Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015
➤ Gửi thông báo lỗi ⚠️ Báo cáo tài liệu vi phạmNội dung chi tiết: Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015
Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015
Extended Liability at Early American BanksI loward BodenhomClemson University and NBER41852Abstract: Limited liability is a defining feature of the mo Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015odem corporation, but it was not always thus. In the nineteenth century, several states imposed extended liability on some firms with corporate status (Ĩ.C.. perpetual life, freely tradable shares, etc.). In 1850 about half of the states imposed double liability on banks, which meant that shareholde Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015rs were liable to twice the par value of the banks* shares. This paper shows that double liability was associated with more concentrated bank shareholBodenhorn Double Liability Shareholding and Bank Risk Taking 2015
dings and that the change from limited to double liability altered bank leverage ratios in New York and Pennsylvania. By asking bank shareholders to hExtended Liability at Early American BanksI loward BodenhomClemson University and NBER41852Abstract: Limited liability is a defining feature of the mo Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015ank shareholdings and charter provisions. Pam Bodenhom, Ghanshaytn Shanna and Danielle Zanzalari provided exceptional research assistance.0I. IntroductionThe sine qua non of the modem firm, according to many students of business organizations modem and historical, is limited liability (Jensen and Mc Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015ckling 1976; Woodward 1985; Carr and Mathewson 1988).1 Shareholders place their personal wealth at risk up to the amount they invest in the corporatioBodenhorn Double Liability Shareholding and Bank Risk Taking 2015
n and no more. As a general rule - mostly absent fraud on the part of the firm’s owners and managers - creditors of a corporation have no recourse agaExtended Liability at Early American BanksI loward BodenhomClemson University and NBER41852Abstract: Limited liability is a defining feature of the mo Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015modern corporation were readily transferable and came to be traded in thick, liquid markets. Firms could tap into a larger pool of capital and capture economics of scale unavailable to closely held or family firms, invcstor/sharcholders could better diversify their portfolios, and consumers had acce Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015ss to inexpensive, mass-produced goods (Chandler 1977). And because limited liability appears to have been the default rule for corporations in the UnBodenhorn Double Liability Shareholding and Bank Risk Taking 2015
ited States very nearly from the foundation of the Republic, the United States might be deservedly labeled the original “corporation nation” (Sylla 19Extended Liability at Early American BanksI loward BodenhomClemson University and NBER41852Abstract: Limited liability is a defining feature of the mo Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015rs up to the early1 Recent scholarship challenges this view on several grounds. Evans and Quigley <1995) show that limited liability did not always dominate unlimited liability in Scottish banking. Guinnane et al <2007 ) argue that alternative forms were as important as the corporation, especially o Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015utside the United States. Hansinann and Kraakman (2000) argue that insulating the assets of the firm from attachment by creditors of bankrupt individuBodenhorn Double Liability Shareholding and Bank Risk Taking 2015
al owners was of at least equal importance and could not have been accomplished through contract or trust law. A special branch of organizational law Extended Liability at Early American BanksI loward BodenhomClemson University and NBER41852Abstract: Limited liability is a defining feature of the mo Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015 that scholars need to exercise care in comparing US corporations across time and space. The corporation was a product of the state and local political struggles tended to shape the corporation and how it was structured. Bodchorn (2011) discusses this 111 the context of federal influence over state Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015bank charter terms.1850s because there was. at that time, no more settled rule of law than that individual shareholders were not liable for the debtsBodenhorn Double Liability Shareholding and Bank Risk Taking 2015
of the corporations in which they owned shares.Early American courts of law upheld limited liabil ity when the charter was silent on the issue, but thExtended Liability at Early American BanksI loward BodenhomClemson University and NBER41852Abstract: Limited liability is a defining feature of the mo Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015e came down lotwo points. One side, made up mostly populist Jacksonians, “looked upon corporations as an evil... they were exceptions to the common law," mostly because they shielded their investors from personal responsibility (Hammond 1936.189). a populist belief that found favor even into the twe Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015ntieth century (Ballantine 1923, 82). On the other side were those who viewed the limited liability corporation as one of the principal mechanisms undBodenhorn Double Liability Shareholding and Bank Risk Taking 2015
