With T.D. Thornton, Author of My Adventures With Your Money: George Graham Rice and the Golden Age of the Con Artist
Steve’s guest, T.D. Thornton explores the glorious underbelly of America in his new book, My Adventures With Your Money, that takes us into the lurid, imaginative, and brilliant world of GG Rice, one of America’s most notorious and colorful con artists.
Master swindler George Graham Rice (GG) operated at the zenith of America’s golden age of con artistry, with plenty of illicit competition. But GG stood out for his sheer audacity, pure nerve, and the nefarious brilliance of his scams. Against the dark rise of American greed in the early 20th Century, the dapper and devious GG feasted on a nation of gullible prey with the flair of a P.T. Barnum, and on a financial scale comparable to modern fraudster, Bernie Madoff.
GG was front page news from 1900 up until The Great Depression, and his rise and fall are closely intertwined with the Roaring Twenties and the massive crash that followed in 1929.
Marketing Innovator Supreme
GG, through his wicked eye for a good scam and his brilliance, pioneered marketing ideas to promote his schemes—ideas such as celebrity endorsements, sex as a selling tool, outlandish publicity stunts, telemarketing, and customer profiling. While he did all this to swindle suckers out of their money, he unwittingly developed tools that marketers rely on to this day.
As Thornton points out in My Adventures With Your Money, had GG instead applied his intelligence to legitimate business purposes, we’d be speaking about him in a totally different light, not connected with the nefarious shadowy world of con artistry.
GG, for instance, instructed his staff to ask people for their telephone numbers when they completed a transaction, back in 1902 when phones were just beginning to take hold. He also pioneered customer profiling and data mining through his “sucker list” of over 200,000 names (which was found after GG died) with notes such as “elderly philanthropist” and “millionaire widow.” He would then be hot to go after them for all they had.
GG’s First Con
GG’s first big con, says Thornton, was in March 1901 after he had gotten out of jail on forgery charges and was basically broke with only $7 in his pocket. Wandering the streets, he spied an old racetrack chum, who was even more broke than GG but who offered him a very legitimate racehorse tip on a steed called Silver Coin.
Instead of simply betting his $7 on 10:1 odds for a maximum win of $70, GG used his money to place an ad in The Daily Racing Form, the bible of American horse racing newspapers, where he offered his free tip to the public, stating that he’d charge $5 a day—an exorbitant sum in 1901—for future tips. As luck would have it, Silver Coin won, and GG had a line of suckers anxious to give him $5 for his next hot horse tip. He was off and running in the tout business.
Thereafter, GG recommended different horses to different sets of customers, and while some customers lost, some also won and were willing to pay more for future tips.
In an effort to grow his business, GG began mailing his newsletter to customers but was eventually arrested for mail fraud, marking the end of his horse-racing venture.
Steve likens GG’s tactic to one used by stock market swindlers where they rate a stock “a Buy” for one set of clients and “a Sell” for another set of clients, knowing very well that they will have enough winners to keep the scam going.
Protect Yourself From Modern-Day GGs
In closing, T.D. Thornton warns that con artists are a cyclical phenomenon. Their core methods to separate you from your money don’t change. What does change is their use of technology to go after you. Where George Graham Rice suckered people through newfangled telephone calls and telegrams, today’s scammers use technology and the Internet. So, beware, protect your identity, and keep your computer and smart devices away from today’s versions of the great GG!
Disclosure: The opinions expressed are those of the interviewee and not necessarily of the radio show. Interviewee is not a representative of the radio show. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by the radio show.
Steve Pomeranz: My next guest is a Boston-based journalist who chronicles the glorious underbelly of American society, and he has spent a lot of time investigating the great con artists of the 20th century. He writes about one in his book My Adventures with Your Money: George Graham Rice and the Golden Age of the Con Artist. The journalist is with me here today, his name is T.D. Thornton. Hi, T.D., welcome.
T.D. Thornton: Hi, thanks for having me on today.
Steve Pomeranz: So, I had never heard of George Graham otherwise known as GG, but from the way you describe it in your book, he sounds like one of the greatest characters of the 20th century.
T.D. Thornton: Yeah, well it’s fairly interesting that you brought that up because I had never heard of George Graham Rice either before I had started researching the book for My Adventures with Your Money and the genesis of how I stumbled upon George Graham Rice was I was actually working on a freelance article about con artists for a magazine piece. I had researched an article—I’m a serial Googler—and I had landed on a 1934 article from Time magazine. Basically, the gist of the article, when I found it a few years ago, was whatever became of George Graham Rice? He was the greatest con artist of his era. Why aren’t the modern con men as charismatic as this guy is? I had followed the shadow world of confidence hustling peripherally kind of as a hobby. I said, “Wow, how come I’ve never heard of this guy?” It was like an onion. The more I started delving in and the more layers I uncovered about George Graham Rice, I found out what a fascinating and forgotten character that he actually was. In the early part of the 20th century, he was front-page news basically from 1900 up until The Great Depression. The reason a lot of people have never heard of George Graham Rice today is (without a spoiler alert, without giving away the ending of the book) his downfall coincides with the roller coaster ride up during the Roaring Twenties and then the massive crash in The Great Depression.
