Evening journal., 1914-09-17
New News Of Yesterday
An Early Comptroller of
the Currency
By Holland.

The late John Jay Knox, who was
for many years Comptroller of the
Currency, being the second who was
appointed to that office, the first hav-
ing been Hugh McCulloch. set the ex-
ample when he resigned as Comptroll-
er which has been followed by many
of his successors in that office-he
became bank president in New York.
With perhaps a single exception, his
various successors up to the admins
tration of President Taft departed
from the Comptrollers office at
Washington to accept invitations TO
become presidents Of large banks
Mr.. Knox was a man of scholarly
/ appearance. Some thought they de-
tected a strong personal resemblance
between him and Senator John j. In
gals, OF Kansas. Though a scholarly
use-sO to speak of his spectaCles ~
Knox impaired the impression that he
was a man OF great learning, as In
fact he was. In speech he was very
moderate apparently carefully weigh
ing his words. He mad the details OF
the ultimate control of the currency
completely mastered, possessing a
wonderful memory for the statistics
of that department. He was regard
ed as a somewhat rigid officer. dis
posed generally to adhere to strict
construction of the law.
Yet that impression Of Mr.. Knox
was not entirely correct, as the fol-
lowing anecdOtc. narrated to me by
his longtime. friend, Frederick ID.
Tappen. Tor many years a high author
ity in the New York Clearinghouse
Association, viii prove:
81 was once chatting informally
with Mr.. Knox after he came to New
York as bank president" said Mr..
Tappen to me, land mentioned that l
believed such discretionary power as
the Comptroller OF the Currency pos
acsses has always been wisely used by
him.
"l spoke of what is called 'overcer-
tifying checks by banks which had
Wall Street brokers as their CUSTOM
ers. Checks were, in fact. overcerti-
fled when the brokers did not have
enough money on deposit to meet
them. but It was always with the un-
derstandiug that the amount would be
made good in the course of the day.
7 said to Mr.. Knox that | had known
only one instance where the pledge Of
that kind had not been faithfully kept
snd in that case it was accidental, not
Intentional / also intimated to Mr..
Knox that as it was a physical impOs-
! sibility for banks to segregate from
their deposits the bank notes which
they received it had been the habit Of
= I.r In
{ parts Of the country. to mix some na-
y tional bank notes in with the funds
consisting OF legal tenders IN gold
which they held as reserve, and this
could not have been done without al
least the tacit of permission of the
Comptroller
Mr. Knox said TO me: Tappen.
learned early in my service as Comp
>. troller of the Currency that IT is not
well always to insist upon a strict in
it depreciation OF The law. learned that
e the public officer who leans backward
: in the administration Of his office Is
; quite as likely to make mistakes as is
the one who may be disposed TO be
i somewhat lenient. Now in the ac.
J. tual operations of the national bank.
/. ing law there are some things which
,. very strict Interpretation would pui
y a stop to- but which a moderate and
4 lenient reading of the law would rea-
= sonably permit. A Comptroller Of the
Currency who absolutely stopped
what you call "overcertifying" cnecks
would thereby paralyze the securities
Al market
"a $50 it has been with respect tC
+ mixing in national bank notes witt
ie the funds held for reserve. There hus
ie been no abuse of this. Il is a matter
10 of convenience, and as national banl
D. notes are in every instance secured b,
government bonds, there is no rea
danger unless the thing is carried Il
excess
ID Il am a great believer in the giving
m by legislative bodies of discretionar,
o. powers to public officers. especial,
et those who are in authority over Oui
" banking and currency system
n "Yet the man who made this remarl
,e was reputed to hold to the strictos
Interpretation of the laws" said Ml
Tappen.
= Copyright. 1914, by L. J. Edwards
All rights reserved