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Charles Manley Smith – Vermont’s Bank Robbing Governor

The best way to rob a bank is to own one. The saying that’s true today was just as true for Charles Manley Smith back in 1936.

If ever a man had a run of bad luck it was Smith, that year serving as Vermont’s governor. His wife had died the year before, he had been injured in a car wreck and he was about to be arrested for a bank robbery he thought he’d gotten away with.

Charles Manley Smith and the Marble Savings Bank

It was as if life had saved all the bumps in Smith’s road for the very end.

Redfield Proctor

Charles Manley Smith wore many hats in his lifetime: farmer, brick maker, grain dealer, bank president and politician. The key to his successful career stemmed from his appointment in 1891, at only 21, as Redfield Proctor’s private secretary.

It’s hard to overstate the power of the Proctor political dynasty in Vermont. Redfield, a Civil War veteran, rose to head the U.S. War Department and serve three terms as a U.S. Senator. He dominated the Republican Party in Vermont. As founder of Vermont Marble Company, he bought and sold marble. He could direct which marble got sent to build giant federal projects and which didn’t. That meant he could make or break other quarry owners as his own company grew to one of the largest marble companies in the world.

But by most accounts Proctor did not seem inordinately greedy. He shared the wealth with his colleagues and all made money in banking, railroading and other business ventures. It made for a powerful foundation for a political dynasty. Two Vermont villages named themselves after the Proctors and three Proctors served as governor.

Charles Manley Smith

For Charles Manley Smith, affiliation with the Proctors turned into a wonderful career move. He rose steadily up the ranks of business and politics. He served in both houses of Vermont’s Legislature, and won election to the lieutenant governor’s office. Smith served as president of Rutland’s Marble Savings Bank. And in 1934 he won election to the governor’s office — the climax of a long political career.

Charles Manley Smith

But even the Proctors had their enemies, men such as Percival Clement. As owner of the Rutland Herald, Clement opposed the Proctor faction of the Republican Party for years. Eventually he made his peace with it. Others within Rutland politics chafed at the power the Proctors held, as well.

In 1935, as Smith’s term as governor rolled along, a former bank bookkeeper at the Marble Savings Bank, John Cocklin, had gotten the job of assistant city treasurer in Rutland. He put his name forward for the post of treasurer. Smith’s enemies had their moment.

Marble Savings Bank

Charles Manley Smith served as president of Marble Savings Bank. What had happened at the Marble Savings Bank in 1932? Cocklin was asked. Had there been any irregularities in the books that he and Treasurer Lathrop Baldwin maintained?

Of course, Cocklin’s enemies knew the answer even before they asked the question.

Lathrop Baldwin’s promotion to the post of treasurer at the Marble Savings Bank (from the Proctor Trust Company) had itself been somewhat fraught.

Runaway Treasurer

In 1915 the treasurer of the Marble Savings Bank disappeared. He hopped on a train to Troy, N.Y., and literally dropped out of sight. The scramble to find him touched off worries about the bank. Had the treasurer stolen money and run off? The auditors quickly tamped down any fears. He had identified no irregularities in the accounts.

When the runaway treasurer surfaced in New Orleans, he explained his departure as the result of mental strain he had experienced. He had simultaneously managed the bank and tried to manage the group of investors he represented who had purchased and refurbished the Hotel Bardwell in Rutland. He put himself under a doctor’s care. Skeptics doubted that they had the whole story, but nevertheless Lathrop Baldwin got promoted to treasurer at the bank.

Fast forward 15 years to 1932 and again the bank had a problem. This time, some $251,000 had gone missing. For an institution the size of Marble Savings Bank, $251,000 in 1932 represented a lot of money. The bank chalked up the disappearance of the funds to bad investments. Cocklin left quietly. And the treasurer, Lathrop Baldwin, certified that no money had ever gone missing. Bank President Charles Manley Smith never signed the reports to the state banking commission, leaving the line for his signature blank.

1936

Then the difficult year 1935 came around for Smith. His wife of more than 40 years passed away. And in 1936 he suffered injuries in a car accident. By mid 1936, the story of the shortage in funds began to leak out.

