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Euro Stock - Part One - the Tale of The Tally

by ChrisCook
Wed Nov 23rd, 2011 at 02:58:11 PM EST

I found a fascinating essay by one David Astle - The Tallies - a Tangled Tale - on the subject of the role of the Tally Stick in the financing and funding of sovereign states generally and the UK in particular.

What was a Tally Stick?

" 1.  Formerly, a piece of wood in which notches were cut as marks of number.  It was customary for traders after notching a stick to show the number or quantity of goods delivered, to split it lengthwise through the notches, so the parts exactly corresponded, the seller keeping one stick, and the purchaser the other.  

In the English Exchequer were tallies of loan, one part called the counterstock, or countertally, being kept in the Exchequer, the other, the stock or tally being given to the creditor in lieu of an obligation for money lent to the Government.  Certain tallies were used in the Exchequer as late as 1827, but all were destroyed by Act of Parliament, 1827."

Here we are.....



Maybe these instruments were relatively unimportant in the scheme of things?

Errr....no

In later years, at the time of the establishment of the so-called Bank of England, despite the confusion set up by the depredations of the goldsmiths from early Tudor times on, there were at least £17,000,000 of tallies in circulation :  a fantastic sum in those days considering that the total cost of the operation of the Kingdom in those days would be no more than between £2,000,000 and £3,000,000 per annum.  

There should be no doubt of the efficacy of the tally in an earlier day when the King's word and rule were unchallenged absolutes.

So why have these credit instruments - for that is what they were - been largely airbrushed until recently from economic history as an irrelevance?

Little, if any, study seems to be available on the full functions of the tally stick in relations to State finance (without cumulative debt) in the many hundreds of years of its use in England prior to its final ending in 1834.  

So far as Library of Congress is concerned, unbelievably, nothing seems to be available on the subject of the tallies other than the book written in Chinese previously mentioned in this essay.

As a consequence the "Economists" may have very good reason to be evasive on the subject of the tally stick, or to ignore its previous existence.  

This attitude of course would be most desirable for what, from the 17th Century onwards, was a growing group of persons described as "Bankers".  

The possibility of the State financing itself without cumulative debt would not fit in with the system it is clear they had in mind......

Tally sticks have also left a linguistic trail which gives further clues of the role and creditary function of the 'Stock' element of the Tally Stick which was given by the sovereign to creditors as a negotiable instrument redeemable in payment of taxes.

"Joint Stock Company"; "Stock Exchange"; "taking stock"; and so on.

Surely Tally Sticks are of historic interest only? Well yes and no: while the physical stock is obsolete, the creditary nature of this negotiable instrument offers the key to a simple but radical approach to public credit generally, and to the Euro crisis in particular.

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The possibility of the State financing itself without cumulative debt would not fit in with the system it is clear they had in mind......

Perhaps the dark side of The Whig View of History?

Burning the tally sticks would have represented a loss of capital comparable to that of the slaves walking away after emancipation in the US, had they not previously suffered a slow default. If given credit, tally sticks would have been the equivalent of gold. The burning of the tally sticks would be symbolic of the triumph of the Liberal view in England and the repudiation of the entire, earlier feudal system by Act of Parliament in 1783.

That Act probably represented a partial default designed to eliminate the ability of the Crown to create endogenous money and thus to arrogate unto the bankers the right to create all money. What has been called The Sinews of Power, the financing system developed in England that enabled her to prevail in the centuries long struggle in Europe simultaneously delivered control of the country's finance to the banks from the Crown.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Nov 24th, 2011 at 11:19:06 AM EST
I knew tally sticks were used in lieu of coin in payment to the Exchequer for all things "due and payable" to the King: taxes, fines, etc.  Never occurred to me they could, therefore would, also circulate as a bills of exchange and zero or interest bearing notes.

