History of Book-Keeping (Accounting)

Section V

HISTORY OF BOOK-KEEPING

THE OLDEST PRESERVED ACCOUNT-BOOK OTHER EARLY AC-

COUNT-BOOKS OF THE THIRTEENTH AND FOURTEENTH

CENTURIES THE DEVELOPMENT OF BOOK-KEEPING—THE

EARLIEST INSTANCES OF DOUBLE- ENTRY — THE FIRST

PRINTED TREATISE ON BOOK-KEEPING—DESCRIPTION OF

THE WORK OF PACIOLO THE INFLUENCE OF PACIOLO ON

SUBSEQUENT AUTHORS THE EAR! JEST TREATISES IN

GERMAN, DUTCH, ENGLISH, FRENCH, AND SPANISH.

Book-keeping, rightly regarded, is simply a specialised form of the art of keeping accounts. It is neither a discovery of science, nor the inspiration of a happy moment, but the outcome of continued efforts to meet the necessities of trade as they gradually developed. One by one the successive steps in the evolution of account-books were achieved till finally it was realised that the transactions of a business in their entirety form a homogeneous whole which is capable of being marshalled in the framework of a system. When this was discovered there originated what is known as ” doubleentry,” which may be said to form the basis of all systems of book-keeping worthy of the name.

The written records of account-keeping applied to trade fortunately go back to a date which is earlier than even the most rudimentary book-keeping. We are thus enabled to trace the development of this branch of the science of Accounting through all its stages. A book is extant which was kept by a Florentine banker in 1211, and it proves that book-keeping, in the only sense in which the word can be used, was then unknown. The man who made the entries was evidently highly efficient for his day. His technical methods are out of all comparison superior to those observed in books of a very much later date, but his account-book exhibits a mere series of detached memoranda. There are spaces on the various pages set aside for different clients, but all connection between these accounts is lacking. Moreover, the transactions of the bank, apart from dealings with its clients, are not recorded at all, so that the exposition of the affairs of the business is most incomplete.1 Such was the art at its best at the commencement of the thirteenth century. We find that it had not advanced beyond a stage which is still that of account-keeping and not book-keeping. Books at this date contained nothing more than a series of unconnected jottings relating to those portions of business in which it would have been unwise to rely on memory alone. There was no provision for anything except personal accounts, the means for detecting omissions and errors were absent, and balancing was unknown.

Next to this oldest account-book of 1211 a considerable number of so-called ledgers are preserved from the period 1300-1400. They show methods and technique greatly inferior to those of the Florentine banker, and they illustrate further the primitive beginnings of book-keeping. The memoranda we find there, for they can be described by no other name, are obviously intended to serve only as aids to the memory in retaining the details of numerous transactions. When an important piece of business is concluded, the original agreements are copied in full, as in a modern sederunt-book, the principals sometimes signing the record, or a notary public adding his endorsation.2 Entries, moreover, relating to sales and purchases, are mixed up with jottings of household expenses, and in one or two cases, even, the character of account-book so completely merges in that of memorandum-book that a few pages are set apart for a family chronicle.1 Characteristics such as these are universal in the books of this time. Italy, which is the birthplace of modern commerce, furnishes some of the earliest examples, and the South of France, which had intimate relations with that country, shows at least one instance of an extremely interesting book which will afterwards be referred to. German books are also extant, especially from the Baltic regions where the Hanseatic League had its settlements. Nothing can be more primitive than these Teutonic records—indeed, Dr. Jager, a learned authority on everything relating to accounts, dismisses them with the remark that from the point of view of book-keeping they are beneath criticism.2 It is purely by accident that the oldest German account-book has come down to us. It was kept by two brothers between 1329 and 1360, and when one of them, who was burgomaster of Liibeck, became involved in a political intrigue and was brought to trial, the book was confiscated. It lay unknown in the archives of the Court of Justice until the other day, when it was discovered and duly reprinted under the direction of a competent editor.3 The nature of the book-keeping may be gathered from the single fact that the entries are all made by the owner himself without assistance from clerks. The ledger is really a note-book. Business transactions are mixed up with household matters, and whole years pass without a single entry being made. Other German books are of the same nature.4 None of them contains anything which can properly be described as book-keeping.1 A factitious interest attaches to the books kept by the family of Fugger at Augsburg between 1413-1426. The Fuggers became celebrated as the Rothschilds of early finance and their descendants at the present day hold princely rank in Austria. It was asserted a century ago by an early German writer on book-keeping2 that these old ledgers were kept by doubleentry. Although it has long been disproved, this statement is frequently repeated. From specimens of the books which have been published it is clear that the Augsburg ledgers are simply memorandum-books of the contemporary German type.3 In our own country, unfortunately, no old accountbooks have yet been published.4

1 The book is described by Professor Sievekiug in some valuable researches on the history of book-keeping which he contributed to Schmollert JaHrbttch fiir Gesetxgebung, &;c. (75th year, 4th Issue). The articles are entitled Aus venetianischen Handelsbiichern.

‘ Sieveking, loc. cit., pages 302 and 303.

1 This is the case in books kept by Guido di Filippo di Ghidone dell’ Antella in 1290; by the firm of Peruzzi in 1308-1336; and by Stephen Maignow, a goldsmith of Constance, in 1480-1500. 2 Altex und Neues aug der Buchaltung, page 2.

3 Das Handlungsbuch von Hermann und Johann Wittenborg (Mollwo, Leipzig, 1901).

1 Other German account-books belonging to the fourteenth century which have been reprinted are : Johann Kliugenberg (1331-1336) and Vicko vou Geldersen (13671377). For further information see the list of old commercial books given at the commencement of Sieveking’s articles; also Mollwo, loc. cit. (Vorwort); and B. Zieger, Die Kaufmiinnuchen Bildungsttiitten,

A decided advance can be traced in the books of a French firm, the Freres Bonis of Montauban, which were kept during the years 1345 and 1359. At the latter date this firm used its books to obtain a review of its position and made up a list of its debtors and creditors. The money owing to them was 678 lib. 7s. 8d.; that due by them was 551 lib. 2s. 10d.5 But further particulars of the result of their trading the books could not furnish. Still, a beginning was made. As soon as a set of books was no longer regarded as a mere repository for detached notes, to be produced at a settlement between creditors, the evolution of systematic book-keeping had commenced. From this period onwards we begin to trace progress. The circum

1 Besides the authority of Dr. Jager already quoted, see Zieger, loc. cit., page 3. J Gerhard Buse, Dot Ganze der Handlung (Erfurt, 1804).

3 Dr. Arnold Lindwurn, Handekbetriebslehre (Stuttgart, 1869). See Dr. Jager’s comments in his Beitriige, $c. page ix. ; Lucas Pacioli,

4 The ledger of Andrew Halyburton (1492-1503) belongs to a later period than that which we are now considering, hut it may be chronicled here, for it is the only early ” ledger ” in our language which has been reprinted. Halyburtou was ” Conservator of the Privileges of the Scotch Nation in the Netherlands,” an important office under the Scottish Crown, with duties not unlike those of a Consul. The book-keeping extends to nothing but personal accounts and is of a very primitive description.