A zealous prosecutor had Cocklin arrested. And then he began gradually working his way up the ladder. He arrested the bank examiner who oversaw the books. Then Treasurer Baldwin. Then two bank directors and its lawyer. And then, on December 1, 1936, as Charles Manley Smith’s term as governor came to a close, the prosecutor had him arrested.

Smith reached out to his friends for help. Earle Kinsey, a Proctor man and Republican National Committeeman, put up $6,000 in bail. Smith explained to the press that he had covered up the theft simply to ensure the bank’s reputation remained intact. Divulging the theft, he said, might have put the bank in jeopardy of failing if customers rushed to take out their deposits.

The day after the arrest, Asa Bloomer, state’s attorney, under political pressure, directed that the charges be dropped against Smith. The superior court also dismissed charges against Cocklin and Baldwin. The judge said it did not have jurisdiction.

However, a feisty municipal court judge decided the case would not be broomed so quickly. Dec. 29, 1936 brought the shocking news that Smith and the others had been rearrested. This time Smith had prepared himself better. The case exceeded the statute of limitations, Smith and others argued. They took their appeal to the state’s Proctor-friendly Supreme Court.

Denouement

The Supreme Court dismissed charges against Smith and the directors. The court convicted Cocklin and Baldwin, however. Cocklin went to jail. Baldwin was to pay a fine.

Baldwin would pursue his appeal. He had been convicted of perjury for filing false statements to the banking commission. His lawyer argued, successfully, that because the forms were not the annual reports mandated by the commission, but were special reports, the signature was not made under penalty of perjury. The line on the forms where Charles Manley Smith was to sign were left blank, the lawyers noted. Baldwin was cleared.

The aftermath of the case was short. Charles Manley Smith, cleared in April of 1937, died in August of 1937. He had been replaced in office. Republicans won only two states in the 1936 elections: Maine and Vermont. New Governor George Aiken had taken over for Smith. He had positioned himself as the common man’s Republican, not a Proctor Republican.

This story was updated in 2023.

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The Oldest Bank in Each New England State

The oldest bank in a state isn’t necessarily the first one chartered. Banks have had their difficulties over the years and many failed or were swallowed up by other banks.

Bank of America, for example, started out as the Providence Bank in Rhode Island in 1791. It became the Industrial National Bank in the 1950s, morphed into Fleet Financial Group in the 1990s, bought Shawmut and BankBoston, and then was acquired by the Bank of America in 2004.

Here, then, are brief histories of the oldest bank in each New England state. If you know of other old banks with interesting histories, please include them in the comments section.

Liberty Bank

Historic Main Street district in Middletown, Conn.

In 1844, a young merchant from Old Saybrook named Frederick Sheffield rode his horse to Middletown, Conn., and deposited $8 in the Liberty Bank. Six months later he deposited another $18.

That $26 grew to more than $32,000 in 1994, when Sheffield’s descendants closed the account. It was the oldest individually owned savings account in America.

Liberty Bank was founded in 1825 as a mutual savings bank to help the poor and working class become thrifty. The bank’s headquarters complex includes its original location at Samuel Southmayd’s pharmacy on the corner of Main and Williams Streets in Middletown. They are part of the Main Street Historic District, and they include the former post office built in 1916, the Middletown Savings Bank built in 1928 and the Old Banking House Block built in 1796 and 1815.

Since 2000, Liberty Bank merged with several other smaller banks and is now the third largest as well as the oldest bank in Connecticut, with 56 branches and about 700 employees. It introduced a checking account to offer rebates of other banks’ ATM surcharges and built an affordable housing complex in Norwich, Uncas Condominiums.

Saco & Biddeford Savings Institution

Maine’s oldest bank, Saco & Biddeford Savings Institution was founded in 1827 as a social good, a way to encourage low-income people to save money.

The Saco & Biddeford Savings Institution was chartered during a flurry of charters for savings institutions along the East Coast. The first was founded in Boston in 1816, and within three years savings banks were incorporated in Philadelphia, Baltimore, New York, Hartford, Providence and Salem, Mass.

Today it has eight branches along the coast of Southern Maine, employs about 200 people and has assets of about $900 million.