By the time George Graham Rice went from big time to small time it was no time. However, in his day he was the fraudster in terms of scale that we would compare to a modern Bernie Madoff except the critical difference is George Graham Rice—which was only one of his many aliases, by the way—he operated with the flair and showmanship of P.T. Barnum, the circus promoter.
Steve Pomeranz: Yeah, let’s get into that. Hang on a second, let’s get into that because there’s a lot here. Just to whet my listener’s appetite, this person that you speak of, this George Graham Rice, he pioneered many of today’s modern marketing ideas, concepts that are still in use a century later. For example, the celebrity endorsement, using sex as a selling tool, outlandish publicity stunts, telemarketing, customer profiling of all of these things and then he wrote a tell-all book after that. So, on the one hand, he did all this to swindle suckers out of their money, but on the other hand, I guess modern advertising is kind of all about that in a legitimate fashion today.
T.D. Thornton: Yeah, George Graham Rice was nothing short of brilliant. I make the point in My Adventures with Your Money that he could have, had he wanted to apply his intelligence to legitimate business purposes, I think we’d be speaking about him in a totally different light today and not the nefarious shadow world that he occupies in con-artistry. You tick off a list of some of the things that he pioneered, and to set the scene for your listeners, this goes back 100 years ago when if you were affluent enough to have a telephone installed in your house, you were thrilled to hear it jangle. You didn’t care if it came from what we would know today as a telemarketer calling and trying to sell you something. George Graham Rice pioneered telemarketing. He was one of the first salespersons to instruct his staff to ask people, “May I have your telephone number?” when they completed a transaction. This was 1902.
Steve Pomeranz: Yeah.
T.D. Thornton: And later on, he was the forerunner of what we would call customer profiling and data mining today except George was a little more blunt. He called it his sucker list. He just cultivated a list by the time he died, and they found this list. It had over 200,000 names on it.
Steve Pomeranz: Oh, my!
T.D. Thornton: He first started cultivating these names when he was a racetrack-horse tipster. He kept the names as he went out west to dabble in mining stocks and when he came back to Wall Street to open what were called bucket shops which were cut-rate brokerage houses that never really invested your money. Every time he had a point of contact with these people, your file in his file cabinet grew fatter and fatter and you didn’t realize, some of these people were contacted numerous times over decades for many of the different schemes and scams of George Graham Rice. It might be apocryphal, but it was rumored that he even had subheadings in his sucker list under names like elderly philanthropist and millionaire widows and, in a predatory fashion, he would go after these people.
Steve Pomeranz: Right, yeah.
T.D. Thornton: He wouldn’t be satisfied to take you for, if he knew you had $20,000 to give up, he wasn’t going to be satisfied if he got $19,000.
Steve Pomeranz: Gotcha.
T.D. Thornton: He would go for the full banana.
Steve Pomeranz: My guest is T.D. Thornton, the book is My Adventures with Your Money: George Graham Rice and the Golden Age of the Con Artist. So, let’s learn about one of these cons. I was particularly interested in the very first one where he … I’ll let you explain it, but it has to do with racing, and I want to get into one thing that I noticed that made his different. Tell us very quickly about the story, his very first biggest con.
T.D. Thornton: George Graham Rice had gotten out of jail on some forgery charges, and he was basically broke. He had seven dollars and ten cents to his name. This was in March of 1901. He was standing on a street corner in New York City and off in the distance, he spied an old racetrack chum. George was looking for, he was on the hustle looking for, marks who were ripe to be suckered. He didn’t necessarily want to fleece his friend but his friend came over to him, his friend was a little bit more down on his luck than George Graham Rice was. George bought him a beer, they got to talking, one thing led to another and his friend said, “Hey, I have a very legitimate hot racehorse tip that I just received by telegram from a guy in New Orleans who knows his stuff.”