4 Sieveking, loc. cit., page 303 n.

stances which brought about this development were mainly two. The first, and by far the most important, has been pointed out by Professor Sieveking. He characterises the transition from chaos to order by remarking that no advance was made as long as the account-books were intended solely for the private information of the trader. As soon, however, as accounts had to be prepared for submission to others, there appear signs of improvement. Banks, as we have already seen, had the most perfect methods of account-keeping, and naturally so, for they had to keep records of how they stood with each customer. But the requirements of banker and client were satisfied by the keeping of personal accounts. Partners in a business, on the other hand, required a record of the entire course of trading so as to apportion profits, and it is in this necessity that we find the prime motive for creating a system of book-keeping. But if the extension in the scale of commercial enterprises and the consequent impetus which was given to the formation of partnerships and joint adventures, led to improvements in book-keeping, the mere growth in the volume of transactions itself must also have led men to ponder on some orderly method for recording their dealings. In early days we find that a few pages sufficed for chronicling the business of a life-time. Now numerous books were required which were distinguished by letters, numbers, crosses, or colour of binding. An Italian firm of merchants named Peruzzi, for instance, opened eleven new books in 1339: five white, two black, and one red, orange, yellow, and green respectively.1 With such a mass of entries, and the endless possibility of error they imply, the discovery of some device for classifying the accounts and proving their accuracy would become a pressing necessity.

The first steps in the development of systematic bookkeeping were very gradual. The methods practised by the banks contained certain rudiments of what may be called

1 Sieveking, he. cit., p. 308.

” cross-entries,” and we find that these were slowly extended to commercial accounts. In the case of the banks the device arose naturally. Owing to the difficulty and risk of making payments in specie a large part of a banker’s business consisted, then as now, in acting as intermediary in settling accounts. Merchants deposited money so as to be able to make payments by means of orders and to receive orders. The bank merely made a transfer in its books debiting one client and crediting another. Entries of this description arose from the nature of things and are very old. We already meet traces of them in the accounts of the Florentine banker of 1211. Applied to mercantile accounting the idea proved a fruitful one, for it led to the formation of ” nominal accounts.” There are books preserved from the year 1297 belonging to Rinerio and Baldo Fini, in which accounts were opened not only for persons, but for things, and the two classes were debited and credited vice versa in regular fashion.1 Thus the idea of making transfers, together with the practice of using the books for making up a state of affairs, as already noticed in the case of the Freres Bonis, proved to be the first suggestion of systematic bookkeeping. In detail the accounts were still imperfect to the utmost degree. The entries were more like narratives than postings. Individual accounts were often kept open for very long periods ; thus an account in the books of the Freres Bonis opens on the 19th of December 1345, and goes on without intermission to the 11th December 1358. Debits and credits, also, were by no means always separated, but often placed one below the other as they occurred.2 Finally there was no attempt made at a general balance, for in some cases the accounts were not even kept in the same monetary unit.3 But for those book-keepers who desired to adopt improved methods the lines of development were indicated. Less than fifty years from the date when Rinerio and Baldo Fini opened their nominal accounts, a complete system of double-entry had made its appearance.

1 Sieveking, loc. cit., p. 306.

s Ibid. p. 309. An account from the year 1289 is preserved, kept by Ser Cepperello Diotainti, a tax-collector of Philip the Fair. In this the debits, or Bfcepta, a replaced opposite the credits, or Expensa et Liberationes. But this is exceptional.

8 Sieveking, loc. cit., p. 308.

Double-entry is first met with in Genoa in the year 1340 in the accounts of the stewards to the local authority. The date when it actually commenced cannot be determined, but the period may be narrowed down within certain limits. The stewards’ books of 1340 show a complete system of double-entry. The books immediately preceding were destroyed by a fire which occurred in 1339 and no books exist of an earlier date than 1278. These earlier books show not the faintest trace of double-entry. The following extracts will illustrate the nature of the entries in the ledger of 1340l :—

Massaria Communis Jamie de MCCCXXXX

MCCCXXXX die vigesima sexta augusti. Jacobus de Bonicha debet nobis pro Anthonio de Marinis valent nobis in isto in LXI

lib. xxxxviiii s. iiii

Item die quinta Septembris pro Marzocho Plnello valent nobis in isto die in LXXXXII

lib, ,i’ii s. ac

Item MCCCXXXXI die sexta martij pro alia sua ratione valent nobis in olio cartulario novo de XXXXI in Cartis C

lib. s. xvi

Summa lib. LXI I s. X

An account called “Pepper Account” throws further light on the system of double-entry adopted in this ledger. The account is debited with expenses, credited with receipts,

1 Taken from Storia delta Ragioneria Jtaliana, by Guiseppe Brambilla, Milan, 1901. 1 Sievekiutr, p. 310. - Ibid.

MCCCXXXX die vigesima sexta augusti. Recepimus in ratione expense Comunis Janue valent nobis in isto in CCXXXI et sunt pro expensis factis per ipsum Jacobum in exertitu Taxarolii in trabuchis et aliis necessariis pro comuni Janue et hoc de mandato domini Duds et sui consilii scripto manu Lanfranci de Valle notarii MCCCXXXX die decima-nova augusti

lib. LXII s. X

while the balance is transferred to profit and loss, as the following specimens show:—

MCCCXXXXdie VHmartij

Piper centenaria LXXX debent nobis pro Venciguerra Imperials valent nobis in VIIII et sunt pro libris XXIIII sol V. pro centenario

lib. MDCCCCXXXX

On the same date there is the following credit entry:—

Recepimus in pipere centenaria LXXX pro Kbris XXIIII sol V. ianuinorum pro centenario valent nobis in XXXXIIII

lib. MDCCCCXXXX

On the credit-side there are further—

Item die VII novembris in dampno centenariorum LXXXIV et lib. XII

1/10 dicti piperis in ratione proventuum in isto in XXXVII

lib. CXXXXVIIII s. XII

Besides the books of the local authority of Genoa we have the records of a bank in that town going back to 1408, and these also are kept by double-entry. From the opening entries it has been supposed that a similar system of book-keeping had been used by the bank for some time.1 An indefatigable antiquarian has subjected himself to the labour of finding out whether these old books balance. He has discovered that the total credits of 54,295 lib. 14s. do not agree with the total debits by an amount of 10s. 7d. This error he looked for and found to be due to the omission of a posting of like amount.2

Next in antiquity to those of Genoa are books preserved in Venice. They are of particular interest because they belong to traders, not bankers, or stewards of local authorities. These books are kept with most remarkable care and neatness, and the ” Method of Venice,” which afterwards became so celebrated, was evidently already beginning to be built up. The gradual development of the

art can be traced in two ledgers of the firm of Donado Soranzo and Brothers, merchants. Of the older ledger only a fragment is preserved, bearing dates 1410 to 1416. The later book is complete and was evidently commenced before its predecessor was discontinued. It covers the period 1406-1434. In the first-mentioned ledger there is a very accurate system of double-entry, but only up to a certain point. Every debit has its corresponding credit, and the “goods accounts” are closed with a balance of profit or loss. The idea, however, of combining the items of profit and loss and transferring them to Capital Account had not yet been adopted. In short, the system stops at a sort of trial balance stage. The second ledger, which commences in 1406, is complete. It has a Profit and Loss Account and Capital Account.

The photographic reproductions of portions of two pages of this ledger, which, by the courtesy of the custodians of the State Archives of Venice we are able to give, illustrate both personal and impersonal accounts, and contain a reference to the Profit and Loss Account. The money is stated in lire, soldi, and denari. What the fourth column containing Arabic figures represents is not quite clear. It is suggested that it was used for denari piccoli as distinguished from denari grossi.

