an accounting system used between 14th and 19th centuries in the ...

AN ACCOUNTING SYSTEM USED
BETWEEN 14TH AND 19TH CENTURIES
IN THE MIDDLE EAST:
THE MERDİVEN (STAIRS) METHOD
Erkan, Mehmet- Assist.Prof.Dr.
Afyon Kocatepe University, İ.İ.B.F.- AFYONKARAHİSAR
Address: Afyon Kocatepe University, İ.İ.B.F.- Campus of ANS,
AFYONKARAHİSAR- TURKEY
Tel: +90 272 228 12 92 (223)
Fax: +90 272 228 12 92
E-mail: merkan954@gmail.com
Aydemir, Oğuzhan- Assist.Prof.Dr.
Afyon Kocatepe University, İ.İ.B.F.- AFYONKARAHİSAR
Address: Afyon Kocatepe University, İ.İ.B.F.- Campus of ANS,
AFYONKARAHİSAR- TURKEY
Tel: +90 272 228 12 92 (223)
Fax: +90 272 228 12 92
E-mail: aydemir@aku.edu.tr
Elitaş, Cemal- Assist.Prof.Dr.
Afyon Kocatepe University, İ.İ.B.F.- AFYONKARAHİSAR
Address: Afyon Kocatepe University, İ.İ.B.F.- Campus of ANS,
AFYONKARAHİSAR- TURKEY
Tel: +90 272 228 12 92 (223)
Fax: +90 272 228 12 92
E-mail: elitas@aku.edu.tr
1

AN ACCOUNTING SYSTEM USED
BETWEEN 14TH AND 19TH CENTURIES
IN THE MIDDLE EAST:
THE MERDİVEN (STAIRS) METHOD
ABSTRACT
In the history of accounting, there have been a number of accounting
methods which were used for centuries before they took their place in the history
having completed their mission. One of these methods is the Merdiven (Stairs)
Method used for centuries in the Middle East first by the Ilhanians, then by the
Ottomans. This paper aims to analyze and evaluate the generation and
developmental processes of the Merdiven (Stairs) method used between 14th and
19th centuries.
This method is an administrative accounting method born out of the needs
of making the tax sources constant, following the strategies for the continuity of
efficiency and controlling the expenses of the state. This paper also refers to the
teaching resources for accounting about the application of the Merdiven (stairs)
method in the Ilhanians and attempts to explore the developmental process of this
method in the Ottomans through bookkeeping records of Ottomans.
Finally, the history of the transition from the Merdiven (stairs) method to
double-entry bookkeeping method in the 19th century is also examined in the last
section of this paper.
Key Words: Merdiven (Stairs) Method, Accounting in the Ilhanians and
the Ottomans, Admnistrative Accounting
3

RÉSUMÉ:
SYSTEME DE LA COMPTABİLİTÉ AU MOYEN
ORİENT ENTRE LES SIECLES XIV ième et XIX ième:
PROCÈDÈ DE L’ÈCHELON
Il ya plusieurs procédés de comptabilité utilisées depuis des siècles durant
l’histoire de l’humanité. Certains procédés ont fini leurs vies et ont pris leurs places
dans l’histoire.
L’un de ces procédés est celui du système de l’échelon dont l’Etat de Ilhanlı et
L’Empire Otoman ont profité durant les siècles.
Le but de cette communication est examiner la naissance et le développement de
ce système d’échelon. Ce système est né de certains besoins: Les Etats mentionnés cidessus
ont voulu tenir toujours vive les sources d’impôts et survivre leurs productivités.
Dans cette communication, on a donné le lieu aux applications de L’Etat de Ilhanlı et
au procéssus de développement à l’Empire Otoman. Pendant le travail on a pris en
considération les livres de comptabilité de l’Empire Otoman.
Au XIX ième siècle, on a passé au procédé d’enregistre double. On a donné le
lieu à cette histoire de ce passage à la fin de la communication.
Mots Clés: Procédé d’Echelon, Comptabilité à l’Etat d Ilhanlı et à l’Empire Ottoman
Comptabilité d’Etat
4

1. THE BIRTH OF THE MERDİVEN (STAIRS)
METHOD AS AN ACCOUNTING SYSTEM 1
1.1 The Analysis of the Political, Economical and Financial
Aspects of the Environment in which the Merdiven (Stairs) Method
Arose
Within the time period between 13th and 14th centuries, Ilhanians
appeared as a state established by the Mongols in Iran and for some time ruled
by the Turks and the Persians.
The economic developments of the Ilhanians, which were successful by
the end of the 13th century, came to a halt and then started to deteriorate. This
resulted in a reduction in agricultural production and scarcities of food and all
goods. The postal service established by the Mongols perished. But Gasan
Khan, together with his vizier Ali Shah, succeeded in reestablishing the
domestic order.
Islam spread out and became influential in the social structure during
the reign of Gazan Khan and his brother Oljayto. After the separation of West
Anatolia, Armenia and Georgia from the Ilhanians, the Ilhanians ruled a small
piece of land in Iran namely El Jazeera until the late 14th century and then
disappeared from the scene of history (Islam Ansiklopedisi, 1993; Spuler,
1987; Uzunçarşılı, 1988).
It is essential to distinguish the second half of the 13th century, which
is the first half of the sovereignty period, from the 14th century, which is the
sovereignty period itself of the Ilhanians. In the late second half of the 13th
century, as mentioned above, the spoiled state system was reconstructed
during the nine year reign of Gasan Khan between 1295 and 1304. This
reconstruction, which influenced the Seljukians and the Ottomans to a certain
extent, includes the great innovations of those times in terms of finance
administration.
1 In this study, It has been benefited from Oktay Güvemli , his studies and sources widely with his
permission. Also, we thank to Prof.Dr. Oktay Güvemli for his kindly support and help.
5

