THE GENESIS OF PROFESSIONAL ORGANIZATION IN SCOTLAND A CONTEXTUAL ANALYSIS

Description
The early organization of accountants in Scotland has been explained as a consequence of the separate
Scottish legal system, the rise of industrial society and as an attempt to achieve social closure and
coUectlve mobility. This paper reports on an historical investigation conducted within a criticakonilict
paradii which examined occupational organization in its contemporary socioeconomic and political
contexts.

Pefgamon Accounting, OrganfzaaNom and Socie~, Vol. 20, No. 4, pp. 285-310, 1995
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THE GENESIS OF PROFESSIONAL ORGANIZATION IN SCOTLAND:
A CONTEXTUAL ANALYSIS*
STEPHEN P. WALKER
University of Edi nburgh
Abstract
The early organization of accountants in Scotland has been explained as a consequence of the separate
Scottish legal system, the rise of industrial society and as an attempt to achieve social closure and
coUectlve mobility. This paper reports on an historical investigation conducted within a criticakonilict
paradii which examined occupational organization in its contemporary socioeconomic and political
contexts. It is shown that professional formation in Edinburgh and Glasgow in 1853 was an organizational
response to the activhies of a powerful group of London merchants whose demands for law reform were
founded on the dominant economic philosophy of mid-Victorian Britain and whose proposals threatened
the interests of accountants in Scotland. Further, a II&age between the dynamics of professional
organization in Scotland and subsequent developments in England is provided.
The causes of the formation of the first modern
organizations of professional accountants
which took place in Scotland in 1853 are the
focus of the present analysis. It is contended
that the existing explanations offered for the
emergence of the Society of Accountants in
Edinburgh (SAP) and the Institute of Accoun-
tants and Actuaries ln Glasgow (IAAG) 17 years
before the lirst organization of accountants in
England, are either misdirected, speculative or
generalized.
In part, such deficiences derive from the
insular, teleological and evolutionary
approaches of traditional accounting history
recently questioned by Miller & Napier
(1993). As an alternative, Miller & Napier advo-
cate a genealogical approach to historical inves
tigation which identities the interplay of the
“multiple and dispersed surfaces of emer-
gence” of accounting phenomena (p. 633),
assumes permeable disciplinary frontiers and
examines “the outcomes of the past, rather
than a quest for the origins of the present”
(p. 631). Such a modus operandi has a poten-
tially revelational impact on current under-
standings of the emergence of the
accountancy profession (Loft, 1986) and the
structure of accounting practice (Walker,
1993).
The conventional explanations for profes-
sional formation in Scotland suffer from such
a decontextualized approach to the processes
and motivations underlying professionalization.
In particular, the nature of the contemporary
social structure and political discourse have not
featured significantly in the literature. Yet, as
Wlllmott has rightly stated, “the organization
of the profession cannot be adequately under-
stood independently of an appreciation of the
political, economic and legal circumstances
_ The author is grateful for the constructive comments of two anonymous referees, Anthony Hopwood and members of the
Scottish Committee on Accounting History. The helpful comments of pattlcipants at the Accounting, Business and
Financial History Conference, Cardiff, September 1993, and members of the Manchester Accounting Group at a presenta-
tion in January 1994 were also much appreciated.
285
286 S. P. WALKER
that have supported and constrained its
development” (1986, p. 556).
It has been shown recently that the success
of the post-formation closure practices adopted
by the Scottish chartered societies during the
nineteenth century can be understood only in
the context of the underlying socioeconomic
and political factors which sustained pro-
fessional monopoly. In particular, it depended
on the articulation of self-interested objectives
through the medium of prevailing ideologies in
support of occupational claims (Walker, 1991,
pp. 276-279). The tendency to adopt a piece-
meal approach to the historical investigation
of the institutionalization of the accountancy
profession in Scotland has resulted in the
neglect of vital source material and a
consequent inability to provide compelling
explanations of why accountants north of
the border organized earlier than their English
counterparts.
The signifkance of professionalization in
Scotland
The predecessor organizations of The Insti-
tute of Chartered Accountants of Scotland
have attracted disproportionate attention in
the professionalization literature (see Lee,
1991). Interest was engendered initially by
the reputation of the Edinburgh and Glasgow
societies as the first organizations of profes-
sional accountants. However, the nature of pro
fessional organization in Scotland is of a much
broader import which transcends its antiquar-
ian novelty. It is contestable that, in the follow-
ing ways, events in 1853 had a formative
impact on the organization of the accountancy
profession outside Scotland as the successful
professionalization project of accountants
north of the border was emulated elsewhere.
The locally structured societies of Edinburgh
and Glasgow were to be mirrored in the pre-
decessor organizations of the ICAEW (in Liver-
pool and London (1870) Manchester (1871)
and Sheffield (1877)). The exclusion from the
Scottish societies of those not engaged in pub
EC practice and the equating of public practice
with professional accountancy was imported
by the associations later formed in England
(Hewitt, 1966, pp. 18-25) and effectively
created a pool of accountants with employee
status who would later form separate competi-
tive societies and thereby create the fragmented
configuration of the British profession (Robson
& Cooper, 1990, pp. 380-382; Edwards, 1989,
p. 277). The acquisition of charters of incor-
poration and the invention in Scotland of the
“chartered accountant” with the requisite sta-
tus enhancing credentials of “CA” became the
quest of the professional organizations which
were established in England and Ireland during
the 1870s and 1880s (Howitt, 1966, p. 5;
Robinson, 1964) and became the cause of
much internecine strife (WaIker, 1991).
Furthermore, as wiIl be shown later, once the
explanation for professional formation in
Scotland is disclosed, new insights into organi-
zational developments in England are revealed.
A CRITICAL-CONFLICT APPROACH TO
THE STUDY OF PROFESSIONAL
ORGANIZATION
The orthodox structural-functionaIist frame-
work for the analysis of professional organiza-
tions in which institutionalization was
perceived as the first attribute in the acquisi-
tion of a catalogue of discriminating traits
(Greenwood, 1957; Caplow, 1954; Wilensky,
1964) has been largely displaced. Recent com-
mentators have recognized that explanations
for professional formation founded on macro
theories of group behaviour (Durkheim,
1957) or generalized abstractions based on the
collective experience of professional groups
(CarrSaunders & Wilson, 1933; Millerson,
1964) fail to accommodate the multiplicity of
professional experiences given the peculiar
occupational, historical and spatial contexts in
which organization took place (see Robson &
Cooper, 1990, pp. 367-379). As Saks commen-
ted, the traditional taxonomic perspective
“was obscuring the social and historical condi-
tions under which occupational groups
became professions - including the power
GENESIS OF PROFESSIONAL ORGANIZATION IN SCOTLAND 287
struggles involved in the process of profession-
alisation” (1983, p. 2).
