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The No. 1 Ladies’ Defrauding Agency

Illustration by Matt Chinworth

Rose Eveleth | Longreads | July 2019 | 12 minutes (2,883 words)

Sarah Howe’s early life is mostly a mystery. There are no surviving photographs or sketches of her, so it’s impossible to know what she looked like. She may, at one point, have been married, but by 1877 she was single and working as a fortune-teller in Boston. It was a time of boom and invention in the United States. The country was rebuilding after the Civil War, industrial development was starting to take off, and immigration and urbanization were both increasing steadily. Money was flowing freely (to white people anyway), and men and women alike were putting that money into the nation’s burgeoning banks. In 1876, Alexander Graham Bell invented the telephone, and in 1879 Thomas Edison created the lightbulb. In between those innovations, Sarah Howe opened the Ladies’ Deposit Company, a bank run by women, for women. 

The company’s mission was simple: help white women gain access to the booming world of banking. The bank only accepted deposits from so-called “unprotected females,” women who did not have a husband or guardian handling their money. These women were largely overlooked by banks who saw them — and their smaller pots of money — as a waste of time. In return for their investment, Howe promised incredible results: an 8 percent interest rate. Deposit $100 now, and she promised an additional $96 back by the end of the year. And to sweeten the deal, new depositors got their first three months interest in advance. When skeptics expressed doubts that Howe could really guarantee such high returns, she offered an explanation: The Ladies’ Deposit Company was no ordinary bank, but instead was a charity for women, bankrolled by Quaker philanthropists. 

Word of the bank spread quickly among single women — housekeepers, schoolteachers, widows. Howe, often dressed in the finest clothes, enticed ladies to join, and encouraged them to spread the news among their friends and family. This word-of-mouth marketing strategy worked, Howe’s bank gathered investments from across the country in a time before easy long-distance communication. Money came in from Buffalo, Chicago, Baltimore, Pittsburgh, and Washington, all without Howe taking out a single newspaper advertisement. She opened a branch of the bank in New Bedford, Massachusetts, and had plans to add offices in Philadelphia and New York to keep up with the demand. Many of the women who deposited with the Ladies’ Deposit Company reinvested their profits back in the bank, putting their faith, and entire life savings, in Howe’s enterprise. All told, the Ladies Deposit would gather at least $250,000 from 800 women — although historians think far more women were involved. Some estimate that Howe collected more like $500,000, the equivalent of about $13 million today. 

It didn’t take long for the press to notice a woman encroaching on a man’s space. And not just any woman, a single woman who had once been a fortune-teller! “Who can believe for a moment that this woman, who a few years ago was picking up a living by clairvoyance and fortune-telling, is now the almoner of one of the greatest charities in the country?” asked the Boston Daily Advertiser. Reporters were particularly put off by their inability to access even the lobby of Howe’s bank, turned away at the door for being men. One particularly intrepid reporter, determined to find out what Howe’s secret was, returned dressed as a woman to gain entry and more information. 


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Then, in 1880, it all came crashing down. On September 25, 1880, the Boston Daily Advertiser began a series of stories that exposed Howe’s bank as a fraud. Her 8 percent returns were too good to be true. Howe was operating what we now know as a Ponzi scheme — 40 years before Ponzi would try his hand at it. 

Here’s how it worked: When a new depositor arrived, Howe would use their money to pay out older clients, so the whole scheme required a constant influx of new depositors to pay out the old ones. Like every other Ponzi fraudster, Howe’s bank would have eventually run out of new money. The run of stories in the Boston Daily Advertiser instilled enough fear in the bank’s investors that they began to withdraw their money, and eventually there was a run on Howe’s bank. 

Sarah Howe was the most unfathomable and outrageous character: a woman villain.

It took two weeks and five days from the first story published in the Advertiser uncovering Howe’s fraud before she was arrested. The press extended her victims a modicum of sympathy, describing their plights while also reminding the reader that they deserved their pain for trusting a woman with their money. “I put every dollar I had into the bank, and if I lose it I am a beggar,” one depositor told the Boston Globe at the time. “I wanted the interest so badly, that I placed a mortgage on my furniture to secure the principal to deposit. Oh! I wish I hadn’t now, for I shall have my goods sold from under my head,” said another. 