Although Ilhanians State was a short-lived one, it played a significant role
in history in terms of its relationships with Seljukians and its influence on the
Ottomans. Besides, İlhanians are important for the history of accounting.
In addition to their political activities in the region, the Ilhanians improved
the business environment during their term of reign. They carried on the efforts
for preserving and improving trade, which started during the Mongols. The fact
that in the letter that Ahmed Khan sent to the sultan of Egypt, Klavun (between
1282 and 1284), he mentioned the tradesmen as “the basis of the state” reflects
the importance attached to trade. Tabriz, which was the capital city of Ilhanians
at those times, was a towering city commercially.
As the Ilhanians were active in political and economical affairs in their
regions, the analysis of their financial structure is necessary. In the analysis of the
financial structure, there seems to appear three sides.
The first one is the grand vizier who is the most powerful person in the
state management. Grand Vizier is responsible for the financial affairs. Despite
this, from time to time grand vizier was discharged from this duty. Bertold Spuler
says that financial affairs caused many problems in state management and thus
except for Ali Shah, who was the vizier of Gazan Khan, all the viziers were
executed (Spuler, 1987, 308).
The second is the Grand Council. Grand Council is the most authoritative
foundation in state management. The chairman is the Grand Vizier, namely
“Sahibi Divan-ı Memalik” in this council. Administrative, military and financial
decisions were taken in this council.
The third is the “Defterdari Memalik ve Müstevfi” which is the official title
of Minister of Finance. This person is responsible for the bookkeeping records and
managing the income and expenditure of the state.
Ilhanians adopted a provincial system. Apart from the provinces, Ilhanians
also ruled the affiliated states. The sultans of these affiliated states acted as if they
are autonomous. Moreover, they collected taxes. Nevertheless, for “haraç”, which
is a kind of tax collected for the Ilhanians, officials called “başkak” were charged
in these countries. Apart from giving “haraç”, they were required to do military
service for the Ilhanians.
A great deal of income had to be drawn to provide a huge military power
with clothing, nutrition and armament, creating a safe and smooth route so that the
existing trade order could run properly, running of the postal system and paying
6

the salaries of the officials country-wide and abroad. Therefore, a highly
organized financial system of income and expenditure of the state was a must.
Spuler explains in detail the corruptions that led to maladministration of
finance before Gazan Khan (Spuler, 1987, 308). While the civil war that broke
out during this period led to a great reduction in tax incomes, the corruptions in
collecting tax resulted in the deterioration of the financial system of the state
(Güvemli, 1995, 217-218).
Gazan Khan ascended the throne at such a hard time. First of all, Gazan
Khan restored the financial structure and improved the bookkeeping system related
to the income and expenditure of the state.
Ilhanian tax officials used to go to villages to collect tax at harvest times.
At these times some people were assigned as watchmen to inform the villagers
beforehand. When they were informed, the males used to leave the village. The tax
officials would get surprised when they met only women and children. As they did
not consider the women as addresses, they would not collect tax. This led to a
regression in the financial structure meanwhile the sexual harassment of some
officials towards females created discomfort.
After being ascended to the throne Gazan Khan reformed the financial
system. One of the solutions he found was about collecting tax from the villagers.
Gazan Khan erected a smooth stone or a planished wood near the gate of all
villages. On these, the amount of tax that the village had to pay for that year and
the following year were written. Thus, for the first time in history a tax board and
an accrual system were used and these solved problems of collecting tax to a
certain extent.
These explanations show that the Ilhanians had a developed economics and
a strong financial system. It is normal for a country with such an infrastructure to
have a developed accounting system.
Furthermore, it is worthy of mention to assert that the high-ranking officials
of the state gave much importance to financial affairs and accounting. For
example, some of the four teaching resources for accounting written during the
reign of Ilhanians were addressed to these high-ranking officials and we will cover
them in the latter part of this paper. So it can be claimed that it is normal for an
accounting system to arise in such an environment.
7

1.2 The Birth of “Merdiven (Stairs) Method”
Kutadgu Bilig 2 : “Upon conquering a land with your soldiers, you become
rich; by sharing this richness with your soldiers, you increase the number of your
soldiers; with this increase in the number of soldiers you have more spoils of war
and with the spoils you expand your army, and this goes on like this…” This is the
method of Cengizhan’s conquest, and it depends on plundering. Method of
accounting in such a system relies on not the place where spoils of war were
gained but on controlling the distribution of the spoils. This is because renewal of
the source of income and gaining tax-income from this source are of secondary
importance. The reason for this is the fact that the income depends on new
conquests that mean the occupation and plunder of other countries. The method of
accounting about soldiers’ shares is a simple accounting of expenditures (İnalcık,
2004, 318).
Prof. Mc. Neil of University of Chicago” says in his book called The Rise of
the West “the Roman and Ottoman Empires established powerful and long lasting
empires by making their people richer, providing welfare and security and
increasing tax sources (and making them constant).”
According to Prof. Halil Inalcık (İnalcık, 2004, 319), Iranian state policy is
also similar to this. In his work “…state should be fair. Justice means protecting
people from cruelty. If you treat the public fairly and protect the community, it
works in security and becomes richer and if the public becomes richer, your
treasure and number of soldiers increase, when the number of soldiers increase,
your power increases, with increased authority, you protect your people more
efficiently. Kutadgu Bilig advises this system as a second one. Ottoman state
system depends on this… Ottoman Empire became rich by protecting the villagers
and workers that work in farms... if a civil servant collects more tax than he should
have, the community has the right to go to Kadı (judge) both individually or as a
group. If Kadı doesn’t pay attention to the complaint, people have the right go to
Divan-ı Hümayun (Government). Complaints to the Divan-ı Hümayun are written
in a notebook called Mühimme (which means a notebook for important matters)...”
he says.
Without any doubt, the needs of accounting for such a state order are high.
Adoption of accrual system is needed for following the taxation according to the
production and income. In general, tax is collected from three sources: agricultural
production, commercial income and people. (like Cizye tax) 3
2 It is a book written by Yûsuf Has Hâcib in 1069-1070. It means Blessed Knowledge. It gives advices to
statesmen and managers.
3 Cizye tax: tax that was paid by non-muslims so that they do not do military service and they are
protected
8

