Journal, 1764–1776; Ledger, 1764–1776
MS account books: American Philosophical Society
December 10, 1764
As Franklin had done when he went to England in 1757, he began a new record of his financial transactions when he started his second mission in 1764. Probably the new record consisted at first of a series of rather informal entries such as those in his “Account of Expences,” 1757–1762, described above, VII, 164–5, and cited repeatedly in volumes VII–X of this series. When his grandnephew, Jonathan Williams, Jr., went to England in 1771 Franklin asked him, as he told the young man’s mother, March 5, 1771, “to put my accounts in order, which had been much neglected. He undertook it with the utmost cheerfulness and readiness, and executed it with the greatest diligence, making me a complete new set of books, fairly written out and settled in a mercantile manner, which is a great satisfaction to me, and a very considerable service.”6 Williams completed the task on February 28, 1771, bringing all entries down to date, and then struck a trial balance. Thereafter Franklin seems to have maintained the books himself and was able to strike a second trial balance after his return to Philadelphia in 1775. A few entries of later date and some miscellaneous memoranda complete the volumes. The rough accounts Williams used to set up these records have not survived.
The two books Williams started and Franklin carried on take the familiar form of a Journal and a Ledger. The first is a folio volume inscribed on an otherwise blank initial page: “The Journal of Benjamin Franklin after his leaving Philadelphia Novr 7. 1764 and during his Residence in London.” It consists of a series of chronological entries recording receipts and expenditures.7 The first entries are dated Dec. 10, 1764, and the last May 31, 1775, except for about two pages of additions from October 1776 which relate, in one way or another, to earlier transactions. The 61 pages on which the entries appear are numbered consecutively.
The second of these account books, also a folio, is inscribed: “The Ledger of Benjamin Franklin containing Accounts of such Transactions only as have pass’d since his leaving Philadelphia Novr 7. 1764 and during his Residence in London.” It consists of a series of facing-page records of specific accounts. Although most of these are with individuals or business firms, including banking houses, there are also accounts with the General Post Office, each of the four colonies for which Franklin acted as agent during these years, and a few other bodies or institutions. On the left-hand page of each account, headed “Dr.,” are entered by dates and brief descriptions the amounts which Franklin paid to the person or organization concerned. On the right-hand page, headed “Contra—Cr.,” are similarly entered the amounts BF credited to himself in connection with that account, showing the nature and sources of such credits.
Jonathan Williams, who had been trained in accounting, set up these books to provide a full system of double-entry bookkeeping.8 This system is based on the theory that every transaction involves simultaneously the receipt of a financial benefit by one person or organization and the conferring of a financial benefit by another. Hence for every transaction recorded in a double-entry ledger, two entries must be made—one debit and the other credit—in two different accounts. Realistically, however, there are numerous transactions for which an entry can be made in monetary terms in only one account, as, for example, when a person whose accounts are being recorded receives money for services rendered, or draws out currency from his bank, or pays cash for a purchase of clothing. To provide a second balancing entry it becomes necessary to create one or more “impersonal,” or nominal, accounts in a ledger. Williams met this requirement for his uncle by establishing accounts, with both debit and credit pages, entitled conventionally “Profit and Loss” and “Cash.” To provide for Franklin’s special situation, where many transactions involved overseas transfers of monetary credit, he also set up a similar record headed “Account of Bills of Exchange.” These three “impersonal” accounts, together with one or two others of minor importance, completed the categories required in the Ledger for a full recording of Franklin’s financial transactions of every sort.
The first entries in the Ledger are again dated Dec. 10, 1764, and the last Oct. 21, 1776. There are 71 pairs of facing pages containing these ledger accounts, both pages of a pair identically numbered. Williams made no attempt at alphabetical arrangement; he simply opened an account under a new name on the next available pair of pages whenever it became necessary, and Franklin later followed suit.9
The entries in the two account books are closely related. For each entry in the Journal there must be two entries in the Ledger, one where it appears on the “Dr.” page of one account, the other where it becomes a “Cr.” entry in another account. Two ruled columns near the left margins in the Journal provide spaces where these page numbers in the Ledger are shown. Similarly, a column on each page of the Ledger contains a figure for each entry to indicate the page in the Journal where that transaction was first recorded. These columns thus provide a complete system of cross-reference between the books. There are, however, no alphabetical indexes.
Two simple examples will illustrate the system employed in these books. Under date of Feb. 1, 1765, there is an entry on page 2 of the Journal showing that Franklin paid William Strahan £163 13s. 7d. to assume James Parker’s debt to Strahan, as Parker had asked before Franklin left Philadelphia.1 Cross-references direct one to the Parker account in the Ledger, where the payment is recorded on the debit page as “To William Strahan,” and to the Strahan account, where it appears on the credit page as “By James Parker.” Both entries refer back to page 2 of the Journal. Again, the Journal records on page 3 that on June 11, 1765, BF received from the banking firm of Brown & Collinson a draft for £12 12s. in favor of Mason Chamberlain “for my portrait.”2 The credit page of the Brown & Collinson account in the Ledger records receipt of this draft on the same date, and the debit page of the Profit and Loss account records the transaction as an expenditure. While some of the financial operations shown in these books are more complicated than these two, the principles involved remain the same.
As occasion requires, these account books will be referred to in this edition as Journal, 1764–1776, and Ledger, 1764–1776, respectively.
6. [Jared Sparks, ed.], A Collection of the Familiar Letters and Miscellaneous Papers of Benjamin Franklin (Boston, 1833), p. 139.
7. The earlier entries in the Journal are all recorded by specific date, but after Williams had gone back to Boston BF usually entered his transactions only by the month in which they occurred.
8. The surviving account books from BF’s years in the printing business, Ledgers A & B, Shop Book, and Ledger D (above, I, 172–5; II, 127–8, 232–4), reflect a less sophisticated system of bookkeeping. “Account of Expences,” 1757–1762, and Memorandum Book, 1757–1776 (above, VII, 164–5, 167–8), useful as they are, can hardly be said to reflect any system at all. It may be surmised that Williams had to teach BF the niceties of the system he set up in 1771.
9. When any of the more active accounts had filled all the space on its pair of facing pages, BF totaled the figures in each debit and credit column and carried these totals forward to an indicated pair of pages later in the book, where he continued the account. BF also pasted into the Ledger a number of bills received, promissory notes, and other papers he wished to preserve. Some of these are helpful in following his affairs, though they are not properly a part of the Ledger accounts.
1. See above, pp. 414, 470–1.
2. Above, X, XV, and frontispiece.