State Street Bank and Trust

An early incarnation of the State Street Bank

Massachusetts Gov. John Hancock in 1792 signed the first charter for Union Bank, the forerunner of the State Street Bank and Trust Co. It was the third bank in Boston, located at the corner of State and Exchange streets. Its first president was Hancock’s lieutenant governor, Moses Gill.

The bank was tied to Boston’s shipping industry, and has always celebrated the city’s maritime history. The bank’s offices featured ship models, prints, harpoons and figureheads, and published about two dozen monographs about Boston’s shipping past.

The monographs, wrote one collector, “hold a unique place in Boston publishing history for a number of reasons, including their high level of scholarship, the elegant printing and presentation of the volumes, the very many rare photographs and illustrations first published therein, and the magnanimity of the great financial institution which made them available to the public.”

The bank’s interior was described as looking like a New England merchant’s counting house of the late 18^th century, including the period furniture.

In 1924, Massachusetts Investors Trust chose State Street Bank as custodian of the country’s first mutual fund. The importance of that development wouldn’t become clear until years later.

In the 1970s, State Street decided to move away from retail banking and commercial lending, and into the high-tech world of processing asset management, global custody, 401(k), retirement plan accounting, and trusteeship of debt securities

A series of mergers and moves resulted in the bank’s current structure. Today it is a subsidiary of the State Street Corporation, the third largest asset manager in the world with $2.45 trillion under management. State Street Corporation is responsible for the custody and administration of 11 percent of the world’s assets. It is the oldest bank in Massachusetts and the second oldest bank in the country next to the Bank of New York, founded eight years earlier.

Bank of New Hampshire

Bank of New Hampshire in Laconia, N.H.

In 1832, the Meredith Bridge Savings Bank in Laconia received its first deposit: $10.50. Its charter had been signed by Franklin Pierce the previous year. Thirty-eight years later it would change its name to the Laconia Savings Bank, and so it would remain until 2012, when it became the Bank of New Hampshire.

New Hampshire’s oldest bank was founded as a mutual savings bank, owned by its depositors, and it has remained that way ever since. In 1994, the bank began acquiring other banks, and today has 24 branches throughout the state.

The Bank of New Hampshire boasts of its support for such nonprofit organizations as the Laconia Public Library, Lakes Region Childcare, the Bedford Public Library and the Children’s Museum of Portsmouth. It has $1.5 billion of assets under management.

Washington Trust Company

Historic downtown Westerly, R.I.

The Washington Trust Company was chartered by the Rhode Island legislature in 1800 to furnish loans and savings options for residents of the Westerly area. More importantly, it also had responsibility for issuing bank notes. The federal government at the time did not issue currency as we know it today, and paper notes were from time to time in short supply. This made bank currency essential to a functioning economy.

Named for President Washington, the Washington Trust Company was known as Washington Bank. It became the first bank in the nation to issue currency that bore Washington’s portrait — a full 69 years before federal currency would bear his likeness. It was just the third bank chartered in Rhode Island history.

In the earliest days of the Federal Deposit Insurance Corporation, the bank insisted that its reliance on the values of Yankee thrift and frugality made it so sound that it had no need of FDIC insurance. Congress eventually forced all banks to participate in the insurance system, regardless of the health of their balance sheets.

National Bank of Middlebury

The State of Vermont chartered the National Bank of Middlebury in 1831. It operated out of the Middlebury Hotel until 1845 when it opened its first building. The bank became a federally chartered bank in 1865.

In 1885 the bank suffered a setback when an investment in the National Bank of St. Albans failed. The National Bank of Middlebury was among a group of banks that were shareholders who were asked to contribute funds to make good the deposits and debts of the St. Albans institution. The banks sued to escape liability, maintaining that they were not responsible for losses beyond their own investments. In 1888, however, the courts ruled that the National Bank of Middlebury, in addition to the others, must contribute to paying the St. Albans bank’s debts. Middlebury was ordered to pay $19,642 in the case.

After the banking crisis of 1933, during which Franklin D. Roosevelt closed the nation’s banks, the National Bank of Middlebury reopened and was declared one of the nation’s soundest banks. Today it is the oldest bank in Vermont.

