The genesis of professional organisation in English accountancy

Description
The organisation of accountants in Liverpool, London, Manchester and Sheffield during the 1870s has not been
subject to exhaustive historical investigation. This paper analyses the first organisations of accountants in England in
the context of theories of jurisdictional boundaries, occupational conflict, the creation of labour market shelters and
social closure. It is shown that the Bankruptcy Act, 1869 disturbed the division of labour between accountants and
lawyers and threatened the status of established accountants by encouraging competition from lesser practitioners. The
study illustrates that the organisation of accountants in Liverpool was instigated by lawyers anxious to establish a
medium for negotiating the boundaries of bankruptcy work with local accountants. In London, Manchester and
Sheffield (and partly in Liverpool) organisation concerned the protection of established accountants from interlopers
and was actualised by erecting market shelters and the imposition of exclusionary closure. Organisation was a device
for the institutionalisation of occupational difference and protecting market advantage. During the 1870s the occupation
of accountant was bifurcated into professional practitioners, marked by the badge of organisational membership,
and less reputable individuals who were denied it.

The genesis of professional organisation in English
accountancy
Stephen P. Walker*
Accounting Group, School of Management, University of Edinburgh, 50 George Square, Edinburgh EH8 9JY, UK
Abstract
The organisation of accountants in Liverpool, London, Manchester and She?eld during the 1870s has not been
subject to exhaustive historical investigation. This paper analyses the ?rst organisations of accountants in England in
the context of theories of jurisdictional boundaries, occupational con?ict, the creation of labour market shelters and
social closure. It is shown that the Bankruptcy Act, 1869 disturbed the division of labour between accountants and
lawyers and threatened the status of established accountants by encouraging competition from lesser practitioners. The
study illustrates that the organisation of accountants in Liverpool was instigated by lawyers anxious to establish a
medium for negotiating the boundaries of bankruptcy work with local accountants. In London, Manchester and
She?eld (and partly in Liverpool) organisation concerned the protection of established accountants from interlopers
and was actualised by erecting market shelters and the imposition of exclusionary closure. Organisation was a device
for the institutionalisation of occupational di?erence and protecting market advantage. During the 1870s the occupa-
tion of accountant was bifurcated into professional practitioners, marked by the badge of organisational membership,
and less reputable individuals who were denied it. It is also contended that inter and intra professional con?ict are
pervasive themes in professional organisation and that individual actors were signi?cant to engineering formation
processes.
#2003 Elsevier Ltd. All rights reserved.
Keywords: Professions; Accountancy; England; Organisation; Nineteenth century
Given the ?ourishing academic interest in the
history of the accountancy profession both within
and beyond the accounting discipline, it is sur-
prising that the formation of the earliest organi-
sations in England during the 1870s has received
little attention. Institutional con?gurations in
England were signi?cant to subsequent patterns of
organisational development in both the UK and
overseas and had implications for the future com-
plexion of intra-professional politics in British
accountancy (Shackleton & Walker, 1998, 2001).
This paper seeks to occupy a void in the literature
by analysing the formation of the Incorporated
Society of Liverpool Accountants (1870), the
Institute of Accountants in London (1870), the
Manchester Institute of Accountants (1871) and
the Institute of Accountants in She?eld (1877).
1
The motives for the organisation of accountants in
these cities are examined by reference to prevailing
theories of professionalism. The study commences
0361-3682/03/$ - see front matter # 2003 Elsevier Ltd. All rights reserved.
PI I : S0361- 3682( 02) 00031- 4
Accounting, Organizations and Society 29 (2004) 127–156
www.elsevier.com/locate/aos
1
In addition to these local organisations, the Society of
Accountants in England was formed in 1872. This was a
national organisation whose archives are missing (see Boys,
1994). The Society is not included in this study.
* Tel.: +44-131-650-8342; fax: +44-131-650-8337.
E-mail address: [email protected] (S.P. Walker).
with an excursus into current theoretical approa-
ches, then outlines existing explanations for pro-
fessional organisation in English accountancy, and
subsequently presents historical evidence pertaining
to the context and speci?cs of institutionalisation.
The signi?cance of the ?ndings for understandings
of occupational organisation as a feature of pro-
fessional jurisdiction, con?ict, labour market shel-
ter and social closure is discussed in the conclusion.
1. Tracking diversity in the dynamics of
professional organisation
Historical studies of the accountancy profession
have moved far beyond the con?nes of function-
alism, ventured towards critical interpretations of
professional behaviour and increasingly focus on
the identi?cation of diversity in occupational
experiences. It is now accepted that there are
manifold paths to professional status and con-
siderable historical variation in occupational pro-
jects. This is re?ective of broader paradigmatic
swings in the sociology of professions. Following
the retreat from functionalism revisionists of the
‘critical’ 1970s and 1980s emphasised mono-
polisation, power and the role of professions in the
class system. Subsequent historical studies of a
range of occupations in di?erent spatial contexts
(especially continental Europe) identi?ed pro-
fessionalisation trajectories not easily accom-
modated within blanket and Anglo-American
theorisations. Post-revisionist studies of profes-
sions now emphasise a ‘comparative approach’
substantially rooted in historical analyses (Collins,
1990; Freidson, 1994, pp. 2–8; Walker, 1999). It is
envisaged that the identi?cation of multifarious
experiences across nations and occupations will
inform broadly conceived and grounded theorisa-
tions of professionalism. This richer con-
textualisation will also render visible the interfaces
between professionalisation and economic, social,
political and cultural developments (Collins, 1990,
p. 22). According to Freidson the ‘strategy of
analysis’ therefore emphasises the particular,
investigating occupations as separate empirical
instances, not ‘‘as specimens of some general, ?xed
concept’’ (1994, p. 26). Further:
By expanding the universe of occupations on
which we have detailed and systematic data,
and by analysing them as individual, historic
cases, we could establish the ground for
catholic comparisons that we lack at present.
. . . Such a portrait is certain to be richer and
more varied than that abstract essence toward
which the traditional literature aimed, but, in
being so, it is likely to be more faithful to
reality (ibid., p. 27).
Studies of the dynamics of professionalisation in
accountancy over the last decade have tended to
con?rm the imprecision of metatheories of profes-
sions. This is particularly the case in relation to
the main concern of this paper, the establishment
of organisational structures. Compare, for exam-
ple, the diverse motivations for institutionalisation
revealed in recent discussions of the profession in
nations such as Belgium (De Beelde, 2002), Brunai
Darussalam (Yapa, 1999), China (Hao, 1999),
Greece (Caramanis, 1997), Japan (Sakagami, Yosh-
imi, & Okano, 1999) and Nigeria (Uche, 2002).
Theories of social closure have been a dominant
theme in the study of the accountancy profession.
These too, have con?rmed the desirability of
greater conceptual plurality. On the basis of their
studies of accountants in late nineteenth century
Victoria, Chua and Poullaos (1993, 1998) suggest
that a nuanced theorisation of Weberian closure is
required: one which recognises that professionali-
sation projects are more complex than the head-
long pursuit of monopolistic control and collective
social mobility. Detailed analyses reveal the need
to capture diverse closure strategies, variation in
the extent to which market control is aspired to
and achieved, and the complexity of state–profes-
sion relationships. This diversity is apparent in
other studies. For example, Ramirez has related
the institution of the Socie´ te´ acade´ mique de
comptabilite´ in 1881 as an instance of ‘‘proto-
professional closure resting on credentialism’’
(2001, p. 396) and The Compagnie des experts-
comptables de Paris in 1912 as the manifestation
of an attempt to create a professional elite.
McMillan (1999), has argued that the organisation
of the Institute of Accounts in New York in 1882
represented an attempt (in accord with the
128 S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156
dominant scienti?c ideal) to institutionalise a
‘community of the competent’ and gain market
advantage on the basis of superior knowledge
claims over uninstructed practitioners. Annisette
(1999), by contrast, has illustrated how the ?rst
professional organisation in Trinidad and Tobago
in 1964 was motivated by the antithesis of closure
and comprised an attempt, supported by a newly
independent state, to open the vocation to those
excluded under the former colonial regime. This
variety is inevitable given that ‘‘there is no pattern
of social closure around an occupation that is not
in?ected by the latter’s past, its speci?c activity
and typical context of performance or, . . .by the
political context within which closure is obtained’’
(Larson, 1990, p. 27).
Criticism of closure theory as an explanation for
professional organisation has also featured in
recent studies by important contributors to the
sociology of professions. Freidson (1994, pp. 80–
91) has contended that a broad conception of
occupational control over work based on the
‘labour market shelter’ o?ers greater illuminative
potential. For Freidson closure is essentially con-
spiratorial, too heavily rooted in the analysis of
class and inequality. It is a concept not su?ciently
sensitive to the possibility of di?erent motives for
pursuing market control. These may range from
aggressive e?orts to achieve monopoly by activat-
ing strategies of exclusion, to attempts at preser-
ving and securing advantageous positions in the
labour market in order that established profes-
sionals can pursue careers in an ordered environ-
ment. The creation of shelters involves disturbing
the market as the occupation seeks degrees of
control over the supply of labour services. At its
extreme the shelter may take the form of a state
sanctioned professional monopoly. A less com-
prehensive form of control is achieved when an
organisation is established to identify those prac-
titioners (members) whose labour is to be pro-
tected. Such organisations also comprise
important bases for the preservation and
enhancement of market control through their
facilitation of collective action and the construc-
tion of quali?cation systems.
Indications that closure theory by itself inade-
quately captures the complexities of professional
organisation are also evident in the predecessor to
the current study. Walker (1995) employed both
critical and con?ict paradigms to accommodate
the causes of the formation of the ?rst institutes of
accountants in mid-nineteenth century Scotland.
While critical analysis emphasised the socio-poli-
tical character of organisation and post-formation
opportunities for the imposition of closure prac-
tices, it was con?ict theory that illuminated the
circumstances compelling institutionalisation. The
formation of professional organisations in Edin-
burgh and Glasgow was not instigated by a desire
for raising status, gaining new privileges, pro-
mulgating monopolies and thereby achieving col-
lective social mobility. Rather, organisation was
about mobilising accountants whose elevated sta-
tus and claims to occupational superiority were
challenged by belligerent outsiders in the form of a
powerful, London-based mercantile interest
group. Organisation also served to enhance group
consciousness and identity during clashes of
ideologies with hostile parties. More recently,
Carnegie and Edwards (2001) also perceive the
formation of the Incorporated Institute of
Accountants in Victoria as displaying elements of
social closure and episodes of intra-occupational
con?ict. Although colonial accountants were
anxious to distinguish themselves from clerks and
bookkeepers by establishing a professional body,
the organisation was instigated in response to the
proposed establishment of a London-controlled
outpost in Melbourne. This threatened local
accountants, aroused sentiments of Australian
nationalism and resulted in a determination to
establish a body under the control of local
practitioners.
Con?ict, at the inter-professional level, also fea-
tures signi?cantly in Abbott’s (1988) statement on
The System of Professions: ‘‘It is the history of
jurisdictional disputes that is the real, the deter-
mining history of the professions. Jurisdictional
claims furnish the impetus and the pattern to
organizational developments’’ (p. 2). While his
model emphasises the centrality of work and
departs from a focus on the components of pro-
fessionalisation such as association (pp. 112, 314),
Abbott recognises the importance of organisa-
tional attributes in the pursuit of jurisdictional
S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156 129
claims (1988, pp. 70, 82–3). In relation to
accounting Abbott discusses skirmishes on the
border between accountants and lawyers, the
diminishing jurisdiction of the latter and work-
shifts within the boundaries of the accounting
domain (ibid., pp. 25–6, 94, 267–71). Abbott’s
thesis, though subject to criticism (see Macdonald,
1995, pp. 14–17), has informed recent historical
studies of the accountancy profession (Maltby,
1999; Sikka & Willmott, 1995). In particular,
commentators have utilised Abbott’s theory to
observe jurisdictional disputes between the pro-
fessions of law and accounting (Dezalay, 1991;
Pong, 1999). Abbott’s own inter-professional case
study of solicitors in England covers the period
from the mid-1870s to the 1950s (1988, chap. 9).
In the current study we explore the dynamic rela-
tionship between lawyers and accountants during
the 1860s and 1870s—a formative period in the
organisation of the latter.
By providing an empirical analysis of four
instances of organisation within the occupation of
English accountancy, this study presents an
opportunity to investigate potential diversity in
occupational experiences and the relative potency
of the aforementioned theories of institutionalisa-
tion which have dominated recent analyses: social
closure, labour market shelters, con?ict and pro-
fessional jurisdictions. Before embarking on such
an analysis of the ?rst accountancy organisations
in England during the 1870s, the extant literature
concerning these institutes is examined.
2. Explanations for professional organisation in
England
When the 50th anniversary of the Institute of
Chartered Accountants in England and Wales
(ICAEW) was celebrated in 1930, The Accountant
suggested that, like many other ‘great’ historical
events, the precise causes of the organisation of
local accountants were shrouded in mystery. The
journal merely identi?ed ‘‘a common spirit’’
among accountants to organise (supplement
17.5.1930). O?cial histories, often prepared for
centennial celebrations, such as those by Howitt
(1966), Hopkins (1980) and Margerison (1980)
have been more expansive. Some insights to the
formation of the Incorporated Society of Liver-
pool Accountants in 1870 and the She?eld Insti-
tute of Accountants in 1877 may be gained from
the texts prepared to commemorate 100 years of
activity (Hargreaves, 1970; Hoe, 1977). There are
no such publications which relate speci?cally to the
Institute of Accountants in London (formed 1870)
or the Manchester Institute of Accountants (1871).
