History of Accounting - Ancient Rome

History of Accounting > Accounting in Ancient Rome

In early Rome the father of a family kept records of his receipts and payments in a sort of blotter or memorandum record. Every month these were transferred to a more carefully kept register, entry in which, if made with the consent of a debtor, was sufficient basis for legal suit or civil obligation. The bankers used a similar register and seem to have made use of a third book in which accounts with customers were set up, on the one page that for which they were indebted to the banker and on the opposite page that with which they were credited. Periodically a balance was figured and might be demanded in cash by the customer or the account might be continued. Checks seem to have been used by the wealthy, though cash payments were usual.
The system developed by the state in this early period introduced a new feature by means of which disbursements were safeguarded. The official intrusted with the funds had no authority for disbursing them. That was intrusted to a separate and distinct body which issued orders on the treasurer, providing him with a voucher, at an accounting time, for the disbursements made by him. Cicero holds up to scathing satire one Verres, a public official and grafter, for the meagerness of his accounting; and in another case criticizes one attempting to base an action on memoranda, mere scraps of papers, in contravention to established usage. Both these instances point to the keeping of very carefully prepared records of transactions between persons. In the early empire, under Augustus, a system of provincial and district treasuries was employed with a strict accounting to the central treasury. It seems that as a basis for the levy of taxes, a crude form of budget showing the needs of the imperial household, the army, etc., came into use. Under the later empire this district system of government, the levying and collection of taxes, became very highly organized. Eight of the ten or twelve central offices or departments of control were devoted to accounting.

The Romans possessed the genius of administration as well as of jurisprudence. Their system of financial administration, which began with the simple arrangements required under the Kings and the Republic, developed into the elaborate and complicated organisation of the enormous Empire.1

In order to obtain a clear view of the subject it is necessary to look at it in three divisions: (1) under the Kings and the Republic ; (2) under the earlier Empire ; and (3) under the later Empire, that is to say, from the time of Diocletian.

In the original constitution of Rome there was no regular direct taxation nor was there any direct regular state expenditure. The state gave no recompense for service in the army or for public service generally: so far as there was such recompense at all, it was given to the person who performed the service by the district concerned in it, or by the person who could not or would not perform the service himself. The king managed the finances—how far he was restricted by use and wont in the administration of public property is not now known. The receipts consisted chiefly of port dues, income from domain lands, cattle fines and confiscations, and the gains of war. A special tax was sometimes imposed, but was repaid if circumstances permitted.2

It is under the Republic that we first see the idea of a treasury of the Roman people, governed by the senate, administered by the consuls, and managed by the quaestors. These were the first elements of the financial organisation, created for a municipality, which developed with the growing requirements of the state, until we see it under the Empire spreading like a network over the greater part of the known world.

The system of recording the state accounting in Rome was based on the system practised in private life from very early times. The father of the Roman family entered in a sort of waste book (adversaria) all the receipts and payments of his household. He posted these monthly to a carefully kept register of receipts and payments (codex accepti et depensi), in which an entry, made with the consent of the debtor, was considered as a good ground of civil obligation. Bankers, of whom there were many at Rome, and merchants, used similar registers down to the time of Justinian. Bankers appear also to have kept a third kind of register, called the book of accounts (rationes, liber rationum), probably arranged in alphabetical order, in which an account was kept for each customer, a page being allotted for the debits and a page for the credits. The accounts were balanced at certain agreed-on times, the banker being bound to render an account, and to produce, if required, an extract of the account before the praetor. The fidelity of the bankers was placed under the supervision of the prsefect of the town, and, in the provinces, of the governor. When the balance of the account was at the credit of the customer, the banker had to pay the amount to the customer unless he was authorised anew to retain it. Sometimes the Roman citizen paid his creditors in cash, kept usually by a cashier, who was a slave; but more frequently the father of a rich family paid by means of a sort of cheque on his banker.

1 Except where otherwise stated, our information with regard to the Romans is directly derived from Monsieur Humbert’s elaborate work Essai gur les Finance* et la Comptabilite Publique chez les Remains.

2 ” History of Rome,” Mommsen, I. 70.

