This Day in History (16-Feb-1659) – 1st known cheque (£400) (on display at Westminster Abbey)

There are early evidences of using cheques. In India, during the Mauryan period (from 321 to 185 BC), a commercial instrument called adesha was in use, which was an order on a banker desiring him to pay the money of the note to a third person, which corresponds to the definition of a bill of exchange as we understand it today. During the Buddhist period, there was considerable use of these instruments. Merchants in large towns gave letters of credit to one another. In early 1500s, the check first got widespread usage in Holland. Amsterdam in the sixteenth century was a major international shipping and trading center. People who had accumulated cash began depositing it with Dutch “cashiers,” for a fee, as a safer alternative to keeping the money at home. Eventually the cashiers agreed to pay their depositors’ debts out of the money in each account, based on the depositor’s written order or “note” to do so.

The first known handwritten cheque in Britain was signed in 1659 on this day. It was made out for £400, signed by Nicholas Vanacker, and made payable to a Mr Delboe and drawn on Messrs Morris and Clayton, scriveners and bankers of the City of London. The world “check” also may have originated in England in the 1700s when serial numbers were placed on these pieces of paper as a way to keep track of, or “check” on, them. As checks became more widely accepted, bankers encountered problem of collecting the money due from so many other banks. At first, each bank sent messengers to the other banks to present checks for collection, but that meant a lot of traveling and a lot of cash being hauled around. The solution to this problem was found at a British coffee shop. The story goes that a London bank messenger stopped for coffee and noticed another bank messenger. They got to talking, realized that they each had checks drawn on the other’s bank, and decided to exchange them and save each other the extra trip. The practice evolved into a system of check “clearinghouses”—networks of banks that exchange checks with each other—that still is in use.

The use of cheques peaked in 1990 but has dropped significantly since being partly replaced by electronic payment systems. Today two-thirds of under 25s have never written a cheque.

 

Reference:

http://www.historyorb.com/day/february/16

http://www.computerweekly.com/news/2240088409/Cheque-is-350-years-old-today-lingering-death-expected

http://en.wikipedia.org/wiki/Cheque

http://www.infoplease.com/ipa/A0001522.html

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