Cheques and balances
Cheques are defined as written bills of exchange drawn on a bank and payable to the bearer when properly endorsed. One hears that they are to be phased out. The Payments Council in the U.K. has announced 31 October, 2018 as the date for ending the cheque clearing process.
“There are more efficient ways of making payments than by paper”, says Paul Smeer, the chief executive officer of the Council. The Smeer campaign against cheques is in ‘top gear’. He says it costs £1 ($1.70) to process each of them and points out that their current use is only about one-third of what it was in 1990.
Guy Legault, CEO of the Canadian Payments Association, says that in this country there is still no plan to ‘leggo’ of cheques. [I couldn’t resist that second pun] However, with the growth of electronic options, their use here has fallen by 72% in the past 20 years.
It used to be said that if someone’s worth were to be judged by the balance in their bank book, that person‘s character could be estimated by looking at the stubs in his or her cheque book. Those were the days when the counterfoil from which a cheque was detached remained to record the date, amount and beneficiary of the payment.
The last pages of the book showed the balance in one’s account at a given time. Cheques and balances were sometimes uneasily related.
Then came automated teller machines, bank cards and PIN numbers. Among my mementoes there is an un-cashed, printed $2 cheque that was intended some years ago to lure me into using the bank’s newly installed ATM rather than lining up to meet a live teller.
For a long time I resisted the come-on and the two-buck document became a ‘keeper’. But the inevitable happened and I now line up in the ATM cubicle and help the bank, with its rising service fees, to dismiss more tellers and better afford those high executive suite bonuses.
The use of cheques, once called bills of exchange, as distinct from the later bank notes that came to be called ’bills’, goes back a long way in time. The Romans called them prescriptions (‘praescriptiones’). That meant that they were requests for funds ‘pre-written’ some time before any money changed hands. Some 12th Century drafts (bank draughts are instruments to draw money) have survived. At that time they were sometimes written in code that could be deciphered only by authorised persons.
A national newspaper editorialised recently that the personal cheque has many advantages over other means of payment. It is more convenient and less attractive to thieves than is cash. The signature on it can be checked against the one on file, thus establishing identity in a way that a PIN number may not do.
Post-dated cheques enable one to make future payments (with the automation risk noted below) all at one time. The cost of cheques, said the newspaper lead editorial, is small enough to make most gifts, charitable donations or payments in that way worthwhile.
Many of us prefer to make payments by cheque through the mail rather than making our credit card numbers available to hackers or other criminals on-line. Although, upon receipt, it may take a cheque three or more days to be cleared, automated handling sometimes means that one is cashed before the indicated date. Machines are less interested in datelines than in amounts.
Have you, as have I, saved cancelled cheques from the days when banks returned them?
Endorsed with oh-so-familiar signatures, they bring back memories of people and occasions, reminders worth far more than was the amount of the given cheque. They are treasured affirmations of past relationships. Banks now decline to return our cheques.
One recalls the last gift given to or received from someone long absent, except from the heart. Another recalls help given to someone who may long have forgotten it. Is all that just sentiment? Didn’t the novelist John Irving say that if there is no sentimentality involved we should ask ourselves whether or not whatever we do really matters?
The anti-cheque argument is that various other methods, online payments, the use of credit and debit cards, are more efficient. Douglas Newman is president of RDM Corporation in Waterloo.
It develops products for the electronic processing of cheques. He says that, especially for a small business, it makes more sense to improve its cheque clearing process than it does to abandon a method of payment that is cost-effective, universally used and with centuries of jurisprudence behind it.
The Canadian Payments Association in Ottawa, however, says that it is actively considering alternatives to cheques. It expects a decision about their discontinuation to be made within a year. But paper cheques should survive. There is no incontrovertible reason to abandon them. Although telegrams are not as much used as they used to be, one can still send a next-day hand delivered wired message for special occasions via Telegraphs Canada. A way should be found to continue the use of written cheques.
Unless that happens, the literal and metaphorical uses of a ‘blank cheque’ will disappear. The comic results of one such filled out by a juvenile for $1 million was filmed by Disney in the 1994 movie “Blank Check”. The use of the term as a figure of speech has involved more serious consequences.
In the summer of 1914 Kaiser Wilhelm II of Germany gave the Austrian emperor ein unausgefüllter Wechsell (what the French would call carte blanche) , promising whatever support might be needed for his campaign against the Serbian nationalists. The First Great War was the result.
Since both the transactional and the colloquial use of cheques have been so important the long-time relationship between our cheques and balances should be preserved. Ask your friendly bank manager to tell the moguls in the King/Bay bank towers so.