Charles Eugene Selover, Sr. and the Madison Square Bank of New York City
Leaving Elmira Behind
We have seen that Charles and Susan Selover were highly motivated to advance themselves in banking and business during The Gilded Age of America. It is perhaps not surprising that Charles would not hesitate to continue his climb in the banking profession. We left him as President and Director of the First National Bank of Elmira in early 1891, having served in that capacity for about 18 months from the bank's founding.Charles tendered his resignation as President of the First National Bank of Elmira on or before 1 March 1891, reportedly in response to a lucrative offer from the Madison Square Bank of New York City. Nevertheless, Charles apparently retained ownership of 250 shares of the First National Bank of Elmira when he took his position with Madison Square Bank in April 1891. These shares, with those of other shareholders, were later listed by Elmira National Bank official J. J. Bush in a tax lawsuit over their assessed value. Charles was listed as having debts, presumably to the First National Bank of Elmira, equivalent to the value of 25 of his 250 shares.
Charles traveled to Moravia, Cayuga Co., New York, the site of his early banking career, to visit friends and relatives in mid-March before his move to New York City, which probably occurred before 1 April 1891. Susan and Charles, Jr., however, appear to have temporarily returned to their former home in Cortland, or possibly to the home of Susan's sister, Philomena Ingalls Straat, in that town. Charles, Sr. made several trips from New York City to Cortland in April, trips probably made more urgent by Susan's pregnancy and birth of a daughter, Kate Miller Selover, on 27 April 1891.
Charles moved his family from Cortland to a house on High Street at Passaic, Passaic Co., New Jersey in late September 1891. In mid-October, Mr. and Mrs. F. Cyrus Straat traveled from Cortland to visit Charles and Susan in their new residence for several days. Charles and Cy undoubtedly discussed their various mutual business ventures and investments during the visit.
Charles Eugene Selover, Sr., Assistant Cashier of the Madison Square Bank
Charles had gone from being "a big fish in a small pond" to "a small fish in a big pond" with his move to the Madison Square Bank where his new position was that of Assistant Cashier. If not so initially, he later was also a Director of the Madison Square Bank, located at 202 5th Avenue in Manhattan. We don't have too much insight into Charles's activities during his first year at this institution.In July 1892, Charles accompanied his sister-in-law, Philomena Straat, and her children on their return to Cortland from a vacation at Asbury Park, Monmouth Co., New Jersey. Charles visited with Mr. and Mrs. Straat in Cortland over a Sunday before returning to New Jersey. Both Charles and Susan returned to Cortland several weeks later to visit the Straats. Susan appears to have remained with her sister in Cortland for the month of August because Charles returned from New York City in early September to rejoin his wife.
Charles became a Director of the Automaton Piano Company in 1892, in which role he continued in 1893. It was later revealed that the Company obtained a loan of $10,000 from Joseph F. Blaut, President of the Madison Square Bank, with essentially worthless shares of the Cyclostyle Company put up as collateral by the Automaton Piano Company. The pot was sweetened when the Automaton Piano Company gave 1,000 shares of its own stock to Blaut as inducement for the loan. The shares were not held by the Madison Square Bank but were held by Blaut who later gave 500 of the shares to Charles. Charles was then made Treasurer of the Automaton Piano Company, presumably to keep an eye on their affairs for the bank. The Automaton Piano Company deal again illustrates mixing of personal business and bank business in what was apparently a "Wild West" of banking in the 1880s and 1890s.
Charles E. Selover and F. Cyrus Straat were elected Directors of the Cortland Omnibus & Cab Company in January 1893. The Directors then elected Charles as Vice President of the Company, which was stated to be in a very flourishing condition.
Collapse of the First National Bank of Elmira
Charles Eugene Selover, Sr. had been gone from Elmira for over two years when the First National Bank of Elmira suddenly collapsed near the end of May 1893. The immediate cause of the bank's closure seemed to be its extensive loans to Col. D. C. Robinson, a stockholder and Director of the institution, and his inability to cover his debts. Last minute negotiations with the Mutual Life Insurance Company for a bailout at first looked promising, but after due consideration the insurance company declined to proceed, and the First National Bank of Elmira closed.Blame, of course, was thrown about to see what would stick. Charles, as the first President of the bank, came under criticism for the Georgia timberland deal executed during his former tenure when the bank receiver sold the bank's interest in 20,000 acres of Georgia timber for a paltry $1,600. Charles defended his management of the bank but did not wish to comment on the receiver's sale. A local lumberman, however, stated that adjacent Georgia timberland in which he held an interest was formerly valued at $3/acre but had increased to $5/acre with recent construction of a new railroad in the area. Charles seemed somewhat vindicated by that assessment, given that the land should have sold for in excess of $60,000.
Charles traveled from New York City to Auburn, Cayuga Co., New York and made a visit with his cousin, Mrs. J. M. Calhoun on 11 June 1893. If there was a business aspect to this trip related to failure of the First National Bank of Elmira, it was not mentioned in the news account of Charles's visit.
