19 Facts About the Franklin Expedition, the Real-Life Inspiration for The Terror

Hulton Archive/Getty Images
Hulton Archive/Getty Images

The last Arctic expedition of Sir John Franklin began in 1845 with the hope of discovering the northwest passage, but it turned into a grim fight for survival. As seen in AMC's supernatural series The Terror, the story of the Franklin expedition still has the power to fascinate historians more than a century and a half later. (Spoiler alert: Though the expedition happened in real life, this list also mentions key scenes in The Terror—so if you haven't seen the show and plan to, read at your own risk!)

1. ITS COMMANDER WAS DESTINED FOR NAVAL SERVICE.

John Franklin was born in Spilsby, a village in the English county of Lincolnshire, in 1786. By marriage, he was a step-cousin of Royal Navy captain Matthew Flinders, who inspired Franklin to join its ranks when he was only 14. Franklin circumnavigated Australia with Flinders in 1802-1803, served in the Battle of Trafalgar during the Napoleonic Wars, and fought in the Battle of New Orleans in the War of 1812. His brave actions caught the eye of the Second Secretary of the Admiralty, Sir John Barrow, who had big plans for the young lieutenant.

2. FRANKLIN'S FIRST ARCTIC EXPEDITION WAS UNSUCCESSFUL …

From a report from whaling captain William Scoresby, Jr. relayed by Sir Joseph Banks, the president of the Royal Society, Barrow learned that the Arctic appeared to be relatively ice-free in the summer of 1817. The time seemed ripe for a voyage to find a northwest passage from the Atlantic to the Pacific Ocean, which would give England a lucrative trade route to Asia. In spring 1818, Barrow organized an expedition of four navy ships—the Isabella and Alexander would explore the eastern Canadian Arctic, and the Dorothea and Trent would attempt to sail over the North Pole by way of eastern Greenland and Spitsbergen. Franklin commanded the Trent but both vessels were stopped by violent storms and pack ice. (The Isabella and Alexander also turned back for an entirely different reason.)

3. … AND HIS SECOND WAS MUCH, MUCH WORSE.

Despite that failure, Franklin was appointed to lead an overland expedition to explore subarctic Canada in 1819. His route would take his party—which included physician/naturalist Sir John Richardson, three naval personnel, and a crew of voyageurs—from Hudson Bay to the Coppermine River delta on the Arctic Ocean. Disaster struck quickly: The party failed to return to their base camp before cold weather set in, their canoes fell apart, and they ran out of food. A voyageur allegedly killed and ate several men. Franklin and the others survived by nibbling shoe leather. On the brink of death, they were saved by Yellowknife guides who brought food and supplies. When he returned to England after this three-year calamity, Franklin was hailed as a hero—the "man who ate his boots."

4. THE ADMIRALTY PLANNED A HISTORIC ATTEMPT AT THE PASSAGE.

By 1843, just a few blank spaces remained on the map of the North American Arctic, and the discovery of the passage seemed entirely within Britain's reach. In spring 1845, the Admiralty would send HMS Erebus and HMS Terror, freshly returned from a grueling four-year voyage in Antarctica under the command of Sir James Clark Ross, back to previously charted Lancaster Sound, which most navigators believed was the main channel leading west. From there, the men were expected to be through the Bering Strait and in Hawaii by the following year.

5. FRANKLIN WASN'T THE FIRST CHOICE TO LEAD THE EXPEDITION.

Illustration of members of the Franklin Expedition
Portraits of the officers on the 1845 expedition, based on Daguerrotypes taken prior to the voyage.
Hulton Archive/Getty Images

By this point, Franklin was a decorated naval officer and experienced explorer—but he was also 59 years old and out of shape. So when Sir John Barrow began considering commanders for the 1845 voyage, Franklin was not at the top of the list. Veteran Arctic hands Sir William Edward Parry and Ross were Barrow's first choices, but both declined. Parry hinted that Franklin desperately needed the validation of a final, triumphant voyage to crown his naval career after his disappointing stint as the lieutenant-governor of Tasmania (where Franklin and his wife Lady Jane served from 1837 to 1843). Franklin lobbied hard and convinced the Admiralty that he was the best man for the job.

