FM on Money (3) Tally Sticks

Felix Martin records some interesting stories about the history of money to support his theory that the conventional view of money is wrong. The Exchequer tally sticks were an interesting portable means for recording receipts and payments.

For more than six hundred years, from the twelfth to the late eighteenth century, the operation of the public finances of England rested on a simple ingenious piece of accounting technology: The Exchequer tally. A tally was a wooden stick – usually harvested from the willows that grew along the Thames near the palace of Westminster. On the stick were inscribed, always with notches in the wood and sometimes in writing, details of payments made to or from the Exchequer. Some were receipts for tax payments made by landowners to the Crown. Others referred to transactions in the opposite direction, recording the sums due on loans by the sovereign to prominent subjects. Even bribes seem to have been recorded on Exchequer tallies.

Once the details of the payment had been recorded on the tally stick, it was split down the middle from end to end so that each party to the transaction could keep a record. The creditors half was called the stock and the debtors the foil, hence the English use of the term “stocks” for Treasury bonds, which survives to this day. The unique grain of the willow wood meant that a convincing forgery was virtually impossible, while the record of the account was portable, rather than just inscribed in the Treasury account books at Westminster. Exchequer credits could be passed from the original holder to a third payment in payment of some unrelated debt. Tallies were what are called: bearer securities” in the modern jargon.

Historians agree that the vast majority of fiscal operations in medieval England must have been carried out using tally sticks; and they suppose that a great deal of monetary exchange was transacted using them as well.

Although millions of tallies must have been manufactured over the centuries, and we know for sure that many thousand survived in the Exchequer archives up until the early nineteenth century, only a handful specimens exist today. The ultimate culprit for this unfortunate situation is the famous zeal of England’s nineteenth century advocates of administrative reform.

By late eighteenth century if was felt that it was time to dispense with it. An Act of Parliament of 1782 officially abolished tally sticks as the main means of account keeping at the Exchequer , though because certain sinecures still operated on the old systems, the Act had to wait for another half-century, until 1826, to come into effect. However, in 1834, the ancient institution of the Receipt of Exchequer was finally abolished, and the last exchequer stick was replaced by a paper note.

The irony is that when the redundant tally sticks were being burnt in a stove in the House of Lords during 1834, the intense heat set wood panelling alight and the houses of Parliaments were burned to the ground and had to be rebuilt.