Several of the standard texts on the develop-
ment of the profession in England o?er little
beyond noting the organisation of local societies.
The less than ?attering account of the emergence
of the profession in England contained in Brown
(1905) is of this character (also Green, 1930, pp.
200–1). The only detail provided in this work
refers to the ‘‘considerable di?culty’’ which atten-
ded organisation in Liverpool (ibid., p. 235).
2
Sta-
cey’s (1954) account of the formation of the
professional bodies in England is substantially
based on that o?ered in Brown. Stacey empha-
sised a causal relationship between the emergence
of industrial society and professionalisation in
England. Only when economic maturity attained
such a pitch as to create a nucleus of public prac-
titioners were the conditions right for the organi-
sation of accountants (ibid., p. 23). For Stacey,
con?rmation of his determinist explanation is
provided by the fact that the ?rst organisations
appeared in the large commercial and manu-
facturing centres.
3
The localised character of the
societies formed in Liverpool, London, Manche-
ster and She?eld was, claimed Stacey, also
emulative of organisational structures in Scotland
(ibid., p. 23). The mimetic nature of professional
organisation in England has been emphasised by
2
An observation not borne out by the ?ndings reported in
this paper.
3
Economic determinist explanations emphasise the
‘obvious’ signi?cance of industrialisation to the emergence of
professional organisations in individual centres and are extre-
mely problematical. The ?rst organisation to be established in
Scotland was in Edinburgh, not recognised as a major manu-
facturing city (Walker, 1995, 2000). In England the ?rst orga-
nisations were formed in Liverpool (the major commercial
centre and trading port of northern England) and London (the
pre-eminent centre of commercial and ?nancial wealth; Rubin-
stein, 1977). Note also the absence of local organisations in
important centres of industry such as Birmingham and Leeds.
130 S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156
other researchers (Macdonald, 1985, p. 548; Lee,
1996b, p. 177).
Other commentators on professional organisa-
tion in England rely on earlier works such as
Brown and Stacey (Parker, 1986, p. 20). Jones
(1981, pp. 67–8) follows Howitt (1966) and refers
to the formation of the London Institute in the
context of the need to regulate a profession whose
social and economic interests were increasingly
threatened by the intrusion of unscrupulous indi-
viduals. In his seminal paper Willmott concurs
with Jones that professional organisation in Lon-
don ‘‘followed a series of scandals that had
brought accountancy into serious disrepute’’
(1986, p. 566). The object of organisation among
London accountants was to di?erentiate them-
selves from the unprofessional and gain control of
the market for accountancy services. As the fore-
going suggests, Jones and Willmott, in common
with most other writers (such as Howitt, 1966 and
Hopkins, 1980), devote attention to the institute
established in the metropolis in 1870. The three
societies of accountants formed in English pro-
vincial towns are marginalised in most analyses.
This is especially unfortunate in the case of the
Liverpool society because, as will be illustrated,
this body was signi?cant in shaping the localised
structures of those organisations formed in its wake.
More commonly, scholars have noted speci?c
legislative events as inducing the organisation of
accountants in England. Carr-Saunders and Wilson
(1933, p. 210) identi?ed the Companies Act, 1862
and the Bankruptcy Act, 1869 as instrumental in
‘‘the emergence of the professional accountant in
independent practice’’. Carr-Saunders and Wilson
contended that the latter piece of legislation was a
catalyst to organisation in Liverpool and was fol-
lowed by similar behaviour in other urban centres:
In 1870 an association of accountants was
founded in Liverpool, and other associations
quickly followed. These associations repre-
sented reputable practitioners; but we hear at
this time of many persons styling themselves
accountants who carried on a practice of a
very doubtful character, and thus made it
apparent that some form of professional reg-
ulation was required (ibid.).
For Macdonald (1995), tracking the organisa-
tion of English accountants assumes some sig-
ni?cance as an example of a professionalisation
project. Institutionalisation represents the inaugu-
ration of such projects. In his 1985 contribution
(p. 547) Macdonald, like Carr-Saunders and Wil-
son, refers to the signi?cance of companies and
bankruptcy legislation to the formation of local
societies of accountants in England. However, a
decade later in The Sociology of the Professions
Macdonald uniquely, and without reference to its
basis, suggests that the Companies Act, 1867 was
signi?cant (1995, p. 191). He also mistakenly
asserts that the local organisations were amalga-
mated as an Institute of Accountants in England
in 1872 (p. 109). Macdonald contends that it is
di?cult to explain why organisation commenced
in England 17 years after Scotland though in
his 1984 study (pp. 187–88) he posed a hypoth-
esis on this subject which invites further study.
Given the increasing presence of accountancy as
a case in the sociological literature, it is appro-
priate to o?er a deeper historical analysis, correct
some misconceptions and provide the explanations
sought.
Boys (1994) was closer to the mark when reiter-
ating the centrality of the Bankruptcy Act, 1869.
The opportunities presented by this statue for the
appointment of accountants in England and
Wales as creditor-elected trustees meant that
‘‘many unscrupulous and unskilled persons soli-
cited for such appointments and the resulting dis-
satisfaction re?ected badly on competent
accountants, who, in order to protect their repu-
tation and to distinguish themselves from the
unquali?ed, started to form professional societies’’
(ibid., p. 10). In Walker (1995) it was also argued
that professional organisation in England should
be understood in the context of legislative devel-
opments pertaining to bankruptcy and insolvency
and the socio-political reactions these engendered
among occupational groups. It was also suggested
that the character of professional formation in
England required further scrutiny as a likely ele-
ment in a continuum of organisational develop-
ments which commenced in Scotland in 1853. In
accord with accepted wisdom, it was suggested by
Walker (1995), that the imposition in England of
S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156 131
the Scottish system of bankruptcy administration
by trustees through the Bankruptcy Act, 1869, was
the catalyst for professional organisation in Eng-
land. However, this assertion was made with the
following caveat: ‘‘The extent to which accoun-
tants in England organized during the 1870s in
order to protect their occupational status and gain
socio-economic advantage over the expected (and
realised) in?ux of unquali?ed applicants for trus-
teeships following the introduction of the ‘‘Scotch
system’’ of bankruptcy administration is deserving
of further investigation’’ (1995, p. 304). This paper
presents the results of a further investigation.
At about the same time as this assertion was
made the author of a major work on the history of
insolvency also contended that changes in the law
of bankruptcy were instrumental in the organisa-
tion of the accountancy profession in England
(Markham Lester, 1995, pp. 5–6). In their survey
of the literature on the history of the profession in
Britain, Matthews, Anderson, and Edwards (1998,
p. 60) have also called for the further study of the
early English accountancy bodies.
The time appears ripe, therefore, for a more
rigorous historical analysis of early professional
organisation in England. Thus, the paper now
examines the likely reasons for the formation of
the local societies in Liverpool, London, Manche-
ster and She?eld during the 1870s. In pursuing
this subject reliance is placed not only on the sur-
viving archives of the local organisations, but, in
accord with the need to examine organisational
developments within their political, occupational
and spatial contexts, also on parliamentary
papers, the record of parliamentary proceedings,
legal journals, contemporary texts on insolvency,
and local and national newspapers.
3. Bankruptcy and the jurisdictions of accountants
and lawyers
Given its likely importance to the organisation
of accountants during the 1870s, it is necessary to
explore developments in bankruptcy legislation in
mid-Victorian England. Applying Abbott’s the-
ory, these events had the potential to disturb
occupational jurisdictions in bankruptcy work and
to incite inter professional con?ict between
accountants and lawyers.
3.1. Accountants and bankruptcy administration in
England during the mid-nineteenth century
According to Markham Lester ‘‘Victorian Eng-
land seems to have been preoccupied with insol-
vency’’ (1995, p. 1). This concern was well
founded. During the 1860s losses from bankruptcy
and similar arrangements could amount to £30m
per annum (p. 300); almost 4% of GDP (Mitchell,
1988, p. 828). Aside from its implications for the
operation of commerce, the prevalence of bank-
ruptcy was a wider social concern and this was
re?ected in popular culture. Weiss (1986) has
described bankruptcy as ‘The Hell of the English’,
the nightmare of the middle-classes, due to its
stigmatised association with failure, poverty and
diminished morals. Not surprisingly, the workings
of the laws of bankruptcy and insolvency fre-
quently occupied the attention of interest groups,
policy-makers and legislators during the nine-
teenth century:
Between 1817 and 1883, three royal commis-
sions, at least ten parliamentary select com-
mittees, and one special Lord Chancellor’s
committee, studied the problem of bank-
ruptcy and recommended remedial measures.
The eighty-year period between 1831 and
1914 . . . saw the introduction of almost one
hundred bankruptcy bills in Parliament.
Nearly a third became law (Markham Lester,
1995, p. 2).
Particularly important to accountants in Vic-
torian England was their role in the administra-
tion and management of insolvent estates under
this shifting body of legislation and the potential
impact on their livelihood of proposals for
legislative change.
From the passing of Lord Brougham’s Bank-
ruptcy Act in 1831 until the 1860s, the adminis-
tration of bankrupt estates in England was
founded on state control, or ‘o?cialism’ (ibid.,
pp. 40–59). Under this system the Lord Chan-
cellor was empowered to appoint six salaried
132 S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156
commissioners who were vested with extensive
powers over the judicial administration of bank-
ruptcy. The Lord Chancellor was also responsible
for appointing a number of ‘o?cial assignees’
whose function was to perform the detailed man-
agement and distribution of bankrupt estates
(Markham Lester, 1995, pp. 81–86; Weiss, 1986,
pp. 42–3; Walker, 1995). These o?cials of the
Courts of Bankruptcy, of whom there were 10 in
London and (from 1843, when the system was
extended to the counties) 16 to 18 in district
bankruptcy courts, were chosen from among mer-
chants, brokers and accountants (Markham Les-
ter, 1995, p. 82). O?cial assignees were
remunerated on a scale commensurate with the
amount of assets they realised. The Bankruptcy
Act, 1831 and its identi?cation of accountants as
potential assignees gave accountancy in England
‘‘its ?rst professional boost’’ (Napier & Noke,
1992, p. 34).
4
From the late 1850s ‘o?cialism’ was criticised
by the increasingly vociferous commercial interest
(Markham Lester, 1995, pp. 123–133). The system
of o?cial assignees was perceived as expensive
(the cost of administration being disproportionate
to dividends received by creditors) and at variance
with the notion that the management of the
bankrupt’s estate should be the responsibility of
those who had the greatest interest in it, that is,
the creditors. The demands of the business classes
were partly satis?ed when the Bankruptcy Act,
1861 introduced a greater measure of creditor
control. Under this Act the assignees elected by
the creditors were to assume greater responsibility
for the management and distribution of the bank-
rupt’s assets while the o?cial assignee was to
retain powers of inspection, supervision and audit
(ibid., pp. 133–146).
The 1861 Act did not, however, quell criticism
of the system of bankruptcy administration in
England. By mid-decade the Mercantile Test
described the statute as a failure (23.1.1864,
23.4.1864). Escalating cost, the encouragement of
fraud under trust deeds, and demands for greater
creditor control, featured large in the deliberations
of a House of Commons Select Committee on the
Bankruptcy Act, convened in 1864 (Report;
Weiss, 1986, pp. 45–6). The chambers of com-
merce argued that bankruptcy administration
should reside wholly with the creditors (Markham
Lester, 1995, pp. 146–151). The Scottish system of
management by creditor-elected trustees, paraded as
an exemplar of the e?cient working of creditor con-
trol since the late 1850s (Kinnear, 1858; Moncrei?,
1865; Robson, 1870, p. 10), was recommended by
the Select Committee for adoption in England and
Wales (Walker, 1995).
5
This would also constitute a
major advance in the assimilation of commercial
laws within Great Britain (Mercantile Test,
5.11.1864, 2.2.1866; Walker, 1995). Public bills were
introduced in 1866 and 1867 to implement this sys-
tembut pressure of parliamentary time and a change
of government prevented the passing of legislation.
By the end of the 1860s discontent with the 1861
Act was widespread and demands for reform from
the commercial and mercantile communities
intensi?ed (Routh, 1870, pp. 8–9). As one public
accountant in Liverpool put it ‘‘there can be no
doubt that the Act of 1861, and the machinery it
provided, has signally failed of its purpose. It was
designed in the interests of the creditor; it has in
fact advanced, in too many instances, the dis-
honest purposes of the debtor’’ (Kemp, 1870, p. 7;
Routh, 1870, p. 8).