Tax that is collected from agricultural production, namely öşür, contains the 1/8
of the agricultural product. Mültezim (tax collector) is commissioned to collect tax
(Iltizam Usulü). Mültezim is debited. The debited amount is accrued and this amount is
entered and by collecting taxes the amount that Mültezim is debited decreases.
Commercial income places (customs, salt producing places) are rented for three
years. The amount of rent per year is written in rental contract. This is called mukataa
order. The amount of rent per year is registered by accrual rules and Mukataacı (tenant)
is debited. The loan decreases with the amount taken from Mukataacı.
Tax that is collected from non-Muslims (Cizye tax) is collected either according
to the number of houses or individually. Defterdarlık (The Office of the director of
finance of a province) announces the amount of the tax that will be collected in relation
to the accrual system to the religious representative of the Non-Muslim area. Kadı of
the area is in charge of the tax that is accrued. Tax amount that is accrued decreases
with the tax being collected.
Procedure of accruement has characteristics like protecting tax payer, taking into
account his means for paying tax and making the state’s sources of income continuous.
Running such a system certainly requires a highly developed state accounting policy.
Birth of “Merdiven (stairs) method” in Iran and its development in the Ottoman
Empire is not a coincidence. The states that ruled these lands had always seen their tax
payers as sources of income in order to achieve the continuity of their states.
Furthermore, they gave priority to the control of the expenses of the state. As a result of
this, necessity for a developed accounting system emerged.
1.3 Characteristics of “Merdiven (Stairs) Method”
Merdiven (Stairs) method for bookkeeping, used by Turkish States between
14th and 19th century, had its roots in Ilhanians.
9

We can see the characteristics of “Merdiven (Stairs) method”, “Merdiban”
in Persian language, used in teaching sources for accounting written during
Ilhanian period. Abdullah El-Mezanderani, the author of Risale-i Felekiyye, claims
that he didn’t invent the Merdiven (stairs) method and this method was developed
by “the ones who wanted to shorten the procedure of bookkeeping (Güvemli,
1995, 286)”. According to the data that is gained, it is obvious that this method
had been continuously developed and Abdullah El-Mezanderani had followed that
progress (Sertoğlu, 1986; Osmanlı Arşivi Daire Başkanlığı, 1994). However,
according to the historical findings, during Ottoman and Seljuk periods, teaching
sources for accounting could not be found. The reason of it is that accounting was
taught through a master and apprentice relationship.
Ottomans, Ilhanians and Seljuks used siyakat writing and numbers in their
records. In Seljuk and especially Ottoman records, siyakat writing based on Arabic
language was used. In dictionaries siyakat is defined as “a kind of written document
used in accounting documents, bills and divan numbers.” In Ottoman Empire, prose
parts of siyakat are called siyakat writings and numerical parts are called siyakat
numbers.
It is understood that after the reign of Ilhanians, Seljuks and then Ottomans for
more than 600 years used siyakat writing and numbers, with little changes and it
improved as a writing system for accounting records. According to some sources,
siyakat writing was used for secret writing which prevented people from reading the
state’s important correspondences.
Siyakat, as written without dots, uses little space. Ismail Otar, accounting
historian, explains siyakat as “stenographic writing style of Arabic letters in numbers
and writings related to numbers (Otar, 1990, 2). In bookkeeping entries, short hand
writing carries great importance so that writing does not take too much room. And this
was achieved by siyakat writing. That’s why it has been observed that the word siyakat
contains a stenographic aspect, the phrase siyakat writing contains a stenographic
writing quality and siyakat number contains a stenographic character. Siyakat’s constant
usage in accounting entries made this word identical with accounting and led the word
siyakat come to be used to mean accounting.
Additional information can also be given about the usage of siyakat in
accounting. In accounting entries and documents, you have to write lots of detailed
information in small space. It is understood that this necessity was met by siyakat.
It is understood that siyakat writing and numbers are used in three important
fields.
10

These are:
• Teaching accounting, accounting entries and organizing records
• Entries and documents that compose a state’s financial order
• State land registers and documents
Besides, this writing had been used in state’s secret correspondences.
In 13th and 14th centuries, lots of space was allocated for numbers in daily
account books. Eastern countries were able to use little space by using Arabic
numbers for bookkeping. For example, this is obvious in books that teach
accounting written during the reign of Ilhanians between 1309-1363. For example,
the number 7966, whether it is an amount or money, was written as:
VIIM VIC IIIIXX XVIII
in a book of accounts in a Western European country until 1400s but in Eastern
countries the same number could be written as ٧٦٩٩ by Arabic numbers. The fact
that there was no such number as zero in Roman numbers was creating some
difficulties. Italians has also used Arabic numbers before 13th century. First usage
of Arabic numbers in accounting bookrecords was by Rijekel Guillame between
1249-1272. However, it became widespread slowly.
In the first half of the 15th century, while Arabic numbers were started to
be used slowly, there was a transition towards double entry bookkeeping system.
Jacob Boader’s big book kept between 1436-1439 was written by Arabic letters. It
will be wise to mention that Luca Pacioli, the author of the famous book which
introduced the double entry method, used Arabic letters occasionally.
The use of Arabic letters in accounting books in Western European
countries became completely common between the late 16 th century and early 17 th
century (Güvemli, 1995, 217-218).
11