The limitations of functionalist analysis
encouraged the development of a critical-con-
flict oriented approach to the study of profes-
sional behaviour and organization founded
particularly on Weberian concepts of social
closure (see, for example, Parkin, 1979;
Murphy, 1988). Critical research indicates that
professional formation is a sociopolitical pro
cess which may be motivated by the desire
for economic rewards and occupational ascen-
dancy. Foremost among the revisionist writers
of the 1970s was Larson (1977) who consid-
ered that professional organization comprised
an integral part of attempts by an occupation to
define and control the market for services and
to achieve the collective social mobility of prac-
titioners (pp. 66-78): “the professional project
is an organizational project: it organizes the
production of producers and the transaction
of services for a market; it tends to privilege
organizational units in the system of stratifica-
tion; it works through, and culminates in, dis-
tinctive organizations - the professional
school and the professional association” (p. 74).
Critical writers have increasingly recognized
that professionalism is most usefully investi-
gated at the level of particular occupations
(Preidson, 1983; Parry & Parry, 1977). Collins
has asserted that one reason why the sociology
of professions is currently being revitalized is
the emphasis on “historical variation” (1990a,
p. 14) and that the investigation of the emer-
gence of specific occupational groups offers
the prospect of the development of broad
multidimensional theories of professions
which are grounded in historical compari-
sons: “all professions do not go through the
same pathways, nor do they arrive at the
same outcomes. We have instead a kind of
family resemblance among different profes-
sions and current work is concerned with
charting those multiple paths” (p. 15). The
emphasis on historical comparisons necessa-
rily involves an examination of “external
dynamics” (Robson 81 Cooper, 1990, p. 374)
- locating professionalization in the context
of contemporary socioeconomic and political
developments and utilizing an array of perti-
nent primary and secondary sources (Davies,
1983, p. 182; Jarausch & Cocks, 1990, p. 4).
Some commentators have also recognized
the potential offered by conflict theory as a
paradigm for the analysis of the behaviour of
professional organizations (Collins, 1975, pp.
340-346; 1990b). Though usually applied to
the analysis of macro-collectivities such as
social classes (as in the work of Marx, Weber
and Dahrendorf, for example) and states (see
Collins, 1975, pp. 56-61; Rex, 1981, pp. 75-
101) conflict models of social interaction may
also be utilized to examine meso-collectivities
such as occupations and allied institutions.
Hostility between collectivities may be pre-
cipitated when established market or property
relationships are challenged by a group seeking
material advantage or when traditional author-
ity structures are threatened (ibid., p. 27;
Neale, 1972, pp. 7-9). In confhctual encoun-
ters between collectivities the hostile groups
engage in a process of political bargaining in
an attempt to achieve desired outcomes. Ulti-
mately, resolution may be achieved by violent
means though the initial stages of conflict are
usually characterized by discourse involving
claims and counterclaims founded on perti-
nent legitimating ideologies (Rex, 1981, p.
14). Arguments are directed at internal consti-
tuents, opponents, potential supporters,
opinion formers and actors within those
institutions which may act as a forum for delib-
eration in the dispute.
Van Door-n asserted that “it is an accepted
fact that conflict creates associations and
increases the internal cohesion of social sys-
tems” (1966, p. 124). As applied to the story
of professional formation contained in this
paper, conflict theory provides a number of
important insights. Conflictual models of strati-
fication reveal that the outcome of encounters
between collectivities is largely dependent on
the ability of the combatants to mobilize their
capabilities, mat-shall their resources and
engage in concerted political action (Collins,
1975, pp. 60-61; Rex, 1981, pp. 90-92). A
288 S. P. WALKER
number of imperatives may be noted. Formal
organization is essential for effective mobiliza-
tion, the encouragement of internal allegiances
and for the development of group conscious-
ness. A collectivity remains passive until it
becomes organized; thereafter its energy
potential is transformed from latent and static
to active and kinetic (Etzioni, 1968, pp. 103-
104). For the collectivity engaged in macro-
scopic political contest institutionalization
provides a framework for the emergence of
group cohesion and control.
The degree of motivation towards participa-
tion in conflict and the development of group
consciousness is also enhanced by the exis
tence of articulate spokespersons, leadership,
normative bonds between group members
and the identification of a common opponent.
Organized collectivities also augment their
resources in conflict situations by mobilizing
the support of other groups outside their for-
mal memberships. Appeals to unifying and pre-
vailing ideologies encourage internal cohesion
and consciousness and also reveal the dispute
as being more than privatized (Neale, 1972,
pp. 9-10).
Studying professions as organized collectiv-
ities with the capacity to engage in conflict
also suggests the redundancy of the attribute-
trait approach with its narrow, insular focus
and excessive emphasis on certain rigidly
defined perceptions of professionalism. Turner
and Hodge, for example, advocated the devel-
opment of a broader analytical framework in
which occupati ons rather than professi ons
alone could be compared and contended that
“in setting out to examine the crystallization
and operation of occupational organization
. . . it is necessary to consider the form of
organization, the ideologies advanced, and the
activities carried out, and to attempt to relate
these to the wider social structure” (Turner &
Hodge, 1970, pp. 35-36).
A conflictcentred approach to the study of
occupati onal groups was advanced by Krause
(1971) whose analysis combined elements of
Weberderived pluralism and Marxian con-
cepts of class consciousness. Societies are
characterized by the struggle between dif-
ferent interest groups for power and rewards.
The effective advancement or protection of
collective interests in the political arena is
dependent on a developed occupational con-
sciousness - “a code word for the degree to
which an occupational group is fighting as a
group in its own interest” (p. Ss). Occupa-
tional consciousness is strengthened by organi-
zation (as a profession or trades union, for
example) and adherence to unifying, articu-
lated ideologies. Ideologies which comprise
“texts, theories, doctrines, phrases, or con-
cepts which are proposed by an interest group
(proponent) with a target group in mind” (p.
89). Group ideologies are changed to accom-
modate new objectives or to react to competi-
tive ideologies and may be developed in order
to encourage “cross-occupational complexes”
or alliances with other groups in order to assist
the achievement of a mutual interest (pp.
88-93).
