The Secret History of the Tally Stick

Money as Debt

All this is illustrated by the split tally. The sides of a twig of seasoned hazelwood or willow were shaved to create a square section along its length. Some tallies were as short as five inches. Later, partly due to inflation, some became much longer. Just as it had been done for tens of thousands of years before, notches were cut crosswise into one side of the stick, and sometimes into the opposite side as well. These notches could represent goods or amounts of money. Cuts and notches, of different widths, recorded amounts of money according to established conventions. The amounts in the agreement would also be recorded on the side of the tally in ink. 

It was then split along most of its length, dividing the notched side and its obverse into two separate pieces. One section at the end of the tally (without notches, for about an inch or more) remained intact. The result was two pieces of wood, one longer than the other, but both carrying the same notched records. There were helpful irregularities in the wood grain and its carving. The two pieces could be brought back together to verify the record of the agreed transaction. The irregularities helped to show that the two parts were authentically related. Fraud was difficult or impossible. Money is a duality – a debt and a credit, based on a relational agreement sanctioned by law. The tally stick was split to represent this.(3) 

As shown below, a curved notch, about the width of a thumb, represented £100. To the right of this in the picture, a ”V” is incised. This represents £20. To the right of that, with “the width of a ripe barleycorn” is a notch representing £1. Two further notches to the right, of diminishing widths, represent 1 shilling and 1 penny respectively. The total value of the tally in the picture is £121 plus 1 shilling and 1 penny. 

The shorter part was called the foil or stub, the longer part was called the stock. The foil indicated an obligation to pay the stockholder. In accounting terms, it was a liability. The stock was the IOU given to the creditor. It had positive value – an asset for its legal owner. The legal contract that was recorded on the tally, followed by it being split, created a positive monetary value and a numerically equal negative amount, on two pieces of wood of negligible intrinsic worth.(4)

The money was not created out of physical stuff, but out of the legal and customary social arrangements that allowed the creation of debt and an expectation of its recovery. The stock could be sold to a third party, typically at a discount. The discount partly reflected the cost and difficulty of finding the debtor and enforcing payment. The tally stock is the etymological origin of financial stocks. 

The widespread use of the tally stick as money depended on the previous evolution of money as a legally enforced unit of account. Tally sticks did not originate money. But they played a crucial and continuous role in the development of medieval and modern monetary systems until the nineteenth century. Much commerce in medieval times was carried out using tallies. One of the functions of medieval fairs was to bring tally users together to reconcile their credits and debts. Lawyers were available to verify the tallies and deal with disputes. 

In England, from about 1100, Henry I used tallies for public finances, including using foils as receipts in the collection of taxes. The stock was kept by the depositor. Henry required that the transactions, the transactors, and the amounts involved be written in ink on both parts of the tally. By the 1437-47 decade, 64 per cent of tax receipts were “tallies of assignment.” As Mitchell Innes noted: “Practically the entire business of the English Exchequer consisted in the issuing and receiving of tallies.” Tallies were also used as devices to circumvent the usury laws, often by fictitiously swelling its notched record of an original loan. 

After Charles II came to the throne in 1660, he further expanded the use of tallies to increase public borrowing. His Treasury officials created the “tally of loan.” Such tallies were backed up by a repayment order with six per cent interest. Samuel Pepys in his diaries referred several times to payments at the Exchequer made to him by tally. After the founding of the Bank of England in 1694, the Bank Act of 1697 increased its authorized capital, allowing up to 80 per cent to be paid in tallies, and the rest in banknotes. But, almost a century later, an Act of Parliament of 1782 declared that the Exchequer’s use of tally sticks would be phased out. Tallies continued to be cut until 1826. In 1834 the Exchequer gathered the many thousands of pieces of wood, in two cartloads, were stuffed in bundles into a stove and burnt in the House of Lords, thus destroying seven centuries of invaluable public financial records. The fire spread out of control and destroyed both Houses of Parliament. In its fiery death, tally money had its symbolic revenge. These unfortunate tallies had already been deprived of their monetary value. Their remaining, material form was the means of their revenge. They destroyed the building that had helped to give them meaning, authority, and power. 

But, almost a century later, an Act of Parliament of 1782 declared that the Exchequer’s use of tally sticks would be phased out over time. In 1834 the Exchequer gathered the many thousands of pieces of wood were stuffed and burnt in bundles in a stove in the House of Lords, thus destroying seven centuries of invaluable public financial records. The fire spread out of control and destroyed both Houses of Parliament. In its fiery death, tally money had its symbolic revenge. As if in retaliation, it destroyed the building that had helped to give it meaning, authority, and power. These unfortunate tallies had already been deprived of their monetary value. They avenged with their material form.(5)