This amounted to insider trading in the horse racing world. George knew that this horse or had inside information that the horse had a good chance at odds of 10 to one, but he was smart enough to, he didn’t want to make $70 off of this transaction which is what he would have got if he bet the horse straight up. Seven dollars to win at 10 to one. He wanted untold riches. He wanted a bigger entry into the world of separating suckers from their money. What he did with this tip was he took his last seven dollars, he went down to what today is known as the daily racing form, the bible of American horse racing newspapers. He bought a tiny ad in the back of the paper, he ran it the next day. It said “Bet your last dollar on (the horse’s name was) Silver Coin. You will win today. I have inside information. If you like this tip and the horse wins, I have a new horse racing business, a tout service that’s in business, and if you like it, this is a freebie but after that it’ll cost you five dollars a day” which was an exorbitant sum in 1901.
Steve Pomeranz: Right.
T.D. Thornton: If you want my inside information. Now this scam only hinged on the horse winning. If the horse didn’t win and ran off the track George’s advertisement would have gone into the trash. Nobody would have made any money. Nobody would have followed him, but as luck would have it, the horse won and he won big. Paid a nice price and the next day when George went to the storefront walkup that he had rented on Broadway, he was surprised to see that the line extended out the door and down Broadway. He had hundreds of suckers lining up wanting to give him five dollars the next day for his next hot horse tip. He was off and running in the tout business.
Steve Pomeranz: So T.D., this is what I find fascinating. I think most of us would have taken that tip, taken our seven bucks and been happy with earning 70 bucks to get us through the next couple of months back in 1901 dollars, but he had bigger visions. This guy was very smart from the very beginning. So, he started this company and it was totally bogus. He rented some closet of a space, and he got a second tip and that tip kind of worked out too, and then he built the little business until what, it fell apart?
T.D. Thornton: Well, it eventually fell apart because he came under federal scrutiny because, to back up a little bit, he eventually built up the business to the point where he had so many suckers subscribing to his daily horse racing tips that he was able to give, let’s say on a scale of if there were 10,000 customers a day and there was a five-horse race at Belmont Park in New York, he would divide it up, and he would give each of the 2,000 subscribers a different horse.
Steve Pomeranz: Oh.
T.D. Thornton: So, if you scale it up every day he was giving out a winner. Some people were getting fraudulent horses that didn’t work out but eventually they landed on a winner, so they stuck with him. His business was big enough that he was not content to just take in walk-in customers. He went about his business by the mails. In 1901 and 1902 it was technically not illegal to commit fraud in the United States. However, the way the government got you was they came in the back door instead of marching boldly up the front steps. If you used the federal mail system, the postal service to defraud people, they would get you for mail fraud. That’s eventually how he went to smash on his horse-tout racing business.
Steve Pomeranz: You know, it’s interesting because you mentioned this idea of having say 10,000 customers and five horses and giving 2,000 the name of a horse so 2,000 out of those 10,000 think that you’re very smart and then you take those 2,000 and you divide that by five and then 400 of those think you’re a genius. By the time you get down to it, you’ve got whatever, 50, 100, 200, 500 people who think that you can’t lose, and you can charge them more and more money. That used to be a stockbroker’s scam by the way. Tell half your customers to buy and half your customers to sell. Half of them think that you’re a genius after you’ve done that two or three times, and that can be very powerful.
We are very limited on time unfortunately. The book is My Adventures with Your Money: George Graham Rice and the Golden Age of the Con Artist. My guest is T.D. Thornton. His first book was Not By a Long Shot: A Season at a Hard Luck Horse Track and again, you want to read about George Graham Rice. I know I personally love stories about these great con artists. You know, I had some dealings with Bernie Madoff, and I was able to save a number of clients from a Bernie Madoff, so I’m very, very much aware of the dangers of these scam artists, and so I like to read about them. Final words, T.D.?
T.D. Thornton: I think that one thing that your listeners should keep in mind is that con artists are a cyclical phenomenon. The core methods that they will separate you from your money don’t change. What does change is technology and the methods by which they go after you. So, George Graham Rice, in his day, it was the newfangled telephone and suckering people by telegrams, and today we do it by the internet. The same scams. The I’m a Nigerian Prince seeking some help getting money, can I use your bank account emails that we all get and hopefully hit the delete key on every day are no different than something that was called The Spanish Prisoner scam that was in vogue in George Graham Rice’s time.
Steve Pomeranz: Well, I guess P.T. Barnum was right, I guess there is a sucker born every minute.
T.D. Thornton: You know, the interesting thing is when I researched that quote out for My Adventures with Your Money the true con artistry of that is P.T. Barnum never actually said that.
Steve Pomeranz: Oh, he never did?
T.D. Thornton: It’s attributed to him but he never actually said it.
Steve Pomeranz: Very good, my guest T.D. Thornton, a Boston-based journalist. The book is My Adventures with Your Money: George Graham Rice and the Golden Age of the Con Artist. T.D., thanks so much for joining us.
T.D. Thornton: Thanks for having me. Hold on to your wallet.