Double liabiliy for bank stock

Double liability for bank shareholders was first employed in the United States primarily as a protection for noteholders. Such provisions were to be found in early bank charters and statutes, but until the passage of the National Bank act in 1864 this means of safeguarding creditors was not generally used. After the passage of the National Bank act, with its inclusion of double liability, the principle was much more widely used in state regulations, and protection was designed chiefly for depositors. By 1910, 32 states had multiple liability provisions, and in 1930, 38 states. The numerous bank failures since 1930 have demonstrated the inadequacy of double liability as protection for depositors and have resulted in the removal of this requirement from the National Bank act and from the laws of 19 states. The trend today is toward such substitute means of protection as deposit insurance and the accumulation of greater surpluses.