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."

Hundreds of 17th-Century Case Notes of Bizarre Medical Remedies Have Been Published Online

Illustrated portrait of Simon Forman.
Illustrated portrait of Simon Forman.
Hulton Archive/Getty Images

As medical texts, the writings of Simon Forman and Richard Napier aren't very useful. The so-called "doctors," regarded as celebrities in 16th- and 17th-century England, prescribed such treatments as nursing puppies and wearing dead pigeons as shoes. But as bizarre pieces of history, the 80,000 case notes the two quacks left behind are fascinating. The BBC reports that 500 of them have now been digitized and published online.

Forman and Napier were active in the English medical scene from the 1590s to the 1630s. They treated countless patients with remedies that straddled the line between medicine and mysticism, and their body of work is considered one of the largest known historical medical collections available for study today. After transcribing the hard-to-read notes and translating them into accessible English, a team of researchers at Cambridge University has succeeded in digitizing a fraction of the records.

By visiting the project's website, you can browse Forman and Napier's "cures" for venereal disease ("a plate of lead," "Venice turpentine," and blood-letting), pox (a mixture of roses, violets, boiled crabs, and deer dung), and breastfeeding problems (using suckling puppies to get the milk flowing). Conditions that aren't covered in today's medical classes, such as witchcraft, spiritual possession, and "chastity diseases," are also addressed in the notes.

All 500 digitized case notes are now available to view for free. And in case you thought horrible medical diagnoses were left in the 17th century, here some more terrifying remedies from relatively recent history.

[h/t BBC]

When Sir Arthur Conan Doyle Tried Solving a Real Mystery

An 1892 drawing of Sherlock Holmes and Doctor Watson, published in The Strand Magazine
An 1892 drawing of Sherlock Holmes and Doctor Watson, published in The Strand Magazine
Sidney Paget, Wikimedia // Public Domain

On September 1, 1907, the New York Times wrote:

It looks as if Sir Arthur Conan Doyle will eventually come to be considered an even greater detective than he made out Sherlock Holmes to be.

Doyle had found himself embroiled in a case that captured worldwide media attention for the fact that he, and not his famous sleuth, was trying to solve it. In 1906, a man named George Edalji was freed from prison after being sentenced for the crime of animal cruelty. He stood accused of injuring horses and cattle in Great Wyrley, and also of writing letters threatening to do the same to women. Upon his release, he wrote to Doyle asking for the celebrated author’s help in proving his innocence.

Doyle, who typically turned down such requests, was grieving over his wife's death and was eager for a distraction. He suspected Edalji’s Indian heritage was partly to blame for his conviction, as the Staffordshire police were believed to be racially discriminatory and the physical evidence was flimsy. (Another horse had even been attacked while Edalji was in prison.)

Doyle’s theory of the man’s innocence was largely dependent on his eyesight. In a remarkably Holmes-esque observation during their first meeting, Doyle noted Edalji held his newspaper close to his face. Since the animal mutilations had taken place at night and the criminal would have had to navigate a series of obstacles, he figured Edalji’s vision was too poor for the accusations to make sense.

Once Doyle took up his cause, Edalji became a symbol for injustice. Letters poured in, both to Doyle and to the Daily Telegraph, who had published his argument of Edalji’s innocence. The Scottish writer J.M. Barrie (creator of Peter Pan) wrote to say, “I could not doubt that at all events Edalji had been convicted without any evidence worthy of the name.”

Not everyone was convinced. The chief constable, George Anson, did not appreciate Doyle inserting himself into what police considered a closed case. Doyle was not simply posturing as an amateur sleuth: he was a pest, bombarding Anson almost daily with letters questioning their investigation, offering alternative theories, and using his celebrity to keep the case in the newspapers. Since Edalji had already been freed, his intention was to get some kind of financial compensation for the wrongful conviction. Anson responded unkindly, dismissing Doyle’s ideas and delivering sharp retorts.

Doyle was a “contemptible brute,” Anson remarked.

But the author would not be dissuaded, even when an anonymous letter had been delivered to him that was threatening in tone and insisted Edalji was the guilty party. It led him to believe the guilty party was worried enough to try and shut Doyle’s efforts down. By this point, he had isolated his suspicions to Royden Sharp, a former sailor who was said to be aggressive and once showed off a horse lancet capable of inflicting the wounds seen in the injured animals.

Doyle’s actions, the anonymous correspondent wrote, were “to run the risk of losing kidneys and liver.”

Doyle would later learn the letter was not written by a suspect, but instead commissioned by an unlikely tormentor: Constable Anson.

The officer had become so aggrieved with Doyle that he believed forging this letter would either discourage the author or send him on a wild goose chase. In recently discovered records that went up for auction in 2015, Anson even expressed glee that he had fooled “Sherlock Holmes.”

Despite Anson’s attempts to embarrass Doyle, the author had too large a platform for the Home Office to ignore. In 1907, they pardoned Edalji of the mutilation crimes, which allowed him to return to work as a solicitor. But they refused to apologize or offer any restitution.

Doyle was frustrated by their stubborn reaction, but his efforts had one crucial impact on British law: the publicity surrounding Edalji led to the creation of an official Court of Appeals, easing the process for future defendants.

Though Doyle won over the court of public opinion, he failed to solve the case: Sharp was not seriously investigated by police. Whoever had stalked the horses, cows, and sheep during those nights in Great Wyrley has never been identified.

This story was first published in 2016 and republished in 2019.

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