The approach taken in this paper is to inves
tigate the formation of occupational organiza-
tions within a criticalconflict based analytical
framework. The emphasis placed by critical
writers on the extent to which professions
seek market control and are engaged in the
pursuit of their economic self-interest explains
why Scottish accountants were motivated to
organize in 1853. Conflict theory as applied
to collectivities provides insights into the cir-
cumstances which compelled institutionaliza-
tion; how the resources and strategies
employed by a threatened occupational group
were utilized; and, how the organizations of
accountants which were formed in Scotland
in 1853 to defend job monopolies were
moulded by encounters with hostile out-
siders. Further, the paper seeks to accommo-
date the demands of the “post-revisionist”
sociologists of the professions for historical
investigations of a rigorous, contextual charac-
ter. The fatter is largely absent from prevailing
analyses of the emergence of organizations of
accountants in Scotland.
GENESIS OF PROFESSIONAL ORGANIZATION IN SCOTLAND 289
EXPLANATIONS FOR PROFESSIONAL
ORGANIZATION IN SCOTLAND
Existing explanations for the formation of
the institutes of accountants in Edinburgh and
Glasgow in 1853 are founded on one or more
of three primary phenomena. Fitly, early pro-
fessionalization in Scotland is perceived as a
symptom of the differences between the
English and Scottish systems of jurisprudence
and legal institutions, particularly in respect of
the law of bankruptcy. Secondly, organization
was grounded in the development and matura-
tion of an urban-industrial society and the
increased demand for accounting labour
which was engendered by the expansion of
capitalist enterprise. Thirdly, professional for-
mation in Scotland was induced by the need
for accountancy practitioners to achieve social
closure and collective social mobility.
Brown’s (1905) account of the formation of
the SAE and IAAG falls into the first of the
aforementioned categories. Brown contended
that the background to the organization of
the profession in Scotland was the difference
between Scottish and English law which
encouraged the early recognition of accoun-
tancy as a separate occupation north of the
border @. 232). Although the specific causes
of professional organization were not
addressed directly, Brown’s detailed (though
insular) description of events includes a recog-
nition that, in Glasgow at least, proposed
changes to the Scats law of bankruptcy was
one reason for societal formation in that city
in 1853 (pp. 203-211).
Brown’s account of professional organization
in Scotland substantially coloured subsequent
analyses such as those of: Littleton (1933, p.
286) who provided a more detailed narrative
of the importance of the Scottish bankruptcy
statutes in creating work for accountants; Carr-
Saunders & Wilson (1933, pp. 209-210); ICAS
(1954, pp. 20-24); Jones (1981, pp. 79-83) and
Parker (1986, pp. 14-20).
Stacey (1954) also recognized the potential
significance of bankruptcy law as a causal fac-
tor in the development of the profession of
accountancy in Scotland and, like Brown, noted
that changes in the law in 1853 were heavily
discussed by the newly formed societies in
Edinburgh and Glasgow (p. 22). However,
Stacey also drew attention to the economic
circumstances in which the organization of
the profession in Britain took place. The vast
expansion of trade, transportation, manufactur-
ing and financial institutions during the first
half of the nineteenth century increased the
demand for the services of accountants as
bankruptcy practitioners, auditors and as finan-
cial and cost accountants:’ “no wonder that
some three associations were formed in
Scotland, quickly in succession at the com-
mencement of the second half of the nineteenth
century” (p. 20).
Stewart’s (1975, 1977) explanations for the
early professionalization of accountants in
Scotland also integrated the economic determi-
nist and differential legal system approaches.
The vast expansion of industrial and financial
activity required the services of skilled accoun-
tants by the mid-nineteenth century. The new
industrial capitalism produced economic fail-
ures as well as successes and in Scotland bank-
ruptcies were administered primarily by
accountants, unlike the situation in England.
Stewart’s commentary draws attention to the
need to consider the long-term economic and
legal background to professional organization
(1975, p. 113). However, like Stacey, he failed
to identify any specific developments in the
contemporary context which induced institu-
tionalization in 1853 and concluded that “the
movement was entirely spontaneous. There
’ The difEculties inherent in identifying a nebulous causal llnk between industrialization and the emergence of specific
qual@lng associations was recognized by Mlllerson (1964) who contended that “To expound reasons for formation in
terms of broad general factors is too approximate. It is as unreal&tic as any attempt to suggest that the discovery of the
wheel ‘caused’ the invention of the steam locomotive” @. 51).
290 S. P. WALKER
was no legislative pressure nor even any official
encouragement” (1977, p. 8).
An alternative analysis of professional forma-
tion in Scotland was offered by Macdonald in
1984. Macdonald applied the concepts of col-
lective social mobility and social closure to
Stewart’s collective biography of Scottish CAs
to 1879 in order to explain the circumstances
which induced their organization. MacdonaId
hypothesized that the process of professionali-
zation differed in Edinburgh and Glasgow. In
Edinburgh, the respectable social origins of
accountants and their close proximity to the
landed proprietor-lawyer nexus in local
society conferred a high occupational status
on a large proportion of accountancy practi-
tioners, This, and the contents of the
Edinburgh Institute’s charter application of
1854 suggest that “an important impetus
came from the need to establish both equality
with and distinctiveness from the legal profes-
sion” (Macdonald, 1984, p. 185) by the institu-
tion of a separate professional organization of
accountants.
In Glasgow, the fact that younger practi-
tioners took the initiative to form an associa-
tion reveals that “somewhat different forces
were at work” (ibid.). The lower respectability
of younger Glaswegian accountants and the
recent organization of professional competi-
tors in Edinburgh probably induced “this com-
petent but less well endowed generation”
(ibid., p. 186) to lobby the senior accountants
of Glasgow to form an association so that the
juniors might “acquire some of the ascribed
and inherited characteristics of their seniors.
By this means they could achieve a ‘closure’
and create a distinction between themselves
and those of even lower attainment and
background” (ibid).
It will be shown later that Macdonald’s
deductions concerning professional formation
in Glasgow have some credibility but that his
observations for the Edinburgh case are more
questionable. The fact that the professional
status of Edinburgh accountants largely
derived from their association with the lawyers
is likely to have constituted a disposition averse
to organizational and occupational differentia-
tion lest the status ascribed by association with
the legal fraternity be fractured. Further, con-
temporary evidence suggests that Edinburgh
accountants did not require organization in
order to achieve “equality” of status with the
lawyers. During the mid-nineteenth century the
legal profession comprised a gradation of occu-
pational and social statuses ranging from the
advocate to the writer. Accountants were
regarded as equal in status to quaked solici-
tors (who were located in the middle ranges
of the stratification of lawyers) well before
1853 (see Walker, 1988, p. 15).
