Blank cheque

A blank cheque or carte blanche (USA: blank check), in the literal sense, is a cheque that has no numerical value written in, but is already signed. In the figurative or metaphoric sense, it is used (especially in politics) to describe a situation in which an agreement has been made that is open-ended or vague, and therefore subject to abuse, or in which a party is willing to consider any expense in the pursuance of their goals.

Literal meaning

Cheque users are normally advised to specify the amount of the cheque before signing it. If created accidentally, a blank cheque can be extremely dangerous for its owner, because whoever obtains the cheque could write in any amount of money, and would be able to cash it (to the extent that the chequing account contains such funds, also depending on the laws in the specific country).

One might give a blank cheque to a trusted agent for the payment of a debt where the writer of the cheque does not know the amount required, and it is not convenient or possible for the writer to enter the amount when it becomes known. In many cases, it is possible to annotate a cheque with a notional limit with a statement such as "amount not to exceed $1000". In theory, the bank should refuse to process a cheque in excess of the stated amount.

The "formal" American legal term for a blank cheque is an incomplete instrument – rather, a blank cheque is an example of an incomplete instrument, which more generally is any incomplete signed writing – and these are covered in the Uniform Commercial Code's Article 3, Section 115.^[1] Filling in an amount into a blank cheque, without the authority of the signer, is an alteration (covered in Article 3, Section 407), and is legally equivalent to changing the numbers on a completed (non-blank) cheque, namely that the cheque writer is not liable for the cheque. However, the cheque writer has the burden of proving that the alteration was not authorized.^[2]

Counter cheque

Blank cheque was also commonly used as a synonym for counter cheque. Before the Federal Reserve established regulations in 1967^[3] requiring that cheque be MICR encoded in order to be handled by their clearing houses, it was fairly common for banks, especially in small towns, to issue cheque to customers which were not personalized other than the name of the bank.

Businesses would have pads of counter cheque which did not even have the bank specified on them - the customer had to not only fill in the value of the cheque, the date, and their signature, but also had to designate the bank on which funds were to be drawn.

Metaphoric meaning

The metaphor of the "blank cheque" is thus often used in politics. For example, in the United States, the Gulf of Tonkin Resolution has been called a blank cheque as it gave the President, Lyndon B. Johnson, the power to "take all necessary measures" to prevent "aggression" in Southeast Asia. These powers were then used to escalate the Vietnam War. Many in the United States Congress protested, but were helpless to effect change, for the Tonkin resolution's terms were too subjective to enforce.

This term was also used to describe how the Kaiser Kaiser Wilhelm II of Germany told Austria-Hungary officials that they could deal with Serbia however they wanted after Serbian Nationalists assassinated the heir to the throne of Austria-Hungary, Archduke Franz Ferdinand. This immediately preceded World War I.

An example of the second metaphorical usage can be seen in a BBC News article, in which Gordon Brown, the then Chancellor of the Exchequer, offered a 'blank cheque', and would thus '"spend what it takes" to tackle Iraq's weapons of mass destruction.'^[4]

It may also be used in service fields. Customers may tell a company to treat the project as their own, which, in essence, is a carte blanche. (To the extent the service meets normal expectations.)

After the September 11 attacks, many described President George W. Bush's reaction as giving the federal government a "blank cheque" in order to hunt down those responsible to the attacks and prevent such attacks from happening again.

In literature

A renowned literary carte blanche (literally 'white card') was handed out by Cardinal Richelieu in Alexandre Dumas, père's The Three Musketeers:

Dec. 3, 1627

It is by my order and for the good of the state that the bearer of this has done what he has done.

Richelieu

or in French:

3 décembre 1627.

C'est par mon ordre et pour le bien de l'Etat que le porteur du présent a fait ce qu'il a fait.

Richelieu.

Sir Arthur Conan Doyle used the term carte blanche in several of his Sherlock Holmes stories.

A Scandal in Bohemia

"Your Majesty will, of course, stay in London for the present?”

“Certainly. You will find me at the Langham under the name of the Count Von Kramm.” “Then I shall drop you a line to let you know how we progress.” “Pray do so. I shall be all anxiety.” “Then, as to money?” “You have carte blanche.” “Absolutely?” “I tell you that I would give one of the provinces of my kingdom to have that photograph.”

The Adventure of the Beryl Coronet

"I understand that you give me carte blanche to act for you, provided only that I get back the gems, and that you place no limit on the sum I may draw.”

“I would give my fortune to have them back.”

Blank cheque company

In economics, the term blank cheque company can refer to a company in development that has no specific business plan yet. For a fuller discussion of blank cheque companies, see Special purpose acquisition company.

See also

• Blank endorsement
• Cost-plus contract
• List of political metaphors

References