In March 1869, following consultations with
representatives of the commercial lobby, the Lib-
eral Government introduced a Bankruptcy Bill
which, it intended, would ‘‘go to the very root of
the matter, and reform the system altogether’’
(Hansard, 5.3.1869, p. 776). Much to the satisfac-
tion of the banking, mercantile and commercial
communities, this legislation provided for the
abolition of o?cial assignees and their replace-
ment by the Scottish system of creditor-elected
trustees (Banker’s Magazine, April 1869, p. 426;
Robson, 1870, p. 12). In introducing the Bill the
Attorney-General stated: ‘‘The great merit of the
4
Among the accountants who bene?ted from such
appointments, was William Turquand, who was later to
become the ?rst President of the ICAEW (Matthews et al.,
1998, p. 32; Markham Lester, 1995, p. 82).
5
The Mercantile Test reported that the cost of winding-up a
bankrupt estate as a proportion of assets was 50% in England
and 13.5% in Scotland (2.2.1866).
S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156 133
Scotch system was its simplicity; the absence of
o?cialism; allowing the creditors to administer the
estates in bankruptcy by themselves, and in their
own way without interference’’ (Hansard,
5.3.1869, pp. 780–1). The Bill was the subject of
comparatively little parliamentary debate and
entered the statute book in August 1869.
For Markham Lester (1995, pp. 155–69) the
complexion of the 1869 Act, particularly its
enshrinement of creditor control, re?ected the
in?uence of the organised and articulate middle
class in mid-Victorian politics. Local and national
chambers of commerce had prioritised bankruptcy
reform during the 1860s and became powerful
lobbies for the articulation of the views of leading
businessmen who were also creditors in larger
bankruptcies. Through the decade these men and
the organisations which represented them con-
sistently demanded greater control and cheapness
in insolvency administration. The Scottish system
was identi?ed as o?ering these advantages. The
content of the Bankruptcy Bill, 1869 indicated
that ‘‘the government went out of its way to meet
the desires of the business community’’ (ibid., p.
160). Government and Parliament had become so
receptive to the demands of the commercial inter-
est that the objections of previously in?uential
groups in framing bankruptcy legislation, such as
the legal fraternity, were not heeded.
As well as being seen as a victory for the busi-
ness classes and a reverse for lawyers, the Bank-
ruptcy Act, 1869 was perceived as opening a
wealth of opportunities for accountants in Eng-
land. The notion that accountants should assume
a major role in the management of bankrupt
estates had been mooted before the 1869 Act. One
pamphleteer noted in 1858 that accountants were
frequently and successfully engaged under volun-
tary schemes of insolvency administration. Hence,
‘‘If our professional accountants can wind up
estates promptly and economically, why cannot
the creditors be allowed to select such accoun-
tants’’ (Advice to the Embarrassed, 1858, p. 56). In
1877 the Comptroller in Bankruptcy was to recall
how, during the 1860s, the chambers of commerce
had argued that bankruptcy reform would be best
e?ected by replacing unremunerated creditor
assignees by a paid accountant as trustee (General
Report, 1877, p. 13). A number of witnesses
before the Select Committee of the House of
Commons (among them accountants) in 1864
expressed a preference for the appointment of
competent, professional accountants to manage
bankrupt estates in place of o?cial assignees or
solicitors (1864, pp. 108–9, 171, 250, 263). It was
observed that respectable accountants dominated
trusteeships in Scotland. In 1865 George W.
Hastings, LLB, General Secretary of the National
Association for the Promotion of Social Science,
an advocate of Scottish bankruptcy administra-
tion, urged the introduction in England of ‘‘facul-
ties’’ of chartered accountants as existed in
Scotland. This would enable creditors ‘‘to lay their
hands upon men to whom they could entrust with
perfect security the conduct of bankrupt estates’’
(Transactions, 1865, pp. 233–4). Hastings observed
that only instructed practitioners entered the pro-
fessional organisations north of the border.
Membership of these bodies o?ered ‘‘a guarantee
of the quali?cations and respectability of the trus-
tee’’ (ibid).
The Attorney-General accepted such views. On
introducing the Bankruptcy Bill, 1869 he envi-
saged that the system of creditor-elected trustees
would encourage greater professionalism in the
management of bankrupt estates in England: ‘‘In
Scotland the e?ect of the system had been to call
into existence a number of persons who made the
o?ce of trusteeship a kind of profession, and they
succeeded in proportion to their diligence, cap-
ability, and trustworthiness’’ (Hansard, 5.3.1869).
While the 1869 Act established that any person
could be selected as a trustee, most commentators
assumed that the Attorney-General had accoun-
tants in mind when framing his legislation.
Although businessmen might have the requisite
experience to conduct the a?airs of the bankrupt,
the variety and complexity of the tasks confront-
ing the trustee would engender a reluctance to
accept a position requiring knowledge of law and
which was ‘‘so irksome, and involving’’ (Routh,
1870, p. 21). Professional accountants, by con-
trast, were possessed of the appropriate combina-
tion of skills (Mercantile Test, 2.2.1866,
30.11.1866). The Economist expressed the hope that
‘‘the creditors will appoint a good professional
134 S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156
accountant to manage the estate—will pay him
fairly and look after him a little’’ (11.12.1869, p.
1458). One accountant observed that the 1869 Act
conferred ‘‘a status on the profession which did
not exist before’’ (Caldecott, 1875, p. 41). He
added that ‘‘The Bankruptcy Act of 1869 places
Accountants on a footing but little lower than that
of solicitors and attorneys’’ (ibid., p. 9). The pro-
spect of an elevation in the status of accountants
was not well received by the more ancient profes-
sion of law.
4. Lawyers and their invaders
As Sugarman has contended, although the rela-
tionship between accountants and solicitors dur-
ing the mid-nineteenth century was often
characterised by mutual dependency and co-oper-
ation, in the law journals, the accountant was
usually portrayed as ‘‘‘a folk devil’, the generic
term for the outsider invading the profession’’
(1995, pp. 229–30). Attorneys and solicitors had
long been acutely conscious of occupational
demarcation and the threats of interlopers (Cor-
?eld, 1995, chap. 4). During the 1850s, and espe-
cially the 1860s, their attention focused on the
intruding accountant. Concerns about the impe-
cunious state of solicitors, the assault on their
privileges through legislation favourable to busi-
ness interests, and the incursion of accountants
(and others) were recurring themes in the profes-
sional press. The pages of The Law Times and The
Solicitors’ Journal contained many articles and
letters on the encroachments of invading accoun-
tants. Lawyers complained that accountants were
not incumbered by obligations to pay stamp duties
and other taxes (see, for example, Law Times,
19.10.1850; 12.4.1851; 1.1.1852; Cor?eld, 1995, p.
83); were not bound by scales of charges; did not
require an expensive vocational preparation; owed
no allegiance to a professional organisation; and,
resorted to base practices such as touting (Solici-
tors’ Journal, 28.3.1863; 10.11.1866; 23.2.1867;
9.3.1867; 7.9.1867; 29.2.1868; 6.2.1869).
During much of the 1860s the anxiety of lawyers
about incursions into their professional jurisdic-
tion centred on insolvency work. According to one
disgruntled correspondent to The Law Times, this
was one source of remuneration not hitherto ser-
iously threatened by usurpers, and was of parti-
cular importance to practitioners in the cities
where a local bankruptcy court was sited
(8.2.1868, p. 275). Under the 1861 Act the cred-
itors elected an assignee. The creditor-assignee
often engaged the services of a solicitor for general
advice or to deal with complex questions arising
from the disposal of property (General Report,
1873, p. 2; 1877, p.5). Accountants and auction-
eers might be similarly engaged on an ad hoc
basis. In a relatively small number of larger bank-
ruptcies the creditors could also decide to employ
a paid manager to collect and wind-up the estate.
In these cases ‘‘The manager was generally an
accountant of known experience in the business
entrusted to him’’ (General Report, 1878, p. 11).
However, in most bankruptcies under the 1861
Act where a solicitor was appointed, it was not
necessary to engage an accountant as manager
(ibid., p. 13).
Accountants were also increasingly involved in
advising insolvent traders and were employed under
clauses in the 1861 Act relating to trust deeds (Law
Times, 3.4.1869; Solicitors’ Journal, 23.2.1867).
6
This increasing area of work,
7
which often attrac-
ted a less reputable accountant disrespectful of the
boundaries between accountants and lawyers, was
an especial source of grievance among solicitors:
What is it we complain of? It is this—
Accountants and similar persons calling and
6
Lawyers often cited the provisions of the 1861 Act, toge-
ther with the commercial crises of the ensuing decade, as rea-
sons for the expanding number of ‘accountants’. Data supplied
in Brown (1905, pp. 234–5) of the number of accountants listed
in local directories con?rms this expansion:
1850 1860 1870
Liverpool 69 91 139
London 264 310 467
Manchester 66 84 159
Whereas the number of accountants in these three cities
increased by 22% 1850–1860, they increased by 58% 1860–
1870.
7
In 1862 the number of assignments and compositions was
2651, in 1868 the number was 8045 (Markham Lester, 1995, p.
166).
S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156 135
attending meetings of creditors, negotiating
with creditors, an many cases preparing the
composition and similar deeds, paying com-
positions, preparing leases, partnership deeds,
wills, agreements &c, and transacting a vari-
ety of other professional business (Solicitors’
Journal, 7.9.1867).
The advancing in?uence of the commercial
interest in bankruptcy reform, and the shift
towards creditor control was perceived by many
solicitors as an attempt by the business classes ‘‘to
banish the lawyers’’ from this ?eld of practice
(Law Times, 9.6.1866, p. 540). The Economist
commented in March 1868: ‘‘The present admin-
istration by lawyers and law courts must be ter-
minated, but the point is to get another system,
freed from legal formalities, by which bankrupt
assets may be collected and divided e?ectively and
speedily’’ (28.3.1868, p. 350). In response, the legal
fraternity suggested that the high cost of bank-
ruptcy administration (resulting from the potential
involvement of o?cial and creditor assignees,
accountants and lawyers) could be reduced by
granting solicitors sole responsibility for winding-
up (ibid; 23.3.1867, p. 399). More vociferous
respondents urged legislation ‘‘to get rid of the
numerous invaders on our Professional rights,
such as accountants, auctioneers, land agents,
stewards and engrossing clerks’’ (Law Times,
8.2.1868, p. 275).
5. The 1869 Act as a disturbance to professional
jurisdictions
Despite the objections of lawyers, it became
increasingly evident during the late 1860s that
future bankruptcy legislation would favour
accountants. The appearance of the Bankruptcy
Bill in spring 1869 caused anxiety among solicitors
and demands for protective action by their pro-
fessional organisations. The Law Society con-
sidered that the 1869 Bill to abolish o?cialism
‘‘contained numerous provisions which appeared
very objectionable’’ (Annual Report 1869, p. 17).
At worst the Bankruptcy Bill was perceived as
another concession to the trading community and
the culmination of the attempt to wipe lawyers
‘‘o? the face of the earth’’ (Law Times, 13.3.1869;
24.4.1869). At best it would ‘‘considerably dimin-
ish the business of attorneys and solicitors who
practice in bankruptcy and in common law’’
(ibid., 20.3.1869, p. 396). In their place the Bill
would ‘‘permanently establish’’ the growing class
of accountants and o?er them ‘‘fresh ?elds and
pastures new’’ (Law Times, 3.4.1869). The County
Courts Chronicle suspected that the Bill was the
outcome of a conspiracy by accountants and their
trader-allies to monopolise bankruptcy adminis-
tration (Markham Lester, 1995, p. 157). Com-
mentators warned that if lawyers were impotent in
their response to this incursion ‘‘they will have
very powerful rivals in these ‘‘accountants,’’ and
that before long’’ (ibid). In a leading article The
Law Times suggested that the proposed introduc-
tion of the Scottish system of bankruptcy admin-
istration in England would: ‘‘largely increase a
class of semi-legal professional men who have of
late trenched greatly on the province of the attor-
ney’’ and reasserted that bankruptcy work
(including trusteeships) rightly fell within the pro-
vince of the lawyer (6.3.1869; 17.4.1869;
24.7.1869). When the rules attached to the Bank-
ruptcy Act were published in autumn 1869 another
correspondent o?ered the following complaint:
I was struck with the entire absence of any
rules as to solicitors. Whoever it is that has
drawn them evidently intends to give solici-
tors the polite go-by, and let in in their stead
a host of agents in the shape of accountants,
house agents, and auctioneers, who have
never paid one farthing to the Government in
the way of stamp duties on their articles (if
ever they were articled), and who, if accoun-
tants, pay nothing at all for an annual certi?-
cate to enable them to accompt (Law Times,
20.11.1869).
On the eve of the implementation of the 1869
Act The Economist welcomed the prospect of
accountant-trustees, celebrated the elimination of
o?cials and the abatement of the power of
lawyers in bankruptcy administration (11.12.1869,
p. 1458). In fact, although the provisions of the
136 S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156
1869 Act constituted an undoubted stimulus to
their accountant rivals, it did not speci?cally
exclude solicitors from bankruptcy work (Mark-
ham Lester, 1995, p. 154). The passing of the Act
did, however, raise questions about the relation-
ship between solicitors and the emergent ‘semi-
legal’ profession of accountancy. The lawyers had
to decide whether they would compete with
accountants for the bankruptcy trusteeships.
8
The
Act also posed questions for established public
accountants who were concerned about the pro-
spect of an incursion by less respectable and
uninstructed practitioners. It was feared that these
men might ‘‘spring up’’ and take advantage of the
opportunities presented by the new legislation
(Law Magazine, 1869–1970, p. 282). The ?rst city
in which accountants and lawyers addressed these
issues was Liverpool.
