Under date of October 29, 1879, Mr. Knox made a full and detailed reply to the charges of the United States Attorney and enclosed with it a report from the receiver of the bank, to whom he had referred that part of the United States Attorney's communication relating to his administration of the trust and course of action, answering seriatim every allegation made by the United States Attorney.
In his reply Mr. Knox severely censured the United States Attorney for giving the public press a copy of his charges, which, he said, in some instances were published with conspicuous headlines, attributing to him the grossest official negligence and malfeasance in office, without first giving him an opportunity to make answer. He stated that between the date that he appeared before the grand jury and the date of the United States Attorney's communication, a period of ten months, the latter had never made any complaint to his official superiors as to the Comptroller's or the receiver's official conduct in connection with the affairs of the defunct bank, and that as no request was received from the United States Attorney for official action, or for information, that was for a moment neglected or denied by either him or the receiver, he had no cause to suspect that he was the subject of the United States Attorney's malevolence or the hostility displayed by his communication and its publication.
Mr. Knox then stated that the only formal complaint made by the United States Attorney, in intelligible and unambiguous terms, concerning his actions in relation to the criminal proceedings referred to, appeared to be that he had misunderstood or failed to obey the public statutes which define the Comptroller's duties, and that he was not in sympathy with the public prosecutor in his efforts to bring to justice the violators of the national banking laws. Even these charges, he said, were made by indirection and innuendo rather than by any specific allegations. But, whether made by vague intimations or definitely alleged, Mr. Knox declared the charges to be maliciously false, and that he believed them to have been made by the United States Attorney, not from any sense of public duty, but to subserve personal and unworthy motives and purposes. So far as the charges related to himself, Mr. Knox stated, he knew them to be false. So far as they related to the receiver, he believed them to be false, and that their falsity was plainly apparent by the records of the Comptroller's Bureau, and by the public history of the transactions in question.
Mr. Knox then proceeded to review the condition of the bank immediately preceding its failure, and the action of the Comptroller's office in connection therewith. He stated that upon receiving the report of the special examiner, which disclosed a serious impairment of the capital of the association, he at once directed a reorganization of the board of directors and a correction of the unsatisfactory matters which he called to their attention.
After weeks of searching investigation into the condition of the bank the reorganized board of directors, one of whom was Hon. John B. Henderson, ex-United States Senator, and a prominent attorney and citizen of St. Louis, informed the Comptroller that the bank was insolvent. He thereupon appointed Walter S. Johnston receiver, who proceeded to wind up the affairs of the institution with noticeable vigor and success.
Mr. Knox then went on to state that on December 14, 1878, in compliance with the request of the United States Attorney, he sent him all the reports of condition of the bank and the oaths of directors and instructed the receiver to give him a copy of the report of the bank examiner, which was then in the receiver's possession, and on December 27, 1878, he appeared himself before the grand jury at St. Louis, in compliance with the United States Attorney's request. As a result of the hearing the president, vice-president and the cashier of the bank were indicted. At a later date, another grand jury made an investigation of the affairs of the bank, and that grand jury, too, was furnished with all the information in possession of the Bureau and the receiver bearing on the case.
From the date of the last investigation to the date of receipt of the United States Attorney's complaint to the Attorney General, Mr. Knox stated, the United States Attorney never sought his advice or gave him any information concerning the criminal prosecutions, nor did he make application to him or to the receiver for any action, aid or sympathy in his proceedings against the accused, although he was always willing and ready to cooperate with him and to place at his disposal any information or records in possession of the Bureau.
In considering the complaints made by the United States Attorney relating to occurrences subsequent to the finding of the indictments, Mr. Knox said that although a year had elapsed after the indictments were found, the accused had not yet been brought to trial.
In explanation of the United States Attorney's imputation that the action of Mr. Knox in accepting payment from Mr. Eads in settlement of his indebtedness to the bank and surrendering to him the evidence of his indebtedness, injuriously affected the interests of the prosecution, Mr. Knox stated that he accepted from Mr. Eads, under an order of a competent court, a large sum of money in full satisfaction of his indebtedness to the bank, believing the settlement to be of vital importance to the interests of the creditors of the association, and in doing so he did not condone any infractions of the law nor deprive the prosecution of any evidence which the District Attorney intended or desired to use.
In regard to the United States Attorney's complaint that the receiver of the bank retained in his employ the late cashier, after his indictment, and that he retained as his counsel ex-Senator Henderson, a director of the bank, who was also the counsel for one of the defendants, Mr. Knox stated that he had no knowledge of these facts until he read the complaint of the United States Attorney, and he expressed the opinion that if the United States Attorney sincerely thought that the employment of these persons by the receiver was detrimental to the interests of the prosecution, it was his duty to have so advised the Comptroller, but that his failure to do so, justified the inference that he made these accusations and gave publicity to them merely to subserve his own interests. He then quoted from the receiver's letter his reasons for employing, and continuing in his employ, the parties referred to.