For What It’s Worth: Stock
Financially speaking, a stock is a stake in a corporation. Etymologically, though, a stock is part of a stick.
The word “stock,” as it’s used in finances, comes from an old English word for a tree trunk. For instance, consider how “stocky” describes a thickly built person.
Centuries ago, Europeans used a stick of wood known as a tally for keeping track of everything from game scores to financial obligations. A crosswise mark – or nick – on the tally stick represented each transaction. In fact, as it applied to last-second scores in sporting contests, this is where we get the expression “in the nick of time.”
For What It’s Worth is an occasional look at the meanings and origins of words and expressions investors may encounter.
In the case of financial accounts, though, the sticks were split lengthwise so that each half contained part of the tally mark showing how much was owed and the date of the debt.
The half kept by the creditor was called the stock. The debtor’s half was the counter stock. When the debtor paid off the obligation – in effect, redeeming the stock – the two halves were rejoined.
The British government used this method for tallying debt in the Middle Ages up until 1826. Years later, two cartloads of discarded wooden tally sticks – retired stocks and counter stocks – were still lying about the Exchequer offices in Parliament.
A clerk ordered workers to burn the old tallies as firewood in a couple of basement stoves, which begat the 1834 conflagration that destroyed both houses of Parliament.
In a cheeky way, you could say Parliament got burned by a tip on a hot stock.
Joel Dresang is vice president-communications at Landaas & Company.
(initially posted July 27, 2017)
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