Edinburgh accountants did not require
organization in order to achieve collective pro-
fessional status as that also had been acquired
previously without the need for institutionaliza-
tion. Evidence of the early professional stand-
ing of accountants is provided by the eminent
Scats commercial lawyer Bell who attested in
1826 that “in this country we have a set of
professional accountants, possessing a degree
of intelligence, and a respectability of charac-
ter, scarcely equalled in any unincorporated
body of professional men” (p. 491). Similarly,
in 1834, the Society of Writers to the Signet
referred to Edinburgh accountants as “a most
respectable body of professional gentlemen”
(see Walker, 1988, pp. 14-15). The “lirst stir-
rings of professionalism” (Bryer, 1993, pp.
671-672) did not, therefore, commence with
the institution of professional organizations
during the 1850s. Finally, as with the technolo-
gical determinists, Macdonald’s hypotheses
cannot explain why the need for collective
action arose specifically in 1853 and his conclu-
sions are inevitably speculative given their
reliance on secondary sources.
Macdonald’s inferences were disputed by
B&ton & Kedslie (1986). On the basis of an
examination of the minute books of the SAE
and IAAG, Briston and Kedslie contended that
the catalyst for the formation of both the
Edinburgh and Glasgow societies in 1853 was
impending alterations to the Scats law of bank-
ruptcy which posed a threat to the principal
source of income of accountants (p. 125) -
GENESIS OF PROFESSIONAL ORGANtZATION IN SCOTLAND 291
“it was a purely economic stimulus which had
nothing to do with respectability or collective
social mobility” (p. 128). This thesis, which
advanced the differential legal infrastructure
explanation for early professionalization in
Scotland, was expanded upon by KedsIie
(199Oa,b). To date Kedslie’s work comprises
the most convincing account of professional
organization in Scotland and has been recog-
nized by other writers (Lee, 1991, p. 197;
Napier and Noke, 1992, p. 35).
Kedslie showed that those accountants who
were Instrumental in forming the SAE and L4AG
in 1853 had a substantial pecuniary interest in
bankruptcy work (1990a, pp. 39-48; 199Ob,
pp. 6-7). Hence, when it was proposed in
the Bankruptcy (Scotland) BiIl, 1853 (the Lord
Advocate’s Bill), that the office of Interim
Factor (the official appointed to preserve the
bankrupt’s estate until a trustee was elected
by the creditors) be abolished and the duties
transferred to local sheriff clerks, accountants
were induced to constitute societies to protect
this source of income. Professional organiza-
tion commenced in Edinburgh on 17 January
1853 “between the introduction of the BiU to
Amend the Laws relating to Bankruptcy in
Scotland and the subsequent Act which came
Into force on 4 August 1853” (1990a, p. 53). It
was also contended that the new Bankruptcy
Act was the principal motivation behind profes
sional organization in Glasgow in September
1853 (1990a, p. 66). KedsIie concluded that
“without any doubt, the catalyst for the forma-
tion of these two societies was the proposed
changes in Scottish bankruptcy legislation”
(199Oa, p. 77).
Although Kedslie’s recognition of the impor-
tance of bankruptcy legislation is correct, the
emphasis on the Bankruptcy (Scotland) BiIl,
1853, is misplaced. There are a number of dif-
ficulties with the thesis that the Bankruptcy
(Scotland) BiII Induced the organization of
Scottish accountants. The Iirst problem con-
cerns the office of Interim Factor which was
to be abolished by the Bill. Although their
appointment as Interim Factors was important
to Scottish accountants because it often
resulted in their election to lucrative trustee-
ship (Bell, 1826, p. 332) it was not in itself
an important source of remuneration. Interim
factorships were so insigniiicant that one group
of Scottish accountants concluded in 1853 that:
“we cannot, after the most patient and search-
ing consideration, see any particular use or
advantage of an Interim Factor, or any reason
why the office should not be altogether abol-
ished” (A Scotch Accountant, p. 12). In 1856
the Bankruptcy (Scotland) Act, which had been
devised following consultations with represen-
tatives of the SAE and L4AG (Brown, 1905, p.
213), eradicated the office of Interim Factor.
Secondly, the Bankruptcy (Scotland) BiIl,
1953, was an unlikely instigator of professional
organization. Brown described the Bill as of “a
limited and tentative nature” (ibid.). The spon-
sor of the BiII, the Lord Advocate, considered it
“not of any great extent” and comprised an
attempt to smooth some of the rough edges
in bankruptcy administration (me Law Mugu-
zi ne, 1853, pp. 331-332). Thirdly, the chron-
ology of the BiU’s progress is inconsistent with
the timing of the formation of the SAE. The
Edinburgh society was constituted in January
1853 yet the Bankruptcy (Scotland) Bill was
not ordered until April and received its First
Reading in May (Alphabetical List of Public
Bills, 1852-3, p. 2). The Institute of Accoun-
tants and Actuaries in Glasgow was instituted
in September 1853 - after the Bankruptcy
(Scotland) Act had entered the Statute Book.
Fourthly, Kedslie’s thesis is founded primar-
ily on quantitative evidence that discloses the
substantial pecuniary Interest of Scottish
accountants in bankruptcy which was threa-
tened by the Bankruptcy (Scotland) BilI, 1853.
Investigation of the work mix of contemporary
accountancy practices suggests that sequestra-
tion was an Important but not always the most
significant source of fee income (Walker, 1993,
pp. 134- 135). The winding-up of insolvent
estates under voluntary trusts (as opposed to
judicial bankruptcy) was also a lucrative area
of work for accountants in Scotland during
the nineteenth century (ibid., pp. 135-138).
As early as the 1820s it was suggested that
292 S. P. WALKER
creditors should choose a professional accoun- free trade, and the related concept of the assim-
tant as a trustee under a voluntary trust because ilation of commercial laws. The product of The
“the regularity of conduct, the clearness of London Committee’s labours and the menace
accounts, the perfect system of administra- to Scottish accountants was the Bankruptcy
tion, according to which these gentlemen man- and Insolvency (Scotland) Bill, 1853 - legisla-
age their trusts, afford an admirable instrument tion which has been overlooked by previous
in the arrangement of insolvent estates” (Bell, writers as a cause of the formation of the SAE
1826, p. 491). and IAAG.
Another important branch of the Scottish
accountant’s practice was judicial factory
work (Walker, 1993, pp. 138- 140). That signif-
icance was never more apparent than in 1834
when one of the previously unidentified ante-
cedent organizations of Edinburgh accountants
was founded to lobby Parliament concerning
an Accountant-General Bill. The Bill threatened
to place the audit of judicial factories - a prac-
tice which accountants had “been exclusively
accustomed under the employment of the
Court, to discharge” (Report by the Commit-
tee named at a Meeting of Accountants, p. 4)
- in the hands of an Accountant-General. An
ad hoc IO-man Committee of Accountants Prac-
tising Before the Court of Session (chaired by
James Brown, the first president of the SAE),
successfully fought against the offending
legislation.
