Blank check
From Wikipedia, the free encyclopedia
A blank check (carte blanche, blank cheque), in the literal sense, is a check that has no numerical value written in, but is still signed. In the figurative or metaphoric sense, it is used in politics to describe legislation that is open-ended or vague, and therefore subject to abuse.
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[edit] Literal meaning
Check owners are normally advised to specify the amount of the check before signing it. If created accidentally, blank checks can be extremely dangerous for their owner, because whoever obtains the check could write in any amount of money, and would legally be able to cash it (to the extent that the checking account contains such funds). The 1994 film Blank Check plays on such a situation.
One might give a blank check to a trusted agent for the payment of a debt where the writer of the check 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 check with a notional limit with a statement such as "amount not to exceed $1000". In theory, the bank should refuse to process a check in excess of the stated amount.
[edit] Metaphoric meaning
The metaphor of the "blank check" is thus often used in politics. For example, in the US the Gulf of Tonkin Resolution has been called a "blank check," for it gave the President 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 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 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 was immediately preceding World War I.
It may also be used in service fields. Customers may tell a company to treat the project as their own, which in essence is carte blanche. (To the extent the service meets normal expectations.)
[edit] In literature
Literature's most famous 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. |
” |
[edit] Blank check company
In economics, the term blank check company can refer to a company in development that has no specific business plan yet.
However, the term usually applies to a shell company with little or no employees, little or no physical assets, and no products whose business plan is to merge with or acquire some unidentified company or companies. (For example: Fortress America)
These very small companies typically involve speculative investments and often fall within the U.S. Securities and Exchange Commission’s definition of penny stocks or are considered microcap stocks.
In the United States, the Securities Act of 1933 (under Rule 419) requires blank check companies disclose the terms and conditions of their offering as well as place any funds received from the offering into an escrow account.