1.4 Books For Merdiven (Stairs) Method In Ilhanian State
1.4.1 Saadetname 4
Believing that a powerful state is required to have a sound “order of
administrative accounting”, İlhanian State attached great importance to the
accounting practices in the first half of the 14th century. The main proof of this
importance attached to accounting is that the administrators of the country were
raised by being trained in accounting (Hinz, 1950, 1-2). The other proof is that
four accounting resources were written for the first time in the same period.
In the era of Gazan Khan, who is one of the Khans of the İlhanlı State, the
system in the financial structure and accounting of the state became established.
Saadetname, which was started to be written in 1309 and completed in 1336 by
Felek Alayı Tebrizi, is the first accounting resource book written with the aim of
to training the son of Gazan Khan in state accounting.
This book was discovered by Prof. Dr. A. Zeki Velidi Toğan at Yusufağa
Library in Konya in 1930 (Toğan, 1931, 14-15). The book was written in Persian
siyakat writing. One of its samples is at Hagia Sophia Library. Saadetname,
written according to the concept of state accounting, consists of three chapters:
The first chapter includes Basic Concepts, Introduction and explanations.
In the second chapter, the transactions of tax accruement are analyzed from
various angles.
The third chapter is important in terms of accounting discipline. In this
chapter, the books of accounts and recording system of the council of state are
introduced. The central recording system is given greater coverage as a result of
the great role played by the central government in the state finance administration.
The same system is seen in Seljuks and the Ottoman Empire.
The introduction of these registers is important in terms of comparing the
accounting systems of Turkish states, especially İlhanian State and Seljuk Empire
with The Ottoman Empire.
4 Saadetname: It was used for expressing the feeling at ease, the pleasure and the truth that the systematic
recording of receipts and expenses of the state gives. Its denotation is to give happiness.
12

The subject will be analyzed by the explanations related to Daftar-e
Ruznamçe (Daily Register) and the sample item recordings that are important for
explaining and introducing the accounting bookkeping system. The following
information about Daily Recording is given in the book:
“This register is also called Department Regulation Register. All the details
of the council tax, expenses and various regulations are registered into the Daily
Register on a day-to-day basis with the information of month and year. Adding is
not common in this register and it cannot be erased. In the case of an error made in
an amount, it is marked to be cancelled and then the information of connection
reason is recorded.
Daily Register starts with this sentence: “In the name of God ……date,
that consists of the council facts.” The first page starts with this text. The line
drawn in width is as long as register. This page doesn’t consist of anything else.
The title stating this is written on top of each of the following pages.
The name of month is written with line in a smaller width on the 2nd page.
The first day of month is written with line in a smaller width below this. If one
page isn’t enough for registration, it should be marked at the edge of the next page
so that it is known that this is the continuation of the former page. If there is not
any registration in a month or a day, the name of the same month or day is written
anyway. “Blank” is written below this so that it can be understood why it has not
been used. The reason of it is written here in the case of the cancellation of a
registered amount or a part of it or the giving the cheque back. It is also valid for
the amount, having been canceled, of the commands for spending approval given
by this council. This cancellation should be marked by writing “It is transferred to
such and such date” when this amount is registered on this page which in fact
belongs to the other day at the command of spending amount.
The reason of explaining the aim of Daily Registered usage in detail is to
draw attention to the similarity between the register called “The First Register” or
“Hand Register,” which was introduced in the work called “Summa de
Arithmetica, Geomteria, Proportiani e Proportionalita” written by Luca Pacioli 185
years after 1307, when Saadetname was written, and “Daily Register” of
Saadetname (Güvemli, 1994, 30-36).
The most important feature of the State Tax Registers is that the amount
forming the total amount is coherently listed in order, one under the other with the
Merdiven (Stairs) Method. The order of registration is the beginning of the
Merdiven (Stairs) method used in Risale-i Felekiyye written in 1363, 54 years
after Saadetname. The foundation of Merdiven (Stairs) method was laid with
13

Saadetname and it became mature with Risale-i Felekiyye. Yet, it is obvious that it
has not been named (Güvemli, 1995, 240-244).
1.4.2 Kanunu Saadet5
Kanunu Saadet was written by the writer of Saadetname, Felak Alayı Tebrizi.
The writer states that Kanunu Saadet is a complementary book for Saadetname. Its real
name is “Kitab-ı Kanunu Sade Des-Siyakat.” Its Persian name is Siyakat and it consists
of four chapters.
In the first chapter, the details in terms of shapes and accounts are given.
In the second chapter, ways of correspondence are given.
In the third chapter, information about these account books is given.
Finally in the fourth part, the definitions of Divan numbers are given.
1.4.3 Cemaiu-l Hesab 6
This book is predicted to have been written by Imad Es Seravi during the period
of Süleyman Khan (1339-1344), who is one of the Khans in Ilhanian state. It was
written with Persian “Siyakat” writing.
Camiü-l Hesab was studies as a doctorate thesis by Prof. Dr. Nejat Göğünç in
Germany (Göğünç, 1965). It consists of four chapters:
The first chapter is introduction.
In the second and third chapters, there are articles and the fourth chapter has the
conclusion.
1.4.4 Risale-i Felekiyye Kitab-Us Siyakat 7
This book written in 1363 was inspired by the previous books but it appeared as
the developed form of the other three. Its writer’s name is “Abdullah Püser
Muahammae bin Kiya el Mezenderani.” Risale-i Felekiye represents the more
developed form of Ilhanian state accounting than Saadetname which was written at the
5 Kanunu Saadet: The laws to bring happiness, welfare and truth.
6 Cemaiu-l Hesab: The combination of accounts.
7 Risale-i Felekiyye Kitab-us Siyakat: It is the report of Siyakat which was prepared by Felekiyye. It
benefited from the book published in “Formul Press and the unpublished book of his own translation by
Ismail Otar’s “Risale-i Felekiyye Kitab-us Siyakat”. Also see “The past of didactics and practice of
accounting, globalism and accounting education” by Güvemli,O (1993).The 13th Turkish Accountancy
Symposium.” The practice of State Accountancy in then Near East during the period of Ilhanlı” by Solaş
Ç.(1993),Yaklaşım Magazine,Year:1,No:6
14