erlying modern economic growth. Potential shareholders in search of productive investment, but without the inclination to be directly involved in an eExtended Liability at Early American BanksI loward BodenhomClemson University and NBER41852Abstract: Limited liability is a defining feature of the mo Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015ntury.4Nineteenth-century jurists, legislators and regulators resolved this fundamental debateIII one of the earliest cases, the Massachusetts court found that the holder of the notes of a failed bank liad no recourse against the bank's shareholders cither individually or severally. The court opined Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015 that allowing the noteholder recourse against any one shareholder opened the door to claims against all shareholders, including those ■‘wholly innoceBodenhorn Double Liability Shareholding and Bank Risk Taking 2015
nt and ignorant of the (hank's) management." which would create a "palpable injustice." A decisive factor in the court's determination was the common Extended Liability at Early American BanksI loward BodenhomClemson University and NBER41852Abstract: Limited liability is a defining feature of the mo Bodenhorn Double Liability Shareholding and Bank Risk Taking 20151X16 as did the United States Courts of Appeal in 1X24. In the latter instance, Justice Story argued a corporation's capital was pledged in the payment of the firm's dehts, and that the public was aware that this pledge was the only guarantee of repayment. Moreover, that pledge freed the individual Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015shareholders from personal liability. In 1X39 the Massachusetts high court opened the door to individual shareholder liability' in cases at equity (noBodenhorn Double Liability Shareholding and Bank Risk Taking 2015
t law), hut only if the creditor could show gross mismanagement of a bank by its directors, acquiesced in by the shareholders. Equity offered the possExtended Liability at Early American BanksI loward BodenhomClemson University and NBER41852Abstract: Limited liability is a defining feature of the mo Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015urt established a substantial hurdle; proving the connection between bankruptcy and mismanagement would be a challenge.Livermore (1935, 687) contended that the small shareholder "deserves the gift of limited liability." lest the firm be unable to raise large aggregations of capital.2through a series Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015 of compromises. When business firms were granted limited liability they were regulated in other dimensions, ostensibly to limit risk taking and theirBodenhorn Double Liability Shareholding and Bank Risk Taking 2015
capacity to inflict losses on creditors or the public. But, more importantly, legislators modified shareholder liability rules either through generalExtended Liability at Early American BanksI loward BodenhomClemson University and NBER41852Abstract: Limited liability is a defining feature of the mo Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015 directly in the corporation’s charter. Massachusetts’ manufacturing corporation act of 1809, applicable to all types of manufacturers, imposed full joint and several (unlimited) liability on shareholders. Other Massachusetts corporations enjoyed limited liability. Pennsylvania, too. extended limite Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015d liability to banks, turnpikes, bridge and canal companies, but incorporated manufacturing firms typically operated with unlimited liability (Dodd 19Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015
48). Among other regulations designed to protect creditors. New York and New Jersey imposed something akin to double liability on manufacturing firms Extended Liability at Early American BanksI loward BodenhomClemson University and NBER41852Abstract: Limited liability is a defining feature of the mo Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015they held. If a shareholder owned a single SI 00 share in a failed corporation that was unable to make its creditors whole, he faced a call from the bankruptcy court of up to SI 00 and no more. Double liability was limited liability, but it limits extended beyond the original purchase price and/or p Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015ar value of the shares.Beginning in the 1810s, several states imposed double liability on chartered commercial banks. Pennsylvania adopted double liabBodenhorn Double Liability Shareholding and Bank Risk Taking 2015
ility in 1808. but returned to strictly limited liability in 1810. Massachusetts imposed double liability in 1811. followed by Rhode Island [1818, modExtended Liability at Early American BanksI loward BodenhomClemson University and NBER41852Abstract: Limited liability is a defining feature of the mo Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015onsin [1852]; in 1850 Pennsylvania and Massachusetts modified their rules such that shareholders were doubly liable only for a bank’s note issues, but not3its other debts (Wisconsin 1852; Blandi 1934; Livermore 1935; Kinner 1927; Marquis 1937; Leonard 1940). Dodd (1948. 1377) could find no readily d Bodenhorn Double Liability Shareholding and Bank Risk Taking 2015iscernible pattern in the patchwork of states that adopted unlimited liability in manufacturing. It is no less difficult to describe the nineteenth-ceBodenhorn Double Liability Shareholding and Bank Risk Taking 2015
ntury pattern of double liability in banking. Grossman (2007) finds that, in the early twentieth century, more commercially developed states and thoseGọi ngay
Chat zalo
Facebook