Reviewed by Salvador Carmona University of Seville
The Spanish Review of Finance and Accounting has been published since the early seventies. In 1985, the Spanish Association of Accounting and Administration assumed the sponsorship of the journal. As many practitioners as academics belong to the Association, and the editorial policy of the Review is to promote the publication of special issues that address the interests of both groups.
Reflecting this policy, the Review has published a special issue on the history of accounting. Limitations of space have made it necessary to present the issue in two volumes. The editor is Esteban Hernández-Esteve. In total, the issue comprises 9 articles, as well as a superb introductory essay by the editor.
The bulk of the articles — six, actually — concern the period from the end of the fourteenth century to the beginning of the seventeenth. For the purposes of the present discussion, these articles have been grouped according to three broad themes:
— identification of the first double-entry accounting records produced in Castille.
— the role of accounting as an instrument of control in public administration.
— particular accounting methods as addressed in the first book on accounting written in Castilian.
The search for the first appearance in Castille of double-entry bookkeeping is a lasting preoccupation of accounting historians. This monograph presents three such articles, written by Carlos Alvarez-Díaz (“Diego Ordóñez, Businessman and Cleric: The Remains of His Private Archive [1497-1520]”), Esteban Hernández-Esteve (“An Historical Commentary on the Account Books of Diego Ordóñez, 1518”) and Fernando Martin-Lamoroux (“The Court Book of Ochoa Pérez de Salinas [1498-1500]”). The first two deal with the records of the clerk Diego Ordóñez, found in the Archivo General de Simancas. Carlos Alvarez-Díaz makes an important contribution by presenting and transcribing Ordóñez’s private records. The survival of such an extensive private archive is unusual in Spanish historiography. In this case, the fact that these records were combined, on Ordóñez’s death, with those of a nephew, who was treasurer of the Casa Real, has guaranteed their survival. The records are of three types: a) commercial and financial; b) religious; and c) testamentary.
Like so many Castilian merchants of the period, his activity was basically financial. Diego Ordóñez speculated in letters of exchange, enjoying the interest from capital circulating in the fairs and exchange markets. He also developed a sideline as a seller of high-quality cloth, dyed in Valencia. In his absence, this activity was controlled by his mistress. The economic activity developed by this woman was remarkable as was that of his aunt, who would later be the executor of his will.
Ordóñez’s bankruptcy occurred as a result of bad financial dealings. In a certain sense, Diego Ordóñez was a child of his age; an age in which, in Castille, the pursuit of wealth by enterprise began to be abandoned in favor of the commercial transactions that could result from administrative contracts with the imperial government.
Esteban Hernández-Esteve carefully reviews the documents presented by Alvarez-Díaz. For this he employs not only the accounting documentation, but the whole appendix of docu-ments, which allows him to reconstruct the economic activities underlying the operations of Diego Ordóñez during the Fair of Medina del Campo in 1518. The fact that these operations concern only the activities related to the Fair prevents us from knowing more about the patrimony of Ordóñez. In any case,
Hernández-Esteve concludes that the entries follow formal double-entry procedure. It would be interesting to speculate on the relationship between a “high” technology activity such as the manufacure of high-quality cloth and the enterprising vision of a business that accompanied it, and the development of a modern business control system such as double-entry bookkeeping, which transcended the traditional purpose of account books as instruments of judicial proof.
The ledger of the banker Ochoa Pérez de Salinas, on which Fernando Martin-Lamoroux comments, is older (1498-1500). This banker was heavily involved in loans of different types, which underscores the volume of his business transactions. The term libro mayor does not appear in the title of the book although evidence seems to indicate that the contents are equivalent to a ledger. Terminology typical of double-entry (deve y a de aver) is used and the redaction of the entries is also traditional. The evidence appears to show that this book is but one part of a well-coordinated system of multiple books. As in the case of Diego Ordóñez’s accounting, the numerals are basically roman.
