Account Books and Economic Life in Early New Paltz

Joan Hollister, Assistant Professor of Accounting at Marist College and Sally M. Schultz, Associate Professor of Business at SUNY New Paltz

EARLY ECONOMIC DEVELOPMENT
In 1609, Hendrick Hudson's exploration of the river that now bears his name provided the first stimulus to European colonization of New York's Hudson River valley. The Dutch West India Company subsequently established trading posts at the current sites of New York City and Albany, as well as at an intermediate point in the area inhabited by the Esopus Indians (near what is today Kingston, New York). Over time, the agricultural importance of Esopus to the settlers increased, and by the 1680s, the area had become a fertile wheat land populated largely by farm families producing grain. The economic goals of the settlers in New York's mid-Hudson River valley and their descendants would have included meeting annual subsistence needs, increasing the comfort level of daily life, accumulating land, and passing on a legacy to heirs (1).

The agricultural economy depended on family labor, which the New Paltz Huguenots supplemented with the labor of slaves. Given good weather and soil, more grain could be produced than needed by the farming household. Some of the excess would have been used locally in barter exchanges throughout the winter months, but the remainder would have found its way into the export market. By the late 1690s, wholesalers in New York City were concerned with obtaining wheat, rye, and corn for export to the Caribbean, and they ultimately obtained these grains from the docks at Kingston and the rest of the Hudson River Valley. In turn, Manhattan merchants provided a source for the imported goods that local residents desired (2).

The area remained primarily agricultural through the eighteenth century. At the beginning of the nineteenth century, farm families in Ulster County were cultivating grain, raising farm animals, keeping gardens, and manufacturing textiles. Most continued to use the same tools as had their grandparents: scythes and sickles for reaping wheat and cutting grass, and wooden plows and harrows. Storekeepers were the primary source of consumer goods produced outside of the valley (3).

COINAGE AND CURRENCY IN EARLY AMERICA
Coinage was scarce in the American colonies, since Britain had enacted rules prohibiting the export of silver coinage. As a result most coinage (or specie) that circulated came from Spanish America, Spain, the Netherlands, the German States, France and other countries. Colonists were able to use these coins within their local monetary system based upon published exchange rates. The British colonists adopted the monetary units of pounds and shillings as a "money of account" to keep track of the various foreign denomination coins in circulation. However, Dutch guilders and stuivers might be used as the unit of account in Dutch settlements, like Kingston, New York, during the early colonial period.

The scarcity of coinage led early colonists to use commodity money such as wheat and tobacco to serve as a medium of exchange for local barter transactions. However, international transactions had to be settled in silver. Because the demand for silver coinage exceeded the supply, silver coins traded at a premium, with every colony legislating its own premium or "crying up" for silver coinage. As a result, although each colony used the monetary units of pounds, shillings and pence, the value of these units was different in the various colonies and in Britain (4).

Eventually, to address the shortage of coinage, the colonies began to issue paper notes that were actually bills of credit, or short-term public loans to the government. With each currency emission, the colony would typically authorize a tax equaling the amount of the emission, so that as individuals paid the tax using the notes, the emission would be taken out of circulation. New York emitted currency denominated in pounds and shillings from 1709 until 1792 (5).

In 1775, when the Revolutionary War became inevitable, the Continental Congress authorized the issuance of currency, redeemable in Spanish milled dollars, to finance the conflict. After the war, the U.S. Congress passed the "Mint Act" in 1792, which established the dollar as the principal unit of currency in the new nation (6). In New Paltz, we continue to see pounds and shillings used as the primary units of account in some surviving ledgers into the mid-19th century. The transition to the use of dollars for recording purposes thus came at a quite a late date compared to that reported for some businesses in colonial New England, who made the transition between 1795 and 1810 (7).

BARTER TRANSACTIONS AND ACCOUNTING RECORDS
In early New Paltz, local trade was largely based upon the asynchronous exchange of goods and services among friends, neighbors, and relatives, as well as with local shopkeepers. Book debts were recorded based upon these face-to-face transactions, with individuals relying upon a mutual sense of trust and obligation between debtor and creditor. There was typically no explicit promise to repay or specified time for repayment, and accounts could be settled with payment in cash or by providing goods or services. Exact settlement was difficult, and bookkeeping was indispensable to keep track of the balances due between individuals.