6. IT WAS THE BEST-PROVISIONED ARCTIC EXPEDITION IN HISTORY.

Franklin commanded the flagship Erebus, which was helmed by an up-and-coming captain, James Fitzjames. On the Terror, Captain Francis Rawdon Moira Crozier was the expedition's second-in-command. Both ships had been reinforced to withstand the pummeling of Arctic ice and stocked with supplies, including scientific instruments, navigational tools, one hand-organ per ship, daguerreotype cameras, and a pet monkey named Jacko (a gift from Lady Jane). A huge library was stocked with accounts of previous polar expeditions, devotional books, volumes of Punch magazine, and novels like Oliver Goldsmith's The Vicar of Wakefield. The ships also took an immense amount of provisions to feed 134 men for three years, including 32,224 pounds of salt beef, 36,487 pounds of ship's biscuit, 3684 gallons of concentrated spirits, and around 4980 gallons of ale and porter.

7. THE VOYAGE WENT ACCORDING TO PLAN …

On May 19, 1845, Erebus and Terror left Greenhithe, England, and sailed for the west coast of Greenland. At Disko Bay, five men were discharged due to illness, bringing the total number of expedition crew to 129. On July 26, en route to Lancaster Sound, Franklin met two British whaleships [PDF], the Enterprise and the Prince of Wales—the last Europeans to see the Franklin expedition alive.

The Erebus and Terror continued west in the summer of 1845 and circumnavigated Cornwallis Island via Wellington Channel. The crew overwintered on tiny Beechey Island, where three crewmembers died and were buried in the permafrost. If Franklin followed the Admiralty's orders, in the spring and summer of 1846 the Erebus and Terror would have continued west to Cape Walker at 98-degree west longitude, then proceeded south [PDF] and west down Peel Sound.

8. … UNTIL THE SHIPS GOT STUCK IN ICE.

On September 12, 1846, the sea froze around Erebus and Terror just north of King William Island, signaling the start of winter. The following May, a party of two officers and six men led by Lieutenant Graham Gore left a note in a cairn (tall piles of stones used as information kiosks in the treeless terrain) on the northwestern coast of King William Island. After noting the date and position where the two ships were beset in the ice, Gore wrote,

"Having wintered in 1846-7 [this was an error, the true period was 1845-1846] at Beechey Island, in lat. 74° 43' 28" N., long. 91° 39' 15" W., after having ascended Wellington Channel to lat. 77°, and returned by the west side of Cornwallis Island.
Sir John Franklin commanding the expedition.
All well."

Explorers knew that the sea usually froze in late August or early September, and then broke up the following spring—but in 1847, spring and summer never arrived in their corner of the Arctic. Erebus and Terror drifted slowly and helplessly with the pack ice down the west coast of King William Island.

9. SOMETHING MAY HAVE BEEN WRONG WITH THE PROVISIONS.

The Admiralty had provided Erebus and Terror with three years' worth of canned foods, including 33,289 pounds of meat, 20,463 pints of soup, and 8900 pounds of preserved vegetables.

The provider of the canned goods was Stephan (or Stephen) Goldner, who a few years later would be caught in a scandal regarding his canned foods going off rapidly—one report from 1853 said a ship needed to throw 1570 pounds of horrifically putrid canned meat overboard. Whether the Franklin expedition’s provisions suffered the same fate is debated, with one 1920s study concluding their canned meat was in perfect condition. In The Terror, assistant surgeon Henry Goodsir, who suspects there's a problem with the food, encourages poor Jacko to test the contents of one of the cans—and it doesn't end well for the monkey.

