THE SKETCHER.

Star (Christchurch), Issue 10418, 23 March 1912, Page 1

THE SKETCHER.

THE BANK CHEQUE. In General Use About ISO Years. ("Bankers' Magazine") Cheques in America, Great Britain, France and most other countries must be paid by the drawee on presentation, any contract for delay notwithstanding. In English and American law they must be presented within "a reasonable time ". from date, and in France within five days from date in the case of a local , cheque and eight days in the case of / one drawn in another place. \ Post-dated chequos, however, are (payable only on or after the date they bear. There is nothing to prevent the payment of an old cheque if there are funds in the hands of tho banker for the purpose, but the delay releases the I endorsers. 1 ■ Bills of exchange were used many years before Christ, and references hero and there in Greek and Latin authors show that transfer orders for money were not unknown. These transfer orders, however", lacked some of the nej gotiability of the modern cheque in not ; being transferable to order. / OMGXX OF THE CHEQUE.

The cheque as known to the modern world had its origin among the London goldsmiths, who received money for safe keeping and permitted its transfer by means of written orders. But it wasn't until the middle of the nineteenth century that the use of cheques became general. Their use in Europe i 3 constantly increasing, but its extension has been hampered by certain conditions. One of these is that in Europe a bank paying a cheque is not responsible for identification of the holders. When cheques came into general use in England they were almost invariably made payable to bearer. When drawers began to make them payable to order the bankers got a section into the Stamp Act of 1853 which specifically \ relieved them from liability for wrong- \ ful payment except as regards the signature of the drawer. From the standpoint, of the banker this system has much advantage over the American system, since it relieves ' him of responsibility. It results in giving cheques, however, so great* a degree of negotiability that when lost or stolen they have practically the character of currency, and can he cashed without difficulty by the finder. There is strong opposition among the European banks to adopting the American system of requiring the personal identification of each holder of a cheque presenting it for payment. But a solution of the difficulty was found at an early date in England by the adoption of what is called THE CROSSED CHEQUE.

This means that two parallel lines about three-eighths, of. an inch apart, era drawn across the face of a cheque, to Indicate that it differs from the ordinary cheque. The original purpose of this so-called crossing was to permit the insertion betiveen tho lines of the name of a bank. Where such a cross , has appeared it meant that tho cheque was payable only on deposit in a bank account and not in cash over a bank's , counter. In other words, only a man who had an account could only have it put to his credit and not paid in cash directly.

So well established had the system become in England that where the , transverse lines appear with only the ' words "and company" between them it is taken to mean that the cheque may come back through any bauk to the institution on which it is drawn, but that it cannot be paid by any bank in ourrency to tho holder except at its own risk. "Where the name of the institution through which the cheque is to be paid is inserted in the crossing, it is called " specially crossed "; where no name is inserted it is defined as " generally crossed." The result of this system is that a crossed cheque in the hands of a dishonest holder cannot be collected without great difficulty. A dishonest hold- , er might conceivably forge an endorse--1 ment to himself, but if he deposited it :in his account he could readily be ' traced n,s the forger; and few forgers can afford to maintain back accounts In their own names for the purpose of EXECUTING FORGERIES. Forgery was one of the great perils of early banking. Less than a century ago tho Bank of England prosecuted 142 persons in a single year for complicity in_ forgeries. The crime was then punishable with hanging. A distinctive paper was adopted by "tho bank in 1855 and was carefully guarded.

Some counterfeiters who stole some of the paper in 1862 were sentenced to penal servitude for life. Forgery by professionals has declined of late years but amateurs still yield to the temptation of doctoring cheques. Tho greatestdiscouragement to these gentry has been the adoption of safety papers. Safety tints also, as manufactured for the ordinary lithographer, although ihey have been on the market for forty years, have not proved a complete protection. If such tints are really sensitive, they are also sensitive to moisture and on this account cannot bo easily handled in the ordinary course of business. Tho moisture of the hand frequently removes a portion of the tint, thus giving to a .genuine document the appearance of having been altered. Many of these tints, moreover, while Appearing sensitive when first printed, easily becorno oxidised and in a short timo become fast tints, which offer no protection whatever. It is a difficult matter to print a sensitive tint without smudging, and on this account tho lithographer or printer frequently LOSES SIGHT OF THE SAFETY FEATURE »nd in order to produce a good lookling piece of work leaves out tho very ingredient which should make the tint sufficiently sensitive. Tho best security against alterations of all kinds should bo found in the paper itself upon which tho document is written. The great valuo of tho distinctive paper lire; in the fact that the user of such paper when once ho is familiar with its distinctive character can thereafter bo assured that ho is getting the article and not merely 6 lithographed cheque which can be altered without removing the background. At Ihe great central banks of Europe the distinctive paper for banknotes is usually manufactured under the direct supervision of tho bank. Less efficient safeguards in many cases are employed for cheques. Tn the United States the distinctive paper for banknotes and paper money is made, under a careful oysteni of counting and cheeking in a Massachusetts paper mill. Tho firrt; use of safety paper for cheques which involves quite different

READING FOR EVERYBODY.

factors from banknote paper, dates hack about half a century. Since 1871 it has been manufactured on a commercial scalo by means of A SECRET PROCESS which has been carefully guarded. This paper is so made that during tho process of manufacture there is combined with the white body of the paper a chemical tint, ornamented with a distinctive design which is conspicuously visible upon the surface of tho paper. This provides at once the requisite distinctiveness, at the same time that tho paper is sensitive to every attempt at alteration. The ornamental tint turns to -white under either acid or mechanical erasure, and it is of such a sensitive character that after being once removed it cannot be restored by any known process.

The properties of the new form are such that tho original writing cannot be altered without so changing the colour of the paper as to make tho forgery apparent, and inthe few cases of attempted fraud which arose tho alteration was easily detected.

in water and put in sawdust in turn-ing-barrels for ten minutes. Then they arc taken from the barrel and put in tho sieve of a fanning-machine and FANNED UNTIL THEY AP.E THEE FHOU SAWDUST. When absolutely clean thoy are sifted into a receiver. Tho pins go from the receiver to a metallic reservoir attached to the "papering" machine, and a woman brushes them on to a thirty-nine barred grating whose bars are so close together that the pins' bends cannot pass. Tho pins, points, down, hang through the. bars. When the prating is full of nins the woman tending it runs a long strip of paper under the roller and starts the machine. Tho sluice bar of tho grating rises and as one row of pins passos out a second bar bears down on the pins' heads, forcing tho pins to run their points evenly and regularly through the paper. Tho simplo bub effectivo manoeuvre is repeated until twelve rows of forty pins each havo l*een mounted on paper. The pin is now ready for marketing.