“ In this popular usage these documents are called commercial paper because they are themselves objects of commerce. In our use of the term the adjective "commercial" applies to them only when they play the rôle of intermediary in a process of exchange through credit. In this sense it is a matter of indifference whether they pass through the hands of brokers or not, and the fact of their being objects of purchase and sale does not confer the quality of commercial paper upon documents having an origin and character other than that above described. ”
Commercial paper
Definition and stakes
Commercial paper is an unsecured short-term promissory note issued by corporations to address immediate financial requirements, typically maturing within 270 days. Supported only by the issuer’s creditworthiness, it serves as a negotiable instrument traded in money markets, offering flexibility and reduced costs compared to conventional loans. Scholars such as Frank O. Butler and Edward Arthur Dawe examined its use in commercial and industrial contexts, underscoring its importance in publishing and manufacturing.
Butler emphasized its expansion as a fundamental component of the paper industry, while Dawe outlined its specialized applications, ranging from map printing to counterfeit-proof checks. The theme highlights commercial paper’s dual role as both a financial instrument and a physical product, illustrating its relevance in corporate finance and industrial output. Its characteristics are influenced by credit ratings, market liquidity, and regulatory structures, making it an essential yet volatile element of contemporary economic systems.
Quotes about “commercial paper”
Frank O. Butler, The Story of Paper-making
“ An increase of such phenomenal proportions as indicated by these figures makes tremendous demands upon allied and tributary industries, but the increase in the production of paper of the variety required has been sufficient to meet these demands. These conditions, however, affect only125 one branch of the industry. The increase in the publication of books, together with the multiplicity of commercial and industrial uses to which paper may be put, as briefly outlined in the preceding chapter, explain an expansion that would otherwise be inexplicable. ”
Edward Douglass White, De Jonge v. Magone — Opinion of the Court
“ It is not reasonable to suppose that congress assumed that the manipulation or treatment of particular paper, in the completed condition in which produced at a paper mill, by mere surface coating,-a process which did not change its form, but only increased the uses to which such paper might be put,-had the result to cause the article to cease to be paper and to become a manufacture of paper, especially in view of the continued commercial designation of the article as a variety of paper, and its sale and purchase in commerce as paper. ”
