Cost Book Companies: A Note on Cost and Profit Shares

Cost Book Companies: A Note on Cost and Profit Shares CORNISH tin mines used a unique form of organizational structure called the cost book company. There are no surviving records of cost book accounts prior to the eighteenth century, but it is believed that they pre-date the Norman Conquest. They survived until the turn of the twentieth century. During the late nineteenth century their role was replaced by the limited liability joint stock company. One of the features of the cost book company was that there were periodic reckonings, at regular intervals of four months or fewer, and the balance of net costs or net receipts would be divided between the shareholders in proportion to their shareholdings. There would either be a call on the shareholders or a distribution of the cash surplus. The commonest numbers of shares in cost book companies were in repeated divisions of the whole by two: that is half, a quarter, an eighth, a sixteenth, a thirty-second, and so on. This contrasts with the way that joint stock companies tend to issue shares in round numbers such as 100, 1,000, 1 million, etc. We would like to suggest that there were practical reasons for cost book companies’ choice of shareholding values. To take the case of the Lower Ninestones China Clay Works1 (which, although not a tin mine, was run as a cost book company) a typical entry for January 1829, was that a list of costs amounting to £50: 2 s: 0½d in total was to be shared between the three shareholders in proportion to their shareholdings. John Lovering held shares of 11/16 of the whole; Robert Martin 3/16 and Thos Nicholls 2/16. In the cost book the amount of £50: 2 s: 0½d was written, and then halved: this was then halved again, halved again and halved again, to yield a one-sixteenth part. These amounts were then used to allocate the cost, thus: £50: 2s: 0½d (the whole, or 16/16) £25: 1s: 0d (a half, or 8/16: the farthing was ignored) £12: 10s: 6d (a quarter, or 4/16) £6: 5s: 3d (a eighth, or 2/16) £3: 2s: 7½d (a sixteenth, or 1/16) £50: 2s: 0½d (the whole, or 16/16) £25: 1s: 0d (a half, or 8/16: the farthing was ignored) £12: 10s: 6d (a quarter, or 4/16) £6: 5s: 3d (a eighth, or 2/16) £3: 2s: 7½d (a sixteenth, or 1/16) £50: 2s: 0½d (the whole, or 16/16) £25: 1s: 0d (a half, or 8/16: the farthing was ignored) £12: 10s: 6d (a quarter, or 4/16) £6: 5s: 3d (a eighth, or 2/16) £3: 2s: 7½d (a sixteenth, or 1/16) £50: 2s: 0½d (the whole, or 16/16) £25: 1s: 0d (a half, or 8/16: the farthing was ignored) £12: 10s: 6d (a quarter, or 4/16) £6: 5s: 3d (a eighth, or 2/16) £3: 2s: 7½d (a sixteenth, or 1/16) John Lovering: 11/16: £25: 1s: 0d (8/16) + £6: 5s: 3d (2/16) + £3: 2s: 7½d (1/16) = £34: 8s: 10½d Robert Marin 3/16: £6: 5s: 3d (2/16) + £3: 2s: 7½d (1/16) = £9: 7s: 10½d Tho’s Nicholls: 2/16: £6: 5s: 3d Total: £50: 2s: 0d This process replaced the necessity of dividing an amount expressed in pounds, shillings, and pence by sixteen (in this case, or an even larger number in some other cases) with a series of simple divisions by two and successive additions of the subtotals. We are not suggesting that this was impossible for whoever prepared the cost book; rather that this was significantly quicker and easier and less prone to error than the alternatives. Clearly other ways of doing the calculation existed. It could be done by long division. Also there was a way of doing such calculations available by using a ready reckoner. A ready reckoner is a book which shows tables of successive £: s: d amounts multiplied by successively larger numbers. The author possesses such a ready reckoner: it has no title page, and shows neither publisher nor date of publication, but by manuscript entries it appears to date from the early 1700 s, so it would be contemporary with cost book companies existence. The first page deals with ¼d which is multiplied by numbers from 1 through 112 (112 being the number of pounds in a hundredweight), then by 144 (a gross, or twelve dozen), by 200, by 256 (half of a quarter ton, measuring 256 pounds), by 272 (?), by 300, by 365 (days in a year), by 400, 500, 600, 700, 800, 900, 1,000, 2,000, 3,000, 4,000, 5,000, 6,000, 7,000, 8,000, 9,000, 10,000. Subsequent double page entries deal successively with multiplicand numbers increasing by a farthing at a time up to 2 shillings, then