Reviewed by Esteban HernandezEsteve Presidente de la Comision de Historia de la Contabilidad de AECA
This book is an abridged version of research presented by Professor DonosoAnes prerequisite to obtaining the chair of Financial Economics and Accounting at the University of Seville. It constitutes an important work; the product of a patient, thorough, and effective trawling through the files. The facts discovered have been submitted to a rigorous analysis, interpretation, and contextualization. In sum, this investigation represents a good example of how modern research in accounting history should be conducted. The author has taken into account the most relevant bibliography both on the Casa de la Contratacion (Trade House) and on accounting practices and thought of that time in order to contextualize the research properly. The investigation is basically supported by manuscripts personally found by the author at the General Archive of Indies in Seville. These documentary foundations, formed by new sources which had not been studied until now, are precisely what gives the investigation its true rank and importance.
The Casa de la Contratacion was the official body established by Ferdinand and Isabella in Seville in 1503 to centralize trade between Spain and the newly discovered West Indies. No harbor other than Seville was allowed to ship or receive goods to or from the Indies, and no vessels from nations other than Castile were allowed in the Spanish New World. All persons and goods going to or coming from the Indies had to be registered in the books of the Casa de la Contratacion. Although national and foreign merchants evaded these strict monopolistic measures in many ways and on frequent occasions, the extensive apparatus set up to control trade with the Indies was both impressive and formidable. The great amount of wealth involved in this trade was not comparable to any previous period in history. An institution such as the Casa de la Contratacion, able to organize, control, and channel this trade, inevitably required an unprecedented organizational and bureaucratic apparatus. Within this administrative and bureaucratic complex, the accounting organization had necessarily to play a fundamental role.
In the first part of the book, the historical context is established. The first chapter deals with the Casa de. la Contratacion in Seville, its structure and administrative organization. The second chapter is devoted to the study of then current accounting theory and practice.
The second part of the book also contains two chapters. The first explains broadly the accounting systems and practices followed by the treasurer of the Casa de la Contralacion. This explanation is illustrated by examples corresponding to different periods and centuries. Taking into account tha/t the recorded transactions had mainly to do with collections and payments, it is not surprising that bookkeeping was entrusted to the treasurer. From the moment the Council of Indies was created in 1524, the treasurer of the Casa de la Contratacion had to report to the Account Office of this Council. Before 1524, he had to settle the accounts with specific commissions appointed by the king himself for this purpose.
The books were kept by the charge and discharge method {cargo y data); i.e., by the system traditionally used in public administration not only in Spain but in practically all European countries at that time. The charge and discharge method was also commonly known in Spain by its alternative name libro de pliego horadado (perforatedleaf book) because the accounts were commonly kept in loose leaves with a hole through which a sufficiently long ribbon or string was passed and tied at the ends. As DonosoAnes remarks, a distinctive feature of the charge and discharge accounting at the Casa de la Contratacion was precisely that, against the common rule, account books were to be bound because of the need to guarantee the authenticity and inviolability of public accounting records.
The charge and discharge accounting method had very limited possibilities because it was primarily directed at recording the financial position of a person (a factor or agent) with regard to his principal. At the Casa de la Contratacion, these limitations led to the use of doubleentry bookkeeping as an auxiliary method so that some aspects of its activity could be; recorded in a more complete and integrated way. Of course, the use of doubleentry was favored by the private merchants who had to work with the Casa de la Contratacion because of its suitability for the type of operations performed.
The final chapter is wholly devoted to the study of the accounting records developed to administer and control the goods and properties left by deceased and missing people; that is to say, people who had travelled to the Indies and had disappeared or died during the journey. Properly speaking, this task had little to do with the original functions of the Casa de la Contratacion, but taking into account that the people involved were registered at the Trade House and had in some way started their adventure under its auspices, the administration and control of properties and goods of deceased and missing people were formally entrusted to it. Originally, a special administrator and accountant were appointed to perform this task, but, after some vicissitudes, the duty fell to the treasurer.
The accounting applied to record and control the goods and properties of deceased and missing persons constitutes a paradigmatic example of the mixed and complementary use of charge and discharge and doubleentry methods in order to obtain more complete information of recorded facts and relations. In this respect, the author analyzes the composition and structure of the different systems and sets of books used to fulfill this accounting purpose and identifies the several stages of their evolution. At the same time, he studies the audit processes performed in different periods and their influence on the evolution and development of the accounting procedures and rationale of the Casa de la Contratacion,
In conclusion, DonosoAnes’ book constitutes a worthy contribution to Spanish accounting history and especially to the history of public accounting. He describes and analyzes in a clear, meticulous, and accurate way the accounting systems and books used in one of the most important and representative public bodies in Spanish economic history in the 16th and 17th centuries. Donoso makes a serious effort to clarify the meaning, reasons, and effects of the changes, inserting all of them into the pertinent context; i.e., trying to establish the relationships among them and their social and cultural setting. The accounting systems and practices studied served to administer and control no less than all the trade and traffic of precious metals between Spain and its overseas possessions.
Far beyond its utility and significance for the knowledge of accounting history, Donoso’s book is a most valuable contribution for all those who are interested in the domestic history of the Casa de la Contratacion, the functioning of its administrative and organizational mechanisms and the real contents of its operations.
