From the Chronicle of Crowland Abbey, Lincolnshire, this is a notable cost-cutting initiative by Abbot John Wisbech, who died in 1476:
"He it was who first wisely abolished that ancient or rather that corrupt custom of giving knives to every visitor on St Bartholomew’s day. By this both abbot and convent rejoice in being free for ever from heavy and needless expenses."
St Bartholomew, who was one of Crowland's dedicatory saints, suffered martyrdom by being flayed alive, and so one of his attributes is a knife. I guess people were given them as souvenirs? Sounds like it would get pretty expensive - and a bit of a health and safety issue too.
I found out today that the Crowland Chronicle, which I'm spending a lot of time on at the moment, was completed exactly 500 years, to the very day, before the day I was born. That's pretty cool.