5.1. Negotiating a jurisdictional settlement: the
Incorporated Society of Liverpool Accountants
Hargreaves’ (1970) informative history of the
Liverpool Society downplays the signi?cance of
the Bankruptcy Act, 1869 as a catalyst to the
organisation of accountants in Liverpool. This is
despite its frequent mention in the early minutes of
the Society. While recognising that negotiations
took place in 1870 between local lawyers and
accountants over the administration of bankrupt
estates, Hargreaves emphasises the Limited Liabi-
lity Act, 1855 as generating an expansion in com-
pany formations and the demand for ‘‘responsible
auditors’’ (p. 1). He explains the stimulus to orga-
nisation thus: ‘‘Clearly the time was ripe for the
latter [accountant-auditors] to band together, and
safeguard both themselves and their prospective
clients against inexperienced and ine?cient com-
petitors’’ (ibid). Given the advancing prosperity of
the city during the nineteenth century, it was no
surprise, argued Hargreaves, that the ?rst organi-
sation of accountants in England was formed in
Liverpool (p. 2). It is clear from available evidence
however, that Liverpool accountants were more
interested in insolvency practice than corporate
auditing during the mid-nineteenth century
(Report from the Select Committee, Minutes of
Evidence, 1864, p. 242).
The sources suggest the centrality of the Bank-
ruptcy Act, 1869 to the organisation of accoun-
tants in Liverpool in 1870. As the leading export
port in Britain and a major commercial centre, the
subject of bankruptcy was widely debated in
Liverpool during the 1860s.
9
It was reported to the
House of Commons Select Committee in 1864 that
there was much discontent in the city concerning
the expense of bankruptcy (Minutes of Evidence,
1864, p. 242). In February 1868 the Liverpool
Chamber of Commerce heard a widely reported
speech by Rt. Hon. George Goschen on the radi-
cal changes necessary to address ‘‘the cumbrous,
expensive, and totally ine?cient character of the
present mode of administration in Bankruptcy’’
(Goschen, 1868, p. 3). In 1869 the Liverpool
Chamber of Commerce published a report on
bankruptcy compiled by a committee of local
merchants and lawyers (Liverpool Chamber of
Commerce, 1869). A deputation was sent to Lon-
don in February 1869 and elicited an assurance
from Lord Hatherly that the new bankruptcy bill
would ‘‘leave creditors the sole choice as to the
manner of winding up estates’’ (Spectator,
27.2.1869, p. 247). When the Bankruptcy Bill,
1869 appeared it was welcomed by the Liverpool
Chamber of Commerce due to its embracing ‘‘all
the more important reforms which the Chamber
had long advocated’’ (Law Times, 6.3.1869, p.
356).
On 19 October 1869 the Metropolitan and Pro-
vincial Law Association
10
met in York. The
Chairman, Edward Lawrence, addressed the
8
Richardson (1997, pp. 639–640) relates a similar episode in
Canada in response to the Insolvency Act, 1874.
9
There is limited information on the geographical distribu-
tion of bankruptcies during the mid-nineteenth century (Mark-
ham Lester, 1985, p. 262). In the immediate aftermath of the
availability of o?cial statistics in 1885 there were marginally
more bankruptcies in Liverpool than any other provincial city
in England and Wales (ibid., pp. 316–317).
10
The objects of this organisation was ‘‘to unite and organise
the in?uence of practising attorneys and solicitors throughout
England and Wales; to promote the better administration of
the law, and protect the rights, and increase the usefulness of
the profession’’ (Solicitors’ Journal, 4.11.1865). The organisa-
tion was formed in 1847 and merged with the Law Society in
1873 (Sugarman, 1996, p. 103).
S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156 137
members on the Bankruptcy Act due to come into
force on 1 January 1870. Lawrence re-iterated the
lawyers’ objections to the new statute. He regret-
ted the abolition of o?cial assignees and expressed
the fear that creditor control would encourage
canvassing for trusteeships and the consequent
election of incompetent persons. However, given
the imminent implementation of the statute the
most pressing issue for solicitors was to decide
whether or not to act as trustees. Section 14(1) of
the Bankruptcy Act, 1869 provided that the cred-
itors in general meeting could appoint ‘‘some ?t
person’’ as trustee for remuneration to be estab-
lished by them (Public General Statutes, 1869).
Section 29 determined that if the trustee was a
solicitor he could ‘‘contract to be paid a certain
sum by way of per-centage or otherwise as a
remuneration for his services as trustee, including
all professional services’’ (ibid).
There were two sets of reasons why these clauses
caused anxiety among solicitors. The ?rst per-
tained to professional etiquette. The provision in
Section 29 that the trustee’s remuneration would
be based on a percentage of the assets realised
contrasted with the usual ‘fee’ and the payment of
solicitors’ costs out of the estate. Appointments
were also to be secured through an undigni?ed
process of election as opposed to an approach by a
client. Further there was the question of the status
and form of remuneration where the solicitor was
appointed by a non-lawyer trustee (with consent
of the Committee of Inspection). The second set of
issues concerned strategy. Would solicitors be
prepared to su?er the indignity of competing for
trusteeships, and associating themselves with debt
collection, for the sake of capturing this work
from accountants? The option remained of not
demeaning themselves by competing for trustee-
ships and thereby leaving the ?eld to ‘invaders’.
Lawrence put it thus:
Do we contemplate allowing accountants
entirely to supersede us in the administration
of insolvencies. Perhaps we ought not to be
disturbed by qualms of conscience as to pro-
fessional status; but we must consider whe-
ther the probable remuneration would
compensate us for the trouble . . . Of course
accountants as a body would be opposed to
solicitors competing with them, and this
might place solicitors in a very invidious
position of being underbid or underbidding in
settling the terms of remuneration (Solicitors’
Journal, 1869–1870, p. 10).
Lawrence urged solicitors to arrive at a united
view on this issue and the meeting resolved unan-
imously ‘‘that it would not be improper for any
professional man to accept, under the new bank-
ruptcy law, the o?ce of trustee, and to receive his
fees, not as quasi attorney, but as quasi trustee’’
(Solicitors’ Journal, 1869–1870, p. 32). The issue
was remitted for urgent consideration by the local
law societies. Having elicited the opinions of the
latter (Law Times, 11.12.1869, pp. 116–117) the
Managing Committee of the Metropolitan and
Provincial Law Association resolved, on 8
December 1869, ‘‘that it would not be inconsistent
with the standing of the profession for solicitors to
accept such o?ce [trustee] upon such terms or
arrangements as they may see ?t in each particular
case’’ (Solicitors’ Journal, 1869–1870, p. 153; Law
Times, 25.12.1869, pp. 141–2). The annual general
meeting of the Incorporated Law Society of
Liverpool on 3 November 1869 was informed
about the unanimous opinion of those gathered in
York. Despite the prevalence of this view and its
con?rmation by the Metropolitan and Provincial
Law Association, the solicitors of Liverpool were
to arrive at a modi?ed opinion.
On 17 January 1870 the Incorporated Law
Society of Liverpool met to discuss the working of
the Bankruptcy Act, 1869. The executive commit-
tee of the society resolved that while ‘‘it may be
expedient in certain exceptional cases that the
Solicitor should take the o?ce of Trustee, they do
not think it advisable as the General rule in
Liverpool that the duties of legal adviser and
Accountant should be performed by the same
person’’ (Book of Proceedings, 28.2.1870). The
Law Times reported that this decision meant ‘‘The
solicitors of London and Liverpool have come to
di?erent conclusions as to the course to be taken
under the new law of bankruptcy. The former have
determined to accept the o?ce of trustee, the latter
have resolved to leave the o?ce to accountants’’
138 S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156
(12.2.1870, p. 287). This instance of Liverpool
exceptionalism would not have surprised con-
temporaries. Liverpudlians perceived their resi-
dence in the ‘‘second metropolis’’, and were
engaged in a jealous commercial rivalry with
London during the nineteenth century. The closely
networked middle classes of Liverpool were com-
paratively uni?ed around a strong adherence to
‘free trade’ (Belchem and Hardy, 1998). The local
law societies were ‘‘vibrant and jealously autono-
mous’’ and sensitive to the threat of London
hegemony (Garrard and Parrott, 1998, p. 156).
The annual report of the Incorporated Law
Society of Liverpool for 1870 and the local press
suggested that having determined their course, the
solicitors approached leading accountants in
Liverpool to negotiate a division of labour
between the two professions. The Solicitors’ Jour-
nal related: ‘‘knowing what an advantage this
decision would prove to the accountants as a
body, and the power that would be placed in their
hands, the committee, with the object of de?ning
the relative duties of an accountant and attorney,
requested the leading accountants’ ?rms of this
town to meet them and discuss the subject’’
(19.11.1870, p. 43). According to The Liverpool
Mercury, having decided that accountants should
assume trusteeships, the Law Society of Liverpool
suggested that accountants should form a profes-
sional organisation (5.2.1870, p. 7). It appears
most likely that these inter-professional discus-
sions were conducted through the good o?ces of
Edward Banner, solicitor, the brother of Har-
mood W. Banner, the leading accountant in
Liverpool. Edward Banner had attended the
meeting of the Metropolitan and Provincial Law
Association in York, was a member of the Council
of The Law Society and its Common Law and
Bankruptcy Committee (Law Society, Council and
Committees, 1869, 1870).
On 19 January 1870, two days after the Liver-
pool Incorporated Law Society passed its resolu-
tion Harmood W. Banner and Andrew W.
Chalmers addressed a letter to a select group of
fellow Liverpool accountants urging their atten-
dance at a meeting on 25th to consider ‘‘the
propriety of forming a Society to be called ‘‘The
Incorporated Society of Liverpool Accoun-
tants’’.
11
This stated: ‘‘The important changes in
the mode of Winding-up Insolvent Cases publicly
and privately appears to us to render it necessary
to form such a Society’’ (Book of Proceedings,
25.1.1870). According to The Liverpool Mercury
the accountants involved in this formation move-
ment were ‘‘gentlemen selected by the Incorporated
Law Society for the purpose of deliberation upon
the course of procedure to be adopted under the
new Bankruptcy Act’’ (5.2.1870, p. 7, emphasis
added).
12
Fourteen accountants were present at
the resultant meeting in the o?ces of Messrs Har-
mood Banner & Son on 25 January 1870. At this
gathering it was determined to form the society. A
memorandum and articles of association were dis-
cussed and agreed and the election of an executive
committee was set in train. Two days later those
elected to the committee were instructed to pro-
ceed with the incorporation of the society under
the Companies Act, 1867. On 28 January those
who were principally involved in establishing the
organisation, Banner and Chalmers, were elected
President and Secretary of the society respectively.
This relatively swift journey through the process
of organisation was necessitated because a meet-
ing had been arranged for 31 January between the
new body of accountants and the Law Society of
Liverpool to discuss the detailed implementation
of the Bankruptcy Act as its a?ected the two pro-
fessions. At this meeting the opinion of the senior
local accountants on the distribution of duties was
sought. On 28 January the accountants were
unable to arrive at a conclusive decision on this
issue. Instead they indicated their willingness to
submit to the whim of the senior profession. It was
resolved that:
. . . in the present state of uncertainty as to the
working of the new Bankruptcy Act it was
11
The Law Society of Liverpool had been incorporated
under the Companies Act as recently as February 1869 (Solici-
tors’ Journal, 1869–1970, p. 29). The accountants appear to
have emulated its form of organisation.
12
It has not proved possible to con?rm this assertion in the
records of the Liverpool Law Society. There are no surviving
minute books of the Society for the relevant period. The author
was informed by the Society that these were destroyed in an air
raid on Liverpool during the Second World War.
S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156 139
found to be impossible to arrive at any de?-
nite conclusion or arrangement which could
be satisfactory. It was the unanimous opinion
of the Committee that the matter must be left
to be tested by the actual working of Estates
with the assurance from the whole body of
Accountants of their desire not to interfere in
any way with the business of the Solicitors
and of their willingness to fall into any
arrangement which they, the Solicitors, may
consider to be reasonable and right (Book of
Proceedings, 28.1.1870).
Representatives of the Society of Liverpool
Accountants met with the Committee of the
Liverpool Law Society on 1 February 1870. At
this meeting the resolutions of the latter dated 17
January and of the former dated 28 January were
discussed. It was decided that ‘‘nothing further
could be done at present’’.
In the ?rst week of February, the formation of
the Society was reported in the Liverpool press.
The Liverpool Mercury related: ‘‘The important
changes in the mode of winding up insolvent
estates introduced by the new law have stimulated
the leading accountants in Liverpool to emulate
their Scottish professional brethren and form
themselves into a body to be called ‘‘The Incor-
porated Society of Liverpool Accountants’’’’
(5.2.1870, p. 7). The Daily Courier con?rmed that
organisation had been ‘‘deemed expedient, owing
to the provisions of the new bankruptcy act, which
vests in creditors and their appointed trustees the
entire administration of the insolvent estate’’
(7.2.1870, p. 6). The Courier also reported that the
members of the new society, who comprised the
leading accountants of Liverpool, were engaged in
discussions with the Law Society concerning the
practical workings of the new legislation.