In order to comprehend the intimidatory
nature of the Bankruptcy and Insolvency
(Scotland) Bill, 1853, to Scottish accoun-
tants, it is necessary to understand the power
and motives of its devisors and sponsors and
the political context in which the Bill
emerged.
THE EMERGENCE OF A THREAT TO THE
INTERESTS OF SCOTTISH ACCOUNTANTS:
THE LONDON COMMITTEE OF
MERCHANTS, 1851-1852
It will be shown in this paper that occupa-
tional organization in Edinburgh and Glasgow
in 1853 was induced primarily by proposals
which would have posed a massive, rather
than a marginal threat to the whole insolvency
practice of Scottish accountants. The nature of
the threat required that accountants strengthen
their competitive position in the political arena
by instituting protective organizations and by
devising a compelling counter-ideology to that
propounded by their opponents. Such impera-
tives acted not only to enhance the occupa-
tional consciousness of accountants in
Edinburgh and Glasgow but also assisted in
the establishment of cross-sectional alliances
capable of repelling the demands of a powerful
antagonistic interest group. The source of the
antagonism was The London Committee of
Merchants - an organization whose ideolog-
ical discourse was founded on the ascendent
economic philosophy of mid-Victorian Britain:
The defects in the system of administering
insolvent estates in Scotland were discussed
frequently during the early 1850s. In April
1851, for example, a group of wholesale mer-
chants and traders in Edinburgh, alarmed by an
increase in fraudulent and reckless trading
which tarnished the reputation of the whole
commercial community, formed a Mercantile
Protection Association (later the Edinburgh
and Leith Trade Protection Association and
the Scottish Trade Protection Society) to inves-
tigate and prosecute offenders (The Edinburgh
Courunt, 3 April 1851, p. 2; also 15 May 1851,
p. 3). By February 1853 the Association boasted
253 members.
During the autumn of 1851, a more vocife-
rous and powerful interest group was formed.
Following their sustaining of what were per-
ceived as heavy losses as creditors of a bank-
rupt in Glasgow, a group of (mainly cloth)
warehousemen trading with Scotland located
in the City and Cheapside districts of London
formed the London Committee of Merchants
and Others Associated for the Improvement
of the Commercial and Bankruptcy Laws of
GENESIS OF PROFESSIONAL ORGANIZATION IN SCOTLAND 293
Scotland, and the Assimilation of Those Laws in
England and Scotland.’
By September 1852 the London Committee
comprised 22 merchants, 4 Liberal MPs, 6 law-
yers and was chaired by Robert Slater of the
largest mercantile house in Britain (Hansara,
1856, Vol. 140, p. 1395). Having suffered as
creditors of a Scottish bankrupt the members
of the London Committee attempted to identify
the reasons for their meagre dividends. They
were astonished to discover that 5% of the
bankrupt’s estate was paid in commission to
the trustee - a percentage which was deemed
“enormous and out of all proportion to the
amount of service rendered for it” (Trade
Protection Circular, January 1853, p. 201).
During the first year of its existence the
London Committee undertook extensive inqui-
ries into the state of the bankruptcy law of
Scotland. A series of “Queries” on the subject
was circulated to a wide audience of business-
men and lawyers and articles on the defects of
the Scottish system of insolvency administra-
tion were printed in the Committee’s mouth-
piece - YYbe Mercantile Test.
The fruits of the London Committee’s
labours were produced in a Report and Sugges-
tions Addressed to the Mercantile Community
of the United Kingdom in October 1852 which
listed a miscellany of evils under the current
Scottish law of insolvency. Delays in the
appointment of Interim Factors and in the reali-
zation and distribution of the bankrupt’s estate
were highlighted. The principal grievance, how-
ever, concerned the Scottish system of vesting
the management of the bankrupt’s estate in the
hands of a trustee. The judicial powers of the
trustee were considered as excessive, the sys-
tem of election by the creditors encouraged
litigious and time-consuming competitions for
trusteeships and the payment of “exorbitant”
levels of commission disadvantaged creditors.
Although it was conceded that “there are
many professional trustees who are excellent
men of business” (Report, 1852, p. 19)
“many hundreds of trustees in sequestrations
are mere tradesmen and mechanics, who
have no knowledge whatever either of com-
mercial jurisprudence, or the rules of evi-
dence, or even of the most simple branches
of judicial procedure” (ibid).
The reforms suggested by the London Com-
mittee to remedy the evils of the Scottish sys
tern of insolvency administration were
sweeping. It was proposed to impose the
English process of bankruptcy on Scotland. So
far as the accountants of Edinburgh and
Glasgow were concerned - remunerative
sequestration trusteeships (see Kedslie, 199Oa,
pp. 39-49) would be supplanted by the admini-
stration of bankrupt estates by a small number
of judicial officers and the hitherto unregulated
and lucrative system of voluntary trusteeships
would be placed under the supervision and
scrutiny of the courts.
The unorganized accountants of Scotland
had every reason to fear the realization of the
London Committee’s proposals. The fact of
their emanation from significant merchants
located in the nation’s business capital was
threat enough.3 In addition, the London Com-
mittee had zealously set about developing
cross-occupational alliances by mobilizing the
support of mercantile, manufacturing and legal
groups. The Edinburgh based Trade Protection
Circular warned that the London Committee
a The Scats law of bankruptcy had long been a concern of merchants in London who traded with Scotland. In 1813, for
example, a committee had been formed to prevent the passing of a Bankrupt (Scotland) Bii and to complain of the level of
commission paid to trustees in sequestrations (see Repot-f offbe London Commfffee on fbe Scotch Bankrupf Bi l l , 1814). It
is possible that the London Committee of Merchants was related to The Committee of Merchants and Traders of the City of
London which reported In 1851 that it had “for some time past endeavoured, with varying success, to Improve the Iaws
relating to Bankruptcy and Insolvency” @. 3).
3 For the signikance of London and its “commercial based’ elite In British economy and society see Rubinstein (1986, p.
34; 1993, pp. 25-32, 157-160; also BrIggs, 1968, pp. 311-360).
294 S. P. WALKER
“have an object to carry, and that for the carry- the creation of the most favourable conditions
ing of that object their chief dependence is on for the free play of market forces is rooted in
the parliamentary power possessed by the com- the classical economics of Adam Smith and
mercial interests of England” (8 January 1853, Ricardo. The extent to which free trade
p. 210). The London Committee’s Report was became the prevailing economic doctrine in
distributed to the chambers of commerce, Britain during the mid-nineteenth century has
merchant companies, town councils and law been weIl documented (se-e Mathias, 1969, pp.
societies of all the major towns and cities in 293-303; Grampp, 1987, pp. 107-112).