The functioning of accounting as an instrument of control in public administration is examined in two other articles: “The Reform of Municipal Accounting in Seville and the Introduction of the Libro de Caja, 1567,” by Jose I. Martínez-Ruíz; and the “Memorials of Salavert, Castilian Gentleman,” by Esteban Hernández-Esteve. The first work looks at the introduction of double-entry bookkeeping into the municipal government of Seville in 1567. This reform was the result of a wider municipal accounting reform motivated by the serious financial situation that had befallen the city in the 1560s. The article, therefore, presents us with evidence concerning larger issues, such as the causes underlying accounting system reform. In this case, a crisis situation in municipal finance promoted the intervention of an expert, who supported, almost 25 years before its adoption in the Hacienda Real, the introduction of a double-entry system. In this case, centralization, order, clarity and accounting control were pursued on behalf of better management of public re-sources.
Along these same lines, Esteban Hernández-Esteve analyzes the memoranda of Salavert. At this time problems of public finance (of the Hacienda Publica) were critical, especially after the suspension of payments in 1575. Hernández-Esteve’s study puts in relief the climate of secrecy and distrust that reigned in the Court (Salavert wanted to be very sure who heard his comments). Salavert reached the following conclusions, among others: that the indifference of those who governed was the root of the situation that had befallen the country; and that it was necessary to adopt double-entry bookkeeping, that is, the Libro de Caxa, in the Hacienda Real, an accounting practice that had been decreed as obligatory in the private sector since 1549.
The third block of articles is comprised by Jose María González-Ferrando’s “The Three Ways to Keep Accounts, Ac-cording to the Lawyer Diego del Castillo, Native of Molina”. The article describes the three forms of bookkeeping in Castille at this time: by data y recibo, by deve y deve aver; and by cargo y descargo. The account book at this time took a juridical perspective, which dominated business methods in Castille and was totally contrary to Catalan dynamism in commercial organization. It is within this context that Diego del Castillo wrote his. book, the technical aspects of which are skillfully analyzed by González-Ferrando. In addition, included in the article is a-comparative study of Del Castillo’s text with those of Bartolomé Salvador de Solórzano (1590) and Claude Irson (1678). González-Ferrando concludes that the terminology used by Del Castillo is technically more precise than that of Solórzano and that the three methods of accounting are essentially the same as those enunciated by Irson 150 years later.
Completing the monograph are three other articles. Enrique Fernández-Peña has compiled the legislation concerning joint stock companies (Sociedades Anónimas) in nineteenth-century Spain. Maria del Pilar Pérez-García examines the five account-ing ordinances that the Castilian mints had to follow during the period 1497-1730. Finally, Rafael Conde investigates the ac-tivities of the bank belonging to Pere Descaus and Andreu d’Olivella during 1377. This study is based on the journals and documentation extracted from the ledgers located in the Archivo de la Corona de Aragón. The article tries to determine the significance of the Usher entries as well as investigate the role of the bank of Barcelona during the last third of the fourteenth century. Conde divides the bank’s activities into two parts: banking and non-banking operations. The study of the first reveals that although checks in the strict sense have not been found, formal written orders evidencing the use and acceptance of checks survive. Regarding the requirement that orders of payment be made in person, it appears that the Barcelona bank had superseded this constraint and accepted written orders. Likewise, it is interesting to note that deposits were not remunerated by the bank.
Besides banking operations, the bank traded in cloth, sugar and saffron, and it had ties with eastern Mediterranean ports, such as Beirut, Alexandria and Damascus.
Since the account books were not kept in double-entry, the benefits accruing to the bank would be impossible to determine except for the existence of a secret book which accounted for the results. Although the bank’s accounting has similarities with double-entry in terms of ledgers with counterpoised sections and the monetary unit, it is different from double-entry in that only personal accounts exist (as in the Tuscan bank of the same period) and the books do not balance.
In conclusion, the monograph is an excellent contribution to the study of Spanish accounting history and is a good reflection of current research trends. The documentation in-cluded in the articles is especially careful and considerable editorial comment is devoted to it. If we bear in mind that great quantities of primary source material in Spain have yet to be discovered and that the preservation of source documents is in a bad state (It is estimated that only 10% of the documentary sources in the Archivo de Indias are in good condition), this emphasis on the presentation and transcription of original documents is especially praiseworthy. The monograph also permits us to gauge the place and contribution of Esteban Hernández-Esteve: he has edited the monograph, realized an excellent introduction to the articles and authored two interesting articles on the history of accounting in Spain. His efforts have been instrumental in awakening interest in accounting history on the part of economic historians and archivists. Their contribution, the importance of which is also demonstrated by the monograph, will enrich research in accounting history.