10. THEY ABANDONED SHIP.

Franklin expedition note found in the cairn at Point Victory
A facsimile of the note found in the cairn published in Carl Petersen's Den sidste Franklin-Expedition med "Fox," Capt. McClintock, 1860
British Library, Flickr // Public Domain

By spring 1848, the ships were still beset, the men were approaching the end of their original food supply, and they were without their captain: Franklin and several officers and crew had died of still-unknown causes. Crozier was now leading the expedition, with Fitzjames as his second-in-command. They decided to abandon Erebus and Terror in a last-ditch attempt at survival. The men hoisted two boats on sledges and packed them full of provisions and items refashioned for survival, such as a table knife with a sharpened blade inside a sheath made from a marine's bayonet scabbard [PDF].

Then they set off in search of rescue, returning to the cairn where Gore had left his note a year before. Now, Fitzjames and Crozier wrote:

April 25, 1848—H.M. ship Terror and Erebus were deserted on the 22nd April, 5 leagues N.N.W. of this, having been beset since 12th September, 1846. The officers and crews, consisting of 105 souls, under the command of Captain F.R.M. Crozier, landed here in lat. 69° 37' 42" N., long. 98° 41' W. Sir John Franklin died on the 11th June, 1847; and the total loss by deaths in the expedition has been to this date 9 officers and 15 men. And start to-morrow, 26th for Back's Fish River."

The 605-mile Back's Fish River (now more commonly referred to as the Back River), navigated by Sir George Back in 1834, led toward Hudson's Bay Company trading posts in the interior. But they were hundreds of miles away from King William Island.

11. THE MEN'S FATE WAS A MYSTERY FOR ALMOST 10 YEARS.

No one outside of King William Island had the faintest idea what had happened to the Franklin expedition when it didn't show up in the Bering Strait by 1846. The Admiralty resisted sending a rescue mission, since the Erebus and Terror had been provisioned for three years; some thought the food supply could be stretched to five years (to 1850). But Lady Jane Franklin launched a relentless campaign to force the Admiralty to act. Beginning in spring 1848—at exactly the same time that the 105 survivors abandoned ship—a series of massive search-and-rescue expeditions began combing the Arctic for clues. On August 27, 1850, a ship discovered the three graves on Beechey Island, the first tangible clue of Franklin's route, but found no letters or records. Despite that important find, subsequent expeditions in 1852 came up empty-handed.

12. THE TRUTH ABOUT THE EREBUS AND TERROR SHOCKED VICTORIAN ENGLAND.

In April 1854, Hudson's Bay Company surveyor John Rae met with several Inuit a few hundred miles east of King William Island. Rae asked if they'd seen white men or ships. One man said some families had encountered about 40 survivors marching south along the west coast of the island, dragging a boat on a sledge. Franklin's men, appearing thin and low on provisions, intimated that their ships had been crushed and that they were headed toward the mainland, where they hoped to find game. Rae relayed the Inuits' next observations to the Admiralty:

"At a later date the same season [1850], but previous to the disruption of the ice, the corpses of some 30 persons and some graves were discovered on the continent, and five dead bodies on an island near it, about a long day's journey to the north-west of the mouth of a large stream, which can be no other than Back's Great Fish River … Some of the bodies were in a tent or tents, others were under the boat, which had been turned over to form a shelter, and some lay scattered about in different directions. Of those seen on the island it was supposed that one was that of an officer (chief), as he had a telescope strapped over his shoulders, and his double-barreled gun lay underneath him.

"From the mutilated state of many of the bodies, and the contents of the kettles, it is evident that our wretched countrymen had been driven to the last dread alternative as a means of sustaining life. A few of the unfortunate men must have survived until the arrival of the wild fowl (say until the end of May), as shots were heard and fresh bones and feathers of geese were noticed near the scene of the sad event."

To support the oral history, Rae purchased artifacts from the Inuit that were clearly tied to the expedition: silver spoons and forks, a star-shaped medal, and a silver plate engraved with "Sir John Franklin, K.C.H." In England, the public reacted with shock and disbelief when his account was published in newspapers.

