A. Size and Aggregate Implications of the Transfers
The aspect of the Deposit Act of June 23, 1836 (also known as the “Distribution Act”) that raised the most concern among its opponents was the return of the federal surplus to the states. Less controversial were provisions that prohibited government deposits from exceeding three-fourths of a bank’s paid-in capital and required the establishment of at least one bank as a government depository (i.e., “pet”) in each state that chartered banks. To comply with the latter provision, then Secretary of the Treasury Levi Woodbury quickly selected 45 new deposit banks, increasing their number from 36 in June of 1836 to 81 by December. Woodbury also asked Congress to clarify his authority to prepare for the official distribution of the surplus that was to begin on January 1 while also reallocating balances to meet the new deposit limits. Congress responded by amending the Deposit Act on July 4 to affirm Woodbury’s discretion to achieve an “equitable” balance among the states. The Secretary then ordered more than $38 million in “supplemental” interbank transfers over the next six months, with nearly two-thirds involving interstate transactions. Of this total, $26.4 million were completed by the end of 1836, with 57 percent crossing state lines. Most of the remaining orders were completed in the first quarter of 1837, with 79 percent requiring interstate movement. These supplemental transfers stand apart from the $28 million transferred in the official distribution, of which only 22 percent crossed state lines. Bank’s paid-in capital has required in the past to deposit funds in accounts but now you may just take a loan even via the Internet and the web site www.speedy-payday-loans.com and decide what sum you want to possess. Any inquiries will be asked and looked for.
Despite the Secretary’s efforts, an increase in the level of government balances from $34 million in June of 1836 to nearly $43 million by December limited his ability to achieve the distribution among the states that soon would be required. Collections over this period were twice as large as payouts, and more than half of the $22 million in new revenues required movement from their point of receipt. Woodbury recognized that the continued inflows would dramatically increase the amounts that would need to be removed from New York City, where the federal deposits had already accumulated far beyond the state’s proportion of the national population. He therefore focused the supplemental transfers in the Summer and early Fall of 1836 on gradually moving large sums from New York. The secret nature of these transfers first led contemporary observers to misunderstand the causes of the rising monetary pressure in August, but as the extent of the pre-distributional transfers became known, they were criticized, along with the Specie Circular, and held responsible for the pressure that had risen to a fever pitch by October.