The Ladies' Deposit: The 19th-Century Ponzi Scheme by Women, for Women

Hulton Archive/Getty Images
Hulton Archive/Getty Images

Sarah Howe never disclosed the methods by which she did business. After establishing the Ladies' Deposit Company in an unassuming brick building in Boston's South End around 1879, the former fortuneteller refused to solicit clients for her brand-new bank. There was no advertising, and no public announcement. Instead, members could only be referred by other members in good standing. They had to be single women, not rich, who didn't own their own homes. Deposits could only be made in amounts of more than $200 but less than $1000, and returns were set at 8 percent interest per month—an incredible amount then as well as today [PDF].

Despite the lack of advertising, word of the Ladies' Deposit Company traveled quickly among Boston's working-class women. Howe's selectiveness endeared her to potential clients, as did the fact that she presented herself as a maternal figure at a time when gender stereotypes and predatory practices often left women and their money at the mercy of men. She even invited her select few depositors to sit with her, offering small talk and compliments. The experience seemed, as one woman put it, "sympathetic."

For the single women of Massachusetts, Howe appeared to be offering a remarkable opportunity to grow their nest eggs in a female-friendly environment. But the Ladies' Deposit was far from what it appeared to be.

A CHARITABLE INSTITUTION

The Ladies' Deposit Company had not been operating for long when its exclusive nature—and its amazing returns—captured the curiosity of local newspapers. One Boston Herald investigator who tried to ask some questions at the bank was rebuffed, so in January 1880, he disguised himself as a woman and successfully got inside. His article reprinted a notice pasted inside each Ladies' Deposit-issued bankbook, which described the establishment as a "charitable institution for single ladies, old and young." When the reporter asked how their interest rates were possible, a clerk had replied, "We never disclose the methods by which we do business."

The answers to further questions were similarly unilluminating. A follow-up article in the Herald included an interview with Howe herself, who described the bank as a "Quaker Aid Society" that had first been formed in Alexandria, Virginia. She coyly claimed that she couldn't provide any further details without angering her superiors.

The more reporters mocked and prodded the Ladies' Deposit, the more business poured in. At the height of the operation's popularity, Howe was serving an estimated 1200 women from Boston and beyond—Buffalo, Chicago, Pittsburgh, Baltimore, and Washington. She bought a luxurious home worth $40,000 on Franklin Square, which she paid for in rubber-banded bundles of cash and furnished with thousands of dollars' worth of exotic plants and other decorations.

But although business was booming, it was the beginning of the end for Howe.

On September 25, 1880, the Boston Daily Advertiser ran the first in a series of articles that reignited the controversy around the Ladies' Deposit. Under the title "A Mysterious Bank," the piece detailed the "fabulous rates of interest" offered to "unprotected females," explaining that "the mystery which surrounds and attaches to [the bank] has never been fully dispelled." While the writer wasn't able to solve the mystery of the amazing interest rates themselves, they noted that no one had yet complained about losing even a dollar, which made it difficult to probe much further: "Whatever there may be that is suspicious, nothing unlawful is disclosed, and no depositor comes forward to say that she has been unjustly dealt with."

But the Advertiser's articles were enough to set tongues wagging. Soon, experts wrote in predicting a crash and theorizing that Howe could only afford to pay out her customers with the deposits of other women, a well that would soon run dry. No one used the phrase "Ponzi scheme"—this was 40 years before Charles Ponzi would garner attention for his frauds—but the Advertiser's series, printed over several weeks, proved to be key in turning opinion against the Ladies' Deposit.

As more investors who read the articles became suspicious, they demanded to withdraw their funds. At the end of that September, there was a week-long run on the bank. For a while, Howe was able to sustain the withdrawals, but she soon tried to suspend payments. In response, the Advertiser published an article interviewing seven prominent lawyers, who all said she was liable to pay her depositors' principal without delay. Not long after, as The Atlantic put it, "a storm of legal process burst upon her."

