Page images
PDF
EPUB

and 1862 he published two carefully prepared papers in “Hunt's Merchants' Magazine," of New York.

Secretary Chase, in his report to Congress for 1861, suggested the issue of bank circulation on a basis of United States stock as one of two plans for assisting the Government in carrying on the war. Mr. Knox's second paper, published in January, 1862, advocated the establishment of a National banking system as suggested by Secretary Chase. His principal argument in favor of his plan was the absolute safety it would insure in the currency of the country. In his last address upon the subject of a permanent National bank circulation before the convention of the American Bankers' Association in New Orleans in 1891, in enumerating the attributes of a perfect system of paper currency, he named first safety, second elasticity, third convertibility and fourth uniformity. These points were considered in the same order in his article in “Hunt's Merchants' Magazine in 1862, which attracted the attention of Secretary Chase. He was first appointed by the Secretary to a clerkship under Treasurer Spinner, but was soon transferred to the office of Mr. Chase as a disbursing clerk. He held this position three years, when he becaine Cashier of the Exchange National Bank, Norfolk, Va. The climate did not agree with him and he returned to Washington and was placed in charge of the Mint and Coinage correspondence of the Treasury Department. In 1866 Secretary McCulloch, who recognized his ability, sent himn to San Francisco to examine the branch mint in that city. His report was published in the Finance Report for that year with the commendation of the Secretary. Mr. Knox also made an examination of the mint at New Orleans in 1866 and discovered a defalcation of $1,100,000 in the office of the Assistant Treasurer of the United States. For a time during his stay in New Orleans he was acting Assistant Treasurer. In 1867 a vacancy occurred in the office of Deputy Comptroller of the Currency, and Mr. Knox was appointed to the position by Secretary McCulloch. While engaged in these various offices he continued to have charge of the Mint and Coinage correspondence of the Treasury Department. It was in this connection that he came to be the author of the coinage act of 1873, since famous as the law discontinuing the coinage of the silver dollar. He drew up a bill codifying the mint and coinage laws, and in his letter to the Secretary of the Treasury, under date of April 25, 1870, Mr. Knox wrote:

“The coinage of the silver dollar piece, the history of which is here given, is discontinued in the proposed bill: * The present gold dollar piece is made the dollar unit in the proposed bill, and the silver dollar piece is discontinued. If, however, such a coin is authorized, it should be issued as a commercial dollar, not as a standard unit of account, and of the exact value of the Mexican dollar, which is the favorite for circulation in China and Japan and other Oriental countries."

The preliminary draft of the bill provided for a silver dollar of 384 grains, and this coin was to be a legal tender for debts of not more than

$5. Mr. Knox submitted this preliminary draft to a number of experts in various parts of the country, for an expression of their opinions as to its merits. As a result of this interchange of views Mr. Knox prepared another draft of a bill omitting the silver dollar, as stated in the letter above quoted.

The bill was before Congress for three years, and passed the Senate January 10, 1871, with no provision for coining a silver dollar. The silver dollar was not in the bill reported to the House on March 9, 1871. In the following year the measure was brought up in the House, and a sentiment was developed in favor of restoring the silver dollar to be of the weight of two half-dollars, or 384 grains. The bill was reported to the House February 13, 1872, containing a provision to this effect, the legal-tender quality being limited to $5. The bill passed the House in this form May 27, 1872.

In the Senate a trade dollar of 420 grains was substituted for the dollar of 384 grains, the legal-tender limit still being $5, and in this form the bill passed the Senate January 17, 1873, the House February 7, and was signed by the President February 12, 1873.

During the three years that the measure was before Congress it was fully debated, the speeches on it in the Senate occupying sixty-six columns of the “Congressional Globe" and the House debates seventyeight columns of that publication.

When submitted to Congress the bill was accompanied by elaborate and extensive reports. These reports were printed and the reasons for discontinuing the silver dollar fully stated.

The standard silver dollar could not have been secretly omitted from this bill, for the reason that it never was in the bill at any time.

A complete documentary history of this act will be found in the Report of the Director of the Mint for 1896, p. 461, and the relation of Mr. Knox to the measure was fully set forth in his hearing before the House Committee on Coinage, Weights and Measures, February 20, 1891,

John Jay Knox was too much of an expert in finance to be deceived by the terms of the bill in question, and he was too honest to lend himself to trickery of any sort. He frankly stated at the outset that it was the purpose of his bill to discontinue the silver dollar and make the gold dollar the unit of value. As the author of the law firmly establishing the credit of the United States upon the gold standard, Mr. Koox performed a service to the country equal to that of any of its statesinen,

Mr. Knox was Deputy Comptroller until April, 1872, when he was appointed Comptroller by President Grant. At the expiration of his term, in 1877, he was reappointed by President Hayes and the appointIDent was at once confirmed, on motion of Senator Windom, without reference to the Finance Committee. In 1882 President Arthur appointed him for another five years' term, but on May 1, 1884, he resigned to become President of the National Bank of the Republic, New

York city. He was President Garfield's first choice for Secretary of the Treasury, but political complications prevented the President trom making the appointment.

As Comptroller of the Currency he made twelve reports to Congress, and they contain invaluable statistical and other information in relation to the banks of the country. During his incumbency the National banks were much more important as regards their currency-issuing functions than they are now, this feature of their business having been largely usurped by the Government paper and silver certificates. He was instrumental in carrying on the negotiations by which the SubTreasury at New York was made a member of the clearing-house, thus effecting great economy in the banking transactions with the Government.

Mr. Knox was successful as a banker, the deposits of the institution of which he became President increasing from $4,000,000 to over $15,000,000 in the eight years of his management. His death occurred at his home in New York, February 9, 1892.

The nucleus of the present work is contained in a series of papers published in “RHODES’ JOURNAL OF BANKING ” in 1892. Besides these and other contributions to this publication, Mr. Knox lectured at frequent intervals before several chambers of commerce, the American Bankers' Association, the students of Yale, Harvard, Hamilton, Columbia and Johns Hopkins Universities. He is besides the author of a well-known work on “United States Notes," a history of the various forms of paper money issued by the Government.

Mr. Knox was admirably fitted by training and experience for the important stations which he filled, and his long executive experience and excellent business habits proved of great value when he became the head of a large metropolitan bank. The honesty of purpose which characterized him when acting for himself also marked all his dealings as a trustee for others. His acquaintance was extensive and bis high mental and moral qualities won him many friends in private and business life.

The Chamber of Commerce of the State of New York, one of the oldest and greatest commercial organizations of the country, at a meeting held on March 3, 1892, paid a special tribute to the memory of Mr. Knox, addresses being made by a number of distinguished citizens of New York and suitable resolutions were adopted, closing in these words: “Patriotic in his impulses, strong in his convictions, thoughtful but reserved, modest yet courageous, a deep thinker, an able finan. cier, an agreeable companion, a kind friend, an upright citizen and a courteous Christian gentleman. Such is our judgment of his character, and so shall the record stand."

CONTENTS.

PAGES

CHAPTER V.

« PreviousContinue »