rising by pennies from 2 shillings to 10 shillings, then rising in increments of 3 pence up to 15 shillings, then rising by 6 pence at a time up to 19 s/6d, all multiplied by the same set of multipliers listed in the previous paragraph. Thus, even when dealing with awkward fractions and money expressed in pounds, shillings and pence, there were ways of mastering calculations involving large numbers and awkward amounts of pounds, shillings, and pence. By a reverse process, division is possible. Another of the features of the cost book company was that, provided he had paid all calls made to date, a shareholder could relinquish his or her shares. If that were to happen, the tidy ‘multiples of 2’ number of shares and the simple method described above would no longer work. Brooke2 reports the following shareholdings as a by-product of his collection of vignettes about the tin mines. 1/20: p. 15; 1/30: p. 69; 1/256: p. 34; 1/1,624: p. 37; 1/54: p. 38; 1/50: p. 38; 1/124: p. 42; 1/5,120: p. 59; 1/128: pp. 62, 70; 1/64: p. 19; 1/256: p. 23; 1/212: p. 24; 1/64: pp. 31, 32; 1/3, 1/6 & 1/12: p. 32; 1/16: p. 32; 1/12: p. 33; 1/32: p. 33; 1/1,867: p. 63; 1/5,600: p. 63; 1/1,400: p. 63; 1/1,024: p. 64; 1/5,600: p. 67; 1/1,100: p. 72; 1/6,000: p. 80. 1/20: p. 15; 1/30: p. 69; 1/256: p. 34; 1/1,624: p. 37; 1/54: p. 38; 1/50: p. 38; 1/124: p. 42; 1/5,120: p. 59; 1/128: pp. 62, 70; 1/64: p. 19; 1/256: p. 23; 1/212: p. 24; 1/64: pp. 31, 32; 1/3, 1/6 & 1/12: p. 32; 1/16: p. 32; 1/12: p. 33; 1/32: p. 33; 1/1,867: p. 63; 1/5,600: p. 63; 1/1,400: p. 63; 1/1,024: p. 64; 1/5,600: p. 67; 1/1,100: p. 72; 1/6,000: p. 80. 1/20: p. 15; 1/30: p. 69; 1/256: p. 34; 1/1,624: p. 37; 1/54: p. 38; 1/50: p. 38; 1/124: p. 42; 1/5,120: p. 59; 1/128: pp. 62, 70; 1/64: p. 19; 1/256: p. 23; 1/212: p. 24; 1/64: pp. 31, 32; 1/3, 1/6 & 1/12: p. 32; 1/16: p. 32; 1/12: p. 33; 1/32: p. 33; 1/1,867: p. 63; 1/5,600: p. 63; 1/1,400: p. 63; 1/1,024: p. 64; 1/5,600: p. 67; 1/1,100: p. 72; 1/6,000: p. 80. 1/20: p. 15; 1/30: p. 69; 1/256: p. 34; 1/1,624: p. 37; 1/54: p. 38; 1/50: p. 38; 1/124: p. 42; 1/5,120: p. 59; 1/128: pp. 62, 70; 1/64: p. 19; 1/256: p. 23; 1/212: p. 24; 1/64: pp. 31, 32; 1/3, 1/6 & 1/12: p. 32; 1/16: p. 32; 1/12: p. 33; 1/32: p. 33; 1/1,867: p. 63; 1/5,600: p. 63; 1/1,400: p. 63; 1/1,024: p. 64; 1/5,600: p. 67; 1/1,100: p. 72; 1/6,000: p. 80. As can be seen, several unwieldy calculations could be involved in dealing with the allocation of costs or receipts some of these instances. Not only are some of the divisors large (e.g. 6,000) but additionally, some are not round numbers (e.g. 1,867). A good example of shares in other fractions is for the Poldice Mine.3 Money from the sale of ores in March 1789 was divided as follows: One of the most serious criticisms of the cost book company, particularly in the nineteenth century is that it did not have the ability to build up an internal fund either to finance expansion and deal with the investment in large pumping engines and other capital expenditures that were necessitated by mines going deeper and deeper and dealing with both water in the workings and the need to lower miners and raise ores to and from great depths.4 Burt and Kudo5 in responding to Burke and Richardson, noted that, over time, the Cornish cost book companies had deviated from their original basis of a pure cash in–cash out method of accounting to this modified version, where balances were allowed to accumulate. The Happy Go Lucky mine cost books from 1787 and 17886 report on a four-week cycle. For the four weeks to 27 September 1787 the recorded costs of £116: 3 s: 8d and sales (net of dues to the Duke of Cornwall and the mineral lord) of £202: 19 s: 0d. A dividend of £84: 0 s: 0d was paid to the shareholders and it was noted that this left a balance of £88: 12 s: 8d in the hands of the purser. Obviously, there would have been a beginning balance of £84: 17 s: 4d in the hands of the purser, but this was not listed in that cost book. Shareholders in Poldice Mine: March 1789: Shareholding: Equivalent to: 124ths Cumulative Samuel Wallis Esq. & the Revd Hawkins Tremayne 5/31 & 3/124 23 23 Sir William Lemon, Bart 2/31 8 31 Messrs Thomas Daniell & Son 11/124 11 42 Revd Thomas Vivian 2/31 8 50 Revd Richd Harrington 2/31 8 58 Execs. of Robert Lovell Esq. 2/31 8 66 Messrs Geo.Fox & Sons 3/124 3 69 Messrs Fox, Philllip & Fox 15/124 & 1/186 15+ 84+ Mrs Jane Mander 1/31 4 88+ James Willyams Esq. 1/31 4 92+ John Vivian Esq. 1/62 2 94+ Messrs Boulton & Watt 1/62 & 1/186 2+ 96+ John Wilkinson Esq. 1/124 & 1/186 1+ 98 Mr Thomas Wilson 1/124 1 99 Mr Richard Phillips 1/124 1 100 Zacchr Andrew Esq. 1/62 2 102 Richard Wymond Esq. 1/62 2 105 Mr John Westlake 1/62 2 107 Mr John Edwards 1/31 4 111 Mr Collan Bawden 1/31 4 115 Mr John Bawden 1/31 4 119 Messrs Jenkins Willyams & Co. 1/62 2 121 Mr John Martyn 1/62 2 123 Capn. William Davey 1/124 1 124 Shareholders in Poldice Mine: March 1789: Shareholding: Equivalent to: 124ths Cumulative Samuel Wallis Esq. & the Revd Hawkins Tremayne 5/31 & 3/124 23 23 Sir William Lemon, Bart 2/31 8 31 Messrs Thomas Daniell & Son 11/124 11 42 Revd Thomas Vivian 2/31 8 50 Revd Richd Harrington 2/31 8 58 Execs. of Robert Lovell Esq. 2/31 8 66 Messrs Geo.Fox & Sons 3/124 3 69 Messrs Fox, Philllip & Fox 15/124 & 1/186 15+ 84+ Mrs Jane Mander 1/31 4 88+ James Willyams Esq. 1/31 4 92+ John Vivian Esq. 1/62 2 94+ Messrs Boulton & Watt 1/62 & 1/186 2+ 96+ John Wilkinson Esq. 1/124 & 1/186 1+ 98 Mr Thomas Wilson 1/124 1 99 Mr Richard Phillips 1/124 1 100 Zacchr Andrew Esq. 1/62 2 102 Richard Wymond Esq. 1/62 2 105 Mr John Westlake 1/62 2 107 Mr John Edwards 1/31 4 111 Mr Collan Bawden 1/31 4 115 Mr John Bawden 1/31 4 119 Messrs Jenkins Willyams & Co. 1/62 2 121 Mr John Martyn 1/62 2 123 Capn. William Davey 1/124 1 124 Shareholders in Poldice Mine: March 1789: Shareholding: Equivalent to: 124ths Cumulative Samuel Wallis Esq. & the Revd Hawkins Tremayne 5/31 & 3/124 23 23 Sir William Lemon, Bart 2/31 8 31 Messrs Thomas Daniell & Son 11/124 11 42 Revd Thomas Vivian 2/31 8 50 Revd Richd Harrington 2/31 8 58 Execs. of Robert Lovell Esq. 2/31 8 66 Messrs Geo.Fox & Sons 3/124 3 69 Messrs Fox, Philllip & Fox 15/124 & 1/186 15+ 84+ Mrs Jane Mander 1/31 4 88+ James Willyams Esq. 1/31 4 92+ John Vivian Esq. 1/62 2 94+ Messrs Boulton & Watt 1/62 & 1/186 2+ 96+ John Wilkinson Esq. 1/124 & 1/186 1+ 98 Mr Thomas Wilson 1/124 1 99 Mr Richard Phillips 1/124 1 100 Zacchr Andrew Esq. 1/62 2 102 Richard Wymond Esq. 1/62 2 105 Mr John Westlake 1/62 2 107 Mr John Edwards 1/31 4 111 Mr Collan Bawden 1/31 4 115 Mr John Bawden 1/31 4 119 Messrs Jenkins Willyams & Co. 1/62 2 121 Mr John Martyn 1/62 2 123 Capn. William Davey 1/124 1 124 Shareholders in Poldice Mine: March 1789: Shareholding: Equivalent to: 124ths Cumulative Samuel Wallis Esq. & the Revd Hawkins Tremayne 5/31 & 3/124 23 23 Sir William Lemon, Bart 2/31 8 31 Messrs Thomas Daniell & Son 11/124 11 42 Revd Thomas Vivian 2/31 8 50 Revd Richd Harrington 2/31 8 58 Execs. of Robert Lovell Esq. 2/31 8 66 Messrs Geo.Fox & Sons 3/124 3 69 Messrs Fox, Philllip & Fox 15/124 & 1/186 15+ 84+ Mrs Jane Mander 1/31 4 88+ James Willyams Esq. 1/31 4 92+ John Vivian Esq. 1/62 2 94+ Messrs Boulton & Watt 1/62 & 1/186 2+ 96+ John Wilkinson Esq. 1/124 & 1/186 1+ 98 Mr Thomas Wilson 1/124 1 99 Mr Richard Phillips 1/124 1 100 Zacchr Andrew Esq. 1/62 2 102 Richard Wymond Esq. 1/62 2 105 Mr John Westlake 1/62 2 107 Mr John Edwards 1/31 4 111 Mr Collan Bawden 1/31 4 115 Mr John Bawden 1/31 4 119 Messrs Jenkins Willyams & Co. 1/62 2 121 Mr John Martyn 1/62 2 123 Capn. William Davey 1/124 1 124 Similar transactions are recorded in subsequent entries, including times when no dividend was paid, and one entry (for the four weeks ending 3 January 1788) where, after a run of months when costs exceeded sales, an advance of £262: 10 s: 0d was made to the purser. However, in the meantime, the operation of the mine was only made possible by the purser becoming a source of funds to pay monthly operating expenses. One response to a challenging calculation of the division of costs or revenues was to move away from the traditional system of calls that completely satisfied the recovery of costs and distributions of all receipts, relying instead on calls and dividends of round money amounts. For example, the Levant Mine cost book (CRO, RG 184)7 shows the following data for the accounting period of August and September 1843 (re-cast for ease of understanding): This situation of a substantial balance carried forward was repeated in every three-monthly accounting in the cost books. As the Levant mine cost book records still exist, and span a fifty-year period from 1843 to 1893, this was not a random or exceptional situation. Clearly there was no attempt here to distribute all the receipts, and a substantial balance of working capital had been established and maintained in the hands of the purser. The Levant mine dividend of £720 for July 1843 was distributed among the thirty-seven shareholders at the rate of £4: 10 s: 0d per share. 