Howe, on the other hand, was spared no remorse. The Boston Herald claimed that Howe was “nearly as deaf as a post” and cross-eyed. Banker’s Magazine described Howe as “short, fat, very ugly, and so illiterate as to be unable to write an English sentence, or to speak without making shameful blunders.” This is all untrue, as Howe’s own statements to the press before her downfall suggest that, in fact, she had a sharp wit. In response to one newspaper’s critique of the Ladies’ Deposit Bank, Howe wrote: “The fact is, my dear man, you really know nothing of the basis, means or methods on which our affairs are conducted, and when shut up in the meshes of your savings-bank notions, you attempt an exposition of the impossibility of our existence, you boggle and flounder about like a bat in a fly trap.” 

 Nevertheless, as soon as she was caught, a backstory for Howe emerged in the papers. The Boston Herald published a story with the headline “Mrs. Howe’s Unsavory Record,” claiming she was born out of wedlock and ran away at 15 to marry an “Indian physician,” who they also referred to as “her dark-skinned Othello.” The paper claimed the marriage caused her mother such distress that she wound up dying in an asylum “raving over the heartlessness of her daughter.” The story also alleged that she then left her first husband, married two house painters in quick succession, had been in and out of prison, and even tried to lure a young girl into prostitution. Basically none of this can be confirmed by historians, but it didn’t matter. Sarah Howe was the most unfathomable and outrageous character: a woman villain. As historian George Robb writes in his paper about Sarah Howe, “She had to be ugly, vulgar and immoral.” The only way her story could make sense to readers was if Howe was some kind of abomination — a complete outlier both physically and mentally.  

 “I’m sure she was just a normal-looking person,” Robb told me. “Until the whole thing unraveled, when people talked about her, no one described her as anything other than an ordinary person.” But in Victorian-era Boston, the idea that a woman criminal could be an “ordinary person” was impossible. “People were comfortable with the idea of women as victims,” Robb told me. “The men were the crooks, the men were doing the manipulation. The women were the victims. They needed to be protected by other men.” 

Howe wound up standing trial in Boston, and was ultimately convicted (although not of fraud, but soliciting money under false pretenses — for claiming that a Quaker charity was backing the venture). She spent three years in prison, and when she got out, in classic scammer fashion, she tried the whole thing again.

“I think there’s a similarity between being a fortune-teller and making money on the stock market, making predictions about the future”

Next, Howe opened up a new Woman’s Bank on West Concord Street in Boston. She kept the scheme going from 1884 to 1886, offering depositors 7 percent interest and gathering at least $50,000, although historians think the number might be far higher. This time, however, Howe was never prosecuted. After being caught and closing down her bank, she gave up the game and returned to fortune-telling and doing astrology readings for 25 cents each. She died in 1892, at the age of 65, no longer wealthy, but still notorious enough to warrant an obituary in the New York Times that read: “For three months she had been living in a boarding and lodging house, carefully keeping from those whom she met the knowledge that she was the notorious Mrs. Howe of Woman’s Bank memory.” 

***

Sarah Howe was, in some ways, a product of her time. In the late 1800s, the United States was moving out of a period marked by “free banks,” in which there were very limited rules governing banks, and into a system of national banking more familiar to us today. Money was flowing into the economy, and financial advisers were telling their clients to put their cash in banks that were now more stable than they had been in the past. This advice was often targeted at women, who couldn’t use their money to, say, start their own endeavors. But they could put their money in stocks and banks, and many of them did. In fact, during that time, women were often the majority of depositors and shareholders.

But there were very few regulations on banks. The stock market was relatively new. For women like Howe, it presented an unregulated place where money was changing hands purely on the basis of confidence. And as a fortune-teller, Howe had plenty. “I think there’s a similarity between being a fortune-teller and making money on the stock market, making predictions about the future, and getting people to believe that you know something about how the trends are going to play,” Robb said. 

At the time there was little fear when it came to watchdogs or regulators. Howe could start her own bank with no real procedure or oversight. “Anybody could form a bank!” Robb said, “If you could get people to give you money you could call it a bank. You advertise, you rent a fancy office space, people come and give you money. It was amazing how much money you could make before anybody caught you.” As much as people love to point fingers at Howe, very rarely do people consider the complete lack of oversight that allowed her to prey upon these women. “It’s so much easier to pick individual villains and say, ‘Oh it’s these nasty scheming people who are the problem, the capitalist system can do no wrong, it’s perfect and self-regulating and we don’t want to mess with that. It’s these individual crooks that are the problem.’” 