eginning of 14th century. Just like the other books, in “Risale-iFelekiyye” as well
illustrations are important. The book includes eight chapters:
In the first chapter, Siyakat numbers are introduced.
In the second chapter, numerical and measurement units are announced.
In the third chapter, the numbers are introduced. The introduction of units, tens,
hundreds and thousands digits are given.
In the fourth chapter, the methods and signs used in registers are explained. The
explanations of account headings and contents are considered, the way that they write
the history is explained, the control sign in order to check its uprightness and also the
rejection sign that is used with the total which isn’t correct in order to prevent erasing,
is introduced.
The fifth chapter is titled as “Filling and Revealing (Clear)”.The idiom that is
turned into today’s Turkish as “Filling” means to understand the registration at first
sight and to reflect the reality “Revealing” means writing the aimed total.
The sixth chapter is titled as methods.
In the seventh chapter, the procedure of financial matters is explained.
In the eight chapter, the account books of states are introduced.
Abdullah el Mezenderani introduces these six accounting books about the state
accounting in Risale-i Felekiyye with examples. He mentions that the book wasn’t
revealed by himself and says that “old instructors constituted six separate account books
in this job (state accountancy) to take control of Money movements in terms of
additions and expenditures”
These are:
1-Ruznamçe (Daily Account book)
2-Evarece Account book (Major Account book)
3-Tevcihat Account book (Account book to observe the expenditures)
4-Tavliyat Account book (The account book of individuals)
5-Müfredat Account book
provinces)
(The account book of incomes and expenditures of
6-Defter-i Kanun-u Memleket (The account book of tax law)
For example we are going to buy Ruznamçe (Daily account book).Abdullah el
Mezenderani identifies this account book as “the one which is needed to determine all
the events happened. This definition shows that it takes up the same deeds of daily
15

account book that takes part in Saadetname. This duty takes up the deeds of the ones in
an agenda that is orderly registered in Pacioli. It fulfills the principles of accounting
documents.
The registration examples of daily account books are just like the ones (shown) below:
Early January, 795 (1363) ------------------------------------------------------------------
Determined ------------------------------------------
Baghdad Taxes, determined by Celal Hodja,
due to a given command
200 Tümen, 10.000 Dinar in each 2.000.000
Dinar
Taxes collected from the province center ---------------
For the province center 100 Tümen 1.000.000
Dinar
A part of the collected amount ---------------------------- 700.000
Dinar
Stamp tax, as indicated in fiscal procedure
A part of the collected amount ---------------------------- 300.000
Dinar
Other taxes, as indicated in fiscal procedure
Taxes collected from the whole province --------------------------------------------------
Province, as written in fiscal procedure
100 Tümen 1.000.000
Dinar
16

This is an example of tax information required to be collected.
This record example belongs to the birth period at Merdiven (Stairs) Method.
Then, the method took a different shape in the development process in Ottoman
Empire. For example, According to Ottoman Empire Accounting system in the XVI
Century, above record can be written as follows.
Abdullah El-Mezenderani said “the functions of these accounting notebooks are:
“money and its allotments, assignments given to people, explanations about these
assignments, the results of disagreements, case and trial phrases, and to find out the
issues about assigning people and every event happened is written on those accounting
books.”
While all the events were being written to the other notebooks, next to the
operation on the everyday notebooks was written as “nukile” which means transferred
as a sign. Then the register on the transferred notebooks was rechecked and matched
with the one on the everyday notebook and lastly, the everyday notebook signed as
“kubele” and the transferred notebook was signed as “biki”, which means matched.
The reason for these explanations to be told was that to take attention to the
common points between what Pacioli told in his handbook and what Abdullah El-
Mezenderani said in his book (Güvemli, 1994, 30-40). The first registers which Pacioli
advised tradesmen have some common points with the state accounting in Ilhanian
State. The other differences are natural differences between tradesman’s accounting
notebook and the state’s.
The four basic teaching books of the Merdiven (Stairs) system, which were
written between 1309-1393, Cemaiü-l Hesab and Risale-i Felekiyye had clearly
displayed the development line of the state accounting. On the other hand, as a
consequence of the state accounting there was no cash account, asset account, capital
account and profit account. Because of these inadequacies, it was impossible for
17

tradesman to have a register. Because of that the developed system of state accounting
in Ilhanian State couldn’t lead to the private sector accounting.
2. THE EVOLUTION OF THE MERDİVEN (STAIRS) METHOD
2.1 Starting to Use the Merdiven (Stairs) Method in Ottoman State
The Ottomans were affected by Ilhanian State’s concern for their financial
system. There being similarities between the two about property and the tax
system, it facilitated the interaction. For the same reason, financial structures and
accounting systems are similar, too.
At the beginning of the 14 th century, the financial structure of the Ottoman
State had a management board left from Ilhanian State called Divan. Divan had
three main functions. They are executive affairs, financial affairs and judicial
affairs.
Executive affairs used to be conducted by a vizier as the deputy of the ruler.
Financial affairs used to be conducted by the head of the financial department.
Judicial affairs were taken over by Kadıasker. They were all the members of
Divan, and the ruler was the president of the Divan.
It is understood that according to the early Ottoman financial structure there
were two civil servants one of whom was responsible for the financial affairs and
the second one who was called as Naip, who used to gather the income from has
(large feudal holding) which belonged to the ruler. However, it is not known if
they were the members of the Divan or not (Akdağ, 1949).
The number of vizier in Divan was increased to two during the reign of
Orhan after Ankara was conquered, and then was increased to three during the
reign of Yıldırım Beyazıd. The second and the third viziers were Beylerbeyi.
18