The accounting system was primarily focused on the need to keep track of payables and receivables. Merchants would typically keep an account for an individual running for a number of years before it would be balanced and settled. The goods sold by the shopkeeper would include both items that the merchant was primarily in business to handle and those that had been received as commodity money and were being resold. Because an individual could also assign his credit to a third party, the merchant also played the role of banker during this era (8).

There were no requirements to calculate or report profits to outside parties during this era, so single-entry accounting satisfied the information needs of many merchants. Single-entry accounting includes only accounts for persons, whereas double-entry accounting, which is used by most businesses today, would also include accounts such as cash, inventory, capital, and profit and loss (9). In early America, small merchants would have been able to gauge their profitability and inventory levels readily without the need for accounting reports.

ARCHIVAL ACCOUNTING RECORDS
Archival records, in conjunction with other sources, can help us shed light on the economic development of the New Paltz community. Accounting records are often among the few surviving records that help us document daily life in the community in which they were created and help contribute to our understanding of business and accounting practices in the past, as well as providing insight into the financial success or failure of individuals and families (10). Accounting records can also give us insight into the timing of cultural shifts that were reflected in the use of different recording languages and currencies (11).

The Cottin Ledgers, 1707-1721
Jean Cottin had been the first French schoolmaster at New Paltz and later became a merchant in Kingston (12). In his will, Cottin bequeathed his mercantile account books to Kingston's 'Old Dutch Church,' so that the receivables in them could be used to benefit the poor of the church. As a result, a number of these ledgers have survived to the current day in the archives of the church. They show that Cottin bought wheat and peltries from local farmers, hunters and trappers, and transported them to New York City for sale to Manhattan merchants. In exchange, he obtained wholesale quantities of the imported goods that his local customers desired. Many of the New York business people with whom Cottin dealt were also French Huguenots, lending support to the thesis that trade, family life, and religion were highly interrelated during this period (13).

Cottin's accounts with local individuals, with few exceptions, were recorded in French using Dutch guilders and stuivers as the monetary units of account. In contrast, the accounts that Cottin kept with Manhattan merchants were denominated in pounds, shillings, and pence, doubtless reflecting the units in use by those merchants. A number of the New Paltz settlers had accounts with Cottin, including the patentee Jean Hasbrouck and his son Jacob. During 1712 and 1713, the purchases charged to Jean Hasbrouck's account include various types of dry goods along with items such as nails, syrup, and rum, with the most costly items being two quilts. As was typical, Cottin recorded both the items sold and the identity of the party who took delivery of the goods. Hasbrouck's son Jacob and daughter Lisbette (Elizabeth) took delivery of most of the purchases charged to their father's account. The credit side of Jean Hasbrouck's account shows that after his father's death in 1714, Jacob Hasbrouck paid the balance due to settle the account. The use of cash in the Cottin ledgers appears to be most prevalent when an account is being settled.

On the same page in the ledger, Cottin then started a new account in the son's name. During 1714 and 1715, the purchases charged to Jacob Hasbrouck's account included gunpowder, cotton, cloth (measured in aunes, an old French measure equivalent to about 47 inches), sewing supplies, quilts, soap, tools, nails, ginger, pepper, and rum; items typical of those sold by Cottin. The Hasbroucks visited Cottin's store in Kingston between two and five times a year during this period.

Many of the goods that Cottin sold were obtained from his Manhattan suppliers who had imported them from Europe, the West Indies, or the Southern colonies. Rum would have come from the West Indies, or possibly from one of the rum distilleries that had sprung up in the American colonies to process the imported sugar and molasses. The ginger may also have come from the West Indies, and the cotton from the Southern colonies. In the 18th century, the colonists imported a range of commodities from England, including some that had originated in the Orient. Dry goods were one important import for New Yorkers, who were unable to provide sufficient cloth and clothing for themselves, and could import textiles more cheaply than they could be produced locally (14). Other goods that the Hasbroucks purchased from Cottin, such as deerskin and syrup (probably maple syrup) had likely been acquired by Cottin in local barter transactions.

The Roggen Ledger, 1750-1795
The account book of Johan Jacob Roggen (also know as Jacques Roggen), which begins in 1750, is the earliest surviving accounting ledger in the archives of the Huguenot Historical Society in New Paltz. It primarily reflects the work of a tailor. Most of the entries record various types of garments that were made, including camisoles and culottes (shirts and pants), suits, coats, and gloves. Sewing supplies were also sold, including buttons from Philadelphia, thread, cloth, indigo (a fabric dye), and buckles. In addition to charges for garments made, Roggen also recorded receivables for days he had worked for others, but no detail is given about the type of work done. Bartering labor with neighbors was common practice during this era.

