Merchant networks and accounting discourse: the role of accounting transactions in network relations

Abstract

Adopting an archival-based, historical methods approach to the study of eighteenth-century merchant trading networks, we analyse base accounting transactions to demonstrate how accounting discourse was a critical conduit via which these commercial networks developed and were sustained. This study contributes to the extant literature on the place of social networks in fostering the growth of merchant capitalism by introducing the crucial role of accounting in this process. The use of social network analysis is novel in accounting history and reinforces the value of a combined qualitative–quantitative approach to historical studies of accounting.

Keywords:

• accounting transactions
• merchant trade
• social network analysis

Acknowledgement

We wish to extend our appreciation to the editor Stephen Walker for his encouragement to pursue this line of research and to the two external referees whose feedback strengthened the final manuscript.

Notes

Discourse analysis has been used widely within accounting yet definitions of its scope and theoretical perspectives are varied, contributing to the confusion in the use of these approaches. Within accounting, the reader may wish to consult the special issue, Accounting as codified discourse, Accounting, Auditing & Accountability Journal 20, no. 6. The work of Phillips and Jorgensen (2002) and Phillips and Hardy (2002) are recommended references with respect to discourse analysis more generally.

An in-depth presentation of Gaignat and the Guide du Commerce and of our secondary data sources is provided in McWatters and Lemarchand (2006, 2010).

A.D. L.-A. B 3510, 3516, 3517, 3518, 3520, 3522, Rôles de la capitation. A.M. Nantes. CC 457, 458, 459, 460, 461, 462, Rôles de la capitation.

A.D. L.-A. C 869, Chambre de Commerce, 1737–1751, registre de l'Entrepôt des Cafés, folio 134, 13 mai 1749. A.D. L.-A. 1 J 58, 30 mai et 23 juin 1749.

A.M. Nantes, FF. 184. Enquêtes, informations, dépositions de témoins, n° 7, 15 décembre 1751.

On the organisation of royal censure, privilege and its mechanisms, see Cerf (1967) and Birn (2007).

The noun le négociant refers to a merchant engaged in wholesale trade but prohibited from operating a retail establishment (cf. McWatters 2008; Pétré-Grenouilleau 1997). We discuss the implications of this anonymous actor later in the paper.

A.D. Loire-Atlantique 4 E 2. Archives notariales Coiquaud, 26 avril 1765.

SNA has been utilised to a limited extent within accounting (Chapman 1998; Chenhall 2008; Masquefa 2008; Richardson 2009; Tucker 2011). Johns and van der Eng (2010) reference Lee (2000) but examine bank ledgers not accounting records with a limited number of actors.

Space constraints preclude the inclusion of an exhaustive review of social network theory and of the graph theory approach that we have adopted. Wasserman and Faust (1994) is a recognised reference text in this domain and provides a comprehensive discussion of the various measures used in this study. We also draw upon Hanneman and Riddle (2005) which is an introduction to social network analysis and visualisation software.

Notwithstanding the use of standard measures, some of them tend to be ‘software-specific’, while others more importantly reflect theoretical differences within sociology, social psychology and social theory (cf. Hanneman and Riddle 2005; Kadushin 2004; Scott 2000; Wasserman and Faust 1994). We comment briefly on theoretical differences in our discussion of centrality measures.

Padgett and Ansell (1993) is a sophisticated examination of the rise of the Medici and the complex web of political, social, and economic networks. It also is helpful in terms of SNA methodology, its metrics, and techniques. The authors describe their study as being above all an ‘archaeological dig’ into robust action – the ability to lock others but not oneself into a course of action. The authors also contend that their research mitigates the tendency to read history backwards. Cosimo de’ Medici had no ‘grand design’ to gain power but instead his success ‘flowed to him without tactical intervention or even effort on his part’ (Padgett and Ansell 1993, 1264, footnote 11). From a methodological viewpoint, the research offers many insights into the strengths and limitations of SNA, including the constraints of secondary data.

It is important to clarify at the outset that in a sociogram, the lay-out of the points on the drawing is totally arbitrary and the length of the lines does not necessarily have any particular significance. The graph lay-out obtained from social network software can be completely random and hinge upon certain measures built into the software program. However, in all cases, the final lay-out results from the joint selections made by the user and the author of the software program.

These calculations were undertaken with the use of the software Ucinet 6 and the sociograms were created using DrawNet, which comes with Ucinet 6. For further details on this software and the various measures that can be derived from it, the reader is directed to Hanneman and Riddle (2005).

We have adopted the term notre négociant – NN for short – to refer to the commercial trader in Gaignat's example and who is at the centre of the network that we analyse in this study.

This example is adapted from the discussion in Hanneman and Riddle (2005).

Bonacich (1987) provides a detailed exposition of this measure in terms of eigenvectors. The model allows for actor centrality – the sum of connections to others weighted by their centralities – and the degree and direction of the dependence of each actor's score on the scores of other actors to vary. It is measured in our study using Ucinet 6.