The following are transcripts and translations of the accounts reproduced, for which we are also indebted to the authorities of the Archives and a correspondent in Venice:—

+ Jesus Mcccc0 xxij j Mr. John Mantegan of Spilimbergo Dr. on 17th March for 12 parcels of mosto vallieri of Como and for 11 webs of cloth at 1C}, ducats the web—amount net,as entered in the book kept for Mr. D. and Mr. James, page 71, in this book page97£xvii i

+ Jesus Mcccc0 xxij j

Mr. John per contra Or. on the 15th December, per Mr. Andrew diPriuli, on account of monies received, as entered in the book kept for Mr. D. and Mr. James at page 71, in this book page 72 £xvii — — and at same date, for moneys deposited by his factor, as appears as above at page 71, in this book

page 103 £— i ii

Mr Dr. on

the . . . per the firm, advanced on 3 occasions, 46 ducats 6 grossi as entered in the book kept for Mr. D. and Mr. James page 71, in this book page 92 £iiil xii vi — and on . . . of April, on above-mentioned account of Mr. Gabriel Soranzo, for the remainder of velvet, as entered as above on page 71 and page

98£iii ii — —

Mr. Rasmo de Viena of Neustadt Dr. on 11th May for 11 parcels of pepper, weight 86 pounds . . . ounces net at !>:>,’ ducats per cantaro(?). Amount net, as entered in the book kept for Mr. D. and Mr. James at page 71, and in this book page 92 £zviiil zviij vi 12

Page 100 + Jesus Mcccc0 xxij j

,, Fuine che aspeta per k a ser Lucha donado laltra .’, per chaxa nostra deno dar di 8 luio / per ser lullian loredan, per fuine/ 184/in le qual fo nun-tori, ids. 22$ 1′una in-1 apar In libro tegnudo per ser d. a ser jacomo Karte 77 in questo val K. 99£iij zzij

Mr per

contra Cr. on the

… by Mr. Lo-

renzo Soranzo on his

special account for

30 braccia of black

velvet at 2 ducats 9

grossi the braccio.

Amount as entered

in the book kept for

Mr. D. and Mr.

James at page 71,

and in this book at

page !)4 £vii

and on the same day

by said Mr. Lorenzo

for 3 braccia at 2

ducats 2 grossi the

braccio as entered as

above at page 71, in

this book at page 94 £—

rviii

Mr. Rasmo Cr. per contra on the 12th May per Mr. Nicholas Cocco and Mr. Anthony Miorati for pepper, as entered as above page 71, in this book page 8o.£zviiii zviij vi 12

+ Jesus Mcccc0 xxij j ,, Fuine, a lincontrodeno auer di 7 luio 1423 per ser lucha donado per la 1 de le contra scritte che labudj linuerno pasado in1 apar ut supra K. 77 et in questo val, che son fuine /92/ K. 89£ij iij viiij 1C

„ ser Nichollo e jacomo di priolli fo de miser constantin, deuo dar dj ulltimo lujo per ser andrea di priolli, R° (resto ?) apar in libro tegnudo per ser d. e ser luane, K. 78, in questo

K. 72 £—

,, e dito di per ser

Lorenzo soranzo/1

qual I aduse due

23 scharsi/apar ut

supra, K. 78, in

questo K. 100£ij

,, e dito di per la chaxa

per in p° i° 33)

che piero condusse

di qua tocha per

la so £ apar ut supra

K. 78 in questo

val K. 72 £—

,,e di . . . per ser

Nicolo e Jachomo,

medemi per saldo de

questo val K. 123 £ —

3/8/6/7

+ Jesus Mcccc0 xxij i Pole-cat skins which

belong half to Mr

Lucha Douado, the

other half to our

firm, Kp on 8th

July, per Mr Julian

Loredan for 184

skins, among which

were 9 marten skins,

at 22£ soldi each-

amount as entered

in the book kept

for Mr D. and Mr

James at page 77, in

this book page 99 £iii The same to our firm

for the duty at the

Custom House, en-

tered as above, page

77, in this book

page 103 £—

The same to our firm, for tanning said skim, at 2 soldi each, amount entered as above, page 77, in this book

page 103 £—

Thesameper Mr Julian Loredau for polecat skins, amount entered as above, page 77, in this book

page 99 £iii — —

Messrs. Nicholas and James Priuli, sons of the late Mr Constantine, I >” on the last day of July, per Mr Andrew de Priuli, balance as entered in the book kept for Mr D. and Mr John, page 78, in this book

page 72 £— xv x

+ Jesus Mcccc0 xxij ii Pole-cat skins, per contra C’ the 7th July 1423, per Mr Lucha Donado, for half of the said skins which he received this winter past— amount entered as above, page 77, & in this book, 92 skins page 80 £ii iii vii! 16

Same, per Mr Piero

Soranzo, for the

value of a quarter of

said skins, 46 skins,

entered as above,

page 72, in this

book page 94 £i i x 24

Same date for theabove

mentioned account,

M* D. Soranzo for

the other quarter,

that is 46 skins,

entered, as above,

page 77, in this

book page 91 £i i x 24

Taken by Victor

Messrs. Nicholas & James Priuli C* 3rd June, for 331 parcels of pepper, for their half share, entered as above, page 78, page 95 £iii

Same date, per Mr Lo-

renzo Soranzo who

paid in 23 ducats

short weight, entered

as above, page 78, in

this book page 100 £ii

Same date for the firm

for which Piero

brought here, his

half entered, as

above, page 78, in

this book page 92 £—

On . . . per Messrs.

Nicholas & James

themselves to close

account, page 123 of

this book. £—

3/8/6/7

While a few specially well-kept books prove that the art of book-keeping was pretty fully developed by the commencement of the fifteenth century, it must not be supposed that a high standard was attained all round. The incomplete system which went no further than the trial-balance stage was in very general use and was imported from Venice into Florence.1 And even in the best books there was a most marked deficiency in one department, which in modern times is almost the accepted standard by which we judge book-keeping—namely, the power of balancing, i.e. proving the equality of debits and credits. It would be too much to say that balancing was unknown, but it was extremely rare. The fact seems to have been that the merchant regarded his book-keeping by double-entry as a guarantee of the formal completeness of his posting, and trusted to careful ” comparisons” for the detection of errors. An interesting light is thrown on the position of book-keeping in these days by an incident in the family of Soranzo, whose two ledgers have been referred to. The brothers had kept house together, but terminated the arrangement in 1434 and made a mutual accounting. Disputes arose, and the case was taken into court. In these legal proceedings reference is made to wills and inventories, but the books of the firm are hardly brought into the case at all. Yet we know that they were excellently kept. Another instance worth noting occurs in connection with another great merchant-house of Venice. One Andrea Barbarigo kept a ledger between 1440 and 1449, and in this whole period there is not a single attempt at balancing. His son Nicolo kept another ledger from 1456 to 1482, and he, at least, makes an annual calculation of profit. But a balance he only made once, in 1482, when the book was full. This practice of not making a general balance till the ledger was completed continued to be widespread till the seventeenth century. ^It is beyond all question that although about this time we find a high development in the theory and principles of book-keeping, we fail to discover a recognition of its many practical advantages. To bring the position of affairs home to us we must bear in mind that the ledger was kept in Roman numerals. It might be supposed that much of the futility of the bookkeeping of the day was due to this cumbrous system of notation. But the difficulty of balancing with the old cyphers was only a question of degree. The Goods Accounts were regularly closed off, and to treat every other account in the ledger in the same manner would certainly have been possible had it been thought advisable. The true position seems rather to be that the continued adherence to Roman figures is simply an additional proof that the mediaeval merchant did not realise all the convenience his doubleentry could afford. He had discovered in a system of cross-entries a fairly serviceable means of satisfying himself that all his transactions were entered in his ledger, and there, for the time being, he stopped. Roman figures he retained because they prevented fraudulent changes in his postings.1 One old ledger only is written in Arabic

1 Sieveking, p. 312.

1 In 1299 we find the guild of bill-changers of Florence forbidding the use of the “new” figures, while as late as 1520 the municipality of Freiburg refused to accept entries as legal proof of debt unless they were made in Roman figures or written out in words.

figures, that of Jacob Badoer (1436-1439), and it was kept at Constantinople—that is to say, in the East, the birthplace of the new cyphers. What was sometimes done was to give the particulars in both figures, and here Germany, which in general was very backward in book-keeping, so far led the way that it placed the Arabic figures in the money-column and the Roman ones in the text. Italy still retained the old numerals in the money-columns.

