This section is from the book "Elementary Banking", by John Franklin Ebersole. Also available from Amazon: Elementary Banking.
The essential characteristic of promissory notes is the same as that of bills - the fact that they can be passed from one person to another. This negotiation is effected either (1) by merely handing it from one person to another when the note is made payable "to bearer" or where the indorsement is "in blank," or (2) by indorsement. It will be remembered that a draft must have certain things present in order to be negotiable. The same things are necessary with promissory notes, viz.: (a) It must be in writing and signed by the maker; (b) it must contain an unconditional promise to pay a definite sum in money; (c) it must be payable on demand, or at some fixed or determinable future time; (d) it must be payable to order or to bearer. A summary of the formal requisites of a note which make it negotiable would give us the following (from the Negotiable Instruments Law): "A negotiable promissory note is an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand, or at a fixed or determinable future time, a sum certain in money to order, or to bearer." A note may be non-negotiable if the words "bearer" or "order" do not appear on its face.