13. CHARLES DICKENS BLAMED THE INUIT.

Though research in the 1990s [PDF] and in 2016 strongly supported the cannibalism account, most Victorians thought it inconceivable that Royal Navy men would resort to "the last dread alternative." Charles Dickens captured the racist sentiment of the time when he wrote in his magazine Household Words, "No man can, with any show of reason, undertake to affirm that this sad remnant of Franklin's gallant band were not set upon and slain by the Esquimaux themselves … We believe every savage to be in his heart covetous, treacherous, and cruel." Yet physical evidence collected over the past 160 years has consistently proven the accuracy of Inuit oral histories of the expedition's final days.

14. THE EXPEDITION'S OFFICIAL RECORDS WERE NEVER FOUND.

In 1859, Lieutenant William Hobson, part of a search expedition led by Captain Francis Leopold McClintock, found a trail of bones and other evidence along the southwestern coast of King William Island. Along with a boat with two skeletons and piles of supplies, Hobson located the cairn and retrieved Fitzjames and Crozier's note, the sole piece of written evidence from the Franklin expedition. According to searchers, some Inuit families had found papers and books—possibly the expedition's log books and official charts—but they had been given to children to play with and had blown away.

15. SOMEONE ACTUALLY DISCOVERED THE NORTHWEST PASSAGE.

Back in England, Franklin was again hailed as a hero. His old friend Sir John Richardson wrote that Franklin had accomplished the mission: "They forged the last link of the Northwest Passage with their lives." Though there's no evidence of Franklin ever completing the passage, one of the rescuers, Captain Robert McClure, had a more likely claim. In 1853, his ship Investigator, approaching from the west, got stuck in ice north of Banks Island and McClure's men were forced to march to another ship that had approached from the east. They traversed the Northwest Passage in the process. But the first explorer to navigate the passage by ship, the original goal of the Franklin expedition, was Roald Amundsen in 1903-1906.

16. THE CREW MIGHT HAVE SUFFERED FROM LEAD POISONING.

Map showing the locations of Franklin expedition relics
A map based on a 1927 Admiralty chart showing the locations of Franklin expedition relics found by search parties in the late 19th and early 20th centuries
Canada Department of the Interior, Wikimedia Commons // Public Domain

In the early 1980s, Canadian anthropologist Owen Beattie and his research team exhumed the three bodies on Beechey Island and conducted forensic testing. He found very high levels of lead in all three, as well as in bones previously collected on King William Island. In his 1987 bestseller co-written with John Geiger, Frozen in Time: The Fate of the Franklin Expedition, Beattie suggested the lead solder used to seal the expedition's canned provisions had leached into the food, resulting in neurological impairment that could have contributed to the men's deaths. More recently, historians have moved away from the lead-in-the-cans theory. Researchers now believe the men probably succumbed to a combination of exposure, starvation, scurvy, tuberculosis, Addison's disease, and even severe zinc deficiency. The Terror gives a nod to the lead-cans hypothesis when Sir John Franklin (Ciarán Hinds) bites into some meat and spits out a metal blob; later, the Inuit woman named Lady Silence (Nive Nielsen) has laid out a collection of lead bits on an overturned bowl—perhaps meant as a warning to the crew.

17. AFTER 166 YEARS, ARCHAEOLOGISTS FOUND THE EREBUS AND TERROR.

Multiple search efforts and scientific research projects tied to Franklin's last voyage continued in the late-19th and 20th centuries. They collected relics and bones, located graves, and partnered with Inuit communities to conduct long-term searches for more clues to the expedition's fate. Yet two significant artifacts remained missing for more than 165 years: the ships themselves. Many researchers believed that the Erebus and Terror could hold a trove of clues to the men's final activities, but the brutal climate and brief research season on King William Island stymied progress. In 2014, with funding from the Canadian government and new sonar technology, archaeologists and Inuit historians, including Franklin scholar Louie Kamookak, finally found the HMS Erebus in Victoria Strait. Two years later, a report from an Inuit hunter, Sammy Kogvik, pointed archaeologists to Terror Bay, on the southwestern coast of King William Island, where they found HMS Terror.