A quick bit of googling came up with a reference to Shaw, W. A. "The Treasury Order Book" Economic Journal, 1906, pg 39, found in:

"The Bank of England - A History" by Sir John Clapham.  Vol 1.  Cambridge U Pr.  1943 (?)

see page 11.  Also on that page is a reference to "Experimental Proposals how the King may have money to pay and maintain his Fleet" by Sir Ed. Ford, pub 1666 from which (?) the idea arose for individuals to "grant money" to the Navy and receive "tallies of loan."

Neither of these are in Astle's bibliography.  In fact Clapham's work is not in the bibliography either, which I find peculiar, suggestive of a lack of adequate research by Astle, and intimating "thar be gold buried in thar libraries."  One obvious place to start is the indexes of English Historical Documents with particular reference to volumes 2 through 7, inclusive.  Perusing Pepy's diaries should also prove illuminating.

For someone who needs a book to fulfill their Publish-or-Perish requirement a history of tally sticks, in English, would make the basic source -- good for one's cite numbers.  :-)

by ATinNM on Thu Nov 24th, 2011 at 02:25:23 PM EST
They were used in China as far back as the Han dynasty. Graeber sees hints that they were transferable back then, though mostly from poetic allusions and jokes such as
There was a man of Sung who was strolling in the street and picked up a half tally someone had lost. He took it home and stored it way, and secretly counted the indentations of the broken edge. He told a neighbor: "I shall be rich any day now".
by gk (g k quattro due due sette "at" gmail.com) on Thu Nov 24th, 2011 at 03:13:10 PM EST
[ Parent ]
Tally sticks seem to be an improvement on the marks that were made on clay tablets which were then baked in ancient Mesopotamia in that they provided two copies and were readily portable. It would be interesting to know just how far back they go in the Mid-East, North Africa and Europe, possibly in Umayyad Spain and onward.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Nov 24th, 2011 at 11:34:36 PM EST
[ Parent ]
Back in Sumeria they would bake little clay animals, or whatever, and then seal them in a pot.  Then they realized they had to break the pot to look at the insides to determine who owed what, and for what, to whom, or even why they had this damn closed up pot kicking around their mud hut.  So they started drawing the animals, or whatever, on the outside of the pot and not too long thereafter realized they could bag the little clay animals, or whatever, and just draw them on a mud tablet.

(And thus accountancy, and writing, were born.)

I don't know, and I doubt anyone else does either, if the pots or tablets were traded to third parties.  That's not the kind of thing archaeologists were aware of, thus looking for, when they were doing those digs.

by ATinNM on Fri Nov 25th, 2011 at 04:33:32 AM EST
[ Parent ]
People were probably more used to memorizing things back then, so, unless they had hundreds of these pots lying around, they would probably remember what it was for. This means that they probably drew the animals for trading to third parties, or just drew them for fun.
by gk (g k quattro due due sette "at" gmail.com) on Fri Nov 25th, 2011 at 04:43:42 AM EST
[ Parent ]
I believe Socrates has a piece on how reading and writing destroys young minds as they become lazy and does not train memorizing anymore.

But nevermind that, I think it is not for remembering that they put clay-animals and then drew them. If we accept that they would have remembered it anyhow, I think we should see it as a contract, they drew it in order that neither party would claim to remember something else then what was agreed upon.

Anyway, how useful they were as general money can be estimated by how far they traveled. Metal coins can often be found in graves far from their minting area.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Fri Nov 25th, 2011 at 07:39:07 AM EST
[ Parent ]
Throughout native american cultures, elder women were always on the lookout, and testing for, proclivity for memory in young children. The best would be singled out for special training at an early age, which continued onward among the best, and became the precise backbone of what's now called "oral tradition." Most NDNs assume oral tradition to be almost faultless because of the attention to developing this propensity for memory.

Then came the anthros, with their "these primitives don't even have written histories." (They did recognize pictographs, but could never wrap their tiny little heads around faultless and accurate memory.)

What was i saying?

