In April 1900, Charles Neely went missing from Havana with the Cuban Postal Service’s ledger books. A Muncie native, Neely was secretary of Cuba’s postal system.

At the conclusion of the Spanish-American War in 1898, the U.S. established a military government in Cuba, which was governed by Leonard Wood, a personal friend of Teddy Roosevelt and officer in the Rough Riders brigade.

In spring of 1899, the War Department advised Wood of accounting irregularities in the Cuban Postal Service, a newly created island-wide system under American control.

The Cuban Postal Service reported directly to the U.S. Post Office Department (now USPS) and as such, they conducted an investigation, which uncovered a fraud perpetrated by the Director of Cuban Posts, Estes Rathbone; Assistant Postal Auditor, James Reeves; and Postal Secretary, Charles Neely.

Neely was born on his family’s farm in 1859, which was located across the White River from Muncie in what would become Riverside City. He was the son of Moses Neely and the nephew of the blacksmith Thomas Neely.

After graduating from Muncie High School, Charles traveled west to explore business opportunities in Missouri. He returned to Muncie in the mid-1880s to work as a school teacher and reporter for the Muncie Morning News. He later bought the paper and served as publisher. He established the Neely Printing Company and heavily invested in the Merry World Theatrical Company, a Muncie-based vaudeville venture.


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As Neely rose to prominence, he rubbed shoulders with politicians including George Cromer, Muncie’s ninth mayor and later U.S. Congressman. Neely was also friends with Perry Heath, another Muncie native and assistant postmaster for the U.S. Post Office Department. He also served on Indiana Governor James Mount’s staff.

At the end of the Spanish-American War, the U.S. determined that the island needed a postal system. In late 1898, Ohio Senator Marcus Hanna suggested that his former campaign manager, Estes Rathbone, would be an ideal choice as Cuba’s first postmaster.

Once in place, Rathbone began filling positions. He relied on recommendations, including one glowing letter from Perry Heath. Heath wrote “There is one man, Mr. Charles F. W. Neely of Muncie, Ind., who wants to go into the Cuban mail service…He is a newspaper writer and publisher and about 42 years of age, splendidly educated, a hustler, a man of the very best habits, and as loyal as loyalty itself. He would make a good confidential man for you.” Rathbone agreed and hired Neely first as a postal clerk, before promoting him to secretary after a letter of support from Congressman Cromer.

Together, Rathbone, Neely, and Reeves began embezzling money and defrauding the Cuban Postal Service in 1899.

The scam worked like this: the U.S. rushed temporary stamps to Cuba in late 1898. It was months before proper stamps were printed. Once new stamps arrived in mid-1899, the USPOD ordered the old ones burned. However, Neely kept the old stamps and sold them. Since they were recorded as "burned" in the ledgers, the money was entirely profit and pocketed on the sly. Rathbone looked the other way and Reeves fixed the books.

Around this time, Neely began sending mysterious packages to Muncie. His old Muncie printing company, which he was supposedly entirely divested of, received government contracts from Havana. Neely and Rathbone also purchased the Havana Brick Company and controlling shares of the West India Fruit Company. Neely also formed a real estate venture in Cuba to purchase the Isla de la Juventud for development.

In a routine April 1900 audit, the War Department discovered that the Cuban Postal Service was making $28,000 in income and only reporting $16,000 worth of stamp sales. After another $36,000 went missing, Neely disappeared.

He was arrested in Rochester, N.Y., in May with a trunk containing $6,502, diamonds, and Spanish gold coins. His bail was set at $20,000, which was paid from a Union National Bank account.

Neely fought extradition, but (then) Governor Roosevelt intervened and extradited him back to Cuba. Rathbone, Reeves and Neely were tried together in Cuban courts in 1902. All three men were found guilty and sentenced to ten years, with heavy fines, although Governor Wood pardoned Rathbone. The first Cuban President, Tomás Estrada Palma later pardoned Reeves and Neely.

Neely stayed in a Havana suburb for a while and visited Muncie at least twice, but moved permanently to New York. He died on March 7, 1928.

Rumors circulated that he had thousands of dollars squirreled away and there isn’t a reliable record of what happened to all of those packages shipped back to Muncie.

(The author relied on news reports from the time and Jack McCallum’s book “Leonard Wood: Rough Rider, Surgeon, Architect of American Imperialism").


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