From the earliest times the Romans recognised the essential distinction between the person who imposes taxes and authorises expenditure and the person who is responsible for the actual receipt and payment. Under the Republic, legislative control over the public revenue and expenditure was in the hands of the senate. Subordinate to the senate, the consuls first were entrusted with the power of ordering payments, having to account to the senate for their intromissions, but in 443 B.c. this power was taken from them and given to the censors, who thereafter became the real ministers of finance. The general administration of the domain of the state was one of the principal functions of the censors, who also let the farming of the taxes to

publicans in the presence of the qusestors of the treasury, and to whom credits were voted in the quinquennial budget of the senate. All receipts and payments having been ordered or authorised by the magistrates, the actual receipt and payment was the special work of the qucestores cerarii. There were originally two of these officials, then the number was increased to four, and, under Sulla, to twenty. The two town quaestors had charge of the keys of the public treasury (cerarium Saturru), and even of the reserve fund (ccrarium sanctius), the latter of which could only be used in virtue of a special vote of the senate, followed by an order of the magistrates. They had offices, with numerous assistants, in the Temple of Saturn. There were also qusestors of the army and navy, appointed to each commander by the comitia, having charge of the military and naval receipts and payments, and, later on, provincial quaestors attached to the proconsuls, who managed the local tribute and provincial expenditure; all of whom had to account to the town quaestors at the central treasury, their directors and correspondents.

The scribes of the treasury under the orders of the quaestors recorded the transactions in tabulce publicce, a species of journal analogous to the adversaria of the father of the Roman family. A monthly register was also kept, resembling the codex accepti ct depensi, in which the receipts and payments were entered separately and regularly, with particulars of the dates, the names of the persons paying or receiving, the nature of the transaction, and the balance of each account at the end of the month. There was also a register of debts (calendarium), and there were special registers for the current accounts between the treasury and the military cashiers, who exchanged letters of credit with the quaestors of the provinces.

All expenditure had to be legally authorised and regularly ordered by a competent magistrate, and could only be discharged by the production of the formal order, supported by documents tending to guarantee the existence and liquidity of the debt, the title of the creditor, and the execution of the work indicated by the order. The identity of the magistrate ordering payment and of the creditor, had, if necessary, to be attested by witnesses.

The quaestors on demitting office rendered an account to their successors of the state of the funds and of the condition of the registers, and they also submitted accounts of their administration to the senate, the meetings of which body they attended for the purpose of advising regarding the credits asked for by the magistrates, and financial business generally, and in which in later years they had seats. The accounts of the sub-quaestors were also submitted to the senate, as well as to the central quaestors.

These various regulations rendered fraud very difficult, in Rome at all events, their observance being under the supervision not only of the senate, but of the censors, consuls, and each member of the college of quaestors. Every illegal act could be easily nipped in the bud, or at least the offender could be prosecuted by the tribunes. From the sixth century of Rome, however, financial abuses crept in. The wars of conquest, along with the establishment of provinces, led to the increase of the public resources and needs, to the long duration of the magistrates’ terms of office, to the abuse of proconsular authority, and finally to disorder and even anarchy in the whole government. The organisation of Rome, suitable for a municipality, was ill-adapted to the requirements of a great state. The governors, all-powerful outside the precincts of the city, and exempt from all local supervision, respected as little the rights of the treasury as the feeble guarantees of the provincial constitution. The generals, not content with enriching themselves at the expense of the enemy, adopted also in their turn independent and almost kingly state. Several laws were passed to repress abuses in financial matters—the Calpurnian law in 149 B.c., the Cornelian law of Sulla and the Julian law of Augustus—but they had but little effect. Salutary regulations were ineffective owing to the absence of a judicial control powerful enough to repress the abuses of financial administration in the hands of an unscrupulous aristocracy, or to apply a remedy to the vices of the too-municipal organisation, or to the excesses of the sovereignty directly exercised by the factious and corrupt comitia.

With the Empire, in spite of the official maintenance of the national sovereignty, public government assumed a dual form, that of the senate and that of the emperor. The provinces and the magistratures were divided into senatorial and imperial; the treasury, into the treasury of the people, that of the emperor, and that of the army ; and officials, rules, and responsibilities were multiplied. While republican forms were at first retained, all authority became concentrated more and more in the hands of the emperor, until the last trace of representative government disappeared with the rights of the senate over the treasury and the right of consent to the imposition of taxes in the name of the Roman people.

At first Augustus endeavoured to maintain the unity of the public treasury; but the necessities of a standing army gave rise to the establishment of a military treasury, and the increasing charges of the imperial government led to the establishment of a treasury of the emperor. The cerarium populi or Saturni was taken as the model of the new creations, but it was reduced to a part only of its former resources, and its jurisdiction was restricted abroad within the borders of the senatorial domain. Instead of the two town quaestors elected by the comitia, who were often young and inexperienced politicians, two praefects were elected by the senate from among the members of the rank of ex-prsetors, under the title of prcetores cerarii or ad cerarium. Later, election by vote not appearing to be the best method of appointing the chiefs of the treasury, Claudius restored the office to the qusestors, but chosen from among the college of quaestors by the emperor, under the title of quoestores cerarii Saturni.

