If Mr. Farley Cannot Show a Surplus on That

Over the years, apart from the general rigors of city living, I have had reason to fear for my life only twice. In the first instance, the FBI called to tell me I was on an assassination list along with two other columnists and Anwar Sadat. Years later, sadly, Sadat would indeed be assassinated; but in the case of us columnists, the FBI assured me, it was just one of thousands of idle plots coming out of the Middle East and I shouldn’t be concerned. Have a nice day.

The second threat, a good deal less serious and entirely unrelated to the first, was contained in the second paragraph of a handwritten chain letter.

“Trust in the Lord with all your heart,” the letter began, “and all will acknowledge Him and He will light your way.” The letter purported to have been sent to me for good luck, same to manifest itself within four days – providing I did not break the chain. “Don Elliot received $60,000 but lost it because he broke the chain,” the letter declared, which would have been reason enough, heaven knows, to make and send the twenty lousy photocopies. But in addition, there was the chilling experience of General Walsh. “While in the Philippines,” the letter warned, “General Walsh lost his life six days after he received the letter. He failed to circulate the prayer. However, before his death he received $775,000 he had won.” (It was probably the taxes that killed him.)

The letter had been around the world nine times, originating in the Netherlands, it said; and I have no doubt that it has been, because I and many of my friends have gotten it, with slight variations, several times before. (I do wonder, though, who lets everyone know when it is time to replace “around the world eight times” with “nine times” and “ten times,” etc. It must be the same man who used to change the “billions” on McDonald’s signs.)

I have always been fascinated by chain letters and by their cousins, the pyramid sales schemes, Ponzi schemes, and the like. I have never originated or passed one on, though I’ve been tempted, but I have done some research on those who have passed them on, to find out how they’ve done. They’ve done very poorly.

Chain letters, of course, can’t work, because very rapidly you run out of people to keep them going. Say I put my name at the end of a list of four, sending $l as requested to the top name on the list and then crossing it off. (My chances for success are just as good if I don’t send the dollar, which is one of the bugs in the system.) I send the letter to 20 people, who put their names beneath mine, moving me up to three; and those 20 in turn send the letter to 20 more each – 400 – which moves me up to second place, who send the letter to twenty more each – 8,000 – all of whom, if these letters are to be believed (and, of course, they’re not), send me $1 as they enter their own names at the bottom and, in effect, start 8,000 new chain letters. By the time the folks who each supposedly sent me $1 get to the top spot, 64 million people have to have joined at the bottom, and for each of them to reap the promised $8,000 return on his dollar, yet another 512 billion folks, give or take, must join in.

An otherwise savvy staffer with a prestigious consulting firm sent me a chain letter once with the following note (he was a very junior staffer): “I’ve never done this before, but my curiosity is aroused. The person my mother got it from says it really works – if you send it to the kind of person who would go along with this kind of freaky thing!” Then, apparently considering that I might not be such a person, he added: “Please mail it back if you’re not interested.”

The letter asked for $1 and promised close to $8,000 within 90 days. “We have had, at the present time, almost one hundred-percent return to the people carrying out this promotion,” the letter stated. “The majority received $7,800. If everyone had worked, they would have received the full $8,000.”

I checked later with the people in the number two spot on the letter – the people, in other words, who were just one level away from cashing in. “I never got a cent. The place the letter supposedly originates from in Knoxville doesn’t exist,” one wrote me, as if genuinely surprised.

There was a time when there was more enthusiasm for this kind of thing (and most others), even if the results were no better. Nowadays, few people consider participating in the chain letters that still occasionally appear in their mailboxes. They have to be disguised as franchise or marketing opportunities if they are to stand a chance of enriching their authors.

Not so in 1935. In that Depression year, a send-a-dime letter sprang up in Denver that sent mail volume zooming. At the peak of the mailing, the Denver post office – “strained to the breaking point,” according to postal officials – was handling about double its normal volume of mail, an extra 160,000 pieces a day. By the time it was over, Denver postal workers had had to put in 28,000 man-hours of overtime (at 70 cents an hour) to handle the crush.

Soon chains were sweeping Omaha, Kansas City, Los Angeles, Spokane, Seattle, and Topeka. In New York, no fewer than 70 members of one ad agency were churning out letters. At the White House, President Roosevelt received hundreds of send-a-dime letters.

