Harvey Mann CONCORDIA UNIVERSITY, MONTREAL
ACCOUNTING FOR LES FORGES DE SAINT-MAURICE
Abstract: From a capital budget, an operating budget and a partnership agreement prepared almost 250 years ago in New France, a cash Budget and balance sheets are prepared to help in an analysis of the viability of the company. This investiga-tion into the feasibility of the project discloses a quite sophisticated use of man-agerial accounting. The original partnership failed, but eventually the company became a successful venture.
Accounting played a prominent role in the establishment of Les Forges de Saint-Maurice between 1730 and 1736. This is illustrated by a capital budget and an operating budget, prepared to support a request for a much-needed loan. In this paper, after an opening balance sheet is drawn up from various bits of data, the two budgets are examined and recast into more traditional forms. They are then analysed to ascertain whether decisions might have been different if present day techniques had been used. To aid in the conclusions drawn, recourse is made to an agreement between the partners. Other parts of this agreement are also examined for their account-ing content. Using all the information, a new balance sheet is then prepared. It is possible to conclude that mistakes were made that may have been avoided if all the proper questions had been asked, but there is no doubt that the original concept was very sound.
European explorers were first lured to North America by hopes of gold and other exotic riches, but it wasn't until 200 years after Jacques Cartier sailed up the St. Lawrence River that a more prosaic, but more useful, metal was mined and worked in New France.1 This venture, Les Forges (ironworks) de Saint-Maurice,
*A great deal of original research on Les Forges de Saint-Maurice has been done by Cameron Nish, Professor of History at Concordia University, Montreal, Canada, and a leading authority on the ironworks. Although liberal use has been made of his work, it must be emphasized that the author is responsible for errors of translation and any interpretations of the data.