Britain (Report, 1852, pp. 5-6). Public meet- According to Neale “if there was any axiom
ings, lecture tours and personal lobbying of of political economy entering the psyche of
organized commercial interests were planned Victorian men and women it was this: free
to highlight the national importance of the trade - Cobden and Bright were the culture
issue. The London Committee’s Report con- heroes of mid-nineteenth-century England not
cluded that: “it appears almost impossible to Marx” (1972, p. 130). The evidence for the
over estimate the importance of this move- conversion of policy makers from protection-
ment to the commercial interests of this great ism to free trade is usually presented as a series
empire . . . The movement is national, and of landmarks from Huskisson’s tariff reforms of
should be nationally supported: the London the 182Os, to the repeal of the Corn Laws in
Committee, connected as they are with the 1846 and the Navigation Acts in 1849 and cul-
greatest commercial city in the world, have, minating in Cobden’s Commercial Treaty with
they hope, not improperly ventured to lead France in 1860. Grampp has identified the deci-
it” (ibid., p. 40). More importantly, the London sion by Parliament to adopt Free Trade in 1820,
Committee commissioned its Secretary to draft following a petition from an earlier Committee
an insolvency bill for Scotland in the expecta- of London Merchants, as the climacteric in the
tion that its proposals would become reorientation of British commercial policy
enshrined in the Statute Book. (1987, pp. 86-106).
THE EMERGENCE OF A GROUP IDEOLOGY
ANTAGONISTIC TO SCOTTISH
ACCOUNTANTS: FREE TRADE AND
ASSIMILATION
In order to excite contemporary opinion and
cultivate cross-sectional alliances, the London
Committee’s reforms were advanced on the
basis of an ideological discourse constructed
around the ascendent philosophies of free
trade and the assimilation of commercial law.
In order to comprehend the threat to Scottish
accountants posed by this strategy, it is neces-
sary to show how the alEed concepts of free
trade and assimilation had come to dominate
economic thought and the attention of law
reformers by the early 1850s.
Richard Cobden and other adherents to the
Manchester School philosophy considered that
free trade comprised more than a crusade for
the removal of restraints on the exchange of
goods. Free trade would also bind nations,
reduce international discord and secure univer-
sal peace (Ed&I, 1986, p. 228). One impedi-
ment to these ambitious ideals was the
disparate and often con.tIicting nature of the
mercantile laws within which free intema-
tional trading was to be conducted. The solu-
tion to the lack of consistency in the
commercial laws of nations was considered to
be their assimilation.
The assi mi l ati on of commerci al l aws
Free trade
The idea of maximizing national wealth
through the removal of obstacles to trade and
Demands for the assimilation, or homogeni-
zation of the mercantile laws of individuaI
states during the late 1840s and early 1850s
had their intellectual foundations in the work
of Jeremy Bentham. Bentham recognized the
incoherent and inconsistent nature of English
GENESIS OF PROFESSIONAL ORGANIZATION IN SCOTLAND
295
statute and common law and in its place pre-
scribed a more comprehensible “Pannomion”,
or, a unified set of constitutional, civil and
penal legal codes (Dinwiddy, 1989, pp. 54-
65). Although some customization would be
required to take account of the peculiar cir-
cumstances of individual nations, universal
legal codes were considered by Bentham to
be an attainable objective because human
nature and needs were largely congruous
across territories (ibid., pp. 70-71). Britain’s
domination of world trade, improved commu-
nications and the increasing internationaliza-
tion of business by the mid-nineteenth
century engendered renewed interest in the
development of national and international
codes of commerce. The most notable manifes-
tation of the mood was the work of an associ-
ate of Cobden, Leone Levi (1821-1888)
(Dictionary of National Biography, XI , 1917,
pp. 1035-1037).
The publication of Levi’s four volume trea-
tise Commercial Law: its Principles and
Administration (1850-2) has been described
as “an international event” and its author was
“showered” with gold medals and prizes (Pal-
grave, 1986, Vol. 2, p. 598). Levi compiled a
synopsis of the merits and conflicts of the
mercantile laws of 59 nations in an attempt to
identify universal principles upon which a
general conformity of commercial jurispru-
dence might be based (Levi, 1850-2, Vol. 1,
pp. vii-ix). In a Cobden-like vein, Levi envi-
saged that the development of an international
code on subjects such as the laws of contract,
bills of exchange and bankruptcy would
improve the circulation of capital and encou-
rage the development of international business.
The results would “cement peace between all
countries, extend commerce and promote mor-
als and justice” (Levi, 1851, p. iii).
Levi’s treatise and a supporting series of lec-
tures in 1851 resulted in the formation of com-
mittees in London, Birmingham, Edinburgh and
Glasgow (consisting primarily of merchants) to
consider the best means of carrying out his
proposals.* Levi’s mission also excited consid-
erable interest because of the concordance of
his objectives with those of the Great Exhibi-
tion of May-October 1851. The Exhibition was
“calculated to promote and increase the free
interchange of raw materials and manufac-
tured commodities between all the nations of
the earth” (Babbage, 1851, p. 42) - it was a
celebration of “peace and international under-
standing through Free Trade” (Fay, 1951, p. 9).
The effects of the Great Exhibition were envis-
aged as being an expansion of trade and the
liberalization of commercial transactions (The
I llustrated London News, October 1951, p.
458). Levi’s proposal that a conference of com-
mercial men from around the world should
meet during the Exhibition to discuss “one
Universal Code of Laws, regulating commercial
transactions under whatever clime or position”
(1851, p. 19) received some support from
Prince Albert and other influential personages
(Levi, 1850-2, Vol. 1, p. ix).
Although the unification of the mercantile
laws of all nations was considered to be an
unrealistic objective made in the excitement
of the Great Exhibition (The Law Magazine,
Vol. XIV, 1851, pp. 60-61), the potential advan-
tages of at least assimilating the separate mer-
cantile laws of England, Scotland and Ireland in
order to extend commercial relations within
the Kingdom was recognized to be an attain-
able objective (Trade Protection Circular,
September 1852, p. 118). One area of differ-
ence in the commercial laws of England and
Scotland which was singled out for close
scrutiny by assimilationists was the law of
bankruptcy.
The London Committee embraced free
trade and assimilation as the ideological justi-
fication for its proposals for reform. The bank-
ruptcy law of Scotland was considered to be
an impurity in commercial relations (Report,
4 The Honorary Secretary of the London branch of the Association for Promoting an International Code of Commerce was
the Scot, John Gilmour, a barrister who was also the Secretary of the London Committee.