***

In spite of her crimes, Sarah Howe is not a household name. It’s not called a Howe scheme after all, it’s a Ponzi scheme. When Howe is mentioned at all, it’s as a punchline. She’s forever stuck as a historical fun fact. “She’s become an anecdote in history, but she should be as famous or more famous than Ponzi,” historian Robyn Hulsart told me. “There’s nothing about what she did that doesn’t fit the definition of a Ponzi scheme.” (In fact, Howe wasn’t even the first to execute this type of scam. At least two other women pulled off Ponzi schemes before her — one in Berlin, the other in Madrid.) 

It’s become popular now to say that we’re living through the golden era of the scammer. “We’re living in a scammer’s paradise,” Sarah Jeong told Willamette Week recently about our current era, “not just economic scams, but intellectual scams, too.” Elizabeth Holmes, Anna Delvey, Fyre Fest, Ailey O’Toole, Jennifer Lee, Anna March — the list is long enough that everybody from WIRED to The Cut called 2018 “the year of the scam.” As the United States recovers from the fraud that was that housing market bubble, we’re in another era of deregulation. President Donald Trump and the Republican run Senate, have gone on what has been called a “deregulation spree,” increasing the cap at which banks become subject to more stringent rules from $50 billion in assets to $250 billion. Robb pointed out that we never seem to actually learn. “Whenever there’s a big boom cycle in the economy everybody screams to deregulate,” he told me, and with deregulation comes increased risk for frauds like Howe’s. 

Howe’s case also demonstrates a struggle in feminist circles that persists today: How do you balance the desire to celebrate women with the need to hold bad behavior accountable?

Howe’s legacy could and should be one that we can learn from today in the so-called era of the scam. Howe’s success was one that tells us something not just about fraud, but about economics and the conditions under which fraud can blossom into a $17 million scam. Howe was aided and abetted by the economic conditions, but she was also a wizard at her craft. What Howe mastered, beyond the Ponzi scheme, is what experts call an “affinity fraud” — going after a group of people who have something in common, and most often who the scammer has something in common with too. As an “unprotected” woman herself, Howe understood what might appeal to her clientele. She decorated the bank to create a mood and aesthetic that would appeal to her ideal mark. The Advertiser described the Ladies’ Deposit Bank this way: “The furniture, of which there are many pieces, is upholstered in raw silk of old gold figured patterns, and corresponds in tone and design with the walls. … The carpets are of a deep warm tone, and all the ornaments are rich and in good taste.” She used language that drew women in, talking about her commitment to the “overworked, ill-paid sisterhood.” Hulsart points out that it’s not unlike the language used by multilevel marketing companies like Mary Kay and Amway, which generally advertise to women through  word of mouth. “They really like to say things like ‘we’re in this together,” Hulsart says.  Read more…

Bearing the Weight of My Grandfathers’ Old Clothes

Illustration by Homestead

Aram Mrjoian | Longreads | June 2019 | 13 minutes (3,320 words)

The first time I was mistaken for my father on the phone, I feigned annoyance. It was around 2004, I was 14 or 15 years old, and my family’s main form of communication was still the cordless phone mounted to the wall at the threshold of the kitchen, important numbers listed in thick pencil on a faded pad of yellow paper taped to the inside of the neighboring cabinet door. My mother and father also had cell phones, single-function dull silver models with green calculator screens and pixelated numbers, but these devices were strictly for work or emergencies. I was too young for my own phone, which was still an uncommon luxury among my friends, especially those still without a driver’s license. At home, the majority of calls we received were from telemarketers, and by my adolescence my parents had trained me to decline the onslaught of polite, prodding inquiries from unknown numbers, so that once or twice a day I hung up on an unfamiliar voice the moment they butchered our last name.

This time, though, it was a number I recognized, from a family member, someone who knew both my dad and me well enough to identify the distinct tones and cadences of our voices. She confused us anyway. I remember the static over the line, my momentary pause as I tried to make sense of this error. How could I be mistaken for my father? How could there be any confusion given the unsure wavering in my adolescent voice? Even as a teenager, I understood one distant moment of misidentification was neither some portentous sign of manhood nor a hint that I had matured in a more physical sense of the word. At least, I didn’t see it that way. Today, the feeling of being lost in adulthood is as constant as ever, like I am still an anachronistic version of my younger self, winging it day to day, uncertain of who I am and what the hell I’m doing. This mood was intensely magnified in my adolescence. My conceptions of masculinity and adulthood were out of whack with my perception of myself. It wasn’t simply that I wasn’t a man yet, but a larger question of how could I ever be half the man my father is, at all?
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We Could Have Had Electric Cars from the Very Beginning

An advertisement depicts a Baker Electric automobile, the Baker Queen Victoria, driven by a young woman, 1909. (Stock Montage/Getty Images)

Dan Albert | An excerpt adapted from Are We There Yet? : The American Automobile Past, Present, and Driverless | W. W. Norton & Co. | June 2019 | 25 minutes (6,750 words)

Most people reasonably expect the story of the evolution of the automobile to begin with the invention of the automobile itself. I’ve disappointed enough people in my life already, so I give you the Jesuit Rat Car of 1672. In that year, missionary Ferdinand Verbiest created a steam wagon to bring the Emperor of China to Jesus, but the car was only big enough to carry a rat.