Howe was arrested upon order of the district attorney on October 16, 1880, with her bail set at $20,000. In court, she was tried on five counts of "cheating by false pretenses" by five former depositors. The nail in the coffin was Howe's claim that a Quaker fund backed the Ladies' Deposit. It became apparent during the Advertiser's investigation and her subsequent court hearing that there was no such fund, and that Howe had no connections with any Quaker organization. "She had no more hold upon the Quakers than she had upon the Pope," The Atlantic wrote.

On April 25, 1881, Howe was sentenced to three years in jail on four counts of cheating by false pretenses. Later that November, she would also be involuntarily declared insolvent after trying to pay back depositors.

A RESILIENT CHEAT

Howe didn't learn any lessons from her experience with the Ladies' Deposit. Upon her release from jail in 1884, she set up a new enterprise, the Woman's Bank, in elegant apartments on Concord Street. The operation again targeted women, but offered a more humble 7 percent interest, as opposed to the Deposit’s 8 percent returns.

The Woman's Bank operated successfully for two years, until in April 1887, one woman from Maine called to retrieve her investment and found she couldn't. Howe soon absconded with an estimated $50,000 in deposits.

Next, she tried a similar scheme in Chicago. Her "Ladies Provident Aid" operated in a familiar manner, promising 7 percent interest a month, with three month's interest offered in advance. Local reporters quickly exposed Howe yet again—proving just how notorious she had become.

Forced to flee once more, Howe made her way back to Boston, where she was arrested in 1888 on an outstanding warrant. By this point, the women preyed upon by Howe received little sympathy at all. "It is plain that Mrs. Howe's methods of business would not have inveigled men," The New York Times wrote. "Men, even when they become victims of the sawdust swindlers, require to see how the tempter can find his account in the offer he makes them." The article neglected to mention that a number of men, seeing an opportunity for quick cash, had enlisted female relatives to invest in the Ladies' Deposit for them.

Howe maintained her penchant for duplicity until the end of her life. After being released from prison for the final time in 1889, she returned to her former profession of fortunetelling, charging 25 cents a reading. She died in 1892 at the age of 65, penniless and alone, but insisted until the day she died that she had not been responsible for the Ladies' Deposit. "It was not I," she said. "I did no swindling."

10 Fascinating Facts About Davy Crockett

By William Henry Huddle, American, 1847 - 1892 - State of Texas/Larry D. Moore, Public Domain, Wikimedia Commons
By William Henry Huddle, American, 1847 - 1892 - State of Texas/Larry D. Moore, Public Domain, Wikimedia Commons

Born on August 17, 1786, backwoods statesman Davy Crockett's life has often been obscured by myth. Even during his lifetime, fanciful stories about his adventures were transforming him into a buck-skinned superhero. And after his death, the tales kept growing taller. So let’s separate fact from fiction.

1. HE RAN AWAY FROM HOME AT AGE 13.

When Davy was 13, his father paid for him to go to a school. But just four days in, Davy was bullied by a bigger and older boy. Never one to back down from a fight, one day Crockett waited in a bush along the road home until evening. When the boy and his gang walked up the road, Crockett leaped from the bush and, as he later wrote in his autobiography, set on him like a wild cat.” Terrified that the schoolmaster would whip him for beating one of the boys so severely, he decided to start playing hooky.

His father, John, was furious when a letter inquiring about his son's poor attendance showed up. Grabbing a stick, he chased after Davy, who fled. The teen spent the next few years traveling from his native Tennessee to Maryland, performing odd jobs. When he returned, Crockett’s parents didn’t recognize him at first. Following an emotional reunion, it was agreed that Davy would stick around long enough to help work off some family debts. About a year later, all these were satisfied, and Crockett left for good not long after.