296 S. P. WALKER
1852, p. 40) and an impediment to the internal
trade of Britain because the commercial com-
munity in England could not rely on Scottish
legislation which was perceived to render
credit Insecure. The Committee considered
that:
at this momentous era, when the established principles
of free trade, and the recent discoveries of gold, hold
out the prospect of a grander development of British
commerce than it has yet attained, every impediment,
from whatever quarter proceeding which may tend to
binder its progress should be removed out of the way.
Such on the most mature consideration, they are con-
strained to regard the present bankruptcy laws of
Scotland (Second Address, 1853, p. 16).
A great effort was required from the mercantile
Interest “to free the internal commerce of this
country from a most unquestionable evil”
(ibid., p. 30) and replace existing Scottish bank-
ruptcy law with a unified law having “one
weight and one measure throughout
United Kingdom” (ibid., p. 17).
the
THE NATIONAL POLITICAL ARENA,
NOVEMBER 1852-JANUARY 1853
The pressure on Scottish accountants to
protect their interest in insolvency work
became more urgent during the late autumn
of 1852 owing to a confluence of developments
which enhanced the position of the London
Committee on the wider political scene.
Firstly, the public profile of assimilation was
raised. On 16-17 November the Law Amend-
ment Society successfully organized Levi’s
major conference of “deputations from the
principal trading and commercial towns in
the United Kingdom, as well as several law
societies” (Z%e Scotsman, 20 November
1852, p. 4) to consider the propriety of assim-
ilating the mercantile laws of England, Scotland
and Ireland. The attenders drew particular
attention to the often antagonistic nature of
English and Scottish commercial law which
tended “greatly to restrict and embarrass com-
merce, by producing uncertainty, perplexity
and delay” (ibid). The conference determined
that progress on assimilation would best be
served by a Royal Commission on the subject
and it was resolved to despatch a deputation
Immediately to represent its collective views to
the Prime Minister. The Earl of Derby con-
curred that the issue was of great importance
and saw no objection to the institution of a
commission5 on assimilation (Hunsard, 7
March 1853, p. 2034).
Secondly, free trade was confirmed as the
guiding principle of British commercial policy.
On 26 November, following the “great free
trade debate”, the House of Commons voted
for the maintenance and extension of financial
and administrative reforms based on free
trade (Connacher, 1972, pp. 151-159). l%e
Edinburgh Courant reported that the cause
of protectionism was lost - free trade is now
“accepted without further protest: it is safe; it
is triumphant” (18 November 1852, p. 2).
Thirdly, the causes of free trade and law
reform were further advanced by the fall of
Derby’s Conservative administration on 16
December and its replacement by the Aberdeen
Coalition (see Stewart, 1971, pp. 206-215). In
late December the new Peelite Prime Minister
stated that the mission of his Government
would be the preservation and advancement
of free trade policies (Connacher, 1968, p. 33)
and his ministerial team emphasized the
“necessity of vigorous measures of Law
Reform” (me Edinburgh Cow-ant, 6 January
1853, p. 2).
Given the increasingly liberal and reformist
5 A Royal Commission on the assimilation of the mercantile laws of the U.K. was later established in June 1853 by the
Aberdeen Government (Robert Slater of the London Committee of Merchants was a commissioner). The recommendations
of the Assimilation Commission (1854, 1854-55) resulted in legislation (Mercantile Law Amendment Act, 1856, and the
Mercantile Law (Scotland) Amendment Act, 1856) which removed the most obvious discrepancies between English and
Scottish commercial law. Bankruptcy was excluded from the work of the Commission (see Hansard, 26 February 1856,
pp. 1393-1401).
GENESIS OF PROFESSIONAL ORGANIZATION IN SCOTLAND 297
political environment of November 1852-
January 1853 the London Committee’s threa-
tened bill to overhaul the Scottish system of
insolvency administration, which posed a sub
stantial threat to the interests of Scottish
accountants, had a chance of success. The
accountants of the principal cities of Scotland
were bound to respond. They did so by estab-
lishing protective occupational organizations
and by devising a potent counter-ideology to
free trade and assimilation.
THE EMERGENCE OF COUNTER
ORGANIZATIONS: SCOTTISH
ACCOUNTANTS, JANUARY-OCTOBER
1853
Conflict theorists reveal that collectivities
such as occupational groups who are engaged
in conflict situations require organization,
articulation and leadership for the effective
engagement of their opponents. The initial
response of Scottish accountants to the agitation
for bankruptcy law reform which had ema-
nated from London took the form of the pub
lication of a series of pamphlets by a number of
leading practitioners who were to form the
SAE. The first and most intluential of these was
Reform of the Bankruptcy Law of Scotland by
Samuel Raleigh which appeared at the end of
1852.
Raleigh considered that in the current cli-
mate of reform the bankruptcy law of Scotland
was likely to be the subject of legislation in the
Parliamentary Session of 1852-53. Although he
provided a convincing rebuttal of the London
Committee’s allegations, Raleigh did recognize
that the London Committee’s concerns about
the qualifications of trustees had some valid-
ity. Although he showed that 75% of bankrupt
estates in Scotland were managed by “profes-
sional trustees” (of whom the majority were
accountants), there was a need to secure “the
exclusion of all unqualified and incompetent
parties” (1852, p. 25). This might be achieved
by the compilation of public certitied lists of
suitably qualified individuals eligible for selec-
tion as trustees. These trustees might become
organized “as a separate professional body”
(ibid., p. 26). The determination of the mem-
bership of such an institution was to be sub
ject to discussion but Raleigh had no doubts
that an organization could be formed (ibid.,
Appendix).
Raleigh’s ideas were supported by a group of
Edinburgh accountants who, in their Remarks
on The Revision of the Bankruptcy Laws of
Scotland, also rejected the London Commit-
tee’s proposals (1853). It was considered that
Raleigh’s suggestion “that a qualified body of
Trustees should be organized, and a certified
list of such drawn out, thereby constituting
them as a separate professional body, and
excluding incompetent and interested parties
from the charge of bankrupt estates, would,
we think, be found highly beneficial” (ibid.,
p. 18). Further, it was argued that “the active
part of the movement should no longer be left
entirely in the hands of our thorough and
energetic London reformers” (ibid., p. 20).
The I nstitute of Accountants in Edinburgh
It was in the context of the imminent threat
to their bankruptcy and insolvency practice
and demands for the organization of qualified
trustees that the first move was made on 17
January 1853 for “uniting the professional
Accountants in Edinburgh” (Society of Accoun-
tants in Edinburgh, Sederunt Book, p. 1).
