Bills of Exchange

[Colin Grainger]

HR,

I must admit that your post fairly electrified me. I thought I had misunderstood it. After a few hours mulling it over, I think you are spot on.

It just seems too simple. Imagine: write out a B of E for, say, £5 million, send it off to (who, exactly?), HM Treasury?*, and then have them deposit the money in your bank account.

They have everything they need: a formal Bill of Exchange, a payee, a payor, an account to deposit the sum demanded, and the all important signature.

As V says, this is money creation in its original, pure form. This way you avoid having to actually purchase something, and of course, there is no need to pay it back with interest.

The only problem I see is that you become the first and the third party. (Unless you have them make the payment to your legal fiction).

How close am I to understanding? Do I win a cigar?

* I know it's uncool to have a ? in the middle of a sentence. Sorry.

[huntingross]

Ah Colin..

Well I think this is back to the birth bond or similar....

I'm more interested in the route back to where the Bill came from, ie BT or MBNA for example, their details on the Bill are in the form of their bank details which makes them the draftee....my details appear then to be the payee....they are also the drafter

I keep thinking of one of my cheques....I write someones name on it (payee), it is pre printed with my banks details (draftee) and I wrote it (drafter).

To look at it the other way around if I received a cheque payable to me.....it would have the drafters bank details on it and their signature....I would take it to my bank (acceptee) and ask them to pay it into my account....not the account on the cheque.....so the bank account details on a Bill are clearly where the money comes from NOT where it goes to.

This seems ridiculously simple....you need to pinch me.

[huntingross]

Well this thread is turning into a stream of consciousness....but I do like this extract from the BoE Act :

S7 (3) Where the payee is a fictitious or non-existing person the bill may be treated as payable to bearer.

How many Bills do we receive where the Payee isn't Fictitious.....

[Colin Grainger]

How many Bills do we receive where the Payee isn't Fictitious.....

Can you elaborate on that a bit? The language confuses me. Who is the "bearer", for instance?

[huntingross]

Hi Colin

The bills that we receive are drafted by the corporation for the corporation.....they are the drafter and the payee....we are the draftee (the bank to them).

But that clause says if you have a bill from a fictitious person, you can treat the bill as pay to bearer....that is the person holding it...the holder or holder in due course.

You pay the bill into your account....you fill the giro credit slip in and write a cheque and pay the company.....you give their money back to them to clear the account.

Nett effect to your account is ZERO.

[museman]

Fantastic work HR, it's starting to make sense to me now that I've re-read it

[huntingross]

I have to agree there museman.....if the banks accept this (in the terms of the Act) this will turn the apple cart right over and doesn't go anywhere near the A4V minefield.

If they don't accept this, they are in contravention of their own statues....interesting times ahead.

This word needs to get out there and be put into action....this cancels peoples debts in a single stroke.....playing by 'their' rules.

[IamallthatIam]

Aaaaaaahhhhhhhh........................

[huntingross]

Aaaaaaahhhhhhhh........................

Yes ?

[Colin Grainger]

Looks like a "Eureka!" moment to me.....