Let’s say you walk into your bank in America and present $ 100,000 to the bank, and ask them to make a Cashier’s Cheque for you. No problem they say! The teller types one up, and charges you $ 10 extra for it and then ask you:
“Sir, what beneficiary name would you like on your cashier’s cheque?”
“No name. Please leave it blank” you say.
“Sorry Sir, I need a name. I cannot leave it blank!” the Teller replies back.
“Sure you can. There is no law that says there has to be a name on it right now? is it? Ask your manager and he (or she) will confirm!” you reply back with confidence.
So the teller walks over to the Manager who walks in. The Manager is a very seasoned banker and she asks you…
“Sir, do you know if I offer a blank cashier’s cheque to you, anyone, and I mean anyone who walks in with a valid ID and the name that is scribbled where the beneficiary’s name is — I will have to cash the cheque. Regardless! Do you understand that?” she quizzes you!
“Yes, I do! and that is exactly what I want,” you reply back.
“Okay! In that case, please sign the indemnification here, and I will have it issued to you, and oh, we will charge an extra $ 15 for it”.
“No problem!” you reply back, as you sign the indemnification document.
You walk out of the branch that day! Smiling. You are holding in your hand what is essentially a bearer financial instrument. Whomsoever holds it — holds the money.
The Manager is thinking, what a weirdo! Roaming about with an open-ended IOU of the bank. Anyone who gets a hand on that piece of paper and scribbles their name on it — gets the money! Even if the instrument is stolen or lost — whomsoever brings it in, this bank will cash it! and only this bank can cash it in.
But no worries. They are covered by the indemnity and they have the $ 100,000 with them anyways.
You walk back into the bank branch, the Teller is mildly surprised to see you back here again…
“How may I help you sir?” she says with a smile!
“Well, you know the cashier’s cheque I made yesterday, for a $ 100,000 with no name on it?”
“Yes, of course! Would you like to change it? Perhaps with a name on it this time?” she says with a tad bit of sarcasm!
“Nope. I’m quite happy with that!” You deposit another $ 100,000 on the counter and tell the Teller “I would like TEN cashier’s cheques for $ 10,000 each. Beneficiary details to be left blank”
“Let me get this straight. Same deal as yesterday, except 10 cheques, for $ 10,000 each, beneficiary details to be left blank?” says the Teller with a slightly confused look.
“Yes!” you reply!
“I need to call the Manager for this again!” she replies and turns away to call the Manager.
Whilst walking back to the counter she quickly updates the Manager with your request.
“So,” says the Manager, “If I read you correct, you want 10 cheques, for $ 10,000 each, beneficiary details to be left blank? Correct?”
“Yes!” you reply back with confidence.
“Okay! Your money! We will charge $ 150 for this arrangement!” she says and you quickly reply back “Fine!”
Half an hour later, you’ve signed the indemnification document, and are holding 10 cashier’s cheques, IOUs essentially, for $ 10,000 each.
The bank, on the other hand, was very happy to take your $ 150 and the $ 100,000. Easy income!
You walk in the branch and this time, both the Teller and the Bank Manager happen to be next to each other when they see you enter the bank. Their eyes following your every step as you slowly come closer.
You approach the counter and plunk $ 100,000 in deposit and say…
“Hello, ladies. I would like a repeat of yesterday. Except for one slight change. I would like 100,000 cheques of $ 1 each” you say without breaking a sweat.
Jaws drop and both the ladies raise their eyebrows and say in unison “Excuse me!”
“I would like 100,000 cheques and…” you are then interrupted by the Manager “Yes! I heard you the first time around — — but I am afraid that is impossible!” she says.
“Why?” you ask.
“Because there is no way we can give you 100,000 cheques today. I don’t even think the entire county has 100,000 cashier cheques.”
The teller quick on the calculator then says… “Just to type them up would take what, 2 minutes per cheque, 200,000 minutes???? — what is that?”
“138 or so days, working 24/7!” you reply back.