1843: Balance brought forward From July: £1,261: 17s: 11d Ore sold:      4,187: 3s: 8d     £5,449: 1s: 7d Payments: Tutwork and wages: £2,620: 14s: 8d Bills:     761: 0s: 7d Dividend paid: 720: 0s: 0d     £4,101: 15s: 3d Balance carried forward To October: £1,347: 6s: 4d 1843: Balance brought forward From July: £1,261: 17s: 11d Ore sold:      4,187: 3s: 8d     £5,449: 1s: 7d Payments: Tutwork and wages: £2,620: 14s: 8d Bills:     761: 0s: 7d Dividend paid: 720: 0s: 0d     £4,101: 15s: 3d Balance carried forward To October: £1,347: 6s: 4d 1843: Balance brought forward From July: £1,261: 17s: 11d Ore sold:      4,187: 3s: 8d     £5,449: 1s: 7d Payments: Tutwork and wages: £2,620: 14s: 8d Bills:     761: 0s: 7d Dividend paid: 720: 0s: 0d     £4,101: 15s: 3d Balance carried forward To October: £1,347: 6s: 4d 1843: Balance brought forward From July: £1,261: 17s: 11d Ore sold:      4,187: 3s: 8d     £5,449: 1s: 7d Payments: Tutwork and wages: £2,620: 14s: 8d Bills:     761: 0s: 7d Dividend paid: 720: 0s: 0d     £4,101: 15s: 3d Balance carried forward To October: £1,347: 6s: 4d Another example of a cost book company deviating from a pure cash flow accounting is that of the Great Polgooth8 mine in respect of their monthly cost book accounts for April, May, June, and July of 1851. In July of 1851 the Great Polgooth mine recorded costs of £1,572: 5 s: 4d. Rather than making a call on shareholders to recover exactly that sum, they first deducted an amount of £321: 12 s: 5d as ‘capital cost from this month’, and the call was for a net amount of only £1,250: 11 s: 11d. No further explanation is given, but a probable explanation is that they were engaged in some major changes (capital additions) the costs of which were first included in the regular mine costs, but which were recoverable for a source other than the regular monthly calls. One might speculate that this could have been a loan from an outside party or a special call on shareholders. Summary There are two concepts covered in this note: the calculation of cost and receipt sharing and the accumulation of balances either of cash in the hands of the purser, or cash owed to the purser. Cost and receipt sharing calculations were done through a process of successive halving of amounts owed, and this was facilitated by shares being expressed in fractions achieved by halving the whole as many times as was necessary. The received theory of the cost book companies is that they were operated on a strict cash based accounting system, where all costs were recovered through calls and all receipts were distributed immediately after each cost report and that there was no scope for accumulation of funds. Evidence from the Happy Go Lucky and the Levant Mines shows that this practice had been modified to allow for the accumulation of undistributed funds to finance investment and expansion, as well as introducing the purser as not just a manager, but also a source of finance for the cost book company. Footnotes 1 Lower Ninestones China Clay Work Cost Book: Wheal Martyn China Clay Museum: SAUWM 1988: 367. 2 J. Brooke, Stannary Tales (Truro, 1980). 3 Poldice Mine, Cost Book, Cornish Record Office, TL 94, 1789. 4 G. Burke and P. Richardson, ‘The Decline and Fall of the Cost Book System in The Cornish Tin Mining Industry, 1895–1914’, Business History, xxiii.1 (1981), 4–18. 5 R, Burt and N. Kudo ‘The Adaptability of the Cornish Cost Book System’, Business History, xxv.1 (1983), 30–41. 6 Happy Go Lucky Mine Cost Book, Cornish Record Office, DD CN/2456/1, 1787–9. 7 Levant Mine, Cost Book: Cornish Record Office, RG 184, 1843–48. 8 Great Polgooth Mine, Cornish Record Office, CF 1/4884, 1850. © The Author(s) (2018). Published by Oxford University Press. All rights reserved. For permissions, please email: journals.permissions@oup.com This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/about_us/legal/notices) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Notes and Queries Oxford University Press

Cost Book Companies: A Note on Cost and Profit Shares