2. HE NEARLY DIED IN A BOATING ACCIDENT.

After serving under General Andrew Jackson in the Tennessee militia, Crockett got into politics. Elected as a state legislator, he served two terms between 1821 and 1823. After losing his seat in 1825, Crockett chose an unlikely new profession for himself: barrel manufacturing. The entrepreneur hired a team to cut staves (the boards with which barrels are constructed) that he planned on selling in New Orleans. Once 30,000 were prepared, Crockett and his team loaded the shipment onto a pair of flatboats and traveled down the Mississippi River. There was just one problem: The shoddy vessels proved impossible to steer.

With no means of redirecting them, the one carrying Crockett ran into a mass of driftwood and began to capsize, with Crockett trapped below deck. Springing to action, his mates on the other boat pulled him out through a small opening. The next day, a traveling merchant rescued them all.

3. HE CLAIMED TO HAVE KILLED 105 BEARS IN ONE YEAR.

If his autobiography can be believed, the expert marksman and his dogs managed to kill 105 bears during a seven-month stretch from 1825 to 1826. Back then, bear flesh and pelts were highly profitable items, as were the oils yielded by their fat—and Crockett’s family often relied on ursid meat to last through the winter.

4. A SUCCESSFUL PLAY HELPED MAKE HIM A CELEBRITY.


By Painted by A.L. De Rose; engraved by Asher B Durand - Museum of Fine Art, Boston, Public Domain, Wikimedia Commons

Crockett ran for Congress in 1827, winning the right to represent western Tennessee. Four years later, a new show titled The Lion of the West wowed New York theatergoers. The hit production revolved around a fictitious Kentucky congressman named Colonel Nimrod Wildfire, whose folksy persona was clearly based on Crockett. Before long, the public grew curious about the flesh-and-blood man behind this character. So, in 1833, an unauthorized Crockett biography was published.

Sketches and Eccentricities of Colonel David Crockett of West Tennessee became a bestseller—much to its subject’s chagrin. Feeling that Sketches distorted his life’s story (although, to be fair, it began, “No one, at this early age, could have foretold that he was ever to ride upon a streak of lightning, receive a commission to quiet the fears of the world, by wringing off the tail of a comet,” so it's unlikely anyone thought it was a straight biography), the politician retaliated with an even more successful autobiography the very next year.

When The Lion of the West came to Washington, Crockett finally watched the play that started it all. That night, actor David Hackett was playing Col. Wildfire. As the curtain rose, he locked eyes with Crockett. They ceremoniously bowed to each other and the crowd went wild.

5. HE RECEIVED A FEW RIFLES AS POLITICAL THANK YOU GIFTS.

Over the course of his life, Crockett wielded plenty of firearms; two of the most significant were named “Betsy.” Midway through his state assembly career, he received “Old Betsy,” a .40-caliber flintlock presented to him by his Lawrence county constituents in 1822 (today, it can be found at the Alamo Museum in San Antonio). At some point during the 1830s, Crockett’s congressional tenure was rewarded with a gorgeous gold-and-silver-coated gun by the Whig Society of Philadelphia. Her name? “Fancy Betsy.”

If you’re curious, the mysterious woman after whom these weapons were christened was either his oldest sister or his second wife, Elizabeth Patton.

6. HE PUT A LOT OF EFFORT INTO MAINTAINING HIS WILD IMAGE.


By John Gadsby Chapman - Art Collection, Harry Ransom Humanities Research Center, The University of Texas at Austin., Public Domain, Wikimedia Commons

For somebody who once called fashion “a thing I care mighty little about,” Crockett gave really detailed instructions to portraitists. Most likenesses, the politician complained, made him look like “a sort of cross between a clean-shirted Member of Congress and a Methodist preacher.” For the portrait above—arguably the world’s most dynamic painting of Crockett, as rendered by the esteemed John Gadsby Chapman—Crockett asked the artist to portray him rallying dogs during a bear hunt. Crockett purchased all manner of outdoorsy props and insisted that he be shown holding up his cap, ready to give “a shout that raised the whole neighborhood.”