Images: Liberty Bank, By Joe Mabel, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=19384631; Westerly, R.I., By English Wikipedia user Daniel Case, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=4422975

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The Hartford Insurance Story: One Man, One Bold Stroke, One Insurance Capital

In 1835 Connecticut’s Eliphalet Terry assumed leadership of a small Hartford insurance firm. Within one year, and with one master stroke, he turned the city of Hartford into the insurance capital of the world.

Terry’s career in insurance began in 1810. That’s when a group of investors formed the Hartford Fire Insurance Company. Just a dozen men with a relatively simple idea.

That idea propelled them to modest success. Then, when disaster struck in New York City, Eliphalet Terry made an extraordinary gesture that brought the insurance industry to Hartford.

Hartford Insurance

Insurance existed in Hartford and elsewhere for many years, with marine insurance the most prominent product. Ship owners sending their vessels abroad would insure them. The China Trade minted millionaires, and insurance provided, for a small fee, a hedge against disaster.

Illustration of New York’s Great Fire of 1835 (New York Public Library), which gave a huge boost to Hartford insurance companies.

But the men in Hartford saw a simpler risk to insure against: Fire. Businesses frequently contributed to fire brigades, which protected buildings threatened by fire. The Hartford Fire Insurance Company, along with many other companies, formalized this system. It accepted premiums, paid fire brigades for protecting insured properties and spent to replace buildings lost to fire.

Fire brigades competed in major cities. The first brigade arriving at a building had the right to fight the fire and claim payment from insurers. It seemed a fairly safe gamble.

In all, the founders of the Hartford insurance company put up $15,000 (10 percent of its capital). They borrowed the rest to show that it could pay any losses.

Hartford Insurance Finds Early Success

In the early years, the business prospered. Losses were controlled, with none reported for the first two years of operation. Premiums rolled in, and the company operated with virtually no overhead. Its treasurer drew a salary of only $300. But he also got another $30 for firewood to heat his office.

Shares in the company were valued as high as $100. But as the company matured, its problems multiplied. Losses were incurred, premiums were mispriced, competition grew and the business became more complicated. The Hartford Fire Insurance Company was no longer the moneymaker it had been. Its owners found they were now on the hook for the company’s liabilities. Some owners offered to sell shares for as little as $5 to someone willing to take on the risk.

Eliphalet Terry

The group originally chose Eliphalet’s uncle Nathaniel, a mayor of Hartford and congressman, as president. By 1835, the insurance company struggled, and a full reorganization was under way. Eliphalet Terry, originally only a minor investor, became president of the Hartford Fire Insurance Company.

The large investors still included David Watkinson and Daniel Wadsworth. Watkinson’s fortune would eventually underwrite the Watkinson Library at Trinity College. Wadsworth would build the Wadsworth Atheneum.

For twelve months Eliphet aggressively worked to right the Hartford insurance company. As the year wound to a close, Eliphalet Terry prepared to celebrate a successful transition. Losses were minimal and the company was to declare a dividend. The company’s directors held a dinner to celebrate on a cold December night and went home to warm beds.

Eliphalet Terry, godfather of Hartford Insurance companies. Painting (detail) by Samuel F. B. Morse.

Trouble in New York

In New York City, December of 1835 turned brutally cold. The East River froze solid and temperatures dropped as low as -17 degrees. On the night of December 16, a gas line broke and the leaking gas then came into contact with a wood stove. That resulted in a warehouse fire in the heart of the Wall Street financial district.

The rapidly growing city lacked adequate fire fighting resources, and the cold aggravated the situation. Firefighters had to chop through frozen fire reservoirs and the river to pump water toward the fire only to have it freeze inside the fire hoses.

Block by block the fire spread out of control. The stock exchange, the merchants exchange, post office, two churches, major banks, warehouses and dry-goods facilities all fell to the fire. The fire’s glow in the sky was visible as far away as Philadelphia.

The marines ultimately resorted to using dynamite from the Brooklyn Navy Yard to blow up buildings in the fire’s path to stop its spread. By the time firefighters controlled the blaze, it destroyed between 500 and 700 buildings. Remarkably, only two people died.