Such was the general position of the art of book-keeping when, in 1494, at Venice, the first treatise on the subject was given to the world.1 The author was one of the most celebrated mathematicians of his day, Luca Paciolo—Latinised Lucas Patiolus—and he had become familiar with the problems of commerce through acting as resident tutor to the sons of one of the merchant princes of the Republic.2 Paciolo describes himself as ” Brother Luke of the borough of San Sepolcro, of the order of St. Francis, and of sacred theology a humble professor.3 The purpose of the work was not in the first place to give instruction in book-keeping, but to summarise the existing knowledge of mathematics. It is therefore entitled ” Everything about Arithmetic, Geometry, and Proportion” (Summa de Arithmetica, Geometria, Proportion* et Proportionalita), and is divided into two parts, one dealing with arithmetic, the other with geometry. Having given directions for making numerical calculations

1 In a book entitled Manuele di Storia del commercio, by G. Boccardo, Book II. chap. 2, § 101 (cited in the Elenco cronologico, 4th ed., 1889, page 7), there occurs the following passage : “Three merchants of Florence, Pegoletti, Uzzano, and Davanzati, have left the earliest treatises on commerce. The first two have given with wonderful method and order various instructions about merchandise, coins, weights and measures, and about the use and keeping of books.” Karl Peter Kheil, in Prague, a diligent investigator of the history of book-keeping, states that he has read through these books and found no trace of the alleged reference to book-keeping. (Uber einige liltere Bearbeitungen det Buchhaltungs-tractates von Luca Pacioli, page 1 n.).

2 Antonio de Hompiasi by name. A mistake in the spelling of this name has become widely adopted through a printer’s error in the 1523 edition of Paciolo, where we read ” Ropiansi.”

3 In the original : “Prater Lucas de Burgo tancti Sepulchri Ordinit minorum, Et sacre theologie humilis professor.” San Sepolcro is a little town in Tuscany. Paciolo was born there about and having devoted particular attention to the difficulties involved in counting-house work by the chaotic state of the coinage of the period, Paciolo brings the arithmetical part of the work to a close by adding the treatise on book-keeping. It is introduced with the following apology: ” In order that the honourable subjects of the most gracious Duke of Urbino may have complete instructions in the ordering of business, I have decided to go beyond the proposed scope of this work and add this most necessary treatise.”

The dissertation on book-keeping is composed of thirtysix chapters, and is entitled ” Of Reckonings and Writings ” (De computis et scripturis). Paciolo makes no claim to offer any original contribution to the art of book-keeping. He states explicitly that he will follow “the method of Venice,” which in his opinion is to be recommended in preference to others. At the same time there can be little doubt that in his exposition the subject gained immeasurably in clearness. The author most fully answered that first requirement of the good teacher: the understanding of the subject himself. Paciolo’s command of detail is astonishing, and in taking the trouble to acquire this knowledge he cannot but have contributed towards carrying the somewhat vague ideas of merchants and their book-keepers to a logical conclusion. It is well worth while to enter somewhat fully into this first printed treatise on book-keeping.1 Not only is it extremely interesting, but the original can be intelligible only to a few.2 The points on which Paciolo’s book-keeping

1 Paciolo’s is the first printed treatise on book-keeping. In 1573, at Venice, a book by Benedetto Cotrugli was published with the title Delia mercatura et del mercante perfetto. It is said to have existed in MS. as early as 1463. This book contains a short chapter on book-keeping, showing that the writer was familiar with doubleentry, which, as we know, was first practised more than a century earlier. If the statement as to the age of the original composition is correct, Cotrugli would be the first known writer on book-keeping, and his work, however rudimentary, may have circulated in MS., as old works did eveii after the invention of printing.

J It is written in contemporary Italian, and the printing is full of contractions. While having the original before him, the present writer has relied on a German translation by Dr. Jiiger {Lucas Paecioli und Simon Stevin. Stuttgart).

differs from modern practice will be found to be broadly four: there is no separation in the books of primary entry; all entries, with exception of transfers and closing entries, are journalised; the profit and loss account is written up in a distinctive way; and stock is not treated in the modern fashion. These peculiarities, however, are far from being due to a defective grasp of the principles of bookkeeping. On the contrary, they were the most convenient and probably the only practicable methods in the circumstances of the time. Much of the interest of an examination of the old treatise De Computis lies in tracing how much of our modern practice is new, how much is old. It is remarkable how many of our present methods are described in the quaintest language by this monk of four hundred years ago.

The object of book-keeping is stated by Paciolo in precise terms: to give the trader without delay information as to his assets and liabilities. In giving directions how to proceed he begins with showing how to open a new set of books. The first step, he explains, is to make a complete inventory of one’s possessions and of one’s liabilities. This inventory, he observes, must not be made at different dates, but on one and the same day. Having completed the inventory, the merchant is advised to keep three books, which Paciolo calls Memorial, Journal, and Quaderno, i.e. ledger. The Memorial and Journal require some explanation. The Memorial is best described as a general book of primary entry. In it everything is entered as it occurs: sales, purchases, and every other transaction. The use of this book becomes apparent on a consideration of the confused state of the coinage which in these days served as circulating medium. We must remember that in the Middle Ages there was no such thing as uniformity in monetary systems. Each petty state, even each important town, had its mint, and if we include token coins, there was money in circulation which, it has been said, was readily accepted in one street while it was looked at with suspicion in the other. Add to this the fact that much of the coinage was debased and clipped, and it becomes evident that the book-keeping of the period was of necessity seriously affected by such a state of affairs. The first important duty of the book-keeper was to convert each item in the Memorial to the monetary unit in which his accounts were kept. Having made his calculation, he transcribed the entry into the Journal, arranging it at the same time as a cross-entry of debit and credit. Such is the historical origin of the Journal as a posting medium. We see that in the early days of book-keeping it was altogether out of the question to post direct from the books of primary entry. It says little for the originality of subsequent generations that centuries should have elapsed before it was recognised that a book prescribed as essential by the old masters, and rightly so, had under altered conditions ceased to be useful and become only cumbersome. As regards the use of a single book for all primary entries, we find that, as late as 1796, Edward Jones in his ” English Book-keeping” advised such a book, and discountenanced even a separate cash-book.

The old form of Journal had only one column, which was not summed ; nor would there have been any particular object in doing so. The entries themselves, as prescribed by Paciolo, are absolutely faultless. There is not yet the grouping together of kindred items, which now saves so much clerical labour, but under a state of affairs when each entry necessitated an arithmetical calculation, it was probably more convenient to write up the items seriatim. Apart from these superficial details, however, the entries were just as we make them to-day. Paciolo begins with the items of the Inventory and opens his books. He takes cash on hand, and debits Cash Account and credits Capital. Incidentally he observes that the balance on Cash Account must always appear as a debtor. Should it ever work out as a creditor, a mistake must have arisen, which should immediately be looked for. Each successive item in Inventory and Memorial is then taken and “journalised.” As an example a short account may be given of the instructions for making entries relating to a Joint Adventure. Each partner is to be credited with the money or goods he contributes, and the Adventure debited. The sales and expenses, such as freights, &c., are to be entered up in the regular manner, and the accounts closed by dividing the proceeds according to the terms of the agreement.

