IMPROVE- MENTS IN CHECKS, MONEY ORDERS, AND BANK NOTES
Year: 1876

page_text: LETTERS PATENT to James Boorman Johnston, of the City, County, and State
of New York, in the United States of America, for the Invention of "IMPROVE-
MENTS IN CHECKS, MONEY ORDERS, AND BANK NOTES."
COMPLETE SPECIFICATION filed by the said James Boorman Johnston at
the Office of the Commissioners of Patents on the 29th May 1876.
JAMES BOORMAN JOHNSTON, of the City, County, and State of New York, in
the United States of America. "IMPROVEMENTS IN CHECKS, MONEY ORDERS, AND
BANK NOTES."
My Invention has for its object to provide for public use a cheque, money order,
bank note, draft, or other evidence of indebtedness, which shall be payable on
demand and shall bear interest from the date of its issue or from such other time
as may be designated upon it for the purpose of securing to the operative or other
holder all the advantages of a savings bank deposit without the disadvantages at-
tending the placing of money in an ordinary savings bank. It is designed for use
more especially by large firms or corporations in paying their employés for the
purpose of enabling the latter to receive interest upon their wages or salaries in
small amounts from the day of payment, although it may be applied to other uses.
To this end the Invention consists in a cheque, money order, or bank note, draft,
or other written evidence of indebtedness payable upon presentation or demand,
and bearing interest payable at rates and times specified, such amounts of interest
so payable at definite times being designated either by means of coupons payable
respectively when the interest stated on each shall have accrued, or by means of
some equivalent device or contrivance, the whole being properly secured and the
security expressed upon the cheque.
In carrying out this Invention the cheques are issued in denominations of one
two, five, twenty, one hundred, or one thousand pounds sterling, or other desirable
amounts, and provided with interest coupons covering the interest at a fixed rate
on the amount stated on the face of the cheque for one year, more or less, and duc
in three, six, nine, and twelve months, or at other stated times.
The security for the holder is expressed in any convenient place upon the cheque,
generally upon the back, and is preferably by hypothecation to a third party of
a certain amount of mortgage bonds on the real estate of the drawer or by other
[Price 2d.1

page_text: property of the drawer. The cheque is good for its face at any time upon demand,
and if held until an interest coupon becomes due it will be good for its face and
interest at the rate of a certain per centum per annum.
If a coupon is cut off before it is due the cheque will not be paid until the
missing coupon is returned or becomes due, and when the last coupon is due the
cheque may be collected or exchanged for a new one with coupons for another
year or additional period of time. The coupon cheque in effect puts an employe's
money into a savings bank as soon as received, and yet can be exchanged at once
for money if preferred.
Savings banks do not, as a rule, pay interest from the time a deposit is made
unless the money is allowed to remain a certain length of time.
By my improved coupon check the moment an employé receives his wages
or salary it begins to draw interest without any effort of his, and in addition
avoids the time and trouble of making a deposit in the savings bank. The use
of the cheque therefore becomes of great value to employés as it encourages them
to save a certain amount of money every week or month or other pay day.
They readily understand that by holding the cheque it will pay them a certain
interest every few months, whereas if they received their entire wages in money
they would be more likely to spend it because of the time and trouble attending
its deposit in a savings bank, and they are further led to hold the cheque by the
knowledge that in the event of sickness or discharge the face of the cheque will be
paid upon demand.
In another respect the cheques tend to the advantage of employés because they
may be transferred by delivery only from one to another upon payment of the face
of the cheque and the accrued interest, so that a workman leaving the employ of
the company or becoming incapacitated for work from any cause will realize some-
thing from the cheques in addition to their face.
1 am aware that bonds and certificates of deposit are provided with interest
coupons, but neither of these includes the principle of my Invention, nor do they
meet the wants of employés who receive small wages. The principal or face of
the bonds is not payable upon demand, and can only be realized by the bondholder
after all the interest coupons have become due, generally after the expiration of a
number of years, while the certificate of deposit only pays interest after a certain
length of time from its issue, and never is the face of the certificate paid without
the surrender of the interest coupons.
Having thus described my Invention what I claim and desire to secure by
Letters Patent is, a cheque, money order, bank note, draft, or other security
having on its face words indicating its payment on demand and having interest
bearing coupons attached or the equivalent thereof, substantially as herein-before
described.
In witness whereof, I, the said James Boorman Johnston, have hereunto set
iny hand and seal, this Twenty-sixth day of May, in the year of our Lord
One thousand eight hundred and seventy-six