Comment: Re:Bearer bonds (Score 1) 198
If you look at a personal check, you'll see the words "pay to the order of". A check is an order to your bank to pay to whoever the check is made out to (out of your funds). It can be made out to "bearer", ie., the person bearing (carrying) the check. As soon as the check changes hands, its owner changes and so does the person who has to be paid when the check is presented. A more common way to write such a check is to make it to "cash". In fact, legally a check made out to "bearer" or "cash" should not require a presenter's endorsement. Because whoever is bearing the check is the one to whom the bank was ordered to pay the money (most bank won't honor such an order without an endorsement though). What does that have to do with the bonds? Well, the "bearer" has the same connotation in this context. A bond is a promise to pay at a future date (an IOU). A registered bond is a promise to pay to its rightful owner. A "bearer" bond is a promise to pay to whoever physically holds the bond.