In the early morning light the scope of the devastation became clear. But then another shock hit the city. One by one its insurance companies began shutting their doors and refusing to discuss claims.

News Reaches Hartford

In Hartford, the news of the fire caused shock. The excitement over the Hartford Fire Insurance Company’s great year gave way to doubt. The fire did more than $20 million worth of damage. But the Hartford was relatively insulated, facing exposure of about $60,000.

Eliphalet Terry summoned the company directors. They would stand by their insurance policies. They also told their bank they would personally guarantee any company checks written for the damage to policy holders in New York.

In a great show of salesmanship, Terry ordered up a sleigh and raced toward New York City. With the city’s financial district in ruins, Terry proclaimed to all who would listen that his firm, the Hartford Fire Insurance Company, would stand by all claims.

To those not fortunate enough to have Hartford insurance, he offered the chance to buy it. When the fire’s damage was finally totted up, 23 of New York’s 26 insurance companies would declare bankruptcy. The center of the insurance industry then headed to Hartford.

Eliphalet Terry’s company, The Hartford, still thrives today. And even though Hartford insurance companies have shrunk since their heyday, Connecticut can still call itself the insurance capital.

***

New from the New England Historical Society. Click here to order your copyt oday.

Thanks to: The Memorial History of Hartford County, Connecticut, 1633-1884, Volume 1 by James Hammond Trumbull. Images of 1835 New York fire courtesy New York Public Library.

This story about Hartford Insurance was updated in 2025.

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New England Coffee Houses: From Fad to Revolution to Fraud

Coffee probably first arrived in New England in 1614 when John Smith sailed up the coast on an exploratory voyage. New England coffee houses took a bit longer to arrive.

The coffee bean, first cultivated in Ethiopia, started out as primarily a drink of the Muslim world. The intrepid Smith encountered it during his time in Turkey and helped spread the word. The drink gained popularity across Europe in the early 1600s. By 1652 the brew had moved out of the kitchens of England, where beans were mashed with mortar and pestle, and into coffee houses. Over the next 20 years, they would number more than 3,000 in England.

First New England Coffee House

In America, Dorothy Jones, who immigrated to Boston from Wales, needed a way to make a living. There is no record of coffee coming over to New England on the Mayflower, but the ship did bring a mortar and pestle that would have been used to make coffee powder.

Painting of an early London coffee house.

Coffee was one of many of the drinks a patron at an early colonial tavern could purchase, along with wines, ciders, and chocolate. But colonists eagerly adopted the popular trends of their home country, and England was mad for coffee houses.

So in 1670, Jones received a license from the government announcing her new venture: “Mrs. Dorothy Jones, the wife of Mr. Morgan Jones, is approved of to keepe a house of publique Entertainment for the selling of Coffee & Chochaletto.”

Morgan Jones, Dorothy’s husband, was a minister and school teacher who moved about from one colony to another, leaving Dorothy to raise funds for her own needs. She capitalized on the coffee trend in Europe, which had already arrived in New York. Four years later, she would add wine and cider to her menu.

From Dorothy’s experiment grew coffee houses throughout New England, though they were difficult to distinguish from taverns in their offerings. Back in the mother country, coffee houses became hotbeds of political discussion. Patrons were admitted for a penny, received unlimited refills and were immersed in the news of the world shared by the assembled public there.

Coffee House Politicians

Wary of the revolutionary ideas brewing in the coffee houses and spouted by the “coffee house politicians,” Charles II tried in vain to squash them out of existence. In the colonies, meanwhile, the coffeehouses (which sold as much alcohol as coffee) also became political.

The British Coffee House, which dated to the 1690s, became the scene of one of New England’s more well-known fights in the run-up to the revolutionary war. The Green Dragon tavern was the hangout of the agitators who opposed British colonial policy, such as lawyer James Otis. Loyalists hung out in the British Coffee House.

James Otis by Henry Blackburn

In 1769, the Loyalists lured Otis to the British Coffee House, and he got whacked on the head with a cane for his views. Otis was never the same man after. Sensing the winds of change, however, the British eventually changed its name, rebranding itself the “American Coffee House.”