7. HE COMMITTED POLITICAL SUICIDE BY SPEAKING OUT AGAINST ANDREW JACKSON'S NATIVE AMERICAN POLICY.

Andrew Jackson was a beloved figure in Tennessee, and Crockett’s vocal condemnation of the President’s 1830 Indian Removal Act didn’t win him many friends back home. “I believed it was a wicked, unjust measure,” the congressman later asserted, “and that I should go against it, let the cost against me be what it might.” He then narrowly lost his 1831 reelection bid to William Fitzgerald, who was supported by Jackson. In 1833, Crockett secured a one-term congressional stint as an anti-Jacksonian, after which he bid Tennessee farewell, famously saying, “You may all go to hell, and I will go to Texas.”

8. HE REALLY DID WEAR A COONSKIN HAT (SOMETIMES).


Harry Kerr/BIPs/Getty Images

Walt Disney’s Davy Crockett TV serial triggered a national coonskin hat craze in the 1950s. Suiting up for the title role was square-jawed Fess Parker, who was seldom seen on-camera without his trusty coonskin cap. Children adored Davy’s rustic hat and, at the peak of the show's popularity, an average of 5000 replicas were sold every day.

But did the historical Crockett own one? Yes, although we don’t know how often he actually wore it. Some historians argue that, later in life, he started donning the accessory more often so as to capitalize on The Lion of the West (Col. Wildfire rocked this kind of headgear). One autumn morning in 1835, the frontiersman embarked upon his journey to Texas, confident that the whole Crockett clan would reunite there soon. As his daughter Matilda later recalled, he rode off while “wearing a coonskin cap.” She’d never see him again.

9. THERE'S SOME DEBATE ABOUT HIS FALL AT THE ALAMO.

It's clear that Crockett was killed during or just after the Battle of the Alamo in 1836—but the details surrounding his death are both murky and hotly-contested. A slave named Joe claimed to have spotted Crockett’s body lying among a pile of deceased Mexican soldiers. Mrs. Suzannah Dickinson (whose husband had also been slain in the melee) told a similar story, as did San Antonio mayor Francisco Ruiz.

On the flip side, The New Orleans True American and a few other newspapers reported that Crockett was actually captured and—once the fighting stopped—executed by General Santa Anna’s men. In 1955, more evidence apparently surfaced when a long-lost diary written by Lieutenant Colonel José Enrique de la Peña saw publication. The author writes of witnessing “the naturalist David Crockett” and six other Americans being presented to Santa Anna, who promptly had them killed.

Some historians dismiss the document as a forgery, but others claim that it’s authentic. Since 2000, two separate forensics teams have taken the latter position. However, even if de la Peña really did write this account, the famous Tennessean still might have died in combat beforehand—perhaps the Mexican officer mistook a random prisoner for Crockett on the day in question.

10. DURING SPORTING EVENTS, A STUDENT DRESSED LIKE CROCKETT RALLIES UNIVERSITY OF TENNESSEE FANS.


Doug Pensinger/Getty Images

Smokey the hound dog might get all the attention, but the school has another mascot up its sleeve. On game days, a student known simply as “the Volunteer” charges out in Crockett-esque regalia, complete with buck leather clothes, a coonskin cap, and—occasionally—a prop musket.

7 Human Body Parts That Were Once Used as Medicine

A 2300-year-old mummy from Egypt's Saqqara Pyramids complex
A 2300-year-old mummy from Egypt's Saqqara Pyramids complex
AFP/Getty Images

For hundreds of years, from at least the Renaissance through the Victorian era, medicine in England, Italy, France, and other European countries routinely involved the use of the dead human body. Bones, brains, blood, and more were believed to be able to cure everything from gout to epilepsy, thanks to the life-giving spirit imparted by the deceased. Although today the use of corpses is still an integral part of our healthcare—from tissue transplants to blood transfusions—the bulk of the practice of "medical cannibalism" has, thankfully, died out.

