Reviewed by William G. Mister Rider College
The monograph is an interesting historical account of a sea-to-sea canal from its start in 1768. The canal was built and adminis-tered by a private stock company—the Forth and Clyde Navi-gation. The canal was faced with political and financial problems not unlike those faced by modern multi-jurisdictional transportation authorities. The accounting controls and reporting systems devel¬oped by the company took on aspects of both governmental and profit oriented organizations. The Forth and Clyde Navigation, how¬ever, was not a government agency, and in fact required very little government assistance to complete the massive undertaking.
The monograph develops a picture of the adaptive financing and accounting controls employed by the Forth and Clyde Navigation during the different stages of the canal. Period and cash account¬ing played a novel role for this enterprise. Statistical presentations in the published accounts were adopted by the Forth and Clyde Nav¬igation, perhaps for the first time ever. Perhaps the most significant of the accounting developments was a “Charge and Discharge” statement which represents an antecedent of our present day sources and applications statements. The development of the state¬ment can be traced both to the traders’ double entry accounting and the stewardship accounting prevelant during the period. Thus, the origins of the sources and applications statement is traced back sixty-five years earlier than previously believed.
One incident documented in the monograph should be of par-ticular interest to modern accountants. The first accountant hired by the Forth and Clyde Navigation was Alexander Stephen. For an annual salary of 70 pounds he was to pay wages, keep accounts and report to the Law Agent in Edinburgh weekly. After 18 years of service his accounts were found to be out of balance by a little more than 1,200 pounds. This sum was recovered from the sale of his house and from his sister and one other of his guarantors. He was not accused of dishonesty but had been able to completely control the finances of the massive canal project which was con¬trolled from three distant centers—Glasgow, Edinburgh and Lon¬don. This indicates certainly that professional responsibility is not a new concept and indeed seemed to be more severely applied in the days of the Forth and Clyde Navigation than modern standards.
The monograph suffered from two admitted defects. The quality of reproduction was poor due to limited budget of the publisher. Also admittedly, the treatment of company finance was at times pedantic. Two other defects detracted from the monograph. The material was organized by function—incorporation, organization, financing, etc.—rather than chronologically. This organization did not allow for an even flow. The reader was jumping back and forth from the early stages of construction to operating problems. The monograph should prove to be a valuable addition to the account¬ing history of the period when put together with other accounts of the period. However, the monograph does not stand by itself. Bet¬ter explanations of how the “innovative” accounting practices docu-mented differed from those normally employed during the period, and what effect they had on future accounting practices were need¬ed for the reader not intimately familiar with the accounting prac¬tices of the period.
In spite of the defects, I found the monograph to be enjoyable and informative reading. The monograph should be particularly valuable to accounting historians of the period.