Collapse of the Madison Square Bank of New York City
The Madison Square Bank suffered a collapse on about 9 August 1893, just over two months after the First National Bank of Elmira had failed. A Clearing House Committee had found that Madison Square Bank was deficient $90,000 in funds, which forced Madison Square to close. To make matters worse, the Automaton Piano Company, of which Charles was a Director, was reported insolvent the following day. This company owed the Bank $31,021.25. The two failures presumably were linked because the Madison Square Bank had loaned money to the Automation Piano Company on collateral of little value. At this point, the 500 shares of the Automaton Piano Company that had been given to Charles presumably became worthless, or nearly so.At first, Charles pursued his other business interests. He and Susan had sold a lot on Elm Street in Cortland for $5,000 only a few days before collapse of the Madison Square Bank. It may be that Charles saw the handwriting on the wall before the bank failed and hastened to bolster his cash reserves for the trouble ahead. He did have remaining debts at the failed Elmira Bank, part of which he had repaid in July 1893. Charles also continued his business interests in Cortland with his election as Director and subsequently Secretary of the Cortland Omnibus & Cab Company in early September.
Legal Aftermath of the Madison Square Bank Failure
The bank failure would have severe consequences for Charles Selover, who as Assistant Cashier and Director could be held criminally and civilly liable. This came to pass when he was arrested at Passaic, New Jersey on the evening of 23 October 1893 on a misdemeanor charge of violating New York State banking laws by failing to do his duty as Director. Charles was jailed by a New Jersey judge to be held for two weeks awaiting extradition proceedings. Apparently this was a more forceful approach than desired by the Assistant District Attorney in New York City who requested that the judge release Charles so that he could appear with his attorney in New York, which subsequently occurred. Charles was bailed on $5,000 bond put up by a friend, then traveled to Cortland on 28 October, presumably with Cy Straat who had come to New Jersey to assist him in his time of need.Charles's case did not go before a Grand Jury until late November 1893. The Grand Jury handed up misdemeanor indictments of the Directors of Madison Square Bank on 27 November. The following day the indicted men each were required to put up an additional $5,000 bail or $10,000 apiece. Charles, with his legal problems momentarily on hold, cast about for new financial pursuits, and fell back on the old family milling business at Moravia, Cayuga Co., New York. He had assumed the Secretary and Treasurer's positions for the Moravia Milling Company by mid-December.
The year 1894 began with a bit of good news for Charles Selover. The Court of Oyer and Terminer in New York City dismissed the indictments against five of the former Madison Square Bank Directors, Charles included, on the grounds that the original charges lacked specificity. On the other hand, the good news soon was followed by bad. A civil suit test case for $4,000 was brought in mid-January against the Directors by a depositor seeking recovery of his funds. Filings indicated that Charles owned 100 shares of the Madison Square Bank originally valued at $10,000. Back in the criminal law arena, the Assistant District Attorney moved to resubmit charges against the Directors to the February Grand Jury. The Court of Oyer and Terminer took the Assistant District Attorney's motion under advisement after hearing counter arguments by attorneys for the Directors in mid-February 1894, but it appears that the charges were eventually dropped with Charles escaping further prosecution.
Charles, as former Assistant Cashier of the Madison Square Bank, was required to testify at the perjury trial of the Joseph F. Blaut, former President of the Bank. In the course of this testimony, Charles was revealed to have purchased and paid for 50 shares of the Madison stock and purchased another 50 shares for $7,500 for which he gave a note to the bank and in return was issued a Cashier's Certificate for the purchase amount. Presumably these constituted the same 100 shares previously referenced as owned by Charles. Further testimony by Charles revealed that he was ordered by Blaut not to include $150,000 in notes in a financial statement and that Blaut said he could verify the statement pursuant to a special contract that he held.
Civil litigation over the failed Madison Square Bank dragged on for the next four years. On 5 April 1895, notice of an amended summons naming Charles among the Defendants was issued on behalf of the creditors of the Madison Square Bank, Plaintiffs. The fate of this suit is not known; however, an apparently separate suit by the receivers of the Bank against Joseph F. Blaut, Charles E. Selover, and two others was settled on 28 April 1898 for $50,152. The share of this burden allotted to Charles is not known. It is likely that Blaut would have borne the major share.
Not to be forgotten were legal liabilities arising from the collapse of the First National Bank of Elmira. Charles had been indebted to the Bank when it failed. On 6 October 1897, the receivers of the Elmira Bank sold the claims, judgments, and demands belonging to the Bank at public auction. Among these was a judgment for $1,101.67 against Charles secured by 16 shares of the former Madison Square Bank.
Thus ended the long and solid start followed by the rather rapid rise and fall of Charles Eugene Selover, Sr. in the banking business. Charles was down but not out as he went on to reinvent himself in subsequent years.
To be continued. . . .