To skirt the postal regulations, some avaricious souls resorted to $5 and $10 telegram chain letters. Others went face-to-face. Others broke into mailboxes in search of funds. One postal carrier, at least, was arrested for plundering his sack.

Of course, at a dime a crack – or even $10 or a pint of whiskey (the Liquid Assets Club, originated in Lincoln, Nebraska, held out the prospect of 15,625 pints in return for the 1 sent) – these letters were only a very modest form of mail fraud and one that was swelling postal coffers munificently. One citizen calculated that “we do not have to go [very far in the geometric progression] to solve all the ills of this country and of the entire world, and possibly any financial worries that may beset the next.” Unbroken to the twenty-third level, he calculated, there would be circulated something on the order of 10 quadrillion letters. “The post-office revenue for sending ten quadrillion letters, at two and a half cents each,” he wrote, “will reach $250,000,000,000. If Mr. Farley cannot show a real honest-to-goodness surplus on that …” Indeed, envisioning a world without need of further taxes, the writer suggested sardonically that it be made illegal to break the chain.

Meanwhile, in Springfield, Missouri (according to the Associated Press), “Chain-letter ‘factories,’ with $18,000 changing hands at three of them within five hours, turned this southwestern Missouri city into a money-mad maelstrom today. Society women, waitresses, college students, taxi drivers and hundreds of others jammed downtown streets. Women shoved each other roughly in a bargain-counter rush on the numerous chain headquarters [that had been established] in drugstores and corridors, anywhere there was space.” The chain had been started the night before as a joke. “By sunup, it was the city’s biggest business.” The letters, in $2, $3, and $5 denominations, were sold from person to person. That each of these people did indeed send the requisite sum to the name at the top of the list was attested to by a notary public; this was supposed to ensure the validity of the scheme. Once notarized, the new owner set about selling copies of the letter to two others to recoup his investment and keep the chain going. “Professionals” offered their services to folks who were too shy to do the selling themselves – in return for a 50 percent cut.

By the following evening, “sad-faced men and women walked around in a daze … seeking vainly for someone to buy their chain letters…. The craze which swept over this city yesterday subsided because almost everybody had a letter to sell, thus draining the buyer market dry.”

Less than two months after it all began in Denver, The New York Times was able to report to a partially sobered up world: “The recent chain-letter mania seems to have run its spectacular course.”

Except that, as the story went on to say, “in its wake … is a series of astonishing requests-petitions, not for dimes, but whiskey, hay, postage stamps [quilt patches, golf balls, postcards, earrings, recipes], dates with college girls, elephants ….”

And having largely run their course in America, the chains – or “snowball schemes,” as the British call them – surfaced for an equally brief but tumultuous run in Britain.

And then it was over.

But lest I leave chain letters with a totally bad name, I should point out that they have, on occasion, been put to unselfish, nonfraudulent use:

In the 1950s, when coffee prices rose to an astonishing $1 a pound, American housewives circulated a chain letter that urged a boycott. Brazilians began circulating their own chain letter: “If the United States does not wish to pay a fair price for our coffee,” it read in part, “why should we pay absurd prices for the junk they are selling us?” Pass it on.

A chain letter to aid the family of slain civil rights worker Medgar W. Evers, in 1964, flooded former Mississippi segregationist governor Ross Barnett with 5,000 one-dollar checks made out to Evers, with Barnett to serve is trustee. Barnett termed the episode “harassment.”

An environmental chain letter in the Seventies called for recipients to wrap and mail a pound of garbage to the corporate polluter of their choice.

And one old classic you have surely seen came to me from an associate at Morgan Stanley. Apart from the instructions, it reads as follows:

The president of the largest steel company, Charles Schwab, died a pauper.
The president of the largest gas company, Howard Hobson, is now insane.
The president of the New York Stock Exchange, Richard Whitney, went to Sing Sing.
The greatest wheat speculator Arthur Cooten, died abroad, insolvent.
The greatest bear of Wall Street, Jesse Livermore, died a suicide.
The head of the world’s greatest monopoly, Ivor Kruger, the match king, died a suicide.
The president of the Bank of International Settlement shot himself.

The same year, 1923, the winner of several of the most important golf championships, Gene Sarazen, won the U.S. Open and the P.G.A. Tournament. Today he is still going strong, still playing an excellent game of golf, and is solvent.

CONCLUSION: STOP WORRYING ABOUT BUSINESS AND GO PLAY GOLF.

[Apologies to those of you who have read all this before. It comes from a magazine column I wrote long ago.]