Before passing to the peculiarities of early book-keeping as exemplified in the ledger of Paciolo, a few technical details may be mentioned which have been preserved till recent times. After each Journal-entry, Paciolo mentions that it is customary to rule a line across the page; he also notes that in the Journal the date should be placed in the middle of the page and not at the side, as in the ledger. No satisfactory reason can be given for doing either of these things, yet they have been retained through centuries. Again, as auditors know who see many styles of book-keeping, there is a habit in use among members of a certain school of indicating posting by scoring the item through with a vertical line. Let them not hastily put this down to slovenliness or ignorance. It is a practice of remote ancestors handed down with reverent piety. Paciolo knows of it, although he hastens to add that a ” tick ” will serve every purpose. Even down to details like posting-folios the old monk was conversant with the methods of book-keepers. He carefully mentions the best method of recording these clearly, and his instructions were followed minutely as long as one-columned journals were in use. The debit and credit folios were placed one above the other in form of a fraction, and two centuries later this habit prevailed as far as remote Scotland, as the reader will see if he refers to the illustration given later on from the Journal of the ill-fated Darien Company.

The ledger is treated by Paciolo with equal excellence

H

and in the same detail as the Journal. But first a point is referred to, which the author regarded as highly important and worthy of a separate chapter. This is the ” alphabet,” or index to the ledger. The system described is very elaborate, for it consists of an ordinary alphabetical index with sub-divisions under each letter for the second letter in the name. It may be noted that at this time persons were indexed according to their Christian names. Edward Jones, for instance, would have been entered under E, sub-division D. Paciolo then passes to the ledger. As ruled books were not provided ready made, instructions are given for arranging the money and date columns.1 These are identical with those we now use, and they have also a division for postingfolios on the left of the money-column. A curious practice occurs in regard to posting-folios, which gives additional weight to the observation already made that the mediaeval merchant laid the chief emphasis on obtaining an assurance that every entry was doubly posted, rather than trusting to a regular balance of his books. The folios entered as references in the ledger are not the pages of the journal, but the number of the ledger-folios where the counterpart of each debit and credit was to be found. Thus the entry crediting a customer with payment of his account would have as reference the folio of the cash account where the receipt was debited. We find this practice still in use in the books of the Darien Company. So much importance was attached to these cross-references, that when Paciolo later on gives directions for making a ” comparison ” of the books, he tells that after checking the debit, the credit should be at once looked up. Regarding the balancing of the books, Paciolo’s directions presume that the balance takes place when a new ledger is commenced.

Among the ledger-accounts themselves the most distinctive is the Profit and Loss Account. Owing to the conditions of the trading of the period no accounts were kept showing in aggregate all sales and purchases. Instead

1 The books of the Darien Company, kept between 1696 and 1707, are ruled by hand.

there were separate accounts for each particular consignment of goods. Partly this arose from the miscellaneous nature of the articles in which each merchant traded. Commerce had not yet become sufficiently lucrative to permit of specialisation, and to earn a living a man had to deal in everything.1 Thus we find one and the same merchant sending on a “journey to Venice” an assortment of goods from which the following items may be taken as typical: linen, furs, iron kettles, altar candlesticks, brass work, and 728 dozen of thimbles. To have kept a general goods account would have served no purpose. Further, it must be borne in mind that the defective means of communication and the insecurity of transit made each undertaking appear in the light of a special venture. Delivery of goods to a neighbouring town took the form of a military expedition to ward off bandits. A “journey” down the Rhine or the Danube was of the same kind. Each robber-castle levied toll. Even sea-borne commerce was in the highest degree precarious. We find, for instance, that the cost of insuring a cargo of wool between London and Pisa was from 12 to 15 per cent.2 Freight, tolls, tariffs, and other charges so far increased the price that English wool was sometimes sold in Florence at twelve times its original value.3 These circumstances brought it about that a merchant’s transactions did not appear to him as a continuous process of trading, but as a succession of individual ventures. His book-keeping reflected this state of affairs, and we accordingly find separate accounts for each undertaking. Expenses also, such as freight and so on, were not grouped together in one account, but carefully apportioned to each venture wherever possible.4

1 Schnltze, Getehichte des mittetatterlichen Handelt.

1 Pagnini, Delia Decima. * Doren, Florentiner Wolltuchinduttrie.

4 Petty expenses were entered in a special account, and Paciolo gives his usual careful direction as to the expenses which it is not worth while to specially apportion. As an instance he cites the wages paid to porters for unloading a ship and carrying the goods to the merchant’s warehouse. No attempt should be made, he says, to divide this expense over the several items of the cargo.

When each of these various transactions which we have called ” ventures” came to an end, the account relating to it was squared off and the balance transferred to Profit and Loss. It may be noted in passing that these entries and all others of the same nature were made directly in the ledger and not by means of the Journal. That book bore in no respect its modern character of a place for recording closing entries, but served exclusively as a medium for arranging the rough jottings in the ” Memorial” and the items recorded in the ” Inventory.” Profit and Loss was thus not written up at the end of the year, but posted periodically as each enterprise came to a conclusion. To a large extent this method of dealing with profit explains why book-keepers at this time did not take stock or balance at regular periods. The absence of a general goods account showing aggregate sales’ and purchases reduced the importance of stock-taking. /Ventures which were completed appeared duly in the profit and loss account; enterprises, on the other hand, which were in course of being settled, simply occurred as balances in the list of assets. This practice, which in the circumstances of the time was the most convenient that could have been adopted, would greatly diminish the necessity for yearly general balances. A Where profits were ascertained piece-meal a balance would only be required for detecting errors in clerical labour, and this contingency was carefully guarded against.

Paciolo’s description of the process of balancing the ledger stipulates, as has already been remarked, that a new book is commenced at the same time. Before commencing operations a careful “comparison” of the books is to be made. The instructions that are given may be reproduced as a specimen of the author’s style. They may also be of value to any young accountant who may chance to read this page. What he now regards as the most tedious portion of his labours may hereafter to his mind become invested with some of the glamour of an immemorial usage.

The “comparison” of books is thus described four hundred years ago by the Franciscan monk, and for the sake of its quaint interest we will reproduce the passage as it appears in an English translation of Paciolo which was published in 1543.1 ” And for the more expedition and cleerness yee shall keepe this order, which is, that yee take and assigne one of your fellowes to helpe you. For it were much labour and over tedious to one alone to examin all that which belongeth unto this acte. Wherefore for the more speede first deliver unto your fellow the Journall and holde yourselfe the Leager. Then request your fellow that hath the Journall to begin with the first parcell of the said Journall, and that he tell you the name and the thing and in what leafe of the Leager it standeth, in Debitor or Creditor, so that you may perceive to what leafe he sendeth you. And when you have found the parcell, by the shewing of him that hath the Journall, then marke and make a token in the said Leager in the same parcell with a pricke upon the pound, thus, lib. • or some other signe, so it be no blemish in the book; that done say to him that hath the Journall, that he also make a pricke or signe of your concordance. And beware that none of you without consent of the other marke any parcell, by reason whereof might grow grievous labours to reforme the correction again of the same. For the parcells discreetly perused and so marked testifyeth a due examination. . . .

