At one time, it was the practice for wages to be paid partly in kind and partly in tokens. These tokens could only be used at the company’s or factory’s shop and good value was not normally given. These shops became known as tommy shops. It was a much-abused practice and abolished by the Truck Act 1831. This is probably the origin of the words ‘tommy rot’.
|Reference: The Penguin Business Dictionary, 3rd edt.|