18. SOME QUESTIONS MIGHT NEVER BE ANSWERED.

Without the journals from the expedition, we may never know some key facts about its fate. Historians still wonder what killed Franklin and so many of the officers and men before the Erebus and Terror were abandoned. Why did Crozier decide to march toward Back's Fish River, where possible help was hundreds of miles away, when he could have marched north to a depot of supplies and food left by an 1825 shipwreck, and where rescuers or passing whalers could have rescued them? Were the men's judgments really impaired by lead poisoning? How long did they survive? Archaeologists and Inuit oral historians continue to search for answers.

19. YOU CAN SEE THE ARTIFACTS IN PERSON.

Books, tools, boots, buttons, spoons, combs, pocket watches, food tins, Crozier and Fitzjames's note, and even a piece of canned meat from Franklin's last expedition are stored in the collection of the National Maritime Museum in Greenwich, London. Artifacts retrieved from the Erebus and Terror, including the ships' bells, and other relics are part of the critically acclaimed exhibit, Death in the Ice, currently on display in the Canadian Museum of History through September 30, 2018.

When Theodore Roosevelt Refused Geronimo's Plea

Portrait of Geronimo (Guiyatle), Apache
Portrait of Geronimo (Guiyatle), Apache
Frank A. Rinehart, Wikimedia // Public Domain

On March 4, 1905, Theodore Roosevelt settled in to watch his first inaugural parade. Though he'd been president since the 1901 assassination of William McKinley, this was the first time Roosevelt would get to enjoy the full pomp and ceremony, as Army regiments, West Point cadets, and military bands streamed down Pennsylvania Avenue in the warm March air. Standing in the president's box with his guests, Roosevelt at times clapped and swung his hat in the air to show his appreciation.

Suddenly, six men on horseback appeared in the procession. They were Native American leaders and warriors, "arrayed in all the glory of feathers and war paint," according to The New York Times report the next day. According to Herman J. Viola, they were “Little Plume, Piegan Blackfoot; Buckskin Charley, Ute; ... Quanah Parker, Comanche; Hollow Horn Bear, Brulé Sioux; and American Horse, Oglala Sioux.” The eldest man, leading the group, was "the once-feared Geronimo," as the Times put it.

The inclusion of the Apache elder was not without controversy. For a quarter-century, Geronimo had attacked Mexican and American troops and civilians, putting up a fierce resistance to settler encroachment. That bloody history—though often sensationalized by press reports—still loomed large during the parade: According to Smithsonian, a member of the 1905 inaugural committee asked Roosevelt, “Why did you select Geronimo to march in your parade, Mr. President? He is the greatest single-handed murderer in American history.”

Roosevelt replied, “I wanted to give the people a good show.”

But unlike the other parade participants, Geronimo wasn't there entirely willingly. He was a prisoner of war. And a few days later, he'd beg Roosevelt for his release.

A Bitter Legacy

Theodore Roosevelt was no friend of America's First Nations. During his childhood, he read books that contained stereotypes of Native Americas, and he and his siblings would, as he wrote in his autobiography, "[play] Indians in too realistic manner by staining ourselves (and incidentally our clothes) in a liberal fashion with poke-cherry juice.” He carried what he had read into adulthood, saying at a lecture in New York while away from his ranch in the Dakotas in the late 19th century that, "I don’t go so far as to think that the only good Indians are the dead Indians, but I believe nine out of every ten are, and I shouldn’t like to inquire too closely into the case of the tenth.”

As president, he supported the allotment system, which broke up reservations and forced Native peoples onto smaller, individually-owned lots—essentially remaking traditional land practices in the dominant white image. In his first message to Congress, Roosevelt called the General Allotment Act “a mighty pulverizing engine to break up the tribal mass.” Roosevelt also favored programs like Pennsylvania's Carlisle Indian Industrial School, established in 1879 to forcibly assimilate Native American children. Students were given new names and clothes, baptized, and forbidden to speak their languages. "In dealing with the Indians our aim should be their ultimate absorption into the body of our people,” Roosevelt said in his second message to Congress.