In its annual report for 1870, the committee of
The Law Society of Liverpool expressed its satis-
faction at the accommodation between the two
professions and of the formation of the Society of
Liverpool Accountants. It was noted that the
organisation of accountants enabled communi-
cation between the two societies ‘‘in the event of
any breach of the honourable understanding
existing between it and the Society of Accountants
as to the province of the members of the respective
professions’’ (Solicitors Journal, 19.11.1870, p.
43).
13
There the question of the division of labour
over bankruptcy administration rested until
August 1871 when an accord was necessary con-
cerning the responsibilities of bankruptcy trustees
in taking oaths on proofs (Book of Proceedings,
30.8.1871). It was decided that this task should fall
within the jurisdiction of solicitors (ibid.,
11.10.1871).
Although the disturbance of the Bankruptcy
Act, 1869 crystallised the formation of the Incor-
porated Society of Liverpool Accountants through
the need to negotiate the jurisdictions between
lawyers and accountants, it is clear that occupa-
tional demarcation was established on two fronts.
First, accountants and solicitors in Liverpool were
anxious to de?ne the inter-professional boundary
in relation to bankruptcy work. Secondly, there
was an intention among accountants and appar-
ently lawyers, to delimit the bounds of the
accountancy ‘profession’ and exclude lesser
‘accountants’ from the ?eld.
As the local press and law periodicals noted in
February 1870, the problem with accountants
performing functions under the Bankruptcy Act,
1869 was that without a professional organisation
the public had no guarantee that those it selected
as trustees were respectable practitioners. The
Liverpool Mercury stated that given creditor-con-
trol ‘‘it is of the utmost importance that the trustee
whom they are authorised to call in aid should, if
an accountant, be a person of integrity, and
belong to some recognised body in whom the
creditors can place con?dence’’ (5.2.1870, p. 7).
This was especially important given that at present
‘‘anyone may style himself an accountant’’ (Law
Times, 12.2.1870, p. 287). The Law Times was
pleased to report that:
13
The co-operative relationship between the legal and
accountancy professions in Liverpool was indicated by another
event in early January 1870. O?cials of the local Bankruptcy
Courts were retired when the 1869 Act was implemented. In
Liverpool the Deputy Registrar had been Henry Bolland,
accountant and original member of the Society of Liverpool
Accountants. When Bolland vacated his post 30–40 lawyers
gathered to express their gratitude and to present a purse con-
taining 153 guineas (Law Times, 15.1.1870, p. 218).
140 S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156
This objection, however, has been obviated
by the accountants in Liverpool, who have
formed themselves into a body to be called
‘‘The Incorporated Society of Liverpool
Accountants.’’ We are told by one of its
members that ‘‘The aim of the proposed
society is not to arrogate to itself all that is
honourable and upright, but rather to weed
the Profession of a class of accountants or
hedge-lawyers who have hitherto brought
discredit on their order’’ (ibid).
The Liverpool Mercury stated that:
In this country every discharged clerk is an
accountant, and may so hold himself out to
the world; and therefore, as important inter-
ests are by the new Bankruptcy Act com-
mitted to them, it is for the protection and
bene?t of the public that the accountants
should form themselves into a society to
which honourable conduct and professional
ability are to be the quali?cations for admis-
sion (5.2.1870, p. 7).
The Incorporated Society of Liverpool Accoun-
tants was then, organised to achieve an accom-
modation with the local legal profession over the
distribution of bankruptcy work and to ensure
adherence to the agreement made. Its progenitors
(solicitors and accountants) also sought to protect
that market for those identi?ed as leading
accountants and to exclude the disreputable from
practising the same profession. The inferior class
of accountants had the capacity to disrupt the
settlement negotiated by the two organised pro-
fessions.
The Incorporated Society of Liverpool Accoun-
tants was licensed by the Board of Trade under the
Companies Act, 1867 on 11 April 1870. There is a
suggestion of its dual intent in the objects of the
Society as stated in its Memorandum of Associ-
ation. These objects were:
1. The protection of the character, status, and
interests of the Accountants of Liverpool,
the promotion of honourable practice, the
settlement of disputed points of practice,
and the decision of all questions usage and
courtesy in conducting accountant business
of all kinds.
2. The consideration of all general questions
a?ecting the interests of the profession at
large, or the alteration of the administra-
tion of the Law.
3. The doing all such other things as are inci-
dental or conducive to the attainment of
the above objects (Book of Laws, 1870).
6. Intra-occupational con?ict, shelters and closure
6.1. Insulating a Practitioner Elite from the
‘Swarm of Pettifoggers’: The Institute of
Accountants in London
Although the Institute of Accountants in Lon-
don has the most comprehensive archive of the
early local societies in England, the records are the
least directly expressive about the immediate cir-
cumstances surrounding its formation.
As shown in Walker (1995, p. 304) the sugges-
tion of an organisation of accountants in London
predated the Bankruptcy Act, 1869. In December
1867 to January 1868 the idea was mooted in The
Times as a result of concerns over the manner in
which ‘‘a swarm of pettifoggers’’ had been awar-
ded a substantial proportion of remunerative
appointments as liquidators under the Companies
Act, 1862. The formation of an institute of
accountants in London was advocated as a means
by which ‘‘questionable individuals’’ might be
excluded from the winding-up of corporations and
other important o?ces open to accountants
(Times, 28.12.1867, p. 28). As part of this debate
an Edinburgh chartered accountant wrote to The
Times on the successful establishment of a profes-
sional organisation in the Scottish capital. He
argued that ‘‘A society in London constituted on
somewhat similar principles . . . would be a public
bene?t and would have the e?ect of excluding the
pettifoggers .. . . who have recently sprang into
existence, and who threaten to overrun the city and
ruin the character of the profession by their mal-
practices’’ (ibid., 9.1.1868, p. 6). The correspondent
S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156 141
could foresee no impediment to the pursuit of this
object, adding, ‘‘it only requires some of the lead-
ing ?rms to take the matter up to prove a great
success’’ (ibid). The Times concurred and advo-
cated an institute for London on the model of the
Society of Accountants in Edinburgh. Organisation
was deemed necessary because:
It has been one of the leading evils of recent
times that an occupation like this, which
requires the highest qualities of commercial
experience and a degree of integrity capable
of resisting the most constant and insidious
temptations, should have been left without
any means being provided by which the most
respectable members of the body might
assume a de?nite position, calculated to
exclude the herd of disreputable who act
merely as the tools of delinquent directors
and o?cials, or of the lowest class of attor-
neys, and whose knowledge of their calling
has generally been derived from personal
experience of failure in every other pursuit
they have tried (ibid).
There, however, the matter rested until the
spring of 1869 when the appearance of the Bank-
ruptcy Bill re-focussed attention on the position of
accountants in London. In a leading article The
Law Times considered that the Bankruptcy Bill
would greatly increase the number of these ‘‘semi-
legal professional men’’ (6.3.1869, p. 361) who
were unorganised and of decidedly mixed repute:
The profession of an accountant is one of
modern date, and its earliest practitioners
were for the most part persons who, having
failed in business, acquired their knowledge in
the manipulation of accounts on their transit
through the Bankruptcy Court. These gentle-
men have been succeeded by a somewhat
superior class, but they, like their pre-
decessors, undergo no test as to their quali?-
cations, and have no acknowledged status
(ibid).
A correspondent to The Law Times from Lon-
don also asserted that the Bankruptcy Bill would
ensure that accountants, who had recently
‘‘sprung into existence’’ in the capital and whose
ranks had been swollen by liquidations under the
Companies Act, 1862, became ‘‘permanently
established’’ (3.4.1869). It was appropriate, there-
fore, to examine the characteristics of this class of
men. On the question of their status the corre-
spondent considered that ‘‘As a rule they are men
of small standing and of less principle’’ (ibid). He
also lamented their intruding into the domain of
lawyers and the absence of ‘‘the control or in?u-
ence of any organised society’’ to regulate their
activity (ibid). In the midst of the debate on the
Bankruptcy Bill the appearance of a pamphlet on
The Origin and Present Organization of the Pro-
fession of Chartered Accountants in Scotland by
James MacClelland, the ?rst President of the
Glasgow Institute, served as a reminder that insti-
tutionalisation had already proceeded elsewhere.
This provided The Times with another opportu-
nity to express its hope that London accountants
would emulate their Scottish brethren and adopt
‘‘some kindred measures for securing their
respectability and in?uence’’ (28.6.1869).
On the implementation of the Bankruptcy Act,
1869 the need for the reputable accountants of
London to organise became more immediate. The
evidence suggests that the need to locate them-
selves above the increasingly visible ‘disreputable
herd’ provoked the accountants from the largest
?rms in London to act. During the winter of 1870
many of the lesser accountants in the City,
anxious to take advantage of the opportunities
presented by the Bankruptcy Act, energetically
o?ered their services as trustees or implementers
of bookkeeping systems to guard against insol-
vency (The City Press, 8.1.1870, p. 4).
14
Others
hoping to bene?t from the Act authored guide-
books and pamphlets on the new legislation which
also served as advertising media (Carrtar, 1869;
Douglas, 1870; Routh, 1870). By May and June
1870 The Law Times lamented how the new act
was opening fresh opportunities for the
14
Bywater’s (1985, p. 793) assertion that the non-profes-
sional accountants in London during 1870 ‘‘were taking
advantage of the substantial opportunities for fraud under the
Bankruptcy Act of 1869’’ overemphasises the criminality of the
interloping practitioners.
142 S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156
disreputable practitioner and also reported
increasing tensions between accountants and law-
yers. Bankruptcy work was being thrown into the
hands of accountants and, ‘‘in the large centres
particularly, much jealousy regarding the
encroachments of these gentlemen exists amongst
the legal profession’’ (11.6.1870, p. 101).
On 8 June 1870 nine of the leading accountants
in London gathered in the o?ces of Quilter, Ball
& Co., 3 Moorgate Street, and resolved ‘‘That it is
highly desirable, in order to maintain and secure
the e?ciency of the profession, that steps be taken
to form an Association of Accountants to be
incorporated by Royal Charter’’ (MS 28406, p. 1).
According to one source it was John Ball of Quil-
ter, Ball & Co., assisted by one of his clerks (Tho-
mas A. Welton
15
), who was instrumental in
organising this meeting (A History of Cooper
Brothers & Co, 1954, p. 5).
16
Those present on 8 June constituted a Provi-
sional Committee. On 15 June this Committee met
to report the results of correspondence with the
Board of Trade on the possibility of incorporating
an institute under a royal charter. The committee
heard that ‘‘for the last two years the Privy
Council has declined to grant ‘‘Charters’’ as they
were found in various ways inconvenient’’ (ibid.,
p. 5). However, the incorporation of non-trading
associations was possible under section 23 of the
Companies Act, 1867. The Provisional Committee
rejected the latter course on the grounds that
incorporation would diminish the chance of later
obtaining a charter (ibid; also MS 28407, p. 240).
Rather it was resolved to establish an Institute of
Accountants in London as a ‘‘voluntary associ-
ation’’. A Sub-Committee was remitted to actua-
lise this objective and draft rules and regulations.
The Sub-Committee circularised 63 London
practitioners, comprising 13% of the accountants
listed in the Post O?ce London Directory of 1870
(MS 28404, pp. 1–2). Each correspondent was sent
the draft rules and regulations, and an invitation
to a meeting at the City Terminus Hotel, Cannon
Street on 29 November 1870.
17
The object was to
obtain ‘‘a representative and in?uential Commit-
tee, by which the Institute may be inaugurated’’
(MS 28407, p. 1). William Quilter chaired the
resultant meeting and gave ‘‘some account of the
manner in which the movement for the formation
of an Institute of Accountants in London had
been initiated’’ (MS 28404, pp. 2–3). Unfortu-
nately, the available minutes do not elaborate fur-
ther on this subject. Thirty-seven of the invitees
attended and on signing the rules and regulations
became the ?rst members of the General Com-
mittee of the Institute. The rules declared: ‘‘The
objects of the Institute are to elevate the attain-
ments and status of professional Accountants in
London, to promote their e?ciency and useful-
ness, and to give expression to their opinions upon
all questions incident to their profession’’ (MS
28407, p. 1).
Membership of the Institute was to be restricted
to those practising as professional accountants in
London or, in the case of Associates, as clerks to
practising members. The con?ning of membership
to the public accountants of a single city was in
accord with the model of professional organisa-
tion in Edinburgh and was conditioned by earlier
developments in Liverpool. In December 1870 the
Secretary of the Institute wrote that accountants
in Liverpool ‘‘have formed an association already,
and this had its weight in determining the Com-
mittee to con?ne themselves to London’’ (MS
28408/1, p. 6).
The formation of the Institute was greeted with
enthusiasm by the press in December 1870. The
Economist noted ‘‘The duties intrusted to accoun-
tants are so important and special, that an associ-
ation which shall have some control over the
members cannot but be useful to the public, as it is
in the case of brokers and similar bodies’’
(3.12.1870, p. 1455). The Times reported that the
movement was instigated by the leading ?rms in
London. The ?rst o?ce bearers being selected
from among the same guaranteed the success of
the venture (1.12.1870, p. 4; City Press, 3.12.1870,
15
Welton was later appointed as the Secretary of the Insti-
tute of Accountants in London.