As noted earlier, we have named our négociant ‘NN’ whose identity has not been identified.

We have retained the spelling of names used by Gaignat, although it differs in some instances with that found in other sources such as parish records, for example, Jude or Judde. The Guide also has variations across journal entries for the same actor. From our own experience, these inconsistencies are not unusual, especially for the time period in question where spelling frequently varied depending on the source document. To avoid confusion, we wish to alert the reader to these minor variations.

We have focused on the first ten actors for each measure after which the rankings are of limited interest.

In contrast to Weber and Marx, the existence of a complot protestant has been rejected by other historians in favour of the historical conjunction of circumstances. Protestantism and Calvinism did not pre-dispose their adherents to banking or finance but rather the latter activities offered a refuge in light of the persecution and dispersion of French Huguenots at the end of the seventeenth century (Bouvier 1963; Fevre 1962; Luthy 1961).

Concerning the bankruptcy of Delarue, D4B6-4 and DB4B6-13, Jurisdiction consulaire, Archives départementales de la Seine were consulted.

Consuls and juges-consuls were not functionaries but rather merchants elected by their peers to judge commercial disputes, to represent their interests vis-à-vis the local authorities, and to facilitate the purchase and sale of their goods and merchandise. They performed their functions voluntarily. This commercial jurisdiction established in 1563 was replaced in 1790 by commercial tribunals which operated under the same principles, including the election process. The juge-consul who led this council had to be of a certain age and experience to occupy the lead position (cf. Barbiche 2001; Quénet 1973). A member of the garde du corps de la Mercerie was an elected master of the Mercer's guild, the most powerful merchant's guild (cf. Delobette 2005, 399, note 991).

These dry-goods and haberdashery merchants commercialised a large variety of products, as witnessed by the impressive list provided by Savary des Bruslons (1748, tome III, 353–356). Savary also pointed out their guild was considered to be the most noble and finest of all merchant guilds, even more so in that guild members did not undertake any form of labour or hand work unless it was to embellish items which had already been made or fabricated (Savary des Bruslons 1748, tome III, 359).

The term ‘caret’ refers to the shell of the hawksbill tortoise, much sought after due to the thickness and quality of its shell (now listed as an endangered species and its harvesting outlawed). At this time, Savary des Bruslons (1748, tome III, 461–463) stated that this shell was used to make combs, cases, snuffboxes, mirror frames, knife and razor handles; all of which were called ‘tortoise shell’.

A voiturier par eau engaged in commerce as a carrier or carter by waterway. This waterway's trade relied upon these specialised intermediaries of whom those established in Orléans were the most important and whose families had long-established links or branches in Nantes.

A conseiller du roi could refer to one of many positions, especially as this term included what were described as the ‘true’ and the ‘false’ conseillers – the advisors who were part of the royal inner circle or a major officer of the Crown versus a plethora of minor officials, magistrates, and members of provincial parliaments and advisory councils. Beginning in the fourteenth century, a contrôleur des guerres was responsible for the verification, accounting oversight and payment of military provisions and expenditures. These positions were held by civilians until 1767 when they became part of the military with the rank of captain and their offices eliminated. Conseillers du roi and contrôleurs des guerres were offices vénales frequently bought and sold subject to market forces with a portion of the amount received reverting to the royal treasury. The Crown had long established administrative decrees and procedures to regulate such transfers (cf. Barbiche 2001).

Berangé et Pelgé of Tours also appear in Figure 5 within their own sub-network involved in credit operations.

The list of manuscripts in the Vernon-Wagner collection at the Library of Congress in Washington mentions two letters sent from Cartagena, Colombia, addressed to Segretier, Léogane, dated the 6 and 9 November 1740 related to orders for provisions. The first is signed by Admiral Blas de Lezo who defended victoriously the port of Cartagena which had been under siege from March to June 1741 by the English fleet led by Admiral Vernon. These letters probably had been intercepted by the British during the time when preparations for the siege were being made (cf. Ford 1904).

Généalogie et histoire de la Caraïbe, avril 1995, numéro 70, 1313.

Letter of 1742 addressed to Pellet from Segrétier of Léoganne (A.D. Gironde, 7 B 1798, Pellet Jean, négociant and armateur à Bordeaux); cf. Cavignac (1967).

Généalogie et histoire de la Caraïbe, numéro 70, avril 1995, 1313.

The French term ‘l'armateur’ does not have a one-to-one correspondence in English thus we have retained French usage. It refers to a ship owner, but more precisely an entrepreneur whose operations in this maritime-trade sector were diversified. The business scope was broad including selecting and acquiring the vessel, raising of investment capital, hiring ship captains and managing the trade. These armateurs generally undertook such business with multiple partners but also had significant amounts of personal capital at risk (cf. McWatters 2008; Pétré-Grenouilleau 1997).

A voyage en droiture refers to voyages to and from the colonies to transport colonial goods to Europe and to ship merchandise and manufactures in return. The growth in colonial trade had resulted in a shipping network to maintain the flow of goods in both directions.