"Life shrinks or expands in proportion to one's courage." - Anas Nin

by Crazy Horse on Fri Nov 25th, 2011 at 10:31:35 AM EST
[ Parent ]
> Most NDNs assume oral tradition to be almost faultless because of the attention to developing this propensity for memory.

It would be interesting to know if the Native American oral traditions used poetic devices to facilitate memorization.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt t gmail dotcom) on Sat Nov 26th, 2011 at 12:49:00 PM EST
[ Parent ]
Good question. Wish i knew.

"Life shrinks or expands in proportion to one's courage." - Anas Nin
by Crazy Horse on Sat Nov 26th, 2011 at 02:38:25 PM EST
[ Parent ]
Tally sticks are covered in some length in Glyn Davies' History of Money from Ancient Times to the Present Day.

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis
by Migeru (migeru at eurotrib dot com) on Thu Nov 24th, 2011 at 07:56:31 PM EST
There's one thing I'm still missing in this story: why weren't tallies falsifiable? What would prevent me from cutting a tally similar to another one in circulation and exchange it in the "secondary tally market"?

Vencit omnia veritas.
by Luis de Sousa (luis[dot]a[dot]de[dot]sousa[at]gmail[dot]com) on Mon Nov 28th, 2011 at 01:42:59 PM EST
I think the meaning is that only the original would match the part at the treasury.

res hum m's ali
by Antoni Jaume on Mon Nov 28th, 2011 at 01:55:39 PM EST
[ Parent ]
Bingo.  Once the tally was "redeemed" it was moved from the active to inactive pile.  This mean the tallies underwent vetting (anti-counterfeiting) examination and it would be interesting to know how long a tally circulated before being redeemed and vetted.
by ATinNM on Mon Nov 28th, 2011 at 02:27:05 PM EST
[ Parent ]
Correct.

The counterfeiter would need an exact match to the Treasury's 'counter-stock' or foil, including the  type, colour and grain of the wood.

In practice, tallies were proof against counterfeiting, but of course they were bearer instruments, and flammable instruments at that.....

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Nov 28th, 2011 at 03:19:02 PM EST
[ Parent ]
But in the "secondary market", how could you tell a tally was for real or not?

Imagine Chris was selling a house and I offered him a tally in exchange. What guarantee would he have the tally I was offering him was real?

Vencit omnia veritas.

by Luis de Sousa (luis[dot]a[dot]de[dot]sousa[at]gmail[dot]com) on Mon Nov 28th, 2011 at 03:37:01 PM EST
[ Parent ]
The short answer: unless he got it verified, he wouldn't.  Just like you don't know if those bills in your wallet are counterfeit or not.  

Any currency has a counterfeit risk.  Even the gold coins the Weirdos are so fond of.

 

by ATinNM on Mon Nov 28th, 2011 at 04:33:17 PM EST
[ Parent ]
Any currency has a counterfeit risk.  Even the gold coins the Weirdos are so fond of.

But that you can easily verify by yourself (even with bank notes). As Chris writes below, you had to go to the Exchequer to verify your tally, hence these were probably local instruments.

Btw, I don't think Complexity Science makes people weirdos.

Vencit omnia veritas.

by Luis de Sousa (luis[dot]a[dot]de[dot]sousa[at]gmail[dot]com) on Tue Nov 29th, 2011 at 02:32:33 AM EST
[ Parent ]
Weirdos = Gold Bugs.

(I'd be the last person on earth to disparage Complexity Theory & those working in the field.)

by ATinNM on Tue Nov 29th, 2011 at 02:14:47 PM EST
[ Parent ]
I don't think there is much known about exchanges of tallies, which were probably pretty local.

Once stock went 'wholesale' through the innovation in the early seventeenth century of Joint Stock Companies and 'shares' markets in private stock (with shares accounted for in books of account rather than tallies) started to evolve, initially in coffee houses.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Nov 28th, 2011 at 06:39:50 PM EST
[ Parent ]


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