” Then proceede ye forth in your worke by and by, and by examining your Journal and Leager together, of all the parcells both Debitors and Creditors, by the which doing thoroughly examined ye shall perceive and find if that your said Leager be perfectly governed and compiled or not. And note you also that every one parcell in your Journal must for the concordance have two prickes because it ought to accorde with two parcells in the Leager, one in dare, the othere in habere. l Then these bookes thus truely and thoroughly examined, if there remain any superfluous parcells not pricked in the Leager, then it presupposeth an error in the Leager.” Paciolo then explains how these errors in the ledger may arise, and how they are to be corrected. False postings are to be cancelled by a cross-entry, and entries omitted are to be filled in with an explanation why they appear out of order of their date. He also points out that some items will occur in the ledger which are not to be found in the journal. These are the balances on the debit and credit which have been transferred, and they must be looked up according to their folios and verified. “And then,” concludes the old monk in the words of his translator, “this acception so discussed, if that your two books the Journall and Leager together well and truly examined, as aforesaid, agree both like in their marking or pricking, then that testifyeth your foresaid two bookes have been discreetly governed and kept: and by this work and provision is your Leager sufficiently rectifyed to the making of your ballance, as afterwarde shall be shewed.” This description of a ” comparison ” is a good instance of Paciolo’s knowledge of the usages of book-keeping down to the minutest detail. The celebrated mathematician who had visited all the great courts of Europe must have compared books himself. How else could he describe the operation so faithfully ? Let the youthful accountant take his great predecessor’s advice to heart and let him make sure that items are never marked off in one book and not in the other, ” by reason whereof grow grievous labours to reforme the correction again of the same.” Having completed his directions for making a comparison, Paciolo gives instructions for opening the new ledger. All accounts representing assets and liabilities are to be squared off and their balances transferred to the new book. Accounts relating to freights, carriages, household expenditure,” interest

1 By Hugh Oldcastle. See infra, p. 126.

1 Dare et habere = Debit and credit.

2 Household expenditure was carried to Profit and Loss Account till a very late period. Legacies received, on the other hand, were credited to Capital Account.

and rents received, &c., are to be transferred to Profit and Loss Account. It is correctly explained that a credit balance on this account represents a profit, while a balance on the opposite side indicates a loss,” from which,” says Paciolo, ” may God preserve every man who proves himself a true Christian.” The balance on Profit and Loss Account is then carried to Capital Account, and thereafter this Account is also balanced and carried to the new ledger. The author is careful to add that each account when it is entered in the new ledger should be noted with its folio in the ” alphabet” or index. As a check on the accuracy of the work it is interesting to note that it is not the balances in the new ledger that are taken down, but the totals of debit and credit sides in the old ledger.1 Should the two grand totals not agree, then Paciolo can only suggest that the book-keeper should set to work ” with such talent as God has given him.”

To briefly review the position of book-keeping at the close of the fifteenth century as reflected in the work of Paciolo we may say that in the technicalities of balancing there was still much to learn, but that in all other departments the ” method of Venice” was developed to a state which exactly met the requirements of the period. In none of the respects in which it differs from modern practice can it be said that the later improvements would have recommended themselves to a merchant of these days. When so excellent a system, therefore, was described with the methodical clearness and mastery of detail which Paciolo commanded, it was natural that the treatise should become a standard. And this is exactly what happened. The history of book-keeping during the next century consists of little else than registering the progress of the De Computis through the various countries of Europe. But before the work of Paciolo could attain its full usefulness, an improvement had to be made in the method of giving instructions in book-keeping. Paciolo uses no examples, and without the assistance of these the art can hardly be acquired by a novice. Paciolo addresses himself to experts, but a demand had arisen for a school-book. It is an interesting feature of the beginnings of modern commerce that it gave rise to institutions which we may describe as ” commercial academies.” The schools of the time, few as they were, devoted their energies to the classical learning which had been revived by the Renaissance. They prepared for the learned professions. To provide for the requirements of intending merchants private enterprise had to step in. We consequently find schools establishing themselves where the new science of arithmetic was the principal item in the ” prospectus.” l In these schools book-keeping was taught J

1 This operation, it will be observed, is hardly a proper trial balance with totals. When a page was carried forward it was squared and the balance transferred. Paciolo’s end totals were thus comparatively meaningless figures.

The next oldest treatise on the art published at Venice in 1525 would probably be more useful in a class-room than the De Computis. Its author is Giovanni Antonio Tagliente, and the work is a modest little pamphlet of twenty-four unnumbered leaves. But it marks this important improvement from the point of view of teaching that it gives examples. The advance made by Tagliente was very soon followed up and improved on. In 1534 Domenico Manzoni, a teacher of arithmetic and book-keeping in Venice, published his Quadcrno doppio col suo giornale secondo il costume di Venetia, which became so popular that it went through seven editions.2 The work illustrates fully the importance of Paciolo’s treatise. It is divided into two parts, and the first, which gives the theoretical exposition of the subject, is to all intents and purposes a mere transcription of the De Computis. The material is slightly re-arranged and some chapters are transposed, but in other respects the two books are identical.8

1 A very interesting historical account of ” Commercial Academies ” is given by Zieger in Die Kaufmilnnischen Sildiingsstutten, §c., vom Ausgange de* Mittelaltert bit in*, 18te Jahrhundtrt. See also Sieveking.

2 Klioil, Bearbeitungen von Luca Pacioli, p. 3 n.

3 Klicil, Uber einige iiltere Bearbeitungen des Buchhaltungs-tractates von Luca Pacioli. Kheil also cites numerous Italian authorities in support of the results of his investigations (loc. cit., p. 3).

Last Page Op Manzoni’s Journal — 1554 Edition

From Copy in the Edinburgh Chartered Accountant? Library

Manzoni’s second part is original and admirable. It gives an example of a representative journal and ledger which is compiled with care and thoroughness. The journal extends to twenty folios and the ledger to forty-six folios. The system of book-keeping described is in every essential detail the same as Paciolo’s. A slight innovation is to give a reference in the ledger to the journal by means of consecutive numbers attached to each journal-entry. Another change, and this time a step in the line of advance, is to use the journal for transfers. Thus, 4344 pounds of sugar were purchased on 15th March 1540 and sold on 2nd April. A special account had been opened, and on the day of sale the balance of profit was transferred to Profit and Loss Account by means of the following journal-entry :—

Q

57 ^ Zucchari ditti || A Pro & Danno

per utile sequido di quelli . 2 Ibs : 8s : 3d : 20p.

” Ibs.” &c., refers, of course, to money; 57 represents the consecutive number in the journal; folio 9 refers to Sugar Account in the Ledger; folio 13 to Profit and Loss Account. Apart from this extended use of the journal, Manzoni makes no advance on his predecessor. He gives no trial balance, but he remarks that, in his opinion, the ledger should be balanced at the end of every one, two, three, or four years. The stock difficulty he shirks by assuming that there are no unsold goods on hand.

Paciolo’s treatise, incorporated without mention of his name in Manzoni’s Quadcrno doppio, soon made its progress through the commercial world, aided no doubt by the examples which the copyist had added. Germany alone can point to two early authors on book-keeping who wrote uninfluenced by Italian teaching. When historians of their own country refer to these old worthies, they treat them with very scant respect. Certainly the first of them, Heinrich Schreiber, a native of Erfurt, who Latinised his name as Henricus Grammateus, deserves no praise beyond that of being the first German who conceived the idea of writing about book-keeping. He was an arithmetic-master in Vienna and according to his preface composed his treatise in 1518. It was printed in Erfurt in 1523 under the title Rechenbuchlin kiinstlich, behend und gewiss aujff’ alle Kauffinanschafft gericht. The part dealing with book-keeping is very brief, and so confused and bad that it proves the arithmeticmaster’s knowledge to have been very perfunctory. Three books are kept, a journal, a sales and purchases book,1 and a ledger.2 The postings are of the simplest description, and at the end the following directions are given for ” proving ” the books : ” Add together the sums due to you and the stock on hand, and from these deduct what you owe to others; there will remain the sum of profit, and that is correct.” This passage has been taken to indicate that Schreiber describes ” single-entry.” But an account of sales and purchases is strictly speaking alien to this system; besides, capital is not mentioned. It seems better, on the whole, not to trouble to find out the arithmetic-master’s intentions, for it is extremely improbable that he himself knew much about what he was professing to teach.3

More successful is the attempt made by the next German author, Johann Gottlieb,4 a merchant of Nuremberg who published his treatise in 1531. This man had the advantage of practical knowledge of his subject, and whatever may be thought of the merits of his system, his explanation is certainly clear. The method he describes is probably the same as that which Schreiber vainly endeavoured to express. Briefly stated,

1 The word used is ” Kaps,” which Dr. Jager conjectures to be derived from caput, head, the ledger being still in Germany called “head-book ” (Hauptbuch). The most serviceable translation is the above, although it is riot really a book, but only a few leaves set aside in the ledger. s Literally, ” debt-book ” (Schuldbuch).

