The crisis of 1847-1848 and the regulation of company accounting in Spain

Abstract

The Spanish economic crisis of 1847-1848 brought about changes to the regulation of joint stock companies. Following their implication in the financial crisis, rules were introduced which required the inspection of the accounting records of companies and the disclosure of their financial statements. The intention of legislators was to reduce the number of limited companies and offer some protection to creditors and other parties who transacted with them. The new legislation was particularly significant in its effect on the confidentiality of company accounts. This paper explains how the Spanish government overestimated the role played by limited companies in the crisis and reacted by passing strict legislation which, for general companies, was a major break from the Commercial Code of 1829. The paper also explores aspects of the implementation of the statute passed in 1848.