Notes and Queries , Volume Advance Article (2) – Apr 25, 2018

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Abstract

CORNISH tin mines used a unique form of organizational structure called the cost book company. There are no surviving records of cost book accounts prior to the eighteenth century, but it is believed that they pre-date the Norman Conquest. They survived until the turn of the twentieth century. During the late nineteenth century their role was replaced by the limited liability joint stock company. One of the features of the cost book company was that there were periodic reckonings, at regular intervals of four months or fewer, and the balance of net costs or net receipts would be divided between the shareholders in proportion to their shareholdings. There would either be a call on the shareholders or a distribution of the cash surplus. The commonest numbers of shares in cost book companies were in repeated divisions of the whole by two: that is half, a quarter, an eighth, a sixteenth, a thirty-second, and so on. This contrasts with the way that joint stock companies tend to issue shares in round numbers such as 100, 1,000, 1 million, etc. We would like to suggest that there were practical reasons for cost book companies’ choice of shareholding values. To take the case of the Lower Ninestones China Clay Works1 (which, although not a tin mine, was run as a cost book company) a typical entry for January 1829, was that a list of costs amounting to £50: 2 s: 0½d in total was to be shared between the three shareholders in proportion to their shareholdings. John Lovering held shares of 11/16 of the whole; Robert Martin 3/16 and Thos Nicholls 2/16. In the cost book the amount of £50: 2 s: 0½d was written, and then halved: this was then halved again, halved again and halved again, to yield a one-sixteenth part. These amounts were then used to allocate the cost, thus: £50: 2s: 0½d (the whole, or 16/16) £25: 1s: 0d (a half, or 8/16: the farthing was ignored) £12: 10s: 6d (a quarter, or 4/16) £6: 5s: 3d (a eighth, or 2/16) £3: 2s: 7½d (a sixteenth, or 1/16) £50: 2s: 0½d (the whole, or 16/16) £25: 1s: 0d (a half, or 8/16: the farthing was ignored) £12: 10s: 6d (a quarter, or 4/16) £6: 5s: 3d (a eighth, or 2/16) £3: 2s: 7½d (a sixteenth, or 1/16) £50: 2s: 0½d (the whole, or 16/16) £25: 1s: 0d (a half, or 8/16: the farthing was ignored) £12: 10s: 6d (a quarter, or 4/16) £6: 5s: 3d (a eighth, or 2/16) £3: 2s: 7½d (a sixteenth, or 1/16) £50: 2s: 0½d (the whole, or 16/16) £25: 1s: 0d (a half, or 8/16: the farthing was ignored) £12: 10s: 6d (a quarter, or 4/16) £6: 5s: 3d (a eighth, or 2/16) £3: 2s: 7½d (a sixteenth, or 1/16) John Lovering: 11/16: £25: 1s: 0d (8/16) + £6: 5s: 3d (2/16) + £3: 2s: 7½d (1/16) = £34: 8s: 10½d Robert Marin 3/16: £6: 5s: 3d (2/16) + £3: 2s: 7½d (1/16) = £9: 7s: 10½d Tho’s Nicholls: 2/16: £6: 5s: 3d Total: £50: 2s: 0d This process replaced the necessity of dividing an amount expressed in pounds, shillings, and pence by sixteen (in this case, or an even larger number in some other cases) with a series of simple divisions by two and successive additions of the subtotals. We are not suggesting that this was impossible for whoever prepared the cost book; rather that this was significantly quicker and easier and less prone to error than the alternatives. Clearly other ways of doing the calculation existed. It could be done by long division. Also there was a way of doing such calculations available by using a ready reckoner. A ready reckoner is a book which shows tables of successive £: s: d amounts multiplied by successively larger numbers. The author possesses such a ready reckoner: it has no title page, and shows neither publisher nor date of publication, but by manuscript entries it appears to date from the early 1700 s, so it would be contemporary with cost book companies existence. The first page deals with ¼d which is multiplied by numbers from 1 through 112 (112 being the number of pounds in a hundredweight), then by 144 (a gross, or twelve dozen), by 200, by 256 (half of a quarter ton, measuring 256 pounds), by 272 (?), by 300, by 365 (days in a year), by 400, 500, 600, 700, 800, 900, 1,000, 2,000, 3,000, 4,000, 5,000, 6,000, 7,000, 8,000, 9,000, 10,000. Subsequent double page entries deal successively with multiplicand numbers increasing by a farthing at a time