A further change was made under Nero, who in 56 A.d. confided the office to two senators of praetorian rank, who took the title of prcefecti cerarii Saturni. Finally, under Diadumenus a rationalis or procurator was put at the head of the prefects of the treasury.

A sort of budget of expenditure was drawn up by the emperor. It was accompanied by statements of the fiscal cash at the beginning and end of the year, of the annual produce of the farm of the indirect taxes, of the amount of the tribute, and of the poll tax of the provinces. The whole formed a statement called rationarum or breviarium imperil.

In the early days of the Empire the power to order or authorise the expenditure included in the senatorial budget continued to belong to the censors, and failing them, usually to the consuls. These magistrates exercised this prerogative only within the limits of the quinquennial budget or the credits specially voted by the senate, and they acted under the control of the emperor. Special curators were gradually substituted for these magistrates. The expenditure of the military treasury, of the crown lands, and of the emperor’s treasury, was directly controlled by the emperor through his officials. Under Hadrian, the knight invested with the department of the finances received the title of procurator a rationibus with the rank of perfectissimus. There was also created, probably under Marcus Aurelius, a sub-director under the name of procurator summarum rationum. The finance minister in the third century received the name of rationalis, which title was extended later by custom to the fiscal procurators of the provinces. The staff of the minister of finance consisted of a great number of officials whose titles have been preserved to us by inscriptions, which do not, however, inform us of their respective functions.

The central accounting office was called tabularium, where the work, under a superintendent, was carried on by the book-keepers or tabularii, the approximi and the assistants, the latter being often slaves.

The qusestors in the senatorial provinces, subordinate to and correspondents of the central treasury, preserved their former functions with respect to the goods and rights falling to that treasury, and the subordinate officials corresponded to those of the central treasury. In the third century they were replaced by imperial governors of the provinces (procuratores or rationales Ccesaris).

The accountants of the military treasury were originally similar to those of the public treasury, but under Hadrian the collection was entrusted to a special administration with a central treasury at Rome, and with offices also in the provinces.

With regard to the administration of the private property of the prince and of that of the fisc, comprised at first under the name of patrimonium privatum, originally freedmen and even slaves fulfilled at Rome the duties of cashiers. There were fiscal procuratorca, and a chief of the office of tabularii. There was a department of public works and a special treasury in connection with the patrimonium with cashiers and their assistants. The inscriptions do not furnish any trace of a central administration or a treasury at Rome for the fisc before the reign of Claudius. The free funds proceeding from the governors of the provinces were deposited in certain temples at the disposal of the director of the fisc.

The governors of the provinces had numerous officials under them. They had often a sub-director, accountants or book-keepers, mostly freedmen, and superintended by a chief of the office, and cashiers, who were mostly slaves. The funds not employed in local expenses were capitalised or sent to Rome. In fact, besides the central treasury of the province, there were district treasuries, independent of the stations of publicans placed under the supervision and control of the governors of Augustus.

After the time of Claudius, a procurator patrimonii administered at Rome the domain of the emperor, having a staff of calculators, book-keepers, and messengers. In the

second century we find superintendents of the patrimony, having complete offices and a special treasury with cashiers. Under Septimius Severus a greater separation was made between the fisc and the Res privata, the latter being administered at Rome by a procurator Rei privatce, and in the provinces by special procuratorcs.

The communal accounting was on much the same lines as that of the old public treasury. The verification of all the necessary deeds was confided to the chiefs of the scribes of the treasury. There were a large number of these scribes, of whom Horace was one.

All the innumerable officials—the quaestors, praetors, or prefects of the public treasury, the proconsuls of the senatorial provinces, the provincial quaestors, &c.—had to render accounts of their intromissions to the senate, to the emperor, or to their superior officials, as the case might be. The administrative control was, however, far from complete or permanent, and in spite of severe penalties bribery and corruption flourished. During the Empire, the great principle of separating the power to order payment from the power to handle money disappeared, with disastrous results.

Under Diocletian the government was divided into four centres of administration, or prefectures, having each its praetorian praefect, its vicar, its army, and its finances. Diocletian multiplied and subdivided the provinces, and arranged them in twelve dioceses. The three classes of governors, the proconsuls, the consuls, and rectors or presidents, were placed under the supervision of the vicar of the diocese, of the praetorian praefect, and of the emperor. The provincial administration was centralised under the praetorian praefect, and was under a powerfully organised regime. The reforms begun by Diocletian were continued and completed by Constantine. The minister of the public treasury received the extraordinary title of count of the sacred largesses (comes sacrarum largitionum), ” with the intention perhaps,” says Gibbon, “of inculcating that every payment flowed from the voluntary bounty of the monarch ;” while the minister of the domain of the emperor was styled comes rti privatce. The three treasuries were now the public treasury (cerarium sacrum or sacrce largitiones), the crown treasury (cerarium privatum or privatce largitiones), and the treasury of the praetorian praefect (area pra>fecturce). The terarium sacrum seems to have corresponded very much to the old ccrari-iim Saturni, but it was no longer under the control of the senate. It received in general all that arose from public contributions in gold or in money, and the crown treasury in general all the other revenue except the tribute in kind, which went to the treasury of the praefect for the requirements of the army.

