Negotiable instrument
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Banking basics
A recap of a few things you’d think financial professionals ought to know 
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So I took my cow
And I cashed it against the wall.
I cashed it against the floor.
I cashed it against the body of a varsity cheerleader.
Cashed it against the hood of a car.
Cashed it against a 1981 Harley-Davidson.
And I ran upstairs to my parents’ bedroom, where
Mommy and Daddy were sleeping quietly in the moonlight. Slowly I opened the door —
Creeping into the shadows, right up to the foot of their bed,
I raised the cow high above my head,
And just as I was about to bring it crashing down —
My father woke up, screaming “STOP!!”
“Wait a minute! Stop it, boy! What do you think you’re doing?”
“That’s no way to treat an expensive negotiable instrument!”
And I said, “Goddamn it, Daddy: you know I love you,”
“But you’ve got a hell of a lot to learn about Rock ’n’ Roll.”
- —Jim Steinman, Love, Death and an American Milking Devon
Negotiable instrument
/nɪˈgəʊʃiəbəl ˈɪnstrʊmənt/ (n.)
An instrument conferring a right to a payment of money or the delivery assets which the bearer can, without the issuer’s consent, transfer to a third party (a process known as, confusingly, as “negotiating”).
These days, negotiable instruments are more or less the same as transferable securities, but in the good old days banker’s drafts, cheques, bills of exchange, promissory notes and — well, large ruminant herbivores[1] — which did not count as securities but were nonetheless negotiable.
“A/C payee only”
The JC used to keep his chequebook in a draw with spare batteries, mousetraps and dried cannelloni. It is still there, as far as I know.
Fellow senior citizens may remember diligently “crossing” their cheques “not negotiable, account payee only”.
This was, at the time, automatic behaviour. It felt somehow prudent; the sort of thing a reasonable person would do, though thinking back on it now, for the life of me, I can’t remember why. Why constrain what a fellow merchant would do with ones’s banker’s drafts once they have been handed over?
Crypto
The new generation of crypto-currencies (you know, like bitcoin) may just usher in a new golden era for negotiable instruments. We’ll see.
See also
- Bills of Exchange Act 1882
- Legal instrument
- Financial instrument
- Expensive musical instrument
- The negotiable cow
- promissory note for an amusing passage from Anthony Trollope’s The Way We Live Now.
- Rome II which excludes from its ambit non-contractual disputes arising out of the negotiable nature of negotiable instruments.
- Bitcoin
References
- ↑ Mansuetae naturae, needless to say.