3 Kheil, Uber einige ilitere Searbeitungen des Buchhaltunga-tractates von Lucri Pacioli, p. 74. An earlier book of Schreiber’s, Behend und Kiinstiich Rechnung nut-It der Regel und welhisch pructic, contains only arithmetic. The above notes on this author are taken from Jager’s Beitriige, p. 234 et teg., and from Kheil’s Bearbeitungen von Pacioli, who both consulted an edition of Schreiber which appeared in 1572.

4 The name is sometimes spelt Gotlieb.

(it is a perfect system of double-entry, adapted, it is true, to the very simplest requirements. The same three books are prescribed,1 and the journal commences with the capital put into the business which is in cash. The specimen postings given are only twenty-five in number, but they amply illustrate the simple transactions, which consist solely of sales, purchases, and cash payments and receipts. There is no reference to expenses of any kind. The ” sales and purchases book” is kept as follows: Each purchase is debited, and opposite it the sales of that particular lot of goods are credited. Stock on hand at the time of balancing is also credited, and the balance is noted as profit. The various items of profit are added up and noted at the close of the ” book,” with the explanation: ” By this amount I have become richer through this trade. To God be the thanks and praise.” The balance-sheet is sufficiently short to be given in full:—

Of ready money 2229 fl. lOss. 3h.

„ debts 20

„ goods (stock) 16

These riches and balances make together . 2265 10 8

To close this account there is everything which I owe in this trade, viz.—

Me Gotlieb my capital 2000 fl. …ss. …h.

Other creditors 44 16 …

Makes together 2044 16 …

One side compared with the other shows a surplus

of net profit 220 14 S

2265 10 3

It may be noted that the profit of 220fl. 14ss. 3h. agrees with the sum brought out on the ” sales and purchases book.” There is no profit and loss account, for there are no expenses. Assuming that the demands of German commerce were met by so very primitive a style of book-keeping, one must admit Gottlieb’s treatise to be excellent. It certainly does not sin against the canon of simplicity. In passing, we may record that both Schreiber and Gottlieb use Arabic figures in the ledger columns. Gottlieb, also, is the first author to treat stock properly J

1 The curious word “Kaps” is not used by Gottlieb, but instead “Goods-book” Here again it is not really a book, but a. ledger account.

/With Schfeiber and Gottlieb we leave the native German book-keepers, and enter the period when Italian influence becomes dominant, not in Germany only, but also in all other countries of commercial importance. Book-keeping, in fact, becomes international. Down to the minutest details we find identically the same methods prevailing among book-keepers whether they hail from Venice, Nuremberg, Antwerp, or London. Journal-entries are everywhere numbered consecutively, posting-folios in the ledger refer to the link between debit and credit, and no book is opened or closed without some religious formulary, however perfunctory.) The friar of San Sepolcro set the fashion in this matter, so much so that taking his book up at random one might imagine one was reading a breviary rather than a commercial treatise. He tells his readers to post their journal and to hear mass, or he stops short in the middle of some explanation of bills of exchange to inculcate the giving of alms. /Never on any account, he warns us, must a new book be commenced without the glorious sign of the cross, ” before which every enemy flees and the powers of Evil deservedly tremble.” And so throughout Europe when a new book was opened it was Laus Deo the 1st of January, or Jesus Maria the 1st of January, or at the very least •%• the 1st of January. This uniformity in certain char-

acteristic practices of the time was partly due to the fact ~ J that young men who intended to become merchants went to Italy, there to acquire a knowledge of commerce which was not to be obtained in the same degree elsewhere*

As early as 1488 we read of a Nuremberg trader who sent one of his apprentices to Venice, giving him the parting advice “to rise early in the morning and first to hear mass, after that to attend the class of a master of arithmetic and then to make his way to the German House on the Rialto.”l But before long those who stayed at home were furnished with the means of acquiring a knowledge of Italian commercial practice. Simultaneously in England, Holland, and France, and a few years later in Germany, there appeared translations of the works of the Italian masters.

(The treatise which introduced Italian book-keeping into England is the earliest work on the subject in our language of which we have a record. It is a translation of Paciolo, and was produced in 1543 by Hugh Oldcastle, a teacher of arithmetic and book-keeping in London. ) Unfortunately no copy of this oldest English treatise on book-keeping is known to exist.2 We can form an opinion of it only by a reprint which was issued in 1588 by John Mellis, also a schoolmaster in London. Mellis is perfectly frank in disavowing any claim to originality. He tells us in his preface that for thirty years he had beside him, ” for his own private knowledge and furtherance,” a little volume on book-keeping which is ” a iewell so commmodious” that he decided to republish it. “And knowe ye for certaine,” he continues, “that I presume ne usurpe not to set forth this worke of mine owne labour and industrie, for truely I am but a renuer and reviver of an auncient old copie printed here in London the 14th of August 1543, then collected, published, made and set forth by one Hugh Oldcastle, Scholemaster, who as appeareth then taught Arithmetike and this booke in Saint Ollaves parish in Marke lane.” Mellis himself enlarged the book, ” bewtified and enlarged it,” to use his own words, but he preserved the form of the original, for when he came to the conclusion of what we can identify as the work of Paciolo he printed the word ” Finis,” adding ” here endeth my Authour, and for the better and plainer understanding and practice of these rules, I have hereunto added a little Inventorie, Journal, and Leager, as followeth : with a briefe Treatise of Arithmetick all together.” That Oldcastle was a translator becomes perfectly obvious when we compare the reprint with the De Computis. The headings of the first fourteen chapters are identical in both cases, except that Oldcastle omits the seventh chapter, in which Paciolo refers to the practice of having commercial books certified by notaries, a custom unknown in England. The succeeding chapters in Paciolo relate to banking, and these, of course, Oldcastle also omits, as banks had not yet been established in this country. Altogether eleven chapters of the original are left out. Several passages are also somewhat condensed, but in other respects the translation is literal.l

1 Zieger, op. cit., p. 9.

2 It’ F. Foster, a writer on book-keeping and a collector of old works on the subject, may possibly have seen a copy of Oldcastle (see “Origin and Progress of Book-keeping,” London, 1862). At the commencement of his preface he almost states in so many words that he had seen the book, but later on, when he refers to John Mellis, who acknowledges himself to be a mere reprinter of Oldcastle’s treatise, Mr. Foster says that Mellis’s book would “appear to be simply a reprint of Oldcastle.” Had the two books been before him, Mr. Foster would surely have used a more definite expression. His statement that he had seen Oldcastle possibly means only that he had seen Mellis’s reprint.

