The noun kite denotes a toy consisting of a light frame covered with a thin material, flown in the wind at the end of a length of string. Its original sense is a bird of prey having a long forked tail and long broad wings (the toy was so named because it hovers in the air like the bird).
In commercial slang, with jocular allusion to the paper toy flown in the wind, kite is used to denote a ‘wind-bill’, an accommodation bill, i.e. a bill not representing or originating in an actual transaction, but used for raising money on credit.
A person thus raising money is said to fly a kite. This phrase is first recorded in The Sporting Magazine or Monthly Calendar, of the Transactions of the Turf, the Chace, and every other Diversion interesting to the Man of Pleasure, Enterprise, and Spirit (London) of February 1805:
Flying a kite in Ireland is a metaphorical phrase for raising money on accommodation bills; and on a recent occasion, when the Irish Chancellor, Lord Redesdale, inquired into the meaning of the expression, he was informed by Mr. Plunket, the Solicitor general of that kingdom, “that, in England, the wind raises kites, but in Ireland, kites raise the wind!”
The phrase to raise the wind, attested in the early 18th century, means to procure money or the necessary means for some end. The Morning Post (London) of 1st October 1802 punned on it:
The Irish members are well pleased with the prorogation of Parliament, as the November gale of rent will enable them to raise the wind to carry them over.
The noun kite also denotes a blank cheque or a cheque drawn on insufficient funds or forged from a stolen cheque-book. This sense originated in American English; the following is from Dialect Notes (American Dialect Society – University of Alabama Press, 1927):
Fly a kite, v. (1) To pass a bad cheque. (2) To sell worthless stocks and bonds. (3) To write mournful letters, as of prisoners, to sympathetic old women and charitable institutions.
The third meaning of the phrase in this definition refers to kite as originally used in criminals’ slang to designate an illicit or surreptitious note or verbal message smuggled into, out of, or within, a prison. In Crucibles of Crime: The shocking story of the American jail (New York, 1923), Joseph Fulling Fishman, Inspector of Prisons for the United States Government, explains that sometimes
prisoners manage to plant notes in various parts of the prison which are to be picked up by the intended receipient [sic]. This practice of “shooting” contraband notes is known among the prisoners as “flying a kite.” They are clever enough to put these notes in code, so that if they should be found by any of the guards they would be meaningless.
A different phrase, to fly, or send up, a kite, means to try ‘how the wind blows’ (which is what one does in flying a real kite), i.e. to find out in what direction affairs are tending. The British statesman Henry John Temple (1784-1865), then Secretary of State for Foreign Affairs, thus concluded a letter that he wrote on 12th April 1831 to the British diplomat Granville Leveson-Gower (1773-1846):
Charles John* flew a kite at us for the Garter the other day, but without success. Do not mention this.
* Charles XIV John, King of Sweden (Jean Bernadotte – 1763-1844)