The emperor having fixed the amount to be raised by each praetorian praefect, the praefect issued an order for his praefecture, and divided the required amount among the various dioceses. The vicar in his turn divided the amount allocated to his diocese among the provinces therein, and lastly the rector divided the amount allocated to his province between the cities and districts. The amount allotted to each of the rectors was divided by the number of taxable units, thus giving the portion payable by each owner. The chief decurions of a city had to prepare, by means of the director of the archives and of the local accountant (tabularius or logograpkus), the principal assessment roll, which was sent to the rector for approval. The latter examined the roll by his director of contributions (numerarius), and returned it as approved to be published and sent to the receiver for the purpose of collecting the contributions, and a copy of it was sent to the exactorcs to recover contributions in arrear. The contributors had to pay to the local receiver or cashier of the tribute in exchange for a receipt delivered to them by the annotator of the receiver, the contribution being recorded by the local accountant and noted on the margin of the roll. Thereafter, the competent decurion had the receipts transferred to the treasury of the receiver-general of the province attached to the director-general of the finances of the governor. Thus the records of the local accountant acted as a check on the transactions and records of the receiver of the city. In like manner, the records of the director of the provincial finances checked the transactions of the local accountants, and showed to what extent they and the exactores had accomplished the work of recovering the contributions. They served also to check the accounts of the receipts of the chief receiver-general. The receiver-general of the province had to send the money received, under the seal of the central accountant, to the treasurer of the public treasury intimating to him its despatch. On his part, the governor had to send by his accountant to the same official a statement of the rolls for the four months to enable him to check the amounts which had been sent to him, and if necessary direct the palatini against any governor who was negligent or in arrear. Thus the collection in each province was thoroughly organised and controlled. Moreover, the public treasurer had a staff of inspectors for the purpose of controlling the accounts of the receivergeneral and of the accountant both of the province and of the city.

It is unnecessary to describe the arrangements for the recovery of the other income, which were similar in character, or to give the names of the host of employees—those administering the tribute in kind, flowing into the treasury of the praetorian preefect, and those under the direction of the count of the crown treasury. The indirect taxes were still let to publicans.

The central organisation was no less elaborate than that throughout the provinces. The count of the public treasury had an office divided into ten departments, and twelve under Justinian, of which eight were occupied with the accounting. The count of the treasury corresponded with the counts of the largesses in the dioceses, one of whom was in each diocese, with the governors or rationales, one of whom administered several provinces, and with the procuratorcs of the manufactures, the accounts of all of whom were submitted to him. The minister of the domain of the crown also had a large central office, divided into four departments, for the examination of the accounts of his numerous agents.

The fundamental distinction between the official authorising expenditure and the official responsible for the actual payment, which was so clearly recognised under the Republic and in the earlier days of the Empire, but which was departed from later, was re-established at least in the provincial administration, as is shown by the words: qui aurum largitionale susceperunt, mhil cum arcce ratiociniis habere commune. Moreover, every accounting official had to render an account of his administration to his superior official, the chief minister accounting to the emperor. All this elaborate machinery with its carefully devised checks and counter-checks signally failed, however, to attain its object, lack of efficient control rendering nugatory the most skilfully devised arrangements.

After the fall of the Western Empire (dating that event from the election of Odoacer as Patrician in Italy), while elaborate methods of accounting were continued in the Eastern Empire, as we have seen, Roman accounting traditions were continued for a time in Italy by Odoacer, the Scyrrian, and Theodoric, the Ostrogoth, and in later years in the ecclesiastical organisation. The Pope we know possessed enormous revenues, and was at the head of a large administrative body, having an arcarius, or treasurer, a sacellarius, or cashier, and a protoscrimarius, who, an Italian writer * informs us, was at the head of a staff of officials similar to that of the eastern emperor, and who had to be an accountant. In the year 1001 we find also that there was a high official on the papal staff called logotheta, whose duties latterly were those of an accountant (ratiocinator).” But with Italy a prey to barbarian invasions and internal struggles little information regarding matters of accounting can be looked for there until we reach the times of the communes and the maritime republics.

1 Vincenzo Campi, // Ragioniere, p. 64. 2 Ibid.

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