up to 2 shillings, then rising by pennies from 2 shillings to 10 shillings, then rising in increments of 3 pence up to 15 shillings, then rising by 6 pence at a time up to 19 s/6d, all multiplied by the same set of multipliers listed in the previous paragraph. Thus, even when dealing with awkward fractions and money expressed in pounds, shillings and pence, there were ways of mastering calculations involving large numbers and awkward amounts of pounds, shillings, and pence. By a reverse process, division is possible. Another of the features of the cost book company was that, provided he had paid all calls made to date, a shareholder could relinquish his or her shares. If that were to happen, the tidy ‘multiples of 2’ number of shares and the simple method described above would no longer work. Brooke2 reports the following shareholdings as a by-product of his collection of vignettes about the tin mines. 1/20: p. 15; 1/30: p. 69; 1/256: p. 34; 1/1,624: p. 37; 1/54: p. 38; 1/50: p. 38; 1/124: p. 42; 1/5,120: p. 59; 1/128: pp. 62, 70; 1/64: p. 19; 1/256: p. 23; 1/212: p. 24; 1/64: pp. 31, 32; 1/3, 1/6 & 1/12: p. 32; 1/16: p. 32; 1/12: p. 33; 1/32: p. 33; 1/1,867: p. 63; 1/5,600: p. 63; 1/1,400: p. 63; 1/1,024: p. 64; 1/5,600: p. 67; 1/1,100: p. 72; 1/6,000: p. 80. 1/20: p. 15; 1/30: p. 69; 1/256: p. 34; 1/1,624: p. 37; 1/54: p. 38; 1/50: p. 38; 1/124: p. 42; 1/5,120: p. 59; 1/128: pp. 62, 70; 1/64: p. 19; 1/256: p. 23; 1/212: p. 24; 1/64: pp. 31, 32; 1/3, 1/6 & 1/12: p. 32; 1/16: p. 32; 1/12: p. 33; 1/32: p. 33; 1/1,867: p. 63; 1/5,600: p. 63; 1/1,400: p. 63; 1/1,024: p. 64; 1/5,600: p. 67; 1/1,100: p. 72; 1/6,000: p. 80. 1/20: p. 15; 1/30: p. 69; 1/256: p. 34; 1/1,624: p. 37; 1/54: p. 38; 1/50: p. 38; 1/124: p. 42; 1/5,120: p. 59; 1/128: pp. 62, 70; 1/64: p. 19; 1/256: p. 23; 1/212: p. 24; 1/64: pp. 31, 32; 1/3, 1/6 & 1/12: p. 32; 1/16: p. 32; 1/12: p. 33; 1/32: p. 33; 1/1,867: p. 63; 1/5,600: p. 63; 1/1,400: p. 63; 1/1,024: p. 64; 1/5,600: p. 67; 1/1,100: p. 72; 1/6,000: p. 80. 1/20: p. 15; 1/30: p. 69; 1/256: p. 34; 1/1,624: p. 37; 1/54: p. 38; 1/50: p. 38; 1/124: p. 42; 1/5,120: p. 59; 1/128: pp. 62, 70; 1/64: p. 19; 1/256: p. 23; 1/212: p. 24; 1/64: pp. 31, 32; 1/3, 1/6 & 1/12: p. 32; 1/16: p. 32; 1/12: p. 33; 1/32: p. 33; 1/1,867: p. 63; 1/5,600: p. 63; 1/1,400: p. 63; 1/1,024: p. 64; 1/5,600: p. 67; 1/1,100: p. 72; 1/6,000: p. 80. As can be seen, several unwieldy calculations could be involved in dealing with the allocation of costs or receipts some of these instances. Not only are some of the divisors large (e.g. 6,000) but additionally, some are not round numbers (e.g. 1,867). A good example of shares in other fractions is for the Poldice Mine.3 Money from the sale of ores in March 1789 was divided as follows: One of the most serious criticisms of the cost book company, particularly in the nineteenth century is that it did not have the ability to build up an internal fund either to finance expansion and deal with the investment in large pumping engines and other capital expenditures that were necessitated by mines going deeper and deeper and dealing with both water in the workings and the need to lower miners and raise ores to and from great depths.4 Burt and Kudo5 in responding to Burke and Richardson, noted that, over time, the Cornish cost book companies had deviated from their original basis of a pure cash in–cash out method of accounting to this modified version, where balances were allowed to accumulate. The Happy Go Lucky mine cost books from 1787 and 17886 report on a four-week cycle. For the four weeks to 27 September 1787 the recorded costs of £116: 3 s: 8d and sales (net of dues to the Duke of Cornwall and the mineral lord) of £202: 19 s: 0d. A dividend of £84: 0 s: 0d was paid to the shareholders and it was noted that this left a balance of £88: 12 s: 8d in the hands of the purser. Obviously, there would have been a beginning balance of £84: 17 s: 4d in the hands of the purser, but this was not listed in that cost book. Shareholders in Poldice Mine: March 1789: Shareholding: Equivalent to: 124ths Cumulative Samuel Wallis Esq. & the Revd Hawkins Tremayne 5/31 & 3/124 23 23 Sir William Lemon, Bart 2/31 8 31 Messrs Thomas Daniell & Son 11/124 11 42 Revd Thomas Vivian 2/31 8 50 Revd Richd Harrington 2/31 8 58 Execs. of Robert Lovell Esq. 2/31 8 66 Messrs Geo.Fox & Sons 3/124 3 69 Messrs