You can look at something all your life and never quite see it. Then suddenly, one fine day, it snaps into focus and makes you wonder.
I was updating my wife's checkbook — we pay bills online like the rest of the modern world, but still send checks sometimes, plus balancing a check book ensures we actually look at where the money is going — and noticed the standard phrase beside where the recipient's name goes: "Pay to the Order of."
I was updating my wife's checkbook — we pay bills online like the rest of the modern world, but still send checks sometimes, plus balancing a check book ensures we actually look at where the money is going — and noticed the standard phrase beside where the recipient's name goes: "Pay to the Order of."
We know what "pay" means —give 'em the money . But why "order"? What does order mean in this context? What is a person's order that we can pay it?
AI is a little helpful, tending to consider the whole phrase and not wanting to pull "order" out. Though it does contrast "order" with "bearer," which is helpful. A financial instrument paid to the order has to be cashed by a specific person, as opposed to pay to the bearer, which is good for whoever has it in hand.
Still, an old school investigation seemed in, ah, order.
A reminder that "order" is like "set," one of those words with oodles of definitions. Off the top of my head: a sequence of events. A state free from disturbance. A request for goods, in a restaurant or a business. A military command. Samuel Johnson offers 14 meanings in his 1755 dictionary, quite succinctly stated, starting with, "1. Method, regular disposition. 2. Established process. 3. Proper state" and including a few I hadn't considered, such as "8. A society of dignified persons, distinguished by marks of honour" and "12. Means to an end," which fits with my "seems in order" usage above.
None quite fit the bill for our check, however.
Noah Webster serves up 15 definitions in his 1828 dictionary, some clearly lifted, such as "15. In architecture, a system of several members, ornaments and proportions of columns and pilasters" which is Johnson, word for word.
The Oxford English Dictionary has more than two full pages of definitions, and a semi-careful reading didn't find anything that would explain my check.
Noah Webster serves up 15 definitions in his 1828 dictionary, some clearly lifted, such as "15. In architecture, a system of several members, ornaments and proportions of columns and pilasters" which is Johnson, word for word.
The Oxford English Dictionary has more than two full pages of definitions, and a semi-careful reading didn't find anything that would explain my check.
It struck me that this was a situation where you needed the right tool for the job. We are a household that is nothing if not rich in dictionaries, and I borrowed my wife's old Black's Law Dictionary, Fifth Edition. There the second definition is what we're looking for: "A designation of the person to whom a bill of exchange or negotiable promissory note is to be paid. An 'order' is a direction to pay and must be more than an authorization or request. It must identify the person to pay with reasonable certainty."
So why is it still on checks? Why not just say, "Pay..." and the person's name?
Black's explains that too, in its definition of "Check, n. A draft drawn upon a bank and payable on demand." It continues later with the Federal Reserve Board's definition of a check, ending: "It must contain the phrase 'pay to the order of.'"
And so they do. "Order" is on checks, part of a phrase that is an obligatory legalism. As to why we're still using checks ... it aids record keeping, and is useful under certain circumstances: handing some money to someone without resorting to Zelle or Venmo or whatever the e-banker of the moment happens to be.
So why is it still on checks? Why not just say, "Pay..." and the person's name?
Black's explains that too, in its definition of "Check, n. A draft drawn upon a bank and payable on demand." It continues later with the Federal Reserve Board's definition of a check, ending: "It must contain the phrase 'pay to the order of.'"
And so they do. "Order" is on checks, part of a phrase that is an obligatory legalism. As to why we're still using checks ... it aids record keeping, and is useful under certain circumstances: handing some money to someone without resorting to Zelle or Venmo or whatever the e-banker of the moment happens to be.
Interesting and never thought of that.
ReplyDeleteAnd that is why the credit union from yesterday is at fault and should return Jack's $100 to Wintrust Bank. Plain and simple. Open and shut.
ReplyDeleteCredit Unions aren't allowed to call them checks, or even "cheques."
DeleteOnly banks have checks. Credit Unions have share drafts.
ar·cane /รคrหkฤn/adjective
1. understood by few; mysterious or secret.