16
Bywater appears to suggest that William Quilter played a
more signi?cant role in these initial events (1985, p. 793).
17
Among the invitees were several signi?cant names in the
profession such as W.W. Deloitte, A. and F. Cooper, S.L.
Price, E. Waterhouse and F. Whinney.
S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156 143
p. 6). By 1873 the council of the Institute felt able
to report that the profession in the metropolis had
‘‘practically completed its organisation’’ (MS
28404, p.32).
Although the primary sources o?er limited
direct evidence about the speci?c motivations for
the formation of the London Institute a number of
additional clues emerge from the subsequent
course of events and documents from the 1870s.
These appear to con?rm that the principal object
was to distinguish the reputable professional
practitioners in the metropolis from the advancing
number of self-styled accountants. The corre-
spondence of the Secretary of the Institute is par-
ticularly instructive here. In June 1871 he wrote to
the editors of Kelly’s Post O?ce Directory for
London (1870) with a request that members of the
Institute appear in a separate list from other
accountants (MS 28408/1, p. 100). In 1875 he sta-
ted ‘‘This Institute at best can do no more than
supply the public with the means of discriminating
between trained accountants who stand well
enough to be recommended for election, and oth-
ers’’ (MS 28408/2, p. 99). In 1877 the Secretary
con?rmed that ‘‘This Institute was established for
the purpose of uniting in one body the professional
accountants of London’’ (ibid., p. 110, emphasis
added).
It is reasonably clear from the foregoing that the
Institute of Accountants in London was formed to
protect the interests of the ‘professional’ accoun-
tants of the city by distinguishing their number
from lesser practitioners (The Accountant,
24.2.1877). One source states that it was the part-
ners of the small number of larger London ?rms
who were instrumental in the organisation
[A.C.H(arper), 1930, p. 5]. The select number of
established ?rms from which the early members
and o?ce bearers were substantially drawn lends
support to this assertion. John Ball commented in
1876 that ‘‘The Institute had originated in the ?rst
instance in the desire which some of what had
been termed ‘the fathers of the profession’ had felt
to raise the status and aims of professional
accountants’’ (The Accountant, 3.6.1876). The
promoters of the Institute originally envisaged
that London practice might be con?ned to mem-
bers of an organisation incorporated by royal
charter, as had been the case in Scotland. Before it
was known that there was no prospect of a charter
the declared object of the promoters was to pro-
mote the e?cacy of the profession. Once the pro-
spect of this preferred form of institutional
protection receded, it was membership of the
Institute itself which was to constitute the means
of delineating the leading practitioners from their
lesser brethren. Hence, when the objects of the
Institute were reformulated in the wake of depres-
sing news concerning a royal charter, the elevation
of the status of the members was added to, and
prioritised over, the promotion of e?ciency.
The conferment of the status of ‘professional
accountant’ through membership of the Institute
and the function of the organisation to protect
and advance that status was often referred to after
1870 (MS 28408/2, p. 236). In 1878 the Secretary
of the Institute wrote that the ‘‘elevation of the
attainments and status of the profession’’ had
always been the primary object of the Institute
(MS 28408/3, p. 82). At the annual general meet-
ing of the Institute in April 1878 the chairman
(Frederick Whinney) responded to the charge that
the organisation had proved of little use since 1870
by declaring: ‘‘Of what use can it be except to ele-
vate the status and position of members, and to
give to the public some assurance that the man
whom they employ is a member of a profession
who can be trusted’’ (Accountant, 27.4.1878, p. 9;
4.5.1878, p. 3).
6.2. Purifying the sons of Levi: the Manchester
Institute of Accountants
The key actor in organising the accountants of
Manchester was the accountant, company pro-
moter and Liberal MP, David Chadwick (1821–
1895). In his biography Cottrell (1984) noted that
as a founder member of the London Institute
(though he was not involved in formation) and as
?rst President of the Manchester Institute,
‘‘Chadwick played an important role in the pro-
fessionalisation of accountancy’’ (p. 626). What
has not been revealed to date is Chadwick’s pivo-
tal role in activating the organisation of which he
was appointed President in 1871. As well as being
involved in the formation of almost 50 companies,
144 S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156
Chadwick was the foremost ‘promoter’ of the
Manchester Institute of Accountants.
Chadwick had begun in practice as an accoun-
tant in Manchester in 1860. At the time of the
formation of the Manchester Institute of Accoun-
tants he was senior partner of Chadwicks, Adam-
son, Collier & Co (A History of Cooper Brothers &
Co., 1986, pp. 45–46). About 1864–1865 he
opened an o?ce in London. This venture provided
the opportunity for an abortive (and previously
unreported) attempt by Chadwick to organise
accountants in the metropolis. Chadwick was later
to reveal that: ‘‘I waited upon one of the principal
?rms of Accountants, and proposed the establish-
ment in London of an Institute of Accountants,
based upon the organization, which has for so
many years existed in Scotland; but I found so lit-
tle encouragement, that I took no further steps in
the matter’’ (Inaugural Address, 1871, p. 4).
Chadwick’s close involvement with the profession
in London and Manchester and his high pro?le as
an MP (he was elected for Maccles?eld in 1868)
ensured that he was well placed to advocate orga-
nisation in the latter once developments took
place in the former. His activism on this occasion
was to yield more fruitful results than had been
the case during the mid-1860s.
Chadwick had been circularised in June 1870 by
the founders of the Institute of Accountants in
London. He joined the Institute as one of the ‘?rst
fellows’ on 29 November 1870 and was present at
the meeting on that date. A week later he set in
train a movement for the organisation of accoun-
tants in Manchester. He explained his actions in a
letter to The Law Times: ‘‘knowing how strongly
our conservative tendencies manifest themselves
when the subject-matter is our own regeneration, I
endeavoured, by a direct appeal through the col-
umns of their contemporaries here to turn the
stream of public opinion through the Augean
stables of the brethren in Manchester’’
(31.12.1870, p. 165). On 5 December 1870, writing
under the pseudonym CODEX, Chadwick sent a
letter to the Manchester Guardian and the Man-
chester Courier on the subject of ‘Accountants’.
The correspondence was published two days later.
In his letter Chadwick proclaimed that the emi-
nent accountants of London had established an
organisation to raise the status of the profession.
Chadwick’s comments support the notion that the
London Institute was formed in order to distin-
guish the professional from the unprofessional
accountant. He considered that institutionalisa-
tion o?ered the prospect of addressing the ‘‘indis-
criminate use of the word ‘‘accountant’’’’
(Manchester Guardian, 7.12.1870, p. 3) and of
closing the occupation to those ‘‘weaker brethren’’
who are uninstructed in its practice:
To me it seems matter for surprise that so
numerous and in?uential a class of men, pre-
tending to the rank and dignity of a profes-
sion, have not long ere this made a
demonstration in favour of a higher form of
existence. This, however, is doubtless owing
to the fact that the great majority of so-called
Accountants are destitute of any sort of qua-
li?cation, natural or acquired, be?tting the
exigencies of the business, who, if perchance
they can boast an average elementary educa-
tion, know absolutely nothing of either book-
keeping or auditing, or the management of
insolvencies or trust estates, not to speak of
the quali?cations requisite for dealing with
the higher and more complex problems falling
within the scope of the profession (ibid; also
Manchester Courier, 7.12.1870, p. 7).
Further:
. . . there are several professions where it is as
di?cult to obtain admission as it is for a
camel to go through the eye of a needle. Not
so with the republic of Accountants. Theirs is
open to all comers. Acknowledging the prin-
ciple of universal su?rage, their number is
legion. Like Jonah’s gourd, they spring up in
a night, and disappear long before they have
had time to become naturalised. There is no
other profession which can so speedily meta-
morphose fraudulent bankrupts into respect-
able members of the community. If these
re?ections are just, they suggest the pertinent
question,—Are the business, and duties, and
necessary quali?cations of an Accountant of
such an order as to justify the title of a
S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156 145
‘‘profession?’’ If the query is to be answered
in the a?rmative by the Manchester Accoun-
tants, the sooner they follow their London
brethren the better for themselves and the
commercial public (ibid).
Given the increasingly multifarious and impor-
tant functions performed by accountants, espe-
cially under the Bankruptcy Act, 1969, Chadwick
considered it extraordinary that organisation had
not taken place in England to distinguish accoun-
tants ‘‘of the true blood’’ from the ‘‘rag, tag, and
bobtail’’. The latter debilitated the claims of
respectable accountants to professional status
(ibid). He concluded that the case for founding an
institute of accountants in Manchester was now
clear.
Chadwick’s proposal to distinguish the
competent and respectable accountants through
organisational membership was supported by
other correspondents to the Manchester news-
papers. ‘PASCAL’ explained in the Manchester
Courier:
Upwards of twenty years ago, and also within
the last three years, the writer has named to
several friends, non-accountants, the para-
mount importance of instituting an associ-
ation whereby the profession of an
accountant might be elevated and placed
upon a ?rm, sure, and solid basis. The bring-
ing into existence such an institution, where
none but competent, skilled, and men of
principle and integrity, whose attainments
elevate them to that position, should be
admitted, would be a boon to the public in
general, and ought to be universally
desired. . . There are many who append to
their business ‘‘accountant’’ who probably
never saw a set of merchants’ or any other
books in their lives, or could comprehend
them even if they did. . . It is necessary that
merchants, tradesmen, and others employing
accountants should know how their quali?-
cations, as the proper auditing, depreciating,
and balancing books is of the greatest
importance (10.12.1870, p. 7).
In a letter to the Manchester Guardian ‘LOGES’
contended that public accountants, though not
organised, were widely considered to have the
standing of professional men, especially by their
diverse but dependent clientele:
How essential, then, that this constantly
increasing class of clients should be protected
against incompetent and ine?cient, not to
say, in many cases, untrustworthy, persons
claiming to be members of an honourable
profession. The ever-increasing in?ux and
e?ux of the latter class of accountants during
recent years has become a crying evil; and it is
undoubtedly necessary now to impose some
obstacle to the unscrupulous use of the term,
or to clearly signify, by an addition or pre?x
to it, that its owner has been publicly recog-
nised as ?t to practice the profession, and so
weed out those who do it so great a discredit
(ibid., 14.12.1870, p. 7).
On 7 December 1870, the same day that Chad-
wick’s letter was published, his suggestion was
pursued by members of three ?rms of accountants
in Manchester: Broome, Murray & Co., Deloitte
& Halliday (Kettle, 1958, p. 7), and Chadwicks,
Adamson, Collier & Co. These participants were
seemingly in accord with an exhortation by
CODEX that ‘‘none but the leading accountants
will attempt to carry the proposition into e?ect’’
(Manchester Courier, 13.12.1870, pp. 3, 5). The
?rms were the signatories of the following
letter addressed to other leading accountants in
Manchester:
It has been thought desirable to establish in
Manchester an Institute of Accountants for
the purpose of promoting and protecting the
interests of the profession.
Will you be so good as to meet a few of the
leading Accountants of this City at the Clar-
ence Hotel on Monday evening next at 7
O’Clock to take the subject into consideration
and if deemed desirable to appoint a Com-
mittee to carry the matter into e?ect (Minute
Book, p. 1).
146 S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156
The meeting was duly held on 12 December.
John Thomas took the chair and explained ‘‘the
objects intended to be sought by the formation of
an Institute’’ (Minute Book, p. 1). The twelve men
present then resolved to establish an institute
(ibid; Manchester Guardian, 14.12.1870, p. 6;
Manchester Evening News, 13.12.1870, p. 2; Man-
chester Courier, 13.12.1870, p. 5). A committee
(including Chadwick who was not present) was
appointed to carry the object into e?ect and for-
mulate draft rules and regulations. It was also
determined that a number of leading accountants
who were not present should be invited to co-
operate in the movement (Minute Book, p. 2).
Chadwick continued to in?uence events through
the media.
18
At the end of December 1870 he wrote
of the satisfactory response to his public appeal for
professional organisation in Manchester:
Self preservation again proved the ?rst
instinct in nature. The sons of Levi responded
to the call, and resolved to purify themselves.
Twelve re?ners were chosen. I was intensely
pleased a new era had dawned; and for the
nonce every one was breathing lofty aspira-
tions concerning ‘‘status and attainments’’
(The Law Times, 31.12.1870, p. 165).
The next meeting for the promotion of the
Institute was convened on 16 February 1871.
Most of those who had been identi?ed on 12
December 1870 as potential participants in the
new organisation attended and the draft rules and
regulations were adopted (Minute Book, pp. 3–5).
The professional body was formally established at
the meeting of 16 February as ‘The Manchester
Institute of Accountants’. Its objects were de?ned
as ‘‘to increase the e?ciency and usefulness of
professional Accountants; to protect the interests
of its Members; to express opinions upon all
questions relating to the profession; and to do all
such things as may be necessary for the attainment
of these ends’’ (Rules and Regulations, 1871, p. 3).
It was provided that Fellows and Associates could
use the credentials ‘FMIA’ and ‘AMIA’ and thus
distinguish themselves from less respectable prac-
titioners. On 25 February Chadwick was elected
President of the Institute and the other o?ce
holders were elected by ballot. Five out of nine
applicants for admission, including William W.