Fox, Philllip & Fox 15/124 & 1/186 15+ 84+ Mrs Jane Mander 1/31 4 88+ James Willyams Esq. 1/31 4 92+ John Vivian Esq. 1/62 2 94+ Messrs Boulton & Watt 1/62 & 1/186 2+ 96+ John Wilkinson Esq. 1/124 & 1/186 1+ 98 Mr Thomas Wilson 1/124 1 99 Mr Richard Phillips 1/124 1 100 Zacchr Andrew Esq. 1/62 2 102 Richard Wymond Esq. 1/62 2 105 Mr John Westlake 1/62 2 107 Mr John Edwards 1/31 4 111 Mr Collan Bawden 1/31 4 115 Mr John Bawden 1/31 4 119 Messrs Jenkins Willyams & Co. 1/62 2 121 Mr John Martyn 1/62 2 123 Capn. William Davey 1/124 1 124 Shareholders in Poldice Mine: March 1789: Shareholding: Equivalent to: 124ths Cumulative Samuel Wallis Esq. & the Revd Hawkins Tremayne 5/31 & 3/124 23 23 Sir William Lemon, Bart 2/31 8 31 Messrs Thomas Daniell & Son 11/124 11 42 Revd Thomas Vivian 2/31 8 50 Revd Richd Harrington 2/31 8 58 Execs. of Robert Lovell Esq. 2/31 8 66 Messrs Geo.Fox & Sons 3/124 3 69 Messrs Fox, Philllip & Fox 15/124 & 1/186 15+ 84+ Mrs Jane Mander 1/31 4 88+ James Willyams Esq. 1/31 4 92+ John Vivian Esq. 1/62 2 94+ Messrs Boulton & Watt 1/62 & 1/186 2+ 96+ John Wilkinson Esq. 1/124 & 1/186 1+ 98 Mr Thomas Wilson 1/124 1 99 Mr Richard Phillips 1/124 1 100 Zacchr Andrew Esq. 1/62 2 102 Richard Wymond Esq. 1/62 2 105 Mr John Westlake 1/62 2 107 Mr John Edwards 1/31 4 111 Mr Collan Bawden 1/31 4 115 Mr John Bawden 1/31 4 119 Messrs Jenkins Willyams & Co. 1/62 2 121 Mr John Martyn 1/62 2 123 Capn. William Davey 1/124 1 124 Shareholders in Poldice Mine: March 1789: Shareholding: Equivalent to: 124ths Cumulative Samuel Wallis Esq. & the Revd Hawkins Tremayne 5/31 & 3/124 23 23 Sir William Lemon, Bart 2/31 8 31 Messrs Thomas Daniell & Son 11/124 11 42 Revd Thomas Vivian 2/31 8 50 Revd Richd Harrington 2/31 8 58 Execs. of Robert Lovell Esq. 2/31 8 66 Messrs Geo.Fox & Sons 3/124 3 69 Messrs Fox, Philllip & Fox 15/124 & 1/186 15+ 84+ Mrs Jane Mander 1/31 4 88+ James Willyams Esq. 1/31 4 92+ John Vivian Esq. 1/62 2 94+ Messrs Boulton & Watt 1/62 & 1/186 2+ 96+ John Wilkinson Esq. 1/124 & 1/186 1+ 98 Mr Thomas Wilson 1/124 1 99 Mr Richard Phillips 1/124 1 100 Zacchr Andrew Esq. 1/62 2 102 Richard Wymond Esq. 1/62 2 105 Mr John Westlake 1/62 2 107 Mr John Edwards 1/31 4 111 Mr Collan Bawden 1/31 4 115 Mr John Bawden 1/31 4 119 Messrs Jenkins Willyams & Co. 1/62 2 121 Mr John Martyn 1/62 2 123 Capn. William Davey 1/124 1 124 Shareholders in Poldice Mine: March 1789: Shareholding: Equivalent to: 124ths Cumulative Samuel Wallis Esq. & the Revd Hawkins Tremayne 5/31 & 3/124 23 23 Sir William Lemon, Bart 2/31 8 31 Messrs Thomas Daniell & Son 11/124 11 42 Revd Thomas Vivian 2/31 8 50 Revd Richd Harrington 2/31 8 58 Execs. of Robert Lovell Esq. 2/31 8 66 Messrs Geo.Fox & Sons 3/124 3 69 Messrs Fox, Philllip & Fox 15/124 & 1/186 15+ 84+ Mrs Jane Mander 1/31 4 88+ James Willyams Esq. 1/31 4 92+ John Vivian Esq. 1/62 2 94+ Messrs Boulton & Watt 1/62 & 1/186 2+ 96+ John Wilkinson Esq. 1/124 & 1/186 1+ 98 Mr Thomas Wilson 1/124 1 99 Mr Richard Phillips 1/124 1 100 Zacchr Andrew Esq. 1/62 2 102 Richard Wymond Esq. 1/62 2 105 Mr John Westlake 1/62 2 107 Mr John Edwards 1/31 4 111 Mr Collan Bawden 1/31 4 115 Mr John Bawden 1/31 4 119 Messrs Jenkins Willyams & Co. 1/62 2 121 Mr John Martyn 1/62 2 123 Capn. William Davey 1/124 1 124 Similar transactions are recorded in subsequent entries, including times when no dividend was paid, and one entry (for the four weeks ending 3 January 1788) where, after a run of months when costs exceeded sales, an advance of £262: 10 s: 0d was made to the purser. However, in the meantime, the operation of the mine was only made possible by the purser becoming a source of funds to pay monthly operating expenses. One response to a challenging calculation of the division of costs or revenues was to move away from the traditional system of calls that completely satisfied the recovery of costs and distributions of all receipts, relying instead on calls and dividends of round money amounts. For example, the Levant Mine cost book (CRO, RG 184)7 shows the following data for the accounting period of August and September 1843 (re-cast for ease of understanding): This situation of a substantial balance carried forward was repeated in every three-monthly accounting in the cost books. As the Levant mine cost book records still exist, and span a fifty-year period from 1843 to 1893, this was not a random or exceptional situation. Clearly there was no attempt here to distribute all the receipts, and a substantial balance of working capital had been established and maintained in the hands of the purser. The Levant mine dividend of £720 for July 1843 was distributed among the thirty-seven shareholders at the rate of £4: 10 s: 0d per share. 