TELL ME, WHAT WAS A CHEQUE?

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Back in the day when music was played by musicians and Dick Tracey was the only dude who had a smart watch, the predominant method of paying somebody was by cheque.

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What was a cheque? Well, it was a bit of paper (legal people call it an instrument, which is strange because you can’t play it) which you tore out of your cheque book provided by your bank, wrote on it (date, amount, payee and signature) and give it somebody in exchange for goods, services or even cash.

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Your cheque would eventually find its way back to your bank where the amount would be deducted from your account, unless you had insufficient funds in it, in which case it may be “bounced”.

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To give you a practical example of how that worked, I would give Neville, the publican at the local pub, my cheque drawn on the Rural Bank, and he would give me a sum of money equal to the amount I had written on it. Then I would buy beer until the cash that he gave me was back in his till.

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He would then deposit my cheque, with many other cheques he received in the course of business into his account, let’s say the ANZ.

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How did my cheque my cheque find its way to the Rural Bank for payment? Well, read on.

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In Lismore, there were seven banks, namely the Commonwealth, CBA (not the CBA of today), CBC, Bank of NSW, Rural Bank, ES@A, ANZ, and each day, representatives from each of these banks would meet at an agreed place to exchange cheques. So, an exchange clerk would arrive with an arm full of cheques drawn on the other six banks, do a swap with each and return with an arm full of cheques drawn on his own bank.

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These Exchange Clerks kept a tab on the value of the cheques exchanged and once week they would have a special meeting to settle up.