Green’s Dictionary of Slang

an Italian; also as adj.

1932		‘Ex-Légionnaire 1384 Hell Hounds of France 200: ‘Hey! You ten cent Dago! [...] [W]hat made you come to Syria at all?’ [...] ‘I have one girl. She no good. She go with ‘nother fellow. I kill.’ ‘We’ve heard that one, Tally. Cut it out!’.
1980		J.L. Gwaltney Drylongso 62: These tallies swear that they are just as white as all those other crackers.
1985		M. Munro Patter 68: Tally Italian: ‘Ye canny whack the real Tally ice cream.’.