In the same year 1543 which saw the publication of the first English work on book-keeping, there also appeared what is the earliest known Dutch book on the subject. It is the work of Jan Ympyn Christoffels, a merchant of Antwerp, and is entitled Nieuwe Instructie Ende bewijs der lo-effetijcker Consten des Rekenboecks ende Rekeninghe te houdene nae die Itatiaensche maniere, <|c.2 Of the personality of Jan Ympyn, as he was commonly called, we know very little. He did not live to see his book through the press, and all the details that can be gathered regarding him are the references contained in a short notice, which his widow prefixed to the work on its publication. We find that Ympyn had travelled much in Spain, Portugal, and Italy, and that for twelve years he lived at Venice. This long residence in itself indicates the source of his knowledge of book-keeping, and he places the matter beyond doubt by stating himself that [his book is a translation from the Italian. V* I made the acquaintance," says Ympyn, " of a man of good reputation, Jehan Paulo de Biancy, who has worked more [in book-keeping] than all others. Through his labours one can comprehend and learn the said science, if one only studies the following book and applies oneself to it. This treatise I have procured and acquired from the above-mentioned Jehan Paulo de Biancy and translated.” A blundering reference to other Italian authors is also given by Ympyn, which is worth mentioning on account of the curious error to which it seems to have given rise. ” Several celebrated personages,” says Ympyn, ” have written about the noble art and science of book-keeping, as Brother Lucas de Bargo & sancty sepulchry of the order of St. Francis, who has written of bookkeeping in his Somma de Arithmetica and Geometria.” This ridiculous perversion of Paciolo’s name, with omission of the ” & sancty sepulchry,” made its way into England, and in this abbreviated and completely meaningless form has become perpetuated there. In most of the scant notes on the history of book-keeping in our language, we may read of a certain ” Lucas de Bargo,” who is confidently stated to have been the first writer on the art. Of Biancy, nothing is known,1 but on examining Ympyn’s translation,

1 It is literal to the point of inaccuracy, as near the end of Chapter XIV. a reference to an earlier chapter is stated as to Chapter XV. ( !). This is the number of the chapter in the original, but Oldcastle has overlooked the fact that by his omissions the chapter has become No. XIII. in his translation.

2 The following description of the Nieuwe Intitructie is taken from the account of the book given by Kheil in his Uber einige iUtere Bearbeitungm des Buchhalturtgs-tractate* von Lvca Pacioli.

1 The obscurity is increased by variants of the spelling of the name. The Nieuwe Instructie was translated into French and English, and in each of the three editions the reading is different (Bianci, Bianchi, and Briancy). He is said to have been connected with Perugia, but Kheil’s inquiries there resulted in nothing, and no such name was found occurring in any local archives.

it becomes clear that the treatise he took as his model was simply Paciolo’s De Computis.

The first part of the book is identical with the corresponding part of the Quaderno doppio, which in its turn was a transcription of the De Computis. The second part of the book is taken up with examples of journal and ledger, and these are said to be excellent both as regards form and

/accounting, although in general they closely follow Manzoni.

‘ One important advance is made, namely, the introduction of the modern trial balance. It will indicate how slavishly the first portion of the book was copied, that the description of balancing which we find there is the cumbrous mode detailed by Paciolo. In the example, however, the method is adopted which we use at the present day. Stock, also, is treated properly in the example, and though this is not the first time that we meet the practice, the system is much better than Gottlieb’s. A separate account is opened and debited with ” Remainders of goods which are over at the conclusion of this book.” The amounts agree with the sums credited to the various goods accounts before striking profit. The entries relating to stock are not journalised, but goods accounts which had come to a close during the course of trading have their balances transferred to Profit and Loss Account by journalentries. In other respects there is no advance on Manzoni. Periodical balances are still of irregular occurrence, for the merchant is told to take stock every year, or at the end of two, three, or four years. Roman figures, it is noteworthy, are still used in the ledger, and other details are also copied. The paraphernalia of piety become almost obtrusive in this book. At the commencement of the journal, for instance, the following prayer is entered: ” May God our merciful Saviour vouchsafe me Grace to make a profit and preserve me from all bad fortune.” When the balance on Profit and Loss Account eventually comes out on the right side, the acknowledgments to the Giver are not omitted. Right across the book there is written in large letters: ” Honour and praise to the Almighty God, who has granted me these things.”

Ympyn’s book was translated both into French and English. The French translation appeared in 1543, the same year as the original edition, and it forms the first work on book-keeping in that language. The English version did not appear till 1547. It had completely fallen out of notice, and was lately discovered in a very interesting manner. Dr. Hugo Balg wrote a description of an anonymous English work which had been found in the library of the NicolaiGymnasium at Reval, in Russia.1 The title was as follows: ” A notable and very excellente woorke, expressyng and declaryng the maner & forme how to kepe a boke of accomptes or reconynges, &c. Translated with greate diligence out of the Italian toung into Dutche and out of Dutche into Frenche, and now out of Frenche into Englishe” (London, 1547). From the title and from extracts given by Dr. Balg, Kheil was able to identify this anonymous work as a hitherto unknown English translation of Ympyn.2

* The introduction of Italian book-keeping into Germany was made in 1549 ‘by a treatise published in Nuremberg under the title of Zivifach Buchhalten. It is a translation of Manzoni’s Quaderno doppio, but the author, Wolffgang Schweicker, who was living in Venice at the time of publication, makes no reference or other acknowledgment to his original. The book calls for no special remark, except perhaps that the examples are executed very carelessly, so that the apparent balance is the result of a ” cook.” 8 One of the most interesting points about the Zwifach Buchhalten is the preface composed by the printer, Johann Petrejus, and addressed to the ” dear, kindly reader.” Petrejus incidentally remarks that while only two books are described as necessary (journal and ledger), it is sometimes found convenient to make sub-divisions in the ledger.) Thus the Cash Account may be placed in a ledger of its own—the modern cash-book, of course, which is nothing but a ledger account bound up separately, as a recent writer has remarked. The debts which arise through buying and selling may also be placed in special ledgers—our debtors’ and creditors’ ledgers. We cannot leave this intelligent old printer without giving him his due for having produced the typographically most beautiful book on book-keeping which has ever been printed. Indeed, great beauty of printing characterises the German books as a whole. Paciolo is a dignified tome, and some of the early Dutch and’ even some of the English authors have their work embodied in handsome volumes. /But the best German books are works of art. It seems as if the love of art for its own sake, which distinguished the German craftsman of the sixteenth century, made it impossible for him to produce in an ugly shape even so utilitarian a thing as a treatise on book-keeping).

1 Zeittchriftfar Buchhaltung, April 1893.

1 Op. cit., p. 66.

8 Kheil points this out. He has taken the trouble to work through a number of old works on book-keeping to find out how far they are copies of Paciolo. fiber finige SJtere Bearbeitungen, Ac., p. 120.

/It is a curious fact that Spain, at this time ‘the most important country in Europe, should be found to lag behind its neighbours in the knowledge of book-keeping.1 No doubt we have here reflected that absence of enterprise in the regions of legitimate commerce which made Spain’s wealth and power so transitory. The earliest Spanish treatise— excluding an arithmetical work by Gaspar de Texada published in 1545—appeared in 1565, and not only in date but in merit it falls short of the achievements of other countries. The author’s name is Antich Rocha, and like so many of his contemporaries he is a translator. But far from having copied the great writers of Venice, Rocha knew of nothing better than to introduce his countrymen to the work of an obscure German schoolmaster, Valentin Menher, who had produced a treatise which is very far from showing a com

1 The claim, once put forward on behalf of Spain, that double-entry had originated in that country does not bear investigation. Tim evidence was partly drawn from collateral circumstances, such as the early acquaintance of Spain with Arabic numerals and with paper, partly from the alleged existence of clauses in early statutes which make double-entry compulsory for merchants. No such clauses have been discovered by subsequent research, and the early use of paper,

PRACTICQJVE

POVR BRIEVEMENT

apprendre aCiffrer, & tenir Liure

dc Comptes,auec la Regie de

Cols,& Geometric.

PAR M. V. MENHER AL’LEMAN.

petent knowledge of book-keeping. Menher was born at Kempten in Bavaria and later migrated to Antwerp, where he taught mathematics and book-keeping. His works are written in French. The first is dated 1550,1 and shows its author’s German origin so clearly that it prescribes the ” Sales and Purchase Book” which we meet with in Schreiber and Gottlieb. Improvements are introduced in later editions, but they are not sufficient to bring Menher’s teaching to anything like the level of excellence attained by students of Italian book-keeping.

1 The second part of this game book (dealing with Algebra) is dated 1556.

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