1. ANY PART OF A MUMMY

Arguably the most popular and the most difficult to find of the bunch, mummy was considered practically a panacea during the golden age of corpse medicine in the 16th and 17th centuries. Brought back from plundered Egyptian tombs, it was added to tinctures or plasters used to combat bleeding, venomous bites, bruising, and joint pain. Unfortunately, demand far outweighed the ill-gotten supply, and clever entrepreneurs cashed in on the craze by preparing fake mummies from the bodies of lepers, beggars, and even camels.

2. SKULLS

A 1633 image of skull moss from "The herball or, generall historie of plantes" by John Gerarde
A 1633 image of skull moss from The herball or, generall historie of plantes by John Gerarde

If powdered corpse was powerful, powdered corpse with chocolate was doubly so—at least according to Thomas Willis, a 17th-century scientist who combined skulls and cocoa in a cure for bleeding. Human skulls were also soaked in alcohol, creating a tincture called “the King’s drops,” since King Charles II of England allegedly paid £6000 for a personal recipe. The tincture was said to be good for gout, dropsy (edema), and "all fevers putrid or pestilential," among other ailments.

Nosebleeds and epilepsy were also treated with a powder made from moss growing on human skulls. Richard Sugg, the author of Mummies, Cannibals and Vampires: The History of Corpse Medicine from the Renaissance to the Victorians, says that this cure actually did work—but only because powder stimulated coagulation.

3. BRAINS

A photolithograph of brains of dissected heads, after a 1543 woodcut
A photolithograph of brains of dissected heads, after a 1543 woodcut

Brains were also used to cure epilepsy. Physician John French describes the process for making a tincture of brains in his 1651 book The Art of Distillation: “[T]ake the brains of a young man that hath died a violent death,” mash in a stone mortar, steep in wine, and “digest it half a year in horse dung” before distilling.

This remedy was supposed to work under the "like cures like" theory of medicine popular at the time, in which skulls and brains were seen as especially useful for curing illnesses thought to stem from the head. Cures taken from corpses that had died horribly were often thought to be extra powerful, because violence was seen to somehow concentrate the life force.

4. FAT

Human fat was a sought-after remedy for bleeding, bruising, muscle cramps, nerve damage, joint pain, and a variety of other afflictions. It was especially popular in Germany, and was delivered to Munich’s doctors by enterprising executioners until the mid-18th century. Others sought to bypass the apothecary entirely and went straight to the executioner for their medicinal supplies. Often the fat was made into a salve (sometimes known as "hangman's salve"), but one physician to several English and French kings combined the ingredient with hemlock and opium and administered it as a pain-reducing plaster.

5. BLOOD

A crowd of spectators wait as Tom Idle is driven in a cart with his coffin to his place of execution and the gallows. Engraving by William Hogarth, 1747
Engraving of an execution by William Hogarth, 1747

Like fat and brains, blood was also often procured directly from the executioner. People who were too poor to afford the fine wares of their local apothecary went instead to the gallows, where they paid a few coins to drink the fresh blood of the recently executed. Though usually drunk straight, blood was also dried and powdered (to cure nosebleeds), sprinkled on wounds (to stop bleeding), or even made into a kind of human marmalade.

6. HAIR

According to Sugg, a tonic called “liquor of hair” was regularly used to encourage hair growth in those who were balding. Under the like cures like theory, the hair of a deceased person was believed to help with the hair of the living. However, powdered hair was also administered for complaints that had nothing to do with heads—including jaundice.

7. TEETH

Engraving of a tooth-drawer by D.J. Pound after G. Dou, 1672
Engraving of a tooth-drawer by D.J. Pound after G. Dou, 1672

Teeth, too, were an example of "like cures like." In North Hampshire, England, and other areas, people wore teeth taken from corpses in a bag around their neck as a remedy for toothache, an ailment that could also be treated by touching a cadaver’s tooth to your own. In Ireland, people went even further, and believed that toothache could be cured by rubbing the afflicted gum with the finger of a corpse, or even washing it with some water that had also been used to wash the dead body. (Makes you thankful for modern mouthwash.)

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