Deloitte were admitted as Fellows at this gather-
ing (Minute Book, pp. 6–7; Manchester Guardian,
1.3.1871, p. 6; Manchester Courier, 1.3.1871, p. 6).
At the next meeting on 3 March 1871 the Council
concerned itself with the dissemination of the
Institute’s Rules, certi?cates of membership, the
Institute’s seal, the acquisition of books and
forms, and invitations to the press to attend the
?rst quarterly meeting of the Institute on 3 April
(Minute Book, pp. 8–9).
19
At this the newly elec-
ted President, David Chadwick presented an
Inaugural Address on the objects of the Institute.
In a wide-ranging speech Chadwick applauded
the attempt in Manchester to ‘‘unite the profes-
sion, and increase the usefulness of its labours’’
through organisation (Chadwick, 1871, p. 1;
Manchester Courier, 4.4.1871, p. 5; Manchester
Guardian, 5.4.1871, p. 6) and noted that the Lon-
don Institute had the same objectives. He per-
ceived that the formation of the Institute would
increase the employment of those accountants
marked by their membership as men of integrity
and experience. He envisaged that the members
would be brought closer to their fellow profes-
sionals in the law and several times mentioned the
desirability of their being close co-operation
between the two vocations (Chadwick, 1871, p. 5).
He referred to the manner in which the 1869 Act
‘‘has opened the way for a large in?ux of new
business to professional Accountants’’ especially
those in whom the legal profession and the mer-
cantile community had con?dence. He also noted
that accountants were increasingly employed as
corporate auditors and how organisation would
protect market advantage. The formation of the
Institute ‘‘will unite all the skilled members of the
profession, and their integrity and ability will be
so conspicuous, that it will be no longer tolerated
18
Chadwick did not attend a meeting of the Institute until 20
March 1871, after his election as President on 25 February. His
parliamentary duties and other commitments in London are
likely to have prevented his attendance in Manchester.
19
The quarterly meeting of the Institute held in April also
served as the Annual Meeting.
S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156 147
for unprofessional and inexperienced men to be
appointed to Audit public Accounts’’ (pp. 7–8). In
its ?rst annual report, the Council of the Institute
re?ected:
By the formation of this Institute, the public,
we believe, not less than ourselves, feel that
the profession of Accountancy has acquired a
guarantee, that its members are competent to
the discharge of the duties they undertake,
and that the want of which all have been
conscious of some recognised test of character
and ability has been satisfactorily met
(Annual Report, 1871).
6.3. The threat of Mrs. Partington’s broom: the
She?eld Institute of Accountants
Following the establishment of the Manchester
Institute of Accountants in 1871, no other local
bodies were formed in England until the foremost
accountants of She?eld organised in 1877. In this
case the working of the Bankruptcy Act, 1869 was
the backdrop to institutionalisation. By the mid-
1870s the Act was heavily criticised. In 1877 its
defective working and the manner in which bank-
ruptcy trusteeships attracted the unscrupulous
disturbed professional accountants in She?eld.
On the subject of the formation of the She?eld
Institute of Accountants, Hoe noted that although
the leading accountants of She?eld were sub-
stantially engaged in bankruptcy work, ‘‘probably
a far more important reason for the formation of
the She?eld Institute of Accountants . . . was to
enhance the position and protect the status of the
leading professional accountants in the area’’
(1977, p. 2). The following illustrates how these
two themes were inseparable.
On 28 February 1877 a series of ‘revelations’
appeared in the She?eld press concerning the case
of a bankruptcy trustee (She?eld and Rotherham
Independent, p. 3; She?eld Daily Telegraph, p. 4).
On 9 February 1877 the creditors of George Perry
& Sons, ale and porter merchants, She?eld, had
met to ?x the remuneration of the trustee, Mr.
F.E. Leggoe, accountant and steel merchant.
Joseph Brailsford, the Chairman of the Committee
of Inspection took the chair. On the proposal of a
friend of the bankrupt, Leggoe was awarded £65
for his services. No other persons attended the
meeting. Brailsford, objected to this exorbitant
level of remuneration. He complained that the
trustee had been elected on the basis of proxies for
which he had touted the creditors; that the bank-
rupt’s estate had been poorly managed with rea-
lised assets of only £120. Yet, through his proxies,
Leggoe had voted himself the whole residue of the
estate after legal and other fees had been paid.
Brailsford argued that he ‘‘was not the party
tamely to submit to the whole surplus of the
bankrupt’s estate being swept into the pocket of
Mr. Leggoe’’ (ibid). Brailsford subsequently issued
a circular to the creditors in which he urged them
to withdraw their proxies. He also argued that the
trustee should receive only £10 (thus leaving a
surplus for distribution to the creditors) and con-
tended that the case illustrated ‘‘the evil working
of the present law of liquidation and bankruptcy’’
(She?eld Daily Telegraph, 28.2.1877, p. 4). Mr.
Leggoe subsequently arranged a special meeting of
the creditors to con?rm his remuneration at £65.
The creditors rebelled and his remuneration was
reduced to £15 plus court taxes.
These ‘bankruptcy revelations’ excited further
correspondence in the local media. On 3 March
1877 a letter to the editor of The She?eld and
Rotherham Independent (which also appeared in
the She?eld Daily Telegraph, 6.3.1877) reported
the bankruptcy of Hawksley, James and Fretwell
in which the trustee was awarded £155 out of an
estate realised of £353. Canvassing for proxies was
again identi?ed as the defect in the law allowing
the trustee to achieve high rewards at the expense
of the creditors. The complainant later wrote
‘‘Can realised assets be so swallowed up with
trustees charges in the 19th century’’ (She?eld
Daily Telegraph, 9.3.1877, p. 3). Another corre-
spondent, who had been a creditor on a number of
estates, lamented that this state of a?airs had long
persisted and recommended the appointment of a
single public o?cial in place of creditor-elected
trustees. This remedy would ensure that ‘‘the whole
race of trustees were swept away; the commercial
world would get a step higher in commercial
morals, and thousands of poor creditors would
148 S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156
bless the change’’ (She?eld and Rotherham
Independent, 6.3.1877, p. 3).
Trustees in bankruptcy responded to this
onslaught on their vocation. The trustee in the
case of Hawksley, James and Fretwell attempted
to give a ‘‘true version’’ of the circumstances sur-
rounding his remuneration (She?eld Daily Tele-
graph, 6.3.1877). Cooper Corbidge, junior,
accountant, argued that his recompense was high
because it included commission relating to a con-
nected estate in which there had been insu?cient
funds to pay him (see Hoe, 1977, p. 6). In a letter
printed on 7 March 1877 (She?eld and Rotherham
Independent, p. 4) ‘Trustee’ argued that the evils
complained of in bankruptcy administration were
a symptom of apathetic creditors. If creditors were
to desist from granting proxies to dubious persons
‘‘the scandals, which respectable accountants (who
refuse to tout) deplore . . . would be avoided’’.
Further, it was important that the public under-
stood that ‘‘There are trustees and trustees, just as
there are solicitors and solicitors, and also coal
merchants and coal merchants’’ (ibid). The notion
that all trustees be swept away ‘‘by the use of Mrs.
Partington’s broom’’
20
and replaced by an o?cial
would unfairly extinguish ‘‘the whole race of trus-
tees’’ including those who were ‘innocent’ and
upright (ibid).
Such comments did not abate the criticisms
levelled in She?eld against bankruptcy trustees.
The palliative of a public o?cer was again o?ered
as a means of protecting the mercantile commu-
nity from the abuses of trustees. One correspon-
dent asserted that while he was not attacking
reputable accountants, it was imperative that pro-
fessional and non-professional trustees be eradi-
cated. This would not preclude accountants from
performing other work (She?eld and Rotherham
Independent, 10.3.1877, p. 2). Others were less dis-
criminating. ‘A Commercial Traveller’ complained
that ‘‘the assets are eaten up by accountants’’ in
bankruptcy cases (She?eld Daily Telegraph,
13.3.1877, p. 3; Hoe, 1977, p. 6). Accountants
were collectively described as ‘‘sharks’’ feeding on
the system of proxies: ‘‘I have known some cases
in which the accountants have received a fee to
hold their noise and not oppose the composition
o?ered’’ (ibid). ‘Billy Fairplay. A Creditor’ simi-
larly referred to the bankruptcy system as ‘‘a pro-
fessional trustee’s harvest’’. Touting and jobbery
by accountants had ‘‘become the talk of the town;
a prostitution of the means lawfully devised for
distributing an estate among creditors; and the
scandal of our day’’ (She?eld Daily Telegraph,
15.3.1877, p. 8). The same correspondent related
cases of the trustees’ remuneration constituting the
larger part of the estate and urged a rigorous
debate on this issue in the She?eld press.
So far as the respectable accountants of She?eld
were concerned this colloquy in the local media
had unfavourable consequences. The ‘profes-
sional’ accountants were being collectively degra-
ded as members of the class of touting trustees.
The debate also indicated that public opinion was
marshalling in favour of the abolition of creditor-
elected trustees and a return to o?cialism. This
was at a time when government bills were framed
to reintroduce o?cial supervision (Markham Les-
ter, 1995, pp. 184–5). There was an obvious need
for professional accountants in She?eld to di?er-
entiate themselves from the less respectable, such
as Mr. Leggoe, and mobilise themselves to protect
their interests.
The surviving Ledger of the She?eld Institute of
Accountants suggests that on 14 March 1877 a
committee room was hired in the Cutlers’ Hall by
leading accountants (Ledger, p. 50; Hoe, 1977, p.
5). The purpose for which this accommodation
was required was reported in the She?eld and
Rotherham Independent (12.5.1877, p. 6):
From time to time, owing to certain revela-
tions made in the Bankruptcy Court, the
public of She?eld have watched with unusual
interest, if not suspicion, the mode in which a
few of the local bankruptcy cases have been
conducted, and the accountants as a body
have felt that a re?ection had been indirectly
cast upon them by the conduct of those
whom they do not regard as professional
accountants. A movement was therefore set
20
Mrs. Partington was a ?ctional character who, armed with
a mop, pursued a constant vigil against dirt and household
pests (Shillaber, 1854).
S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156 149
on foot for the formation of an association
amongst the more respectable accountants. A
meeting was convened, the requisition for
that purpose being signed by Messrs. Allott
and Co., Barber Bros. and Wortley, Camm
and Corbidge,
21
E.S. Foster, G.W. Knox,
Macredie and Evans, W. and S. Short, T.G.
Shuttleworth, John Watson and Sons, Wing,
Wing and Co, and J.B. Wostinholm.
At the meeting on 14 March 1877 a committee
was appointed to formulate rules and on 10 May
the ?rst general meeting of the association was
held in the Cutlers’ Hall. At this gathering ‘‘the
accountants of the town were well represented’’
(She?eld and Rotherham Independent, 12.5.1877,
p. 6) and the rules and regulations of The She?eld
Institute of Accountants were adopted. The objects
of the organisation were de?ned as follows:
To increase the e?ciency and usefulness of
Professional Accountants; to protect the
interests of its Members; to express opinions
upon all questions relating to the profession;
and to do all such things as may be necessary
for the attainment of these ends (Rules and
Regulations, 1877, p. 3).
The Fellows and Associates of the Institute were
to be distinguished from non-professionals by the
credentials FSIA and ASIA. Of the 21 ‘?rst fel-
lows’ of the Institute 16 were members of the
Society of Accountants in England and one was a
member of the Institute of Accountants (White’s
General and Commercial Directory, 1876; Harper,
1877; also Hoe, 1977, p. 3). The local nature of the
discourse on bankruptcy trustees clearly necessi-
tated an additional medium for the protection and
defence of the interests of She?eld practitioners
and for identifying themselves as distinct from less
worthy accountants.
On 8 June 1877 the Council of the Institute
placed further distance between its members and
the unorganised accountants of She?eld by
adopting bye-laws which outlawed those practices
which had recently bought the occupation into
disrepute. Advertising was only rendered permis-
sible within 3 months of commencing practice or
for the purposes of notifying changes in partner-
ships and addresses. Touting was deemed unpro-
fessional and procedures were instituted to deal
with situations in which more than one member
was proposed for a single bankruptcy trusteeship
(Bye-Laws, 1877, p. 3). The Rules and Regula-
tions also contained provisions for expulsion in
cases of dishonourable conduct. The de?nition of
the latter included participating in the pro?ts of
solicitors, auctioneers, brokers and agents (Rules
and Regulations, 1877, p. 12).
At the quarterly meeting of the She?eld Insti-
tute on 12 June 1877, the President, Alfred Allott
conceded that organisation had involved a small
number of accountants. Now that the rules and
regulations were approved the Institute invited
‘‘suitable gentlemen from She?eld, Rotherham
and neighbourhood’’ to enjoy its privileges (Shef-
?eld and Rotherham Independent, 13.6.1877, p. 3).
The President re-iterated that the intention in
forming the Institute was to:
. . . bring all the able and respectable men of
the profession together, and to give people
outside it con?dence in those whose aid they
might require. . . People would have in the
membership of this institute a guarantee of
respectability, and they would know that if
they had anything to complain about as to
the conduct of anyone connected with it, the
matter would be fully and closely inquired into
(She?eld Daily Telegraph, 13.6.1877, p. 4).