Whereas other individuals acting as sequestra-
tion trustees, such as lawyers, bankers and mer-
chants, had established institutions to defend
their interests, the occupational group which
occupied most trusteeships - accountants -
were unorganized.
The Minute Books of the Institute of Accoun-
tants reveal that organization was an urgent
political expedient. By 22 January 1853 a draft
constitution was discussed and attempts were
made to enrol suitable members “with as little
delay as possible” (ibid., p. 4). Such exigency
was necessitated by the fact that the London
Committee’s promised Bill to overhaul the
Scottish system of bankruptcy administration
was now drafted - on the same day as the
298 S. P. WALKER
Institute of Accountants discussed its draft con-
stitution, the London Committee’s Chairman
was explaining the merits of the Bill to the
Edinburgh Chamber of Commerce (Alexander,
1853, p. 21).
The progress of the Bankruptcy and
I nsolvency (Scotland) Bill
The offending Bill (House of Lords, Sessional
Papers, 1852-3, Vol. 3, 100) consisted of 266
clauses and was designed to consolidate the
insolvency law of Scotland, improve the collec-
tion and division of sequestrated estates, pre-
vent delays in the winding-up of bankruptcies
and place all insolvency proceedings under
judicial control (ibid., lOOa, Paper of Observa-
tions, p. 1). The guiding principles of the Bill
were to assimilate and codify the law of bank-
ruptcy, protect creditors and produce “the
soundest and truest Economy” in insolvency
administration (ibid., pp. 32-33). These objec-
tives were to be achieved by removing the
exclusive power of the Court of Session in
Edinburgh to award sequestrations and by
reposing administrative power in new local
Courts of Bankruptcy and Insolvency through-
out Scotland. The management of bankrupt
estates would be vested in five Official Assign-
ees for Scotland rather than in the 862 trustee-
ships currently filled by accountants (60%)
lawyers (lo%), bankers (4%) merchants and
others (26%) and which cost creditors a total
of &90,702 in trustees’ commission (Report by
the Sub-Committee of the Edinburgh General
Committee on Bankruptcy-Law Reform, 1853,
p. 2). Voluntary trusts for behoof of creditors
-
a highly lucrative source of income for
accountants and lawyers which were currently
outwith the public gaze and judicial control -
were to be supervised by the new Courts of
Bankruptcy and Insolvency to which trustees
were to be made accountable for their actions.
The parliamentary progress of the Bank-
ruptcy and Insolvency (Scotland) Bill was
unpredictable in a legislature of shifting alle-
giances and comparatively weak party disci-
pline (Beales, 1967; Woodward, 1962, pp.
160-166). However, the London Committee
claimed that the Bill was received by the
Government “in a friendly manner” (Second
Adress, 1853, p. 21). The Bill’s chances of
success were further advanced when its parlia-
mentary sponsor was revealed as Henry, Lord
Brougham ( 1778- 1868) (Dictionary of
National Biography, Vol. II, pp. 1356-1366).
Although he had only once held a major
office of state (as Lord Chancellor 1830-34)
Brougham remained a powerful political figure
in the mid-1850s. As an acquaintance and sym-
pathizer of Bentham (Stewart, 1985, p. 234),
Brougham was a noted instigator of law re-
forms. He had been instrumental in formulating
the English Bankruptcy Laws of 1831 and 1849
and in 1844 had founded the Law Amendment
Society and chaired its conference on the
assimilation of mercantile laws in November
1852 (Hawes, 1957, p. 201). As an advocate
of reform and free trade (Aspinall, 1939, p.
250), Brougham was a champion of middle-
class causes in a legislature dominated by aris-
tocratic representatives (Perkin, 1969, p. 316;
Rubinstein, 1993, pp. 145-148). Hence, when
the Bankruptcy and Insolvency (Scotland) Bill
received its First Reading in the House of Lords
on 15 March 1853, Brougham stressed that the
“great mercantile body” in Britain felt “deeply
anxious” on the need for reform on this subject
(Hansard, 1853, Vol. 125, p. 1%).
The appearance of Lord Brougham’s Bill
galvanized a cross-occupational alliance of
accountants, lawyers and merchants in
Edinburgh into vigorous lobbying of the princi-
pal Government representative in Scotland -
the Lord Advocate (see Report by the Sub
Committee of The Edinburgh General Commit-
tee on Bankruptcy-Law Reform, 1853). The
result was the framing and introduction into
the House of Commons of the Bankruptcy
(Scotland) Bill on 4 May 1853. The Lord Advo-
cate’s Bill contained a mere 18 clauses designed
to remedy the most obvious defects of Scottish
bankruptcy administration and thereby negate
the necessity for the radical reforms proposed
in Brougham’s Bill.
The appearance of the Lord Advocate’s Bill
resulted in an intensification of effort by the
GENESIS OF PROFESSIONAL ORGANIZATION IN SCOTLAND 299
London Committee. A series of petitions in
favour of its Bankruptcy and Insolvency (Scot-
land) Bill were raised including one from over
200 merchants in London whose trade with
Scotland amounted to &5m (Hansurd, 19 July
1853, p. 433). The assault on bankruptcy
administration in Scotland, and particularly
the system of trusteeship, became more veno-
mous. In July 1853 Brougham stated that for
trustees: “no qualification was required. He
ought to be both an accountant and a judge.
Instead of this, however, he was required to
possess no learning whatever - no qualification
of any sort” (Hunsard, 4 July 1853, p. 1145).
Brougham’s Bill passed its Second Reading in
the House of Lords on 22 July 1853. The Gov-
ernment measure - the Bankruptcy (Scotland)
Bill - was passed in August with little parlia-
mentary discussion. The new Act failed to quell
the agitation of the London Committee.
Within one week of the Second Reading of
its Bankruptcy and Insolvency (Scotland) Bill
the London Committee reassembled at the
Guildhall Coffee House. It was resolved that
the Lord Advocate’s Bill was “utterly inade-
quate” (Second Address, 1853, p. 20) and “in
no way alters the state of the question” (ibid.,
p. 21). The campaign was to be escalated in
order to further interest the mercantile commu-
nity “in a matter of such vast importance to the
welfare of our internal commerce” (ibid., p. v).
A Second Address to the Mercantile Commu-
nity of the United Kindom was prepared and
widely circulated during the summer of 1853 in
order to encourage petitioning of Parliament
against the system of insolvency administration
in Scotland. The Secretary of the London Com-
mittee - John Gilmour - was remitted to
lobby the mercantile and law organizations
located in all the major commercial and manu