Roggen, who was likely Swiss, used the French language to record entries during the earlier years of the account book (15). Use of the Dutch language was introduced in the ledger around 1777. Dutch was used interchangeably with French at first, and then it eventually became predominant. The units of measure used in the account book were pounds, shillings, and pence, although descriptions of transactions during the earlier years included valuations in francs. Beginning about 1756, references to "escallions" (shillings) as well as francs begin to appear in product descriptions. The colonists were still using multiple currencies during this period, but the use of the pound as the unit of account suggests a more widespread adoption of the New York monetary units by the middle of the 18th century. For personal record keeping needs, both Roggen and Cottin had largely retained use of French, their native tongue. The eventual shift to Dutch in the Roggen ledger may illustrate the difficulty that the New Paltz settlers had in maintaining the use of French in a largely Dutch region.
In addition to the entries for garments manufactured, sewing supplies sold, and labor provided, which predominate, some entries in the later years of the Roggen account book record the sale of other items, including tea, tobacco powder (snuff), handkerchiefs, rum and gunpowder. A few entries note that the goods had been shipped from Manhattan, in particular, soap from York and one pound of veal from York, for which the bookkeeper noted that he had paid too much. Account credits show that payment was frequently received from customers in wool and cloth.

The Hasbrouck Store Ledgers, 1793-1813
Tradition holds that the store in the right front room of the Jean Hasbrouck house was in existence by revolutionary times, and perhaps as early as the 1760s. Renovations made to the stone house around 1786 included installation of a public sales area in the north front room, documenting the existence of the store at this point (16). A number of surviving ledgers document the fact that a prosperous general store and tavern was operating in the house during the late 18th and early 19th centuries. An expanding New Paltz population supported this local store, which in turn saved the residents the trip to Kingston that their forbearers would have made in order to shop for basic supplies and luxury items.

There is also evidence that a store was operating in the Bevier-Elting house on Huguenot Street during the 1760s. A store inventory in the collection of the Huguenot Historical Society prepared in 1768 lists a wide variety of goods, but with no monetary values attached to the items. During this period, shopkeepers were interested in keeping track of what they had in inventory, but were not focused on valuing their business or its assets.

The transactions of the Hasbrouck store are documented in two surviving account books and related daybooks. Transactions were recorded chronologically in the daybooks, which were books of original entry, and then posted to the customer's page in the account book. An alphabetical index of customers allowed the bookkeeper to find the customer's page in the account book.
A wide range of products was sold at the Hasbrouck store. Customers were buying spices, beverages (particularly tea, wine, and rum), and tobacco products. A wide variety of textiles were sold, as were sewing supplies, and limited clothing items, particularly hats and shawls. Kitchenware was another popular category of product, and assorted household supplies were available, as were tools and building supplies. Customers often paid for their purchases by delivering goods from their farms, particularly wheat, flax, rye, corn and butter.

SUMMARY AND CONCLUSIONS
Because cash was in short supply in the mid-Hudson River valley during much of the 18th century, asynchronous exchanges involving goods and services were prevalent. In such an economy, bookkeeping was indispensable to keep track of the balances due between individuals. This bookkeeping barter not only accommodated two-way trade, but also facilitated triangular exchanges since merchants could made cross-entries in two customers' accounts. In this way, the accounting records of a small business also served to facilitate the smooth economic functioning of the wider community. The role of bookkeeping barter in supporting the economy in New York's mid-Hudson River valley confirms what has been reported for other locations in colonial and early America, including Massachusetts and Delaware (17). The ledgers that we examined also confirm the important role that rural merchants played as intermediaries facilitating trade between local farmers and the New York City merchants who were engaged in international trade. In this period characterized by an absence of regulatory requirements to report income or wealth, we find no attempt to measure these accounting constructs in the ledgers. The adequacy of single-entry accounting to meet the reporting needs of small businesses in early American confirms the findings reported by others (18).

ENDNOTES
1 Michael Kammen, Colonial New York: A History ( New York: Charles Scribner's Sons, 1975), 1-2. Marius Schoonmaker, The History of Kingston, New York: From its Earliest Settlement to the Year 1820 (Salem, MA: Reprinted by Higginson Book Company, 1888), 2-3, 21. Joyce D. Goodfriend, Before the Melting Pot: Society and Culture in Colonial New York City, 1664-1730 (Princeton, NJ: Princeton University Press, 1992), 10-11. Thomas S. Wermuth, Rip Van Winkle's Neighbors: The Transformation of Rural Society in the Hudson River Valley, 1720-1850 (Albany: State University of New York Press, 2001), 13-14, 46.

