The first cheques
By the 17th century, bills of exchange were being used for domestic payments as well as international trades. Cheques, a type of bill of exchange, then began to evolve. They were initially known as ‘drawn notes’ as they enabled a customer to “draw” on the funds they held on account with their banker and required immediate payment. One of the earliest handwritten cheques known still to be in existence was drawn on Messrs Morris and Clayton, scriveners and bankers based in the City of London, and dated 16 February 1659. It was for £400 (about £43,000 today) made payable to a Mr Delboe and signed by Nicholas Vanacker.
At the very first meeting of the Court of the Bank of England on 27 June 1694, it was decided that customers who deposited money would have the choice of three types of account. One of these allowed customers to draw notes on the Bank up to the extent of their deposits.
These ‘drawn notes’ had themselves evolved from the ‘transfer in bank’, an authority to a banker to pay money to a named person, and took some time to become popular, being overshadowed by the use of bills, bearer notes, and later, Bank of England notes.
First printed cheques
The earliest drawn notes, such as the Vanacker cheque, were all written in letter form such as “Mr Speed [the Chief Cashier], please pay….” but the Bank of England pioneered the use of printed forms, the first of which were produced in 1717 at Grocers’ Hall, London. The customer had to attend the Bank of England in person and obtain a numbered form from the cashier. Once completed, the form had to be authorised by the cashier before being taken to a teller for payment. These forms were printed on ‘cheque’ paper to help prevent fraud – and cheques today are still printed on special paper for this purpose. Only customers with a credit balance could get the special paper and the printed forms served as a check that the drawer was a bona fide customer of the Bank of England and not a fraudster. The printed slips had scrollwork at the left-hand edge which could be cut through, leaving part on the cheque and part on the counterfoil – the real “check” – which is how the cheque got its name.
Examples of these early forms of security printing are shown here. The Boldero, Carter, Barnston & Snaith items show both black and white and one of the earliest uses of colour.
The Oxford English Dictionary says the earliest use of the term ‘cheque’ (as opposed to ‘drawn note’) dates to an Act of 1706 which provides for Exchequer Bills to have two counterfoils instead of one and that “the Governor & Company [of the Bank of England] shall have the use and custody of the one part of all and every the cheques, indents or counterfoyles of all such Exchequer Bills, from which the same Exchequer Bills shall be cut”.