For most of his life, Geronimo aggressively resisted such attempts at assimilation. Born in the 1820s and named Goyahkla—"One Who Yawns"—near what is now the Arizona-New Mexico border, his life changed forever after his wife, mother, and small children were murdered by Mexican soldiers in the 1850s. Afterwards, Geronimo began attacking any Mexicans he could find; conflict with American settlers soon followed. It is said that his nickname, Geronimo, may have come about after one of his victims screamed for help from Saint Jerome, or Jeronimo/Geronimo in Spanish.

In the 1870s, the Chiricahua Apache were forced onto a reservation in Arizona, but Geronimo and his men repeatedly escaped. Eventually, as Gilbert King writes for Smithsonian, "Badly outnumbered and exhausted by a pursuit that had gone on for 3000 miles ... [Geronimo] finally surrendered to General Nelson A. Miles at Skeleton Canyon, Arizona, in 1886 and turned over his Winchester rifle and Sheffield Bowie knife."

The next chapter of Geronimo's life included being shuffled from Florida to Alabama to Fort Sill in the Oklahoma Territory while watching his fellow Apaches die of one disease after another. He was also repeatedly turned into a tourist attraction, appearing at the 1904 St. Louis World's Fair and even joining Pawnee Bill’s Wild West show (according to King, under Army guard), where he was billed as "The Worst Indian That Ever Lived."

Geronimo's Tearful Request

The 1905 meeting between Roosevelt, Geronimo, and some of the other Native American men took place a few days after the inauguration, once the crowds had thinned out and things had calmed down a little. Geronimo addressed Roosevelt through an interpreter, calling him "Great Father." According to one contemporary account, Norman Wood’s Lives of Famous Indian Chiefs, he began, "Great Father, I look to you as I look to God. When I see your face I think I see the face of the Great Spirit. I come here to pray to you to be good to me and to my people."

After describing his youthful days on the warpath, which the septuagenarian Geronimo now called foolish, he said, "My heart was bad then, but I did not know it." Now, however, he said, "My heart is good and my talk is straight."

With a tear running down his cheek, he got to the heart of the matter: "Great Father, other Indians have homes where they can live and be happy. I and my people have no homes. The place where we are kept is bad for us. Our cattle can not live in that place. We are sick there and we die. White men are in the country that was my home. ... I pray you to cut the ropes and make me free. Let me die in my own country, an old man who has been punished enough and is free."

According to a March 1905 New York Tribune article, Roosevelt said, “I cannot do so now ... We must wait a while and see how you and your people act. You must not forget that when you were in Arizona you had a bad heart; you killed many of my people; you burned villages; you stole horses and cattle, and were not good Indians.” But it seems at some point, Roosevelt softened—according to Wood, Roosevelt said, “Geronimo, I do not see how I can grant your prayer. You speak truly when you say that you have been foolish. I am glad that you have ceased to commit follies. I am glad that you are trying to live at peace and in friendship with the white people.

"I have no anger in my heart against you," Roosevelt went on. But, he said, "You must remember that there are white people in your old home. It is probable that some of these have bad hearts toward you. If you went back there some of these men might kill you, or make trouble for your people. It is hard for them to forget that you made trouble for them. I should have to interfere between you. There would be more war and more bloodshed. My country has had enough of these troubles."

The president reminded Geronimo that he was not confined indoors in Fort Sill, and allowed to farm, cut timber, and earn money. He promised, "I will confer with the Commissioner and with the Secretary of War about your case, but I do not think I can hold out any hope for you. That is all that I can say, Geronimo, except that I am sorry, and have no feeling against you."

Geronimo's request was never granted. Four years later, in 1909, he died after falling from a horse and developing pneumonia. The Chicago Daily Tribune printed the headline: “Geronimo Now [a] Good Indian."

At least, he was finally free.

Mental Floss has a podcast with iHeartRadio called History Vs., about how your favorite historical figures faced off against their greatest foes. Our first season is all about President Theodore Roosevelt. Subscribe on Apple Podcasts here, and for more TR content, visit the History Vs. site.

