Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1878-11-22
THE CONTEMPORARIES REPORT


The report of John j. Knox, comptroller
of the currency, is marvel in it's way, for
it is seldom that public official finds it nee
essary to go out of his way to argue in favor
of the perpetuation of system of private
monopolies that have been demonstrated to
be injurious to the public interests and pre-
judicial to the financial standing of the gov
eminent. This Mr.. Knox does when he
apologies for and defends the national bank
system. He declares, with the air of Sir
Oracle, that eff the national bank system is
to be abolished, and an additional amount
of United States notes is to be issued, all
hope of reducing the rate of interest on the
public debt, must be abandoned" We
would like to know why all hope of reducing
the rate of interest on the public debt must
be abandoned in such contingency? Have
the national banks contributed in any
degree to the reduction thus far effected?
Have they not rather sought to keep up the
rate? 1t is true that they have assisted, for
commission, in negotiating the sale Of the
low-interest bonds, but would they not, as
private banks, do the same thing? To pre-
sumo that they would not is to presume that
their managers are prize fools, who would
deliberately throw away chances to make
money. The fact is-and the figures Mr..
Knox gives prove that he is we'll aware o.
the fact-that the national banks own but u
small fraction of the low-interest tonds now
IN circulation. They have negotiated their
sale purely as matter of business, with a
considerable profit in view. But private
banking institutions, which are not behold
en- in any way to the national banking sys-
tenn, have succeeded in negotiating the bulk
OF these bonds. Which goes to prove
that Mr.. Knox is wholly wrong
in the presumption that the abo-
lition or continuance of the national banks
will have anything to do with reducing the
rate of interest on the public debt. Such a
result can be reached by following well
known business laws, not from any sense of
patriotism that may reside in the national
banks.
Again MIR. Knox says that "twenty- one
million dollars yearly may be saved to the
government by funding s and per cent.
bonds into per c:nts., while the amounts
which it is claimed may be annually saved by
the repeal of the national bank act, and the
issue of three hundred and twenty millions
of inconvertible treasury notes is 81, 100000
only. With the issue of this large amount
OF government notes the funding of the pub
lie debt will be rendered impossible, for the
pledge of the government will then be vio-
lated, and its credit permanently injured"
Here Mr.. Knox is little at fault in his
figures. The amount that will be saved by
substituting greenbacks for national bank
notes is $16,000,000, not 1900, 900, as he
states it, for with the issue of $500, 100000 of
greenbacks, an equal amount of bonds can
be retired. and the interest upon them saved
to the government. This need not interfere
with the saving of the twenty one millions
affected by funding the and per cent.
bonds into per cents, for that process can
continue just the same as at present. Why
the funding of the public debt will be rem
dered impossible, or the pledge of the gov
ernment violated by the issue of this amount
of greenbacks, is one of these things no fell
low can find out.
Mr.. Knox presumes that the notes of the
government, if issued, will be inconvertible.
Such need not be- the case. They should be
redeemable Tor receivable) at par for all
debts, public and private, including duties
on imports and interest on the public debt.
Notes possessing such value cannot hon
estly be called inconvertible. They would
be in as great demand and of as great value
for all purposes of commerce as gold and
silver, and would in no contingency possess
less value than the national bank notes.
Taken as whole Mr.. Knox's report is
shameful piece of special pleading, evidently
dictated by his own self-interest quickened
by the entreaties of those bankers who draw
SO largely from the national treasury. It is
unworthy of a public officer whose duty it is
to look only after the public interests. L[r.
Knox's place is evidently that of an attorney
for the banks, not that of servant of the