Exchange Coffee House

Over the years coffee houses came in all flavors, from the grandest to the lowest. Probably the largest, most expensive coffee house ever built, however, was also in Boston. The Exchange Coffee House was the brain child of Andrew Dexter, Jr. At seven stories tall, it counted as a skyscraper in the early 19th century.

Dexter envisioned a palace of commerce. Some would come to drink. Others would come to trade information about shipping and foreign conditions. And, most importantly, Dexter wanted to establish a trading floor for bank notes.

The Exchange Coffee House

Unfortunately, Dexter was a fraud. In 1808, currency was issued by individual banks, based upon the gold and silver they held. People traded and valued bank notes based upon a bank’s reputation for solvency. A trader might make a sharp profit buying a discounted note and redeeming it for its full value in gold or silver.

Running short of funds, Dexter came up with a scheme for financing his vision. He began taking over banks in remote parts of New England and issuing bank notes far in excess of their assets. He thought no one would ever redeem the notes and he could have unlimited capital.

In 1807, Thomas Jefferson placed an embargo on British goods, throwing New England into a depression. As a result, holders of some of Dexter’s notes tried to exchange them for their face value in gold or silver. Lacking funds, bank after bank collapsed. As news of Dexter’s scheme spread, his bank notes became worthless.

Dexter fled to Canada and his coffee house became a white elephant for its new owners. It limped on as a banquet hall and coffee house, but burned in 1818.

Thanks to: All About Coffee By William H. Ukers. This story last updated in 2022.

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Old Home Days: Frank Rollins, the New Hampshire Man Who Invented Them

June marks the start of Old Home Days season not just in New England, but throughout the United States, in Canada and Australia. The birth of the celebration can be traced to one man: Frank Rollins. He set in motion the first Old Home Days – 44 of them, all in New Hampshire – in 1899.

Canaan, N.H., decked out for Old Home Days.

Frank Rollins was born into a prominent political family in New Hampshire. His father, a railroad executive, had served in the New Hampshire Senate and then won election to the U.S. Senate. Frank also won election to the state Senate and then as governor in 1898. He also worked with John Wingate Weeks on writing the National Forest Act.

Rollins worried, as well, about the decline of the state’s rural communities because people began to move away.

They’d begun to move a lot in 19^th century New England. Yankees went west, looking for better land and a warmer climate, or they went to work for the mills in the cities. Newcomers from Europe also arrived seeking work. It was a big change from the settled population patterns of the previous centuries.

Frank Rollins

Farms were abandoned and rural towns started to look shabby. One New Hampshire farmer urged his neighbors not to move west: “Had you not better be content to keep and improve the old homestead, so near the school house where you can hear the church bell and where you can enjoy the association of good neighbors?”

Rollins, New Hampshire’s governor from 1899-1901, encouraged people to buy old farms, spruce them up and use them as summer homes. He encouraged town centers to get facelifts with new monuments and renovated municipal buildings.

Rollins had an interest in promoting investment: He and his father, Edward H. Rollins, had started a banking house. It then became one of the largest in the United States until the crash of 1929.

Old Home Days

In 1897, Rollins broached the idea of Old Home Week:

“I wish that in the ear of every son and daughter of New Hampshire, in the summer days, might be heard whispered the persuasive words: Come back, come back!” he wrote in 1897.

“Do you not hear the call? What has become of the old home where you were born?…Do you not remember it — the old farm back among the hills, with its rambling buildings, its well-sweep casting its long shadows, the row of stiff poplar trees, the lilacs and the willows?”

He founded an Old Home Week Association, and presided over the state’s first homecoming as governor.

In 1899, 44 New Hampshire towns held Old Home Week celebrations during the last week in August.

“They celebrated with bands and bonfires, parades and poetry, dances and dinners, and statesmen and speeches,” wrote Gary Crooker, in New Hampshire Old Home Celebrations.

Old Home Days in Newmarket, N.H.

The first Old Home Day in Concord on Aug. 31, 1899 ended with a 53-part fireworks show. Each part had a theme, such as No. 22 Design Portrait of Admiral Dewey, the hero of Manilla, No. 45 Starry Flags and No. 52, Aladdin Jeweled Trees.