I wouldn’t give any more money to the order of Sam Zell - he took too much already…๐
ReplyDeleteZelle is the banking app version Neil ๐
Fixed, thanks.
DeleteZelle
ReplyDeleteGreat article!!
ReplyDeleteUntil reading this column, like you, I had never given it much thought. I am grateful for the edification.
ReplyDeleteThe sole reason I have even bothered to possess a checkbook for the past 8 or 9 years is because our luddite landlord refuses to dip his toe into the 21st century and begin accepting e-payments.
Good for your landlord. I am also a Luddite. I want to own my posessions including money. Read a screed against checks saying they should die in favor of digital currency not just for convenience, but for security. BS served on toast! More people are financially damaged, in the billions, by digital crime than check thieves. It's also next to impossible to track, capture or prosecute digital criminals. They've got more brains than most of us and no morals, zero.
DeleteAnd the few cyber criminals that do get caught and punished simply buy pardons via their hidden digital slush funds.
I stick my toe into the 21st century, but my privates remsin mine.
By definition, then, it seems fairly obvious that the credit union that honored Jack Clark’s fraudulently endorsed check (from yesterday’s EGD) neglected their legal obligation and fiduciary duties
ReplyDeleteI use a spreadsheet to balance checking accounts. Much more convenient than the traditional paper mess attached to the checkbook.
ReplyDeleteHah! Just wait till you have to make Required Minimum Distributions from your IRA. One way to reduce the tax burden of the RMDs is to make your charitable contributions direct from your IRA. For each contribution, you can either arrange a transfer of funds with the IRA trustee (burdensome for everybody except maybe for large contributions that are out of my league) or you can write and mail a check.
ReplyDeleteIn its wisdom, the IRS does not permit this to be done online or using a debit card. So for the past several years I’ve been writing checks and sticking stamps on envelopes. What a vague and 20th Century way to do charitable business!
The last time I purchased checks, I bought them through Costco. As you can imagine, the order is Costco-sized. Every so often, I get an email, reminding me to reorder checks. I do believe that I literally have enough for the rest of my life. I don't write out many, but I send checks for Christmas and birthdays because I ain't puttin' cash in the mail.
ReplyDeletehow wonderfully arcane
ReplyDeleteWe split things pretty evenly. Half online and half with checks.
ReplyDeleteMy wife likes the idea of having a paper trail. Works for us.
She's used a checkbook for decades. We're pushing 80, and no scams yet
I recently gave up check writing for all of our regular monthly bills. I'm away from home a great deal during the warmer months, and the bills were arriving at inopportune times. I'm obsessive about paying bills on time. I do the automatic payment option and watch my bank account closely.
DeleteOn a general level, I regard checks as taking a less-visible path through the... um, I was going to write "financial network"... then tried "Internet"... oh, let's just say a less-visible path through the world, as compared to digital transactions floating around God-knows-where being seen, viewed or copied by God-knows-who.
ReplyDeleteYes, I pay my major bills from major entities on-line. You have to have some trust that the bigger outfits have their act together—not always a good idea, I know; I think I'm on my third Discover card number—but for local small businesses, they get our checks, not our credit card numbers. I think JPMorgan Chase is reasonably secure; I can't say the same for the dentist's office with software operated on an old PC by a semi-retired senior who comes in once a week.
I had a money market account I was putting money in for years, rarely wrote checks from it except for big purchases. Because of that fact, I wasn't diligent about keeping track of the monthly statements. By the time I realized this, it turns out the account was being cleaned out by a close relative who had gotten ahold of the package of checks. Daily checks for thousands of dollars written out to cash and signed with a signature that looked nothing like mine. And the Bank of America cashed them all. My bank knew in 5 minutes that this was a case of fraud, especially since I rarely wrote checks from the account. I did everything they required: made out a fraud statement for every one of the checks, filed a police report. But they refused to return any of my money. Which is why I'm still working on past retirement time.
ReplyDeleteNow do drafts, instruments used by insurance companies to make payments that must be approved by the insurer when presented by the insured.
ReplyDeleteI love my checkbook register. It keeps me sane. I still write checks at the mechanic’s; he said it was cheaper. I wrote a check when I bought my car 10 years ago. Cash is still king.
ReplyDelete