all of my outstanding notes."

"How do you propose to show that?" he asked.

"By allowing an auditor, acceptable to all of the officials concerned, to determine the total of my liabilities," I explained.

"Will you let that auditor examine your books?" he went on.

"I will turn over to him all of the books, papers and records which are necessary to determine my liabilities," I stated. "And no more."

"How is he going to verify whether you or not you are solvent?" he inquired.

"I will attend to that," I replied. "When the total of my liabilities will be announced, I shall exhibit by assets. Is that satisfactory?"

"Yes," he said, "but who is going to pick out the auditor?"

"You and the other officials," I told him. "I don't care who the auditor is. Only, I want it understood that here is going to be one investigation for all of the officials concerned. And not a separate investigation for each one of them."

"Why do you say that?" he asked.

"Because, from my phone conversation with the Attorney General, I have reason to believe that he wants to conduct a separate investigation for each one of them."

"Why do you say that?" he asked.

"Because, from my phone conversation with the Attorney General, I have reason to believe that he wants to conduct a separate investigation of his own."

"For my part," said Mr. District Attorney, "I am willing to agree to a joint investigation."

"And so is the Assistant United States District Attorney," I stated. "Therefore, unless the Attorney General falls in with the majority, he'll be out of luck. That's all there is to it."

It was at this point that I felt the psychological moment had arrived for an announcement intended to upset my opponents.

"Mr. District Attorney," I said, "it occurs to me just now that it might be an impossible task for an auditor to determine my liabilities, if I should continue to issue notes every day throughout the investigation."

"I guess it would be at that," he agreed. "Couldn't you stop issuing those notes?

"I could," I admitted, "but I haven't had the time to consider whether it would be expedient for me to do so. However, the suggestion has an appealing feature. Because it offers me the opportunity to spike certain insinuations which are being made by the press, I will do it."

"You will stop issuing notes?" he asked. "When?"

"Right now," I told him. "May I use your phone?"

"Surely," he said. "Help yourself."

I called up my office. Miss Meli answered.

"Miss Meli," I directed her, "from this moment we shall cease accepting money for investment. Until further order. Post a couple of notices around the office. Notify by phone or wire all agents and sub-agents. But we shall continue to redeem notes as usual. At maturity, with interest. Before maturity, without it."

"Mr. Ponzi," said the District Attorney after I had replaced the receiver, "I had probably misjudged you before you entered this office. Your frankness impresses me favorably. I believe you mean to do the right thing. I want to thank you for facilitating my task and I want also to assure you that I will not put you to any greater inconvenience than is absolutely necessary."

From his office, I went to call on the United States Attorney. I related to him what had occurred. And he seemed entirely satisfied with it.

He said we would consult with the District Attorney and let me know about the auditor.

I left the office of the Assistant United States District Attorney to go to the State House where the Attorney General had been waiting for me for the last three or four hours. But, on my way, I had to drop in at my office to straighten things out. My announcement that I would not accept any more money, had provoked a run. I found as many investors ready to withdraw their money, as I had seen there in the morning eager to give it to me. Only, the cops were missing and the crowd was not as orderly.

I entered my office and was told that the police on duty had been recalled. Immediately, I phoned to the Police Commissioner. I couldn't get him.

Finally, I got the Superintendent on the wire. He said that the police had been withdrawn because it was against the law for them to be on duty in private buildings.

"That's a fine time to tell me!" I exploded. "So long as I was taking in money and presumably, stealing it and committing a felony, it was all right for the police to protect me. Now that I am performing a lawful act, that of making restitution, the law denies me protection! There is something fishy somewhere, but I haven't the time to bother with you fellows. You can tell the Commissioner I don't need his police force. I will organize one of my own."

And I did. I hired the Pinkertons and other private guards. Inside of an hour I had the crowd under control. Without resorting to violence. I went personally through the line of investors. Talking to them. Explaining things. Making it easy for them to get their money. And with that I averted another vicious blow.