Notable Days

At other notable celebrations:

Rollins came to Woodstock’s Old Home Day and 100th anniversary celebration in 1900. An 1812 cannon was fired from Sunset Hill.
Rollins also attended Mont Vernon’s Old Home Day in 1900, which featured a performance of the Tobasco Banjo, Mandolin and Guitar Club of Lowell, Mass.
In 1913, Fitzwilliam held an Old Home Day party in mid-August. The invitation included a poem about the ‘latch string,’ a term often used in Old Home celebrations. Putting the latch string out meant ‘welcome.’
Brookline celebrated Rural Free Delivery and Uncle Sam (who came from nearby Mason) in its 1921 Old Home Day celebration.
In 1933, Swanzey celebrated its bicentennial with a mile-long parade featuring 49 floats.
In 1936, Salisbury celebrated Old Home Day with a baseball game between the Sand Crabs and the Sand Fleas in a ‘Little World Series.’

Old Home Days Catches On

Maine and Vermont adopted Old Home days in 1901, and soon Massachusetts and Connecticut followed. By 1907, the custom spread to New York, Ohio, Alabama, Virginia, North Caroline, Kentucky, Rhode Island, Pennsylvania, and onto Nova Scotia, Ontario and Australia.

Bradford, Vt., readies for Old Home Days.

Old Oaken Bucket

Old Home Days included parades, church services, reunions, band concerts and poetry – lots of it. Come Home to Your Mother was typical, describing, “the pond where you skated, the lake where you fish’d and the great elm shadows, where you swung all you wished.”

Poets described the vanished farm, the ticking of the old clock, the flowers in the yard, the old oaken bucket, the fleecy clouds, the granite mountains and the omnipresent latchkey.

There was even an Old Home Week songbook. In 1906, one observer wrote, “In every New England town observing the festival the local poet has been burning the midnight oil so assiduously that it is no wonder the price of kerosene has been advanced a cent or so a gallon.”

After the world wars, Old Home Week celebrated the return of the men and women who fought. Then eventually Old Home Week season spread out from June until September.

This story was updated in 2022.

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Charles Ponzi, The Financial Idiot Who Drove Boston Money Mad in 1920

Charles Ponzi sent Bostonians into such a frenzy over his get-rich-quick scheme in 1920 that police had to subdue enthusiastic investors. They overflowed from his North End banking office and blocked traffic.

Charles Ponzi in his office. Photo courtesy Boston Public Library, Leslie Jones Collection.

The dapper little Italian had convinced people he could double their money in 180 days. And he could, for a while.

“At every corner, on the street-cars, behind the department store counters, from luxurious parlors to humble kitchens, to the very outskirts of New England, Ponzi is making more hope, more anxiety, than any conquering general of old,” reported Marguerite Mooers Marshall in the New York Evening World.

In less than a year, the swindle unraveled, giving the financial world a new phrase: Ponzi scheme.

High Hopes

He was born Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi in Parma, Italy, on March 3, 1882 to a family of at least some means. As a young man he spent four years partying at the University of Rome La Sapienza and then came to the United States. He had $200, a fashionable wardrobe, his mother’s blessing and hopes to make a fortune.

He arrived in Boston on the SS Vancouver on Nov. 3, 1903, having gambled and drunk away all but $2.50 on board.

After four years of working odd jobs in the Northeast, he moved to Montreal. He got a job as a teller at the Bank Zarossi. which catered to Italian immigrants. Founder Louis Zarossi offered customers twice the interest rate they could get elsewhere. He used new deposits to pay the high interest. The bank failed and Zarossi fled to Mexico – a victim of circumstance and bad associations, according to Ponzi.

Again unemployed, Ponzi got caught forging a check for $423.58. Sentenced to three years in a federal prison, he told his mother that he got a job as a special assistant to the prison warden.

In 1911 he returned to Boston and started smuggling Italian immigrants into the United States. He got caught again and spent two years in an Atlanta prison.

Back in Boston he met stenographer Rosa Gnecco, the daughter of a North End grocer. He didn’t tell her about his past, but his mother did in a letter from Italy. Rosa married him anyway.