At first the income of the Divan members used to be provided disorderly by
the revenues, and it is seen that since the reign of the ruler, Murad the first, Has
were assigned to the members.
Until the year 1362, Anatolia was the only province, but in the same year
Edirne was captured and then Rumelia province was founded. Thus it is known
that the number of the provinces rose to two (Akgündüz, 1990, 255-266).
Beylerbeyi used to govern these provinces in the Ottoman State.
İsmail Hakkı Uzunçarşılı states that the financial structure of Ottoman State
at the outset was taken from Ilhanian State which affected Seljuk State
(Uzunçarşılı, 1978). Uzunçarşılı also expresses that taxes were paid to Ilhanian
State while the Ottoman State was being founded (Güvemli, 1995, 276).
It is known that the siyakat writing and the numbers used in the recordings
of the accounting passed not only to Seljuk State but also to Ottoman State from
Ilhanian State and were used in Ottoman State till the mids of 19 th century.
Uzunçarşılı claims that the siyakat writings used for centuries in the financial
system of Ilhanian State, Seljuk State and Ottoman State was for making the
financial information impossible to be known by the public avoiding cheating.
Since Seljuk State existed in 13 th century, the idea that the siyakat writing
and the numbers must have been used in this century must also be accepted.
However, it is hard to say the same thing for the Merdiven (Stairs) method.
Because there is no document about the Merdiven (Stairs) method.
Uzunçarşılı also tells that in the foundation course of the Ottoman State
some idioms such as Ruznamce, Muhassıl, Muhtesip were used in State
Accounting which were all the same idioms used in Ilhanlı State.
In the foundation course of the Ottoman State, taking the financial
organization from Ilhanlı State and using it almost in the same style appeared to be
necessity of the policy they used in the diplomatic and military areas.
The primary accounting notebooks and documents about Ottoman State’s
existing economic and financial information dates back to 15 th century. They are
originally all about Bursa. For many years in the past, Bursa was a significant
residental and commercial centre on the route of Silk Road. There is no doubt that,
in Bursa, as being an international trade center in this century there were some
accounting notebooks and recordings which were used to follow the revenues and
the payments and commodity shopping made by tradesmen from various kinds of
19

countries in their own langauges and in their own methods. On the other hand, an
international market in which many kinds of accounting culture lived lack of such
documents would be a huge loss not only for the Ottoman State but also for the
whole accounting history.
However, the kadı (judge) in Bursa proceeded with cases concerning
commercial, selling-buying, credit-payment disagreements and they kept the book
called Şer-iye Sicil Notebook (İnalcık, 1960). Şer-iye Sicil Notebook was kept by the
judges to finish up and write the results of the cases presented to them. Meanwhile
they were also used to make commercial determinations. The Şer-iye Sicil Notebooks
which belonged to the Bursa Court (kadılığı) originally belonged to the second half
of the century.
As it is understood by the explanations we have made till now, Ottoman State
was under the influence of Ilhanian State concerning the financial organization of the
State and accounting registration method. Likewise, in Ilhanian State, Ottoman State
did not have their own accounting discipline book. The fundamental reason for this is
that financial affairs used to be executed through a master and apprentice
relationship.
The order of conquest, production, enlarging army and central management
became much more significant for the palace in the 15 th and 16 th centuries. Private
enterprise proceeded firstly in the Ahilik system left from Seljuk State and then in
the system of Guild. It was determined that the private capital savings which
sometimes appeared were nationalized and then they were all consumed.
However, it is known that in the 15 th and 16 th centuries, the state made
some efforts to develop the production the fashion of tradesman and enhance the
trade within the existing situation. It was also enabled that the experts gathered in
the covered bazaars built in the city centers and invited to come, and they were
even supplied with tax immunity (Sevinç, 1978, 118-119).
It is known that from the beginning of the second half of the 16 th century
minority members of Greek and Armenian tradesmen supplied the capital savings of
Jewish tradesmen. Nevertheless, because of the extreme interventionist behavior of the
Ottoman State, they remained in commerce, especially dealt with foreign trade instead
of moving to production and turning their capitals into big corporations.
These explanations also show that Ottoman State always tried to keep the
private enterprise and capital savings within certain limits. The capital saved by
moneychangers was also under the control and intervention of the state. In that
case, it is natural that the private enterprise in Ottoman State would not compete
20

with the national and international commercial corporations in the west although
they were both founded in the same century.
Because of the Ottoman State’s interfering structure for the capital savings,
the tradesmen were naturally not expected to make their accounting recordings due
to the fact that tradesmen did not want to leave any document back about their
capital savings.
It is not a coincidence that the private side accounting notebooks remained
from that date were related with foundations even if they were kept with the
understanding of statism. These foundations which has autonomy from the state in
terms of management and finance used to be examined only by kadı (judge). It
would be appropriate to say the reason why the accounting records of these
foundations lived up to date is not because of the recording custom but because of
the fact that the income and expense of the state used to be controlled by these
judges.
Production in this situation would intend to supply the local needs. On the
other hand, while supplying the needs in such huge residential places as Istanbul,
Bursa, Edirne, it was impossible to exceed the production order of the guild under
the support of the state which divided the country into regions.
This order which hampered machines, equipment and the number of the
people working was called breach order (Zeytinoğlu, 1993, 165).
It is seen that the problem to meet huge needs of the army urged the state to
tend to create foundations which could produce great quantities. It must be
mentioned here that besides army, there were some more state foundations in the
palace that produced goods (Mantran, 1991, 120). To meet the needs of the army,
among the industrial foundations, Haliç, Cannon foundry, Armory and Gunpowder
factory can be considered as the state enterprises. As it is apparent that carrying
out production by huge foundations for the state and carrying out production for
the market by small foundations with support of the state created a contradiction,
and the historians who focused on this contradiction belonged to the state regarded
this as the result of being unable to move into capitalism (Berkes, 1969, 83).
21