1843: Balance brought forward From July: £1,261: 17s: 11d Ore sold:      4,187: 3s: 8d     £5,449: 1s: 7d Payments: Tutwork and wages: £2,620: 14s: 8d Bills:     761: 0s: 7d Dividend paid: 720: 0s: 0d     £4,101: 15s: 3d Balance carried forward To October: £1,347: 6s: 4d 1843: Balance brought forward From July: £1,261: 17s: 11d Ore sold:      4,187: 3s: 8d     £5,449: 1s: 7d Payments: Tutwork and wages: £2,620: 14s: 8d Bills:     761: 0s: 7d Dividend paid: 720: 0s: 0d     £4,101: 15s: 3d Balance carried forward To October: £1,347: 6s: 4d 1843: Balance brought forward From July: £1,261: 17s: 11d Ore sold:      4,187: 3s: 8d     £5,449: 1s: 7d Payments: Tutwork and wages: £2,620: 14s: 8d Bills:     761: 0s: 7d Dividend paid: 720: 0s: 0d     £4,101: 15s: 3d Balance carried forward To October: £1,347: 6s: 4d 1843: Balance brought forward From July: £1,261: 17s: 11d Ore sold:      4,187: 3s: 8d     £5,449: 1s: 7d Payments: Tutwork and wages: £2,620: 14s: 8d Bills:     761: 0s: 7d Dividend paid: 720: 0s: 0d     £4,101: 15s: 3d Balance carried forward To October: £1,347: 6s: 4d Another example of a cost book company deviating from a pure cash flow accounting is that of the Great Polgooth8 mine in respect of their monthly cost book accounts for April, May, June, and July of 1851. In July of 1851 the Great Polgooth mine recorded costs of £1,572: 5 s: 4d. Rather than making a call on shareholders to recover exactly that sum, they first deducted an amount of £321: 12 s: 5d as ‘capital cost from this month’, and the call was for a net amount of only £1,250: 11 s: 11d. No further explanation is given, but a probable explanation is that they were engaged in some major changes (capital additions) the costs of which were first included in the regular mine costs, but which were recoverable for a source other than the regular monthly calls. One might speculate that this could have been a loan from an outside party or a special call on shareholders. Summary There are two concepts covered in this note: the calculation of cost and receipt sharing and the accumulation of balances either of cash in the hands of the purser, or cash owed to the purser. Cost and receipt sharing calculations were done through a process of successive halving of amounts owed, and this was facilitated by shares being expressed in fractions achieved by halving the whole as many times as was necessary. The received theory of the cost book companies is that they were operated on a strict cash based accounting system, where all costs were recovered through calls and all receipts were distributed immediately after each cost report and that there was no scope for accumulation of funds. Evidence from the Happy Go Lucky and the Levant Mines shows that this practice had been modified to allow for the accumulation of undistributed funds to finance investment and expansion, as well as introducing the purser as not just a manager, but also a source of finance for the cost book company. Footnotes 1 Lower Ninestones China Clay Work Cost Book: Wheal Martyn China Clay Museum: SAUWM 1988: 367. 2 J. Brooke, Stannary Tales (Truro, 1980). 3 Poldice Mine, Cost Book, Cornish Record Office, TL 94, 1789. 4 G. Burke and P. Richardson, ‘The Decline and Fall of the Cost Book System in The Cornish Tin Mining Industry, 1895–1914’, Business History, xxiii.1 (1981), 4–18. 5 R, Burt and N. Kudo ‘The Adaptability of the Cornish Cost Book System’, Business History, xxv.1 (1983), 30–41. 6 Happy Go Lucky Mine Cost Book, Cornish Record Office, DD CN/2456/1, 1787–9. 7 Levant Mine, Cost Book: Cornish Record Office, RG 184, 1843–48. 8 Great Polgooth Mine, Cornish Record Office, CF 1/4884, 1850. © The Author(s) (2018). Published by Oxford University Press. All rights reserved. For permissions, please email: journals.permissions@oup.com This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/about_us/legal/notices)

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Published: Apr 25, 2018

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