Charles Ponzi ran his Securities Exchange Company in 1920 from an office in the Niles Building at 27 School Street, at the corner of City Hall Avenue beside Old City Hall. He promised investors 50 per cent in 45 days, or 100 per cent in 90, and said the profit came from international postal reply coupons, which cost about one cent in Spain and could be redeemed for six cents in the United States. Deposits grew from $870 paid by 15 people in December 1919 to almost $500,000 in May 1920 and $2.5 million from 7,824 people in June, and by July the queues of investors had stopped traffic on School Street. The Boston Post's acting publisher, Richard Grozier, believed Ponzi bought no coupons at all and paid early investors with later investors' money. On 26 July 1920 the Post published the doubts of the financier Clarence W. Barron, and that afternoon Ponzi agreed to stop taking deposits pending an audit; 30,195 investors had by then paid in $9,582,591. On 2 August the Post printed an account by Ponzi's former publicity agent, William H. McMasters, calling him hopelessly insolvent, and on 11 August it reported that he had been jailed in Montreal in 1908 for forgery. Ponzi surrendered on 12 August. Noteholders recovered only a fraction of what they had paid in, the Hanover Trust Company, a bank Ponzi had taken control of, never reopened, and the Post won the 1921 Pulitzer Prize for Public Service.
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