If you don’t like the Jesuit Rat Car as an automotive first, you might consider Nicolas-Joseph Cugnot’s cannon hauler of 1769. A product of the French army’s skunk works, it was canceled in beta testing. In 1790, Nathan Read got the first American patent for a steam-powered wagon, a remarkable feat because the US Patent Office itself had yet to be invented. Perhaps that counts. In London, Richard Trevithick set a Georgian coach body atop a steam boiler and eight-foot wheels, creating the first giraffe-less carriage. In 1805, American Oliver Evans drove his harbor dredge, the Orukter Amphibolos, down the streets of Philadelphia in hopes of enticing investors for a car business. Philadelphia cobblestone street paving gave horses purchase but shook the Orukter so violently that the wheels broke. Let’s call his the first amphibious car. Read more…

‘They Happen To Be Our Neighbors Across the Span of a Century, But They’re Our Neighbors.’

White children celebrating after having raided the home of African Americans during the race riots, Chicago, 1919. Jun Fujita / Chicago History Museum / Getty Images

Adam Morgan | Longreads | June 2019 | 10 minutes (2,587 words)

 

Precisely one hundred summers ago, at least 165 people were killed in “race riots” against black Americans in cities ranging from Washington, D.C. to Bisbee, Arizona. The bloodiest conflict of that “Red Summer” unfolded on the South Side of Chicago between July 27 and August 3. It started at the 29th Street Beach, where a white man threw rocks at black swimmers and killed a 17-year-old boy named Eugene Williams. Over the next few days, 38 people were killed and more than 500 were injured as roving gangs of white men terrorized Chicago’s Black Belt.

“Chicagoans tend to be enthusiastic and vocal discussants of our own history,” Eve Ewing writes in the introduction to 1919, her second book of poetry. “But 1919 didn’t seem to make it into the timeline alongside titanic stories about Fort Dearborn, Jean-Baptiste Point du Sable, the World’s Columbian Exposition, the 1968 riots, Richard J. Daley, or Harold Washington.”

So Ewing — the poet of Electric Arches, the scholar of Ghosts in the Schoolyard, the comic book writer of Marvel’s Ironheart, the playwright of No Blue Memories, and arguably the most powerful cultural voice in Chicago over the past five years — set about telling the story of 1919 in a characteristically clever way. Flecked with historical photos and evocative quotes from a post-riot commission report, filled with biblical and mythological references, seamlessly bending time and genre, 1919 is an unforgettable conversation-starter. Every poem leaves a bruise. Read more…

Caught Between Borders

Illustration by Eric Chow

Malia Politzer | Annie Hylton | Longreads | June 2019 | 25 minutes (6,991 words)

 
The first time his father tried to kill him, Ismail* was 15 years old. By the time he turned 19, he had escaped four attempts on his life: Once, he was outside an asylum center in South Africa, where he’d hoped to find safety; other times he was in Somalia, the country from which he fled. His father was intent on killing him to protect the family’s “honor.” No matter where he went, it seemed, his father had enlisted Somali immigrants to mete out his execution. Ismail’s crime? He is gay.

Slender and tall, Ismail dresses sharply, favoring bright colors and tight cuts. He wears a signature mixture of ladies’ perfumes, and carries a silver-chain necklace and anklet in his backpack that he longs to wear but is too afraid to put on. From a young age, Ismail displayed traits that he said were “woman things” — his walk, the way he spoke, how he moved his hands — mannerisms that were not “normal” and provoked his father’s ire. His father forbade him from school and kept him under house arrest.

