The curious history of chain letters.

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Oct. 1 2010 1:33 PM

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The curious history of chain letters.

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This, of course, was the scheme's appeal: The exponential structure of a four-copy chain (four letters, then 16, then 64) meant that 20 rounds would generate 1,099,511,627,776 recipients. Or it would, at least, were it not for the inconvenient limitation of the earth's population. Even a perfectly executed chain inevitably left its final "round" out of a great deal of money, and only the first few generations of participants were greatly enriched. By 1899, the U.S. Postal Service had seen enough: It declared "dime letter" chains a violation of lottery laws and cracked down.

Chain letters have never gone away, of course: They made a comeback in World War I, when they were used by pro-German Americans during the neutral era "to send a substantial sum to Field Marshal Hindenburg"; by 1917, they were fingered by the New York Times as "a German plot ... to clog the United States mails." A Jewish anti-Nazi chain letter circulated in 1933; and the invention of photocopiers and then e-mail have ensured a reliable afterlife for endlessly copied chains that threaten woe upon all who chuck them in the trash. The most cunning variant was the "Circle of Gold" scheme, which first propagated through parties in Marin County, Calif., in 1978; it skirted Postal Service enforcement by insisting that participants hand-deliver their letters.

But no chain-letter craze has ever quite topped the spring madness of 1935. Gutted by the Great Depression, Americans turned back to the allure of the "dime letter." After letters for a "Prosperity Club" came blossoming out of Denver, the city of Springfield, Mo., was seized with a mania for the idea: Chain letter "stores" sprung up in vacant storefronts selling official-looking "certificate" shares in high-ranked names on chain letters. "Beauty shops," reported the AP, "sold the letters to their customers while administering facials and permanents." Emboldened by hazy laws governing their business, chain-letter brokerages appeared in a matter of days from Portland, Ore., to Buffalo, N.Y.; at its mad height, one chain-letter shop in Toledo, Ohio, boasted 125 employees.


The chains became such a cultural phenomenon that Paramount announced plans for Chain Letter, a movie to star Fred MacMurray. Spoofs appeared in the mail, like the "Send-a-Packard" letter ("Think how nice it would be," it rhapsodized, "to have 15,625 automobiles"). Other letters promised fantastic exponential results in procuring dames, whiskey, and elephants. A few residents of Springfield even attempted a "drunk chain"—doubling their crowd in size with each round of highballs at a new tavern, while "the originators were hazily trying to figure out how long it would take to get the whole city drunk." Alas, they passed out before completing their calculations.

Soon the entire country had a hangover: The chain-letter market crashed after a few weeks, chain-letter brokers fled town with tens of thousands of dollars, and a $26.9 million suit was filed against Western Union for allowing the first electronic chains via telegraph. As dazed customers woke up to discover their investments were worthless, the U.S. Postal Service was left in July 1935 with "between 2,000,000 and 3,000,000 letters in the dead letter offices."

It all has a curious ring of familiarity, which makes the earliest chain-letter fiascos all the more instructive. After all, what happened to Natalie Schenck, the teenager who nearly capsized her Long Island town with chain-letters for the Spanish-American War troops? The one who shook down a cascade of money, embarrassed a respected institution, and left government agencies tied up in knots?

Reader, need you even ask? She became a Wall Street banker.

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