Another of the ‘?rst fellows’, George W. Knox,
considered that the formation of the Institute
would be well received by the legal profession
22
due to its objective to ‘‘raise and sustain the standard
of honour and professional conduct amongst pro-
fessional accountants’’ (She?eld and Rotherham
21
The ?rm of Cooper Corbidge, junior, who was directly
engaged in the discussion in the local press about trustees
remuneration.
22
The solicitors, attorneys and notaries of She?eld had
organised as The She?eld District Incorporated Law Society as
recently as 1875 (White’s General and Commercial Directory,
1879, p. 13).
150 S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156
Independent, 13.6.1877, p. 3). The stringent bye-
laws to prevent touting ‘‘would ultimately meet
with their reward’’ (ibid). In all, Knox contended
that the formation of the Institute would meet
with public approval and ‘‘would place the pro-
fession of accountancy in She?eld in a position
which it could not otherwise have attained’’ (ibid).
7. Conclusions
In declarations about their organisation, English
accountants often referred to the altruistic intent
of protecting the public from the unscrupulous.
However, a closer examination of the formation of
the organisations in Liverpool, London, Manche-
ster and She?eld, and the impact of changes in
bankruptcy legislation on institutionalisation,
suggest the pertinence of more self-interested
motives. These concern the inter and intra-profes-
sional demarcation of work, the protection of
markets, and attempts to bifurcate an occupation
into classes of superior and inferior practitioners.
These themes are now explored in relation to
theorisations of professional jurisdictions, con?ict,
labour market shelters and social closure.
In this paper we have necessarily encountered
the disputed ‘‘border territory’’ between the pro-
fessions of law and accountancy (Freedman &
Power, 1992, p. 1). Indeed, the story of profes-
sional formation in England is evocative of
Abbott’s (1988) work on The System of Profes-
sions. Although Abbott underestimates the role of
legislative change in his discussion of the emergent
jurisdiction of English accountants (ibid., pp. 94,
101), in his framework the Bankruptcy Act, 1869
would constitute a system disturbance. It was a
state-activated creation of a vacant task area—
bankruptcy trusteeships. The Act was attended by
government support for the emergence of a pro-
fession of trustees as had been established in
Scotland, but the state was inactive in shaping the
institutions it appeared to encourage. It is credible
that established accountants organised to capture
these statuses in an attempt to extend their jur-
isdiction (ibid., pp. 86–98). The following obser-
vation by Abbott is potentially germane to the
accountants’ case: ‘‘On occasion a jurisdiction is
enclosed and seized by a group which comes into
existence for that purpose. This occurs only when
dominant individuals or organizations direct the
process’’ (ibid., p. 96).
The system disturbance engendered by the 1869
Act and attempts to capture the work it created
involved accountants in contests with other pro-
fessions, especially lawyers and the less identi?-
able, expected invasion of peripheral practitioners.
These disputes were resolved in Liverpool by for-
mal ‘settlement’ over the distribution of bank-
ruptcy work between the newly incorporated
societies of solicitors and accountants. The orga-
nisation of accountants in that city was deemed
necessary by lawyers in order that a concordat on
the division of labour between the two professions
could be negotiated and adhered to (ibid., p. 73).
The solicitors determined to concede bankruptcy
trusteeships to the accountants provided the safe-
guard of institutionalisation was in place to pro-
tect the redrawn jurisdictional boundaries from
the intrusion of less reputable accountants. From
the perspective of both professions, the organisa-
tion of Liverpool accountants was only worth-
while, and the inter-professional settlement over
bankruptcy trusteeships only e?ective, if the
enclosed occupational populace comprised
respectable practitioners. In the cases of London,
Manchester and She?eld there were no locally
negotiated settlements between lawyers and
accountants over the allocation of work. Bank-
ruptcy trusteeships were a matter of open compe-
tition between the two professions and although
the government appeared to favour organized
accountants as trustees, an informal resolution of
the division of labour was envisioned.
Although these ?ndings are in accord with the
centrality of work-based jurisdictions in Abbott’s
thesis a number of the features observed in the
foregoing narratives are not easily accommodated
by his theory. Abbott’s exhortation to centre the
historical study of professions on disturbances and
work, as opposed to the structures of professio-
nalisation (ibid., p. 314) and his assumption that
organisation has a ‘‘subsidiary role’’ in profes-
sional development (ibid., p. 246), do not sit easily
with all of the formation events in English
accountancy. During the 1870s institutionalisation
S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156 151
was more than a reaction to jurisdictional dis-
putes. It was identi?ed by accountants as the con-
dition for actualising jurisdictional maintenance
and the enforcement of settlements. Organisation
served as the medium for implementing devices
(such as closure and knowledge systems) which
secured and legitimated the control of work.
Abbott’s theory also focuses substantially on the
inter-professional arena. While he recognises the
signi?cance of internal di?erentiation in profes-
sions (ibid., chap. 5) he does so primarily in
‘‘relation to system conditions’’ (ibid., p. 315,
emphasis added). Abbott tends ‘‘to conceptualize
professions as if they were fundamentally homo-
genous’’ and pays little attention to the ‘‘micro-
politics of how professions actually organize to
de?ne, defend or enlarge their area(s) of jurisdiction’’
(Sikka &Willmott, 1995, p. 549). In the accountants’
case contests were substantially located in the intra
rather than the inter-professional arena.
Macdonald has also criticised the nebulous
character of Abbott’s ‘system’ and its inability to
capture the ‘‘meanings and motives’’ of actors in
speci?c professional projects (1995, p. 17). In
London, Manchester and She?eld (and also
partly in Liverpool), it is appropriate to focus on
organisation as localised and intra-occupational
phenomena activated by a small number of indi-
viduals. In these centres the themes which domi-
nated the rhetoric of organisation were not about
the predatory seizure or capture of a jurisdiction.
Rather, they emphasised status protection, exclu-
sion and di?erentiation. While these themes ema-
nated from an originating concern with work, they
re?ected the anxieties of, and were articulated by,
established practitioner elites in a variety of local
settings. The institutional structures which
emerged from this discourse are redolent of
Freidson’s theorisation of labour market shelters
(protection) and invoke consideration of theories
of social closure (exclusion and di?erentiation).
As related earlier, Freidson emphasises the
manner in which organisation comprises an
important element in the occupational project to
de?ne and control the market for expertise. Occu-
pations (and professions in particular) seek to cre-
ate market shelters in order to protect those who
already occupy vocational statuses. Organisation is
about solidifying hard won advantages, and
introducing greater stability to the market for
professional services, thereby providing the condi-
tions for personal career advancement among the
organised. The dynamics of institutionalisation in
London, Manchester, She?eld, and partly in
Liverpool reveal the importance of protecting
market advantage as a motive for organisation.
The professional accountants in these major cen-
tres were threatened by the increasing number of
‘pettifoggers’. For the most part, those who
formed the new professional bodies were local
elites—reputable accountants from the leading
?rms whose position was threatened by inter-
lopers. Though accountants certainly lauded the
enhanced socio-economic status which accom-
panied organisation, and not infrequently referred
to the desirability of elevating the standing of the
profession, theirs was not ostensibly a crusade for
collective upward social mobility. This had also
been the case in Scotland during the 1850s.
Rather, it was about preserving advances already
made but now imperilled by the prospect (in
Scotland) or the reality (in England) of changes to
the law of insolvency and bankruptcy.
Although Freidson’s emphasis on organisation
as protective labour market shelters features in the
episodes of institutionalisation analysed in this
paper, other aspects of his theory are less compel-
ling in this instance. In particular, members of the
local accountancy organisations were unable to
de?ne a shelter by monopolising the performance
of particular accounting tasks: their institutions
may have been designed to encourage greater
market control but they could not prevent non-
members from competing for trusteeships or other
appointments. Freidson also appears to assume
that the creation of a shelter is an aspiration of an
occupation in its totality. However, we have
observed that the organisation of accountants was
substantially an intra-occupational a?air. It was
an attempt to bifurcate a single occupation
through di?erentiating the estimable professional,
who was admitted to membership, from the lower
class of intruders, who were debarred from the
organisation. In order to capture these themes of
exclusion and delimitation we must re-engage with
closure theory.
152 S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156
Through their organisation accountants pursued
an exclusionary strategy of closure. This occurs
where a superior group within an occupation seeks
to subordinate an inferior group and thereby
maintain or enhance its privileged status (Witz,
1992, p. 46). Although his focus is not on the
structures and mechanics of occupational control,
Abbott similarly posited that internal strati?cation
may be created by a professional elite in order to
protect its domination of work when this is threa-
tened by an external disturbance (1988, p. 119).
Incorporation was the device utilised by accoun-
tants in England to achieve exclusionary closure,
impose internal strati?cation and maintain their
position in the supply of insolvency services. The
organisations (and the credentials they conferred)
categorised insiders as professionals and outsiders
as non-professionals. As Jenkins asserts ‘‘organi-
sation is the harnessing and orchestration, under a
symbolic umbrella, of di?erence’’ (1996, p. 140).
Organisation institutionalised and signi?ed an
intra-occupational status hierarchy, which trans-
lated into positions of advantage and dis-
advantage in the quest for clientele. These motives
were akin to those pursued by early accounting
organisations in Australia where Chua and Poul-
laos (1993) found that institutions ‘‘sought to dis-
tinguish their members from ‘‘unquali?ed’’
accountants not belonging to accountancy orga-
nisations’’. As mentioned above professional
accountants in England had no capacity to
enforce an internal demarcation of the occupation
by de?ning the speci?c tasks to be performed by
the two classes of practitioners. Rather, they
sought to di?erentiate the superior professional
from the inferior non-professional through the
conferment of institutional membership or non-
membership. Thereby, the newly de?ned profes-
sional populace would maintain its jurisdiction
and protect market advantage.
These themes of exclusion pervaded the dis-
course on organisation during the 1870s. As The
Accountant noted in 1876, the societies of accoun-
tants had been established to clear out ‘‘counter-
feit accountants. . .the greatest thorn in the side of
the profession’’ (1.7.1876). In Manchester the need
to de?ne the professional accountant was likened
to the Old Testament account of the puri?cation
of the sons of Levi whereby the Levites, selected to
work at the Tabernacle, were ceremonially
cleansed to distinguish them from the other Israe-
lites (Numbers 8:5–26). The ‘cleansing’ metaphor
was also applied in She?eld. The threat that Mrs.
Partington’s broom might be wielded to sweep out
the whole race of trustees necessitated intra-occu-
pational di?erentiation to ensure that the broom
was applied only against non-professional
accountants whose use of a common occupational
nomenclature tainted the claims of respectable
practitioners.
What pervades all of the episodes analysed in
this paper is the object of organisations to protect
markets in the supply of accountancy services, and
the pervasiveness of con?ict in the emergence of
institutions of professionalism. Abbott argued
that ‘‘On balance, studying interprofessional con-
?ict provides one of the best possible avenues to
analysis of professional development’’ (1988, p.
279, emphasis added). To this we may add the
illuminative potential of investigating intra pro-
fessional con?ict. While the Bankruptcy Act, 1869
instigated con?icts between occupational groups it
also encouraged discord within them. Friction
surfaced at the boundaries between accountants
and lawyers and inside the occupation of accoun-
tancy in English cities. Con?ict solidi?ed occupa-
tional allegiances among the leading accountants
in four major centres and encouraged the emer-
gence of organisations to defend common interests
placed in jeopardy. The circumstances surround-
ing professional organisation in Scotland also
reveals how disputes over jurisdictions engage
more than the professions immediately concerned
(Walker, 1995). It should also be noted that, as the
case of Manchester makes vivid, professional
organisation can be emulative and is activated
through the interposition of motivated individuals
such as David Chadwick and the Banner brothers
(Collins, 1990; Lee, 1996a, p. x).
The paper thus illustrates that within a single
nation, the genesis of professional organisation
varied in the context of a common legislative cat-
alyst which disturbed extant inter and intra-pro-
fessional arrangements. The discovery that
elements drawn from di?erent frameworks utilised
for the study of professions are pertinent to the
S.P. Walker / Accounting, Organizations and Society 29 (2004) 127–156 153
organisation of English accountants during the
1870s, as opposed to being encompassed within a
single paradigm, accords with Freidson’s prospect
for theoretical advance in this ?eld: ‘‘The task for
a theory of professions is to document the untidi-
ness and inconsistency of the empirical phenom-
enon and to explain its character in those
countries where it exists’’ (1994, p. 25). While such
studies may be criticised for inciting greater epis-
temological confusion they at least ‘‘increase the
clarity and precision of a body of literature whose
status has been vague and chaotic for too long’’
(p. 28).
Acknowledgements
The ?nancial support of the Accounting History
Committee of ICAS is gratefully acknowledged.
Thanks are due for helpful suggestions from those
attending presentations of earlier drafts at Deakin
University, University of Leeds, Glasgow Caledo-
nian University and the 8th World Congress of
Accounting Historians in Madrid, July 2000. I am
also grateful to the two referees for insightful and
constructive comments and to the Law Society
and the Societies of chartered accountants in
Liverpool, Manchester and She?eld for access to
records.
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