had supported the bill, — Calhoun, for instance, — holding a distribution of public funds as a gift among the states to be unconstitutional, but a deposit or loan to be constitutional, seriously thought that the states might be called upon at some time to refund the money. But generally the deposit was looked upon as a gift; and Clay, on his return to his constituents, said “he did not believe a single member of either house imagined that a dollar would be recalled.” The Whigs represented the passage of the bill as a great victory on their side. It was a bad law in itself, but perhaps no worse than other available expedients, since the accumulation of the surplus had not been prevented by a timely reduction of the taxes.
The effect of the law was to hurry on a crisis. The distribution of the public deposits among the “pet banks” had served to place capital arbitrarily in different parts of the country, without much regard to the requirements of legitimate business. The regulations imposed upon the deposit banks by the new law, especially the provision that the public deposits in no one bank should exceed three fourths of its paid-up capital, led in some cases to an equally arbitrary dislocation of funds from banks which had an excess of deposits to other banks in other places which had less than the amount allowed. But the distribution of the treasury surplus among the several states produced this effect of arbitrary dislocation on a much greater scale. On January 1, 1837, the surplus