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How the Toronto Raptors and the Vancouver Grizzlies Revived the NBA

Carlo Allegri / AFP / Getty

“There’s no character to the Toronto Raptors’s uniform anymore,” Tom O’Grady says. “It’s clean, yes, but not eye-catching. The logo doesn’t jump off the shelf.” He adds, “The uniform today might as well belong to a intramural basketball team.” Read more…

How the Cosby Story Finally Went Viral — And Why It Took So Long

Associated Press, Collage by Homestead

Nicole Weisensee Egan | An excerpt adapted from Chasing Cosby: The Downfall of America’s Dad | Seal Press | 14 minutes (3,614 words)

In October 2014 Bill Cosby was in the middle of a career resurgence. His biography by former Newsweek editor Mark Whitaker had just come out to rave reviews and was climbing the bestseller list. He had a comedy special coming up on Netflix and was in development with NBC to star in a family sitcom. He was about to embark on another comedy tour based on a special that had aired on Comedy Central the year before. The special, Far from Finished, was Cosby’s first stand-up TV special in three decades, and it attracted two million viewers.

It was as if the scandal in 2005 had never happened, as if fourteen women hadn’t accused him of heinous offenses. The book didn’t even mention Andrea Constand’s allegations, let alone her civil suit or any of the other accusers. And no one in the media was asking Whitaker or Cosby why.

The situation was clear: Cosby had successfully repaired what little damage there was to his reputation after Andrea’s case made the news. He slipped right back into his revered status as public moralist and children’s advocate, chalking up even more awards and honors, including his entrée into the NAACP’s Image Awards Hall of Fame in 2006 for being a “true humanitarian and role model.” Read more…

The Gymnast’s Position

Illustration by Homestead

Dvora Meyers | Longreads | June 2019 | 25 minutes (6,257 words)

More than two decades ago, a billboard went up in Salt Lake City near the 600 South exit of the I-15. It featured a young woman in repose clad in a sleeveless black leotard, her back to the viewer and her head tilted up. The weight of her upper body rested on her right arm, which was extended behind her; her left arm lay languidly on her bent left knee. Her right leg was extended straight in front of her, its foot arch, creating the appearance of a straight line from hip to toe.

The angle of the woman’s head seemingly bathed her face in light, her long curly blonde hair falling freely down her neck. The pose was reminiscent of Adam on the ceiling of the Sistine Chapel, only inverted.

Passersby unable to make out the words printed in small text beneath the image would be forgiven for not knowing what exactly the billboard was advertising. Was it selling a dance performance or was it an ad for workout apparel or a photography exhibit at a local gallery? Visually, there were few clues.
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Reimagining Harper Lee’s Lost True Crime Novel: An Interview with Casey Cep

Ben Martin / HarperCollins

Adam Morgan  | Longreads | May 2019 | 14 minutes (3,793 words)

 

Four years ago, when the news broke that a second Harper Lee novel had been discovered fifty years after To Kill a Mockingbird, the literary world was shocked. Some readers were thrilled by the prospect of returning to the world of Scout, Atticus Finch, and Boo Radley. Others were concerned the 88-year-old Lee might have been pressured to publish an unfinished draft. But Casey Cep, an investigative reporter for the New Yorker and the New York Times, drove down to Alabama to get to the bottom of it. And what she found wasn’t a publishing conspiracy, but another lost book Lee had attempted to write for more than a decade, but never finished.

The book was called The Reverend. It would have been a true-crime novel like In Cold Blood (a book Lee helped Truman Capote research, write, and edit, despite his failure to give her any credit). The Reverend would have told the story of Willie Maxwell, a black preacher who murdered five members of his own family in the 1970s in order to collect life insurance money. It would have touched on voodoo, racial politics in post-industrial Alabama, and a courtroom setpiece that rivaled To Kill a Mockingbird for drama. But Harper Lee never finished writing The Reverend, and now, thanks to Casey Cep, we know why.

Cep’s debut, Furious Hours: Murder, Fraud, and the Last Trial of Harper Lee, is fascinating, addicting, and unbearably suspenseful. Cep actually tells three concentric stories: the crimes of Willie Maxwell, the trials of his lawyer Tom Radney, and Harper Lee’s failed attempt to write about them. When I called Cep from “a Southern phone number” on an unseasonably hot spring afternoon, she initially thought I was one of her sources calling with a “some bombshell thing they want to show me, far too late to help with the book.”

*

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Glass, Pie, Candle, Gun

Henry Griffin / AP

Sean Howe | Longreads | May 2019 |  15 minutes (3,853 words)

In November 2018, after the Secret Service seized the security credentials of CNN reporter Jim Acosta, the White House Press Secretary stated the reason for the revocation was that the administration would “never tolerate a reporter placing his hands on a young woman just trying to do her job as a White House intern.” Within hours, attorney Ted Boutrous responded on Twitter:
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