2.2. The Developments in the Merdiven (Stairs) Method since 16th Century
In Ottoman state the second half of the 15 th century was the period in which
lawful regulations and financial regulations were realized. The 16 th century,
however, was the century in which accounting organization had some experience
and accounting system grew stronger. Primarily creating the financial and legal
regulations enabled the accounting system to develop according to the judicial
bases.
It was known that the accounting notebooks used to be preserved in
Ilhanian State. The Defterhane which was under the command of an officer called
Defterhane-i Memalik used to replace archive. Still, in Ottoman state, the mission
was taken over by Defterhane-i Amire. There is not much document about the
reign before the ruler, Fatih. The reason for this is that the capital of the country
used to change continuously and they were demolished in Timur’s invasion at the
beginning of the 15 th century (Başbakanlık Osmanlı Arşivi Rehberi, 1992, 15).
Although it is known that after the conquest of Istanbul the documents were
constantly preserved, it is clear that the number of the accounting notebooks
belonged to the period before 16 th century was not more than a few hundred.
Accounting notebooks were both kept in the centre and in the provinces. It is
known that accounting notebooks kept in provinces were always sent to the centre
and were preserved with the notebooks kept in the centre.
When these accounting notebooks in provinces and in the centre are
examined, it is seen that more errors could be found in the books kept in the
province, but less errors could be possibly found in the notebooks kept in the
centre. The probable reason why the notebooks kept in the province include more
errors is that education of accounting in Ottoman state was conducted in a
relationship through the relationship between the master and the apprentice, and
lack of accounting education foundations and accounting discipline books. This
situation appeared to be the result of centralization of the accounting culture
(Güvemli, 2000a, 178).
Here, an accounting notebook sample called Ruznamçe, which was about
central financial recordings from the basic accounting notebooks in which daily
incomes were noted, belonging to the 16 th century will be given as an example.
Ruznamçe means daily accounting notebook. In the 16 th century, Hazine-i
Amire used to keep the first and second entries of Ruznamçe. In these entries of the
accounting notebook, daily income used to take place.
22

In this accounting notebook, the income is written with a number according
to the time order they appeared. According to the Finance Group Rulebook
published in the reign of the ruler (Akgündüz, 1992, 594-596), Kanuni, the income
is firstly written onto the side of accounting notebook, then written to the
Ruznamçe in Hazine-i Amire. After that it is written into the accounting book of the
Internal revenue office. Recording into the Ruznamçe enables all the income to be
seen completely and daily. It also realizes the mission of internal supervision.
Prof. Dr. H. Sahillioğlu mentions that in the Internal Revenue Office
Ruznamçe is also kept (Sahillioğlu, 1985, 113), moreover there are not only
Ruznamçe kept for the cash but also there are Ruznamçe kept for commodities.
Example: Taxes collected from the province of Maraş in order to cover the expenses of
the military movement the Southeast Anatolia between the years 1038- 1045.
23

When we convert the record above according to double entry, It becomes as below.
24

----------------------------------------- / -----------------------------------------------------
Cash (Treasury) 2.126.015
2.126.015
The Province of Maraş Taxes
- Nüzül Taxes in 1038 12.392
- Nüzül Taxes in 1041 1.048
- Nüzül Taxes in 1042 231.917
- Nüzül Taxes in 1043 14.317
- Taxes in 1044 106.727
- Nüzül Taxes 58.677
- Avarız Taxes 48.050
- Nüzül Taxes in 1045 1.762.584
----------------------------------------- / -----------------------------------------------------
3. USING THE DOUBLE ENTRY METHOD
In the Accounting History of Turkish states, after Tanzimat (administrative
reforms) period (XIX th century) has a special importance. Economical and social
structure had entered a rapid process of development. This process had significant
effects on the thought of accounting. These effects appeared, firstly, at the legal
arrangements about accounting. The most important of these was the Trade Law
which was accepted in 1850. As for institutionalization, the state had established
institutions such as Meclis-i Muhasebe (Accounting Assembly), Divan-ı
Muhasebat (Accounting Chamber) in order to make accounting system updated.
These institutions had contributed to the modernization of the accounting system
of the state which has succeeded to survive under the names like Muhasebat Genel
Müdürlüğü (General Management of Accounts) and Sayıştay (Court of Accounts).
For example as a result of these developments the state budget had a modern look.
The second half of the 19th century had many features as for teaching
accounting. It is hard to say that teaching accounting was adequately developed till
then. Ottomans had used an unnamed accounting system for centuries on state
accounting which was taken from the Ilhanian State and which was called as
“Merdiven (Stairs) System” by them. This systems’ education had been done in
master-apprentice relationship. By the second half of the 19th century Ottomans
didn’t know and didn’t use the registering systems of accounting which Western
25

Europe countries had been using for centuries firstly under the name of Basic
Accounting and then Double Entry System.
The Double Entry Method was also amongst the innovations which were
taken from The Europe after the modernization movement on administrative and
social issues which was announced in 1839 called the Tanzimat Edict.
It has been known that in the last thirty or forty years of the century in
question accounting education, including the double entry method, had been taught
in secondary schools (Rüştiye), high schools (İdadi), law and technical schools.
The rapid development of the printing had eased the expansion of this education. It
has been seen that accounting education books had been pressed mostly but not
only on general accounting but also on some specific issues such as agricultural
accounting.
By the end of the 19 th century the state had started to use the double entry
system on state accounting and on the other organizations of state. These efforts,
which were intensive at the last thirty years of the century, had been very
important for the history of Turkish Accounting. If the Republic period had some
achievements it can’t be denied that it was the result of the intensive and selfdevoted
efforts at that time.
One of the successful samples of the Westernization and modernization
process is, absolutely, the efforts to accept the double entry method in a short time
on education and application which had no basic facilities.
It will be better to tell more about this entrance. A country may use a
different accounting system. If there is a accounting culture in that country, it may
be easier to change accounting system or to accept a new one. Thus, in state
accounting it took a period for Ottomans to use double entry method. This had
been possible as a result of state accounting culture which occurred with using the
Merdiven (Stairs) System used for about 600 years.
Because private sector accounting in Ottomans wasn’t very well developed,
it had been possible for private sector to accept the double entry system at the
Republican period. For that delay in addition to lack of accounting culture, lack of
capital, inadequate production and commerce experience and capitulations had
been effective.
The most important effect of the capitulations was reducing or removing
the custom taxes in importing. This case had fastened the importing of food and
households produced in Europe. As a result of this, production facilities had
26