The Ponzi Scheme

Ponzi with his gold-handled cane. Photo courtesy Boston Public Library, Leslie Jones Collection.

He tried his hand at several businesses until he stumbled across the key to the scheme that made him rich.

People could buy an International Reply Coupon in one country for the price of a stamp and redeem it in another country for the equivalent value of that nation’s stamps. Ponzi realized that IRCs could be exchanged in the United States for more than their value in Europe because of the massive currency devaluation across the continent.

He started out by paying agents to buy the IRCs for him in Europe, then he redeemed them for U.S. stamps and sold the stamps.

Nice acronym

Ponzi then sought investors, promising returns of 50 percent in 45 days, or 100 percent in 90 days. He repaid those early investors with money from later investors. For a while, Ponzi had plenty of them. About 20,000 investors gave him $10 million. Boston went money mad.

Living Large

At his height, Ponzi pulled in $250,000 a day and could finally live large. He bought a mansion in Lexington, Mass., with a heated pool and air conditioning. He promised a donation of $100,000 to the Italian Children’s Home in Jamaica Plain. And he carried a gold-handled cane, sported a diamond stickpin and drove around Boston in a chauffeured limousine.

Ponzi made so much money he took control of a bank that rejected his loan application. He bought a brokerage firm for the pleasure of firing his former boss the next day.

“If five-spots were snowflakes, Ponzi would be a three day blizzard.” wrote Neal O’Hara for the Boston Traveler in July 1920. “This baby can turn decimal points into commas on almost any bank-book.”

On July 26, 1920, his scheme started to unravel. The Boston Post reported 160 million international reply coupons would be needed to cover investments in Ponzi’s scheme, but only 27,000 were in circulation.

The story caused panicked investors to crowd outside his office demanding their money. Ponzi handed out coffee and donuts along with $2 million in three days. He assured everyone they had nothing to worry about.

A Financial Idiot

But according to Ponzi’s publicity agent, William McMasters, he was a financial idiot who couldn’t add. McMasters went to the Boston Post with the revelation that Ponzi’s investment scheme amounted to robbing Peter to pay Paul.

Investors were invited to testify at the Massachusetts Statehouse. Ponzi himself visited state officials in the building.

Time magazine described the scene:

As the dapper little man with the straw hat, the walking stick and the boutonniere emerged from Boston’s State House, a cheer went up for “the greatest Italian of them all.” Charles (“Get-Rich-Quick”) Ponzi shrugged off the compliment. “No,” he admitted, “Columbus and Marconi were greater. Columbus discovered America, Marconi discovered the wireless.” Hysterical voice from the crowd: “But you discovered money!”

He was arrested on August 12, 1920, and charged with 86 counts of mail fraud.

Ponzi’s mug shot around 1920

In his self-serving and unapologetic autobiography, The Rise of Mr. Ponzi: The Autobiography of a Financial Genius, he wrote,

My house of cards had collapsed! The bubble had busted! I had lost! Lost everything! Millions of dollars. Credit. Happiness. And even my liberty! Everything, except my courage. I needed that to take my medicine like a man. To meet the future. Unquestionably, I was licked. For the time being. But no man is ever licked, unless he wants to be. And I didn’t intend to stay licked.

The Best Show

Charles Ponzi spent 3-1/2 years in federal prison, then faced state charges after he was released. He was convicted, but appealed his conviction and fled to Florida, where he sold swampland. He promised investors 200 percent returns in 60 days.

Ponzi soon got caught, tried and convicted again. He shaved his head, grew a moustache and tried to flee the country as a merchant seaman. He got caught in New Orleans and was sent back to Massachusetts, where he served seven more years in prison. The commonwealth deported him upon his release.

Ponzi spent the last years of his life in poverty in Rio de Janeiro, sometimes working as a translator. He died in a charity hospital on Jan. 15, 1949.

Before he died, he granted one last interview. He told the reporter,

Without malice aforethought I had given them the best show that was ever staged in their territory since the landing of the Pilgrims! It was easily worth fifteen million bucks to watch me put the thing over.

This story was updated in 2024.

Images: Ponzi Investment Group by ArrrRT eDUarD via Flicker, CC By 2.0.

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