5 Facts About Charles Ponzi and the Original Ponzi Scheme

Wikimedia Commons, Public Domain
Wikimedia Commons, Public Domain

Some of the most infamous scams in history have been Ponzi schemes, but before Bernie Madoff (or Bitcoin), there was Charles Ponzi himself. The con he built was so successful that his last name became synonymous with fraud. In January 2020, a century after he set up his fraudulent Securities Exchange Company, the phrase Ponzi scheme is still used to describe any scheme in which funds from new investors are used to pay back old investors. Here are some facts about Ponzi and his scheme that you should know.

1. Charles Ponzi arrived in the U.S. with $2.50 in his pocket.

Charles Ponzi was born in Lugo, Italy, in 1882. As a young adult, he worked as a postal worker and studied at the University of Roma La Sapienza. Neither path panned out for him, however. In 1903, when faced with dwindling funds, Ponzi boarded a ship for America in search of a better life. But Ponzi wasn't a master hustler at this point in his life; he arrived in Boston with $2.50 after gambling away the rest of his life savings on the ship.

2. Charles Ponzi spent time in prison before his famous scheme.

Ponzi was no stranger to crime before concocting the scheme that made his surname infamous. Not long after arriving in Boston, he moved to Canada and got in trouble for forging checks. He spent two years in a Canadian prison for his offenses. Back in the U.S., he served a term in federal prison for illegally transporting five Italians immigrants across the Canadian border. It was only after his so-called Ponzi scheme began to crumble that his criminal history was made public by journalists, thus speeding up his downfall.

3. Charles Ponzi got rich off the postal system.

In 1920, Ponzi discovered the key to the ultimate get-rich-quick scheme: an international postal reply coupon worth $.05. It had been included in a parcel he received from Spain as prepayment for his reply postage. Thanks to an international treaty, the voucher could be exchanged for one U.S. postage stamp worth a nickel, which Ponzi could then sell. Ponzi knew that the value of the Spanish peseta had recently fallen in relation to the dollar, which meant that the coupon was actually worth more than the 30 centavos used to purchase it in Spain. He took this concept to the extreme by recruiting people back home in Italy to buy postal reply coupons in bulk from countries with weak economies, so that he could redeem them in the U.S. for a profit.

4. Charles Ponzi swindled $20 million from investors.

Ponzi technically wasn’t breaking any laws with his postal service transactions, and if he had kept his idea to himself he would have gotten away with it. Instead, he turned his small money-making operation into a wide-reaching scam. If people invested money into his “business” of cashing in foreign postal vouchers, which he dubbed the Securities Exchange Company, they would get their money back plus 50 percent interest in 90 days. The deal was too good for many investors to pass up.

It was also too good to be true: The money wasn’t being used to buy coupons overseas. Ponzi kept most of the investments for himself and used the flood of money coming in from new investors to pay off the old ones. Many investors were so thrilled with their returns that they invested whatever money they had made back into the business, which helped Ponzi keep the sham afloat.

Ponzi was finally rich and famous, but soon enough, cracks in the scheme started to form. The Boston Post launched an investigation into Ponzi and revealed that in order for his business to be functional, he would need to be moving 160 million vouchers across world borders. There were only 27,000 postal reply coupons in circulation at the time. The final blow came when the publicist he had hired to represent him came out against him to the public. His system fell apart and it was revealed that he had stolen $20 million from investors.

Because he had lied to his clients about their investments through the mail, Ponzi was ultimately charged by the federal government for mail fraud. He served three-and-a-half years in prison and then served an additional nine years for state charges.

5. Charles Ponzi didn’t invent the Ponzi scheme.

Though Ponzi schemes were eventually named for him, Charles Ponzi didn’t invent this type of scam. There were many crooks before him who used the same method to exploit investors. Charles Dickens even wrote pre-Ponzi Ponzi schemes into his 1857 novel Little Doritt.

It’s possible that Ponzi got the idea for his own fraud from William F. Miller, who pulled a similar stunt working as a bookkeeper in Brooklyn in 1899. But it was the highs of Ponzi’s success—and the lows of his demise—that made his story so memorable.

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