2 Cathy Matson, Merchants and Empire: Trading in Colonial New York (Baltimore and London: The Johns Hopkins University Press, 1998), 27, 125.

3 Wermuth, Rip Van Winkle's Neighbors, 92-96.

4 Louis Jordan, "The Comparative Value of Money between Britain and the Colonies," University of Notre Dame, Colonial Currency Website, accessed August 13, 2000,
http://www.coins.nd.edu/ColCoin/ColCoinIntros/IntroValue.html

5 Louis Jordan, "New York Currency: May 31, 1709," University of Notre Dame, Colonial Currency, website accessed August 13, 2000: http://www.coins.nd.edu/ColCurrency/CurrencyText/NY-05-31-09.html. Louis Jordan, "Bills of Credit," University of Notre Dame, Colonial Currency, website accessed August 13, 2000: http://www.coins.nd.edu/ColCurrency/CurrencyIntros/IntroBillsofCredit.html.

6 United States Secret Service, Department of the Treasury, "Know Your Money: History of United States Currency," website accessed August 18, 2002: http://www.secretservice.gov/money_history.shtml.

7 W. T. Baxter, "Accounting in Colonial America," in A.C. Littleton and B.S. Yamey, ed., Studies in the History of Accounting (New York, NY: Arno Press, 1978), 287.

8 W. T. Baxter, "Credit, Bills and Bookkeeping in a Simple Economy," Accounting Review, Vol. 21, No. 2 (April, 1946): 154-166.

9 Terry K. Sheldahl, "America's Earliest Recorded Text in Accounting: Sargeant's 1789 Book," Accounting Historians Journal, Vol. 12, No. 2 (Fall, 1985): 1-42.

10 Gloria Vollmers and Darlene Bay, "Small-Time Accounting: A 19th Century Meat Merchant in Maine," Accounting Historians Journal, Vol. 28, No. 1 (2001): 43-65.
11 For an expanded discussion of the economic lives of one line of the descendants of New Paltz patentee Jean Hasbrouck, see Sally M. Schultz and Joan Hollister, "Single-entry Accounting in Early America: The Accounts of the Hasbrouck Family," Accounting Historians Journal (forthcoming).

12 For a more detailed discussion of Jean Cottin's life and account books, see Sally M. Schultz and Joan Hollister, "Jean Cottin, 18th Century Huguenot Merchant," Manuscript submitted for publication.
13 J. F. Bosher, "Huguenot Merchants and the Protestant International in the Seventeenth Century," William and Mary Quarterly, 3rd series, LII (January 1995): 77-101.

14 John J. McCusker and Russell R. Menard, The Economy of British America, 1607-1789 (Chapel Hill: The University of North Carolina Press for the Institute of Early American History and Culture, 1985), 290. Cathy Matson, Merchants and Empire: Trading in Colonial New York (Baltimore and London: The Johns Hopkins University Press, 1998), 139-141, 182-183.

15 The father, probably Roggen's brother, of the child whose baptism Roggen witnessed in Kingston in 1755 was Swiss according to The New York Genealogical and Biographical Record (1903), 172.

16 Ralph LeFevre, History of New Paltz New York and its Old Families, 2nd ed. including appendix, (Albany, NY: Fort Orange Press, 1909), 398. Crawford & Stearns and Neil Larson & Associates, "Historic Structure Report for The Jean Hasbrouck House," (New Paltz: Huguenot Historical Society, 2002), 1.24-1.26.

17 Baxter, "Credit, Bills and Bookkeeping in a Simple Economy." W.E. Stone, "1794 Middletown, Delaware-From Accounting Records," Accounting Historians Journal, Vol. 6, No. 1 (1979): 39-51.

18 Baxter, "Accounting in Colonial America." C. Densmore, "Understanding and Using Early Nineteenth Century Account Books," Midwestern Archivist, Vol. 5, No. 1 (1980): 5-19. Stuart Bruchey, "Success and Failure Factors: American Merchants in Foreign Trade in the Eighteenth and Nineteenth Centuries," Business History Review, Vol.
32 (1958): 272-292. Michael Chatfield, A History of Accounting Thought, rev. ed. (Huntington, NY: Robert E. Krieger Publishing Company, 1977).