stopped which caused the decrease of capital and postponed the industrialization
and consequently, developed increasing importing and increasing agricultural
goods based exporting accounting, developed the expansion of double sided
accounting system. But because this trade was mostly controlled by foreigners
these developments occurred mostly in foreign organizations not in Turkish ones.
That was one of the reasons why accounting teaching books, at the second
half of the 19 th century, were mostly about the needs of commercial organizations
rather than the needs of industrial organizations.
It has been seen that the double entry system, which is more complex than
the simple accounting, had gained a global importance at the 19 th century. The
reason this system had expanded is that the importance which was held for the teaching
of this system in accounting education. The concern for this system on both Ottomans
state and private sectors had resulted in giving a place to accounting in schools’
curriculum.
Because it couldn’t be expected the accounting system to be out of innovations
while the state organizations were in after Tanzimat Edict, the sate had led to the double
entry system. While trying to adopt its own accounting system to the double sided
accounting system, the state, had also given a place for accounting in school curriculum
to set a background for this system. The importance held for teaching accounting had a
great part for the expansion of double entry system.
For this eagerness for accounting education there was a need for teaching
accounting book for simple accounting and double sided accounting. Because French
was common in the Ottomans under the effect of Westernization, French accounting
books were mostly used in higher education organizations. Turkish accounting
education and application was being introduced to the double entry system without
knowing the simple accounting system which was the pioneer of the double sided one
in Europe. The old system of Ottomans had no resistance against this new system and
accepted the double entry system (Güvemli, 2000b, 595-597).
Ottoman Empire, officially, announced that they had left the Merdiven (Stairs)
Method in state accounting and started to use double entry method in 1879.
4. RESULT
The Merdiven (Stairs) system, between the 16 th and 19 th centuries in the Middle
East İlhanian State, Seljhuk State, and the Ottomans used in state accounting, is
27

understood to be an accounting method consistent in itself, able to cover the needs
of the era.
The reason why this accounting system had occurred and developed was
that not only Ilhanian State but also Ottomans, desired their tax incomes to keep
alive and fruitful and to control state outcomes. From the accounting teaching
books about Merdiven (Stairs) system taken from Ilhanian State and from the
applications seen on the accounting notebooks of Ottomans it was understood that
the Merdiven (Stairs) system had lived its process of generation in Ilhanian State
and its development process in the Ottomans. It was seen that the Merdiven
(Stairs) system ended giving its place to double entry method in the 19 th century.
Merdiven (Stairs) system had got some features. One of these was that it
was a method used to register events happened in Ilhanian State and it was a
method used to register according to the accrual aspect in Ottomans where it had
lived its development process.
Merdiven (Stairs) system was born in a state accounting system. But in the
Ottomans this system was broadly used in both state accounting and organizations
which could be considered as public organizations such as foundations, shipyards
and customs which have income and outcome.
Merdiven (Stairs) system was not based on finding out profit. On the other
hand for some organizations such as shipyards and customs it was observed to be
used for matching incomes and outcomes and cost accounting in some
organizations.
Because Merdiven (Stairs) method was a method of state accounting it was
not based on inventory, too. On the other hand, it was an efficiently used method
to find out wealth of the state and outcomes.
Another feature of the Merdiven (Stairs) system was that siyakat writing
and numbers were used. Siyakat writing uses Ottoman language with Arabic letters
without full stops in accounting registers. There were two reasons for that: by
using siyakat writing it was possible to write more on the narrow places and to
provide secrecy for the incomes and outcomes of the state.
As the double entry system was developed in the writing culture which was
from left to right, Merdiven (Stairs) method was born and developed in accordance
with Ottoman language, Arabic and Persian writing structure which is from right
to left.
The usage of Merdiven (Stairs) system was officially over between 1879-
1880 as a result of the entrance and expansion of double entry system in Turkey
towards the midst of 19 th century in the modernization movement process of
Ottoman Empire.
28

BİBLİOGRAPHY
Akdağ, M. (1949). “Osmanlı İmparatorluğu’nun Kuruluşu ve İnkişafı
Devrinde Türkiye’nin İktisadi Vaziyeti”, Belleten, sayı:51.
Akgündüz, A. (1990). Osmanlı Kanunnameleri, İstanbul.
Akgündüz, A. (1992). Osmanlı Kanunnameleri 4. Kitap. İstanbul.
Başbakanlık Osmanlı Arşivi Rehberi. (1992). Ankara.
Berkes, N. (1969). 100 Soruda Türkiye İktisat Tarihi. İstanbul.
Gögünç, N.( 1965). “İmad Es-Serawi ve esri”. Tarih Dergisi,
Cilt:XV., Sayı:20.
Güvemli, O. (1994). Luco Pacioli ve Muhasebenin 500. Yılı. İstanbul.
Güvemli, O. (1995). Türk Devletleri Muhasebe Tarihi. 1. Cilt.
İstanbul.
Güvemli, O. (2000a). Türk Devletleri Muhasebe Tarihi 2. Cilt.
İstanbul.
Güvemli, O. (2000b). Türk Devletleri Muhasebe Tarihi 3. Cilt.
İstanbul.
Hinz, W.( 1950). Das Rechnungswesen Orlentalisher
Reichsfinanzamter im Mittelalter, Der İslam XXIX.
İnalcık, H. (1960). “XV. Asır Sanayi ve Ticaret Tarihine Ait
Vesikalar”, Belleten, Cilt: XXIV.
İnalcık. H. (2004). Tarihçilerin Kutbu. Türkiye İş Bankası Yayını.
İstanbul.
İslam Ansiklopedisi, cilt;5/11 (1993). Milli Eğitim Bakanlığı Yayını.
Mantran, R. (1991). XVI. Ve XVII. Yüzyıllarda İstanbul’da Günlük
Hayat(Tercüme eden: M. Ali Kılıçbay). İstanbul.
Osmanlı Arşivi Daire Başkanlığı (1994). Osmanlı belgelerinde
Siyakat Yazısı, Yayın No;18. Ankara.
Otar, İ. (1990). Risaleyi Felekiyye Hakkında. İstanbul.
Sahillioğlu, H. (1985). Ruznamçe, Paleograya ve diplomatik
Semineri, İstanbul.
Sertoğlu , M. (1986). Osmanlı Tarih Lugatı. İstanbul.
Sevinç, N. (1978). Osmanlılar’da Sosyo Ekonomik Yapı. İstanbul.
29