Reviewed by Horace R. Givens University of Maine at Orono

The first edition of this book was published in 1856; the eighth and last edition appeared in 1884, the year Marsh died. Some years prior to the publication of The Theory and Practice of Bank Book-keeping, Marsh had authored two other works dealing with single and double entry bookkeeping respectively. Each of the volumes also appeared in a number of editions.
This text on bank accounting was a departure from Marsh’s earlier works in that it dealt with a specialized set of records applicable to a single type of business activity. Early 19th century accounting texts frequently stressed the fact that the systems they described could be applied to any business enterprise. However, in the latter part of the 1800s books began to appear which dealt with accounting systems designed for particular industries such as railroads, steamboats and banks. This work is an example of such a book.

The entire book takes the form of a long case study of the organization and operation of a fictional firm, The State Bank. The first twenty or so pages are entitled “Introduction” and form a review of basic accounting procedures. The first major text section consists of what Marsh calls, “The Routine of Business.” This is a narrative account, on a day-to-day basis, of the activities of the bank from its founding, May 10, 1855, until the end of its first fiscal period, October 31, 1855.

The next section introduces a series of documents: The Articles of Association, Stock Subscription Record, By-Laws, and the Minutes of the Board of Directors including resolutions, votes and other business.

The longest section of the work presents the various accounting records, complete with entries and full details, to record the events described in the earlier narration. These include the Stockholder Records; Cash Disbursements Journal (maintained by the First Teller), and Cash Receipts Journal (maintained by the Second Teller); the Offering Book, a record of notes offered for discount; the Deposit Ledger; the City Collection Register, which shows the notes the bank has received for collection in its home city; a General Journal and a General Ledger.

Two additional sets of records are of particular interest. Marsh includes what he calls a Tickler. This is a listing, by due date, of the future payment of all the discounted paper held by the bank. This record is not part of the double-entry system, but would have been a useful additional record for bank officials.

The second record, which was a part of the formal system, dealt with the bank’s activities as an issuer of bank notes. This book was organized by denomination of note, including not only $2 bills, but also $3 bills. The receipts of new, “unfilled,” notes were recorded as debits. (Unfilled notes were those which had not yet been signed by the bank officers.)
On the credit side were amounts representing the distribution of the filled, signed notes to the first or Paying Teller. The balance of the account represented an inventory of available notes.

The accounting records conclude with a full income statemen-and balance sheet, prepared in account form. Of interest here is a closing adjustment made for depreciation. Marsh shows 5% of the original cost of furniture as a debit to income. This rate is used for the six month period of the case as based on an annual rate for wear on these assets of 10%. The rate was established by the Board of Directors. The entry is made in the General Journal as part of the closing entry for expenses. The offsetting credit is made directly to the asset account which is then shown net on the balance sheet.

The book is an impressive description of bank accounting practices, which no doubt accounts for its long press run. Unlike many accounting texts of the time, it provides no exercises for students. However, a careful reading would have given the student a good understanding of bank accounting. It is sufficiently comprehensive to have served as a valuable reference work for bank officials and accountants.

Accounting historians, especially those with an interest in the accounting for financial institutions, will find this book a valuable source of information on 19th century banking and bank accounting. Arno Press and its editorial board have made another excellent choice.