The police, as I was told later, had been withdrawn in the hope that some rioting might develop and furnish a pretext to the authorities to step in and take charge. I don't know for sure where the order came from. I learned, however, that political and financial interests had caused that order to be issued. But I disappointed them.

As soon as I had things running smoothly in my office, I went to call on the Attorney General.

I brought a lawyer along with me as a precaution. I had the intuition that I wasn't going to a mere conference. In fact, when I entered the Attorney General's office, I found about a dozen people sitting at a long table. Assistant A. Gs galore. Stenographers. And what not. The only one missing was the official executioner.

Fortunately, there wasn't what you may call a keen intellect in the whole bunch.

The conference wasn't much of an ordeal. Except from the standpoint of time. It lasted longer than any other. Because my audience was just naturally slower. At grasping things. But, on the other hand, I got away with more fibs. Some of them actually awful. And had the pleasure of leaving that distinguished gathering as much in the dark about my activities as they were at the start. Only, they didn't realize it. Ignorance is bliss.

On my way home, in the evening, I had twenty or thirty minutes in which to review the events of the day. So far, I was still master of the situation. The Assistant United States District Attorney had appointed Edwin L. Pride, a noted accountant, to compile the list of my liabilities. The District Attorney had declared himself ready to abide by Pride's findings. The Attorney General had been left out in the cold. He wasn't likely to make any trouble because, with two district attorneys on my side, he didn't have a chance either with the courts or the public.

But, even if I was still the master of the situation, the fact remained that I did not have enough money or assets to balance my liabilities. Nobody knew that. Except myself. Yet, it looked as it the whole world would know it before long. Unless … That's it! Unless I happened to have a couple of wild deuces up my sleeve. And I had them all right. I had tucked them there myself in the morning.

In fact, for one thing, I had nothing to fear and everything to gain from the run I had provoked. I had enough liquid cash to keep on paying out half a million a day for two weeks. The chances were that I would have paid out an average of half that amount per day. For four weeks, instead of two. Then, in a pinch, I could have liquidated my other assets and stretched things along for another week. But the best feature of the run was that I would have redeemed more notes without interest than with interest. Because frightened investors would not have waited for their notes to mature. Even a few days. And every time I refunded the principal, I would save the roughly 50% interest.

Roughly, I owed then $15,000,000. Of which $5,000,000 were interest. My total resources were around $8,000,000. And I was $7,000,000 in the hole. But, by refunding the principal only, before maturity, instead of paying principal and interest, at maturity, with $8,000,000 I would have wiped out $12,000,000 of liabilities. And made a gain of $4,000,000. True enough, I would still be in a hole of $3,000,000. But the second wild deuce would have taken care of that.

The second deuce was the Hanover Trust Company. The bank had, at that time, easily $5,000,000 in negotiable securities and plenty of liquid cash. There were not mine. They were the bank's. But I had access to them.

Now, the Hanover was located at the corner of Washington and Water Streets. The United States Attorney's office was at the corner of Devonshire and Water Streets. The two were less than one-half block apart. My plan was to have the showdown in the office of the Assistant United States District Attorney. As soon as he was ready to announce the total of my liabilities, I would have gone up to his office with all of my cancelled notes, all of my bank books, and all of my other assets, whether in the form of deeds or stocks. But, on my way over, I would have dropped in at the Hanover and grabbed enough securities and cash to make up the difference between the liabilities and my actual assets. The show-down might have lasted an hour or so. On the way back, I would have replaced in the Hanover what I had temporarily taken away. And nobody would have known the difference.

The investigation would have ended right there and then. The authorities would have to certify as to my solvency. And I would have resumed my activities with an officially clean bill of health.

All considered, I was far from licked yet. But I certainly had to be on the alert twenty-four hours of the day. For the next two or three weeks. The banks, the authorities and the press were all after my scalp.