The superstructure of business as it exists today rests on the broad foundation of confidence - the result of what may be called the evolution of commerce, and the principal stages in this evolution are an interesting study. First there was only barter in kind, as still practiced among savages - for example, the exchange of a bushel of corn for a handful of arrow-heads. Then came the introduction of money as a medium of exchange; and today we have the substitution of negotiable paper as documentary evidence of indebtedness, including promissory notes, due bills, drafts, checks, certificates of deposit, bills of exchange, bank bills, treasury notes (greenbacks), and all other evidences of debt, the ownership of which may be transferred from one person to another.

The mere acknowledgement of debt is not sufficient to make negotiable paper; the promise of payment or an order on someone to pay is indispensable. This promise must be for money only. The amount must be exactly specified. The title must be transferable. This feature must be visible on the face of the paper by the use of such words as "bearer" or "order." In some of the States peculiar phrases are ordered by statute, as "Payable without defalcation or discount," or "Payable at ------," naming the bank or office.

A written agreement, signed by one person, to pay another, at a fixed time, a stated sum of money, is a promissory note. It becomes negotiable by being made payable to an order on some one or to bearer. As it is a contract, a consideration is one of its essential elements. Yet, although it be void as between the two first parties, being negotiable and coming into the hands of another person who gives value for it, not knowing of its defect, it has full force and may be collected.

The date is of great consequence. In computing time the day of date is not counted, but it is the fixed point beginning the time at the end of which payment must be made. Omission of the date does not destroy a note, but the holder must prove to the time of its making. The promise to pay must be precise as to time which the note is to run. It must be at a fixed period, or conditional upon the occurrence of something certain to happen, as "at sight" "five days after sight," "on demand," "three months after date," "ten days after the death of John Doe." The time not being specified, the note is considered "payable on demand."

The maker, the person who promises and whose signature the note bears, must be competent. Insane people and idiots are naturally, and aliens, minors and married women may be legally, incompetent. The maker is responsible and binds himself to pay the amount stated on the note at its maturity. He need not pay it before it becomes due, but should he do so and neglect to cancel the note, he would be again responsible if any other person, without knowledge of such payment, acquired it for value before maturity. Even a receipt for payment from the first payee would not stand good against the subsequent holder.

The payee is the person in whose favor the note is drawn - the legal holder, the person to whom the money must be paid. When a note is made payable simply to bearer, without naming the payee, any one holding the note honestly may collect.

A subsequent party, one who comes into possession of the note after the original holder, has a better claim than the first one, for the reason that between the maker and the first payee there may have been, in the contract, some understanding or condition militating against the payment when it would become due, but the third person, knowing nothing of this, gives his value and receives the note. The law will always sustain the subsequent party.

The indorser is held responsible if the maker fails to pay when the note arrives at maturity. A note payable to order must be indorsed by a holder upon passing it to another, and, as value has been given each time, the last holder will look to his next preceding one and to all the others.

A note, being on deposit as collateral security, becoming due, the temporary holder is the payee and must collect.

An indorsement is a writing across the back of the note, which makes the writer responsible for the amount of the note. There are various forms of indorsement:

1. In blank, the indorser simply writing his name on the back of the note.

2. General, or in full, the indorser writing above his signature, "Pay------------" or "Pay------------or order."

3. Qualified, the words "without recourse" being used after the name of the payee in the indorsement.

4. Conditional, a condition being stated, as: "Pay------------, unless payment forbidden before maturity."

5. Restrictive, as: "Pay------------only."

The blank indorsement, the full indorsement and the general indorsement are practically the same; each entitles the holder of the note to the money, and to look to the indorser for payment if the maker of the note defaults. It has even been held that in a general indorsement the holder had the right to fill in the words "or order" if he saw fit. The qualified indorsement releases the indorser from any liability in case the maker of the note defaults. The conditional and restrictive indorsement are used only in special cases. Bach indorser is severally and collectively liable for the whole amount of the note indorsed if it is dishonored, provided it is duly protested and notice given to each. The indorser looks to the man who indorsed it before him, and so back to the original maker of the note. As soon as a note is protested, it is vitally necessary that notice should be sent to each person interested at once.

To be on The Safe side, it is well to see to it that any note offered for negotiation Is dated correctly;

Specifies the amount of money to be paid;

Names the person to whom it is to be paid;

Includes the words "or order" after the name of the payee, if it is desired to make the note negotiable;

Appoints a place where the payment is to be made;

States that the note is made "for value received;"

And is signed by the maker or his duly authorized representative.

In some States phrases are required in the body of the note, such as, "without defalcation or discount;" but, as a general thing, that fact is understood without the statement.