Tallysticks have been used through history as evidence of a financial transaction. In Old England, a hardwood stick was used. When a financial transaction took place, the stick would be notched as evidence of the transaction. For £1,000, the cut was the width of a hand; for £100, the width of a thumb; for £20, the width of a little finger; and £1, the width of a swollen barley corn. Once the transaction was recorded, the stick was split lengthwise and each party received a piece.
In another method, once the notches were made, one small stick was carved out of the larger stick. The larger one was the lender and the shorter one was the debtor. (To this day, we don’t like to have “the short end of the stick.”) The long end was the stock; it is better to be a stockholder. The lender could sell the obligation to another. The debtor knew a stranger’s claim was true because the sticks matched.
The system was fraud-proof. Only two pieces of wood in England matched each other. Neither party could add a notch without the alteration being obvious. Tally sticks could function as money (a store of wealth, a medium of exchange, and an unit of measure).
The system continued in England until the early 1800s. The Bank of England, with a growing knowledge, realized it was a threat to its power if individuals have the ability to create money.
Sources:
Apostolou, Nicholas and D. Larry Crumbley, “The Tally Stick: The First Internal Control?” The Forensic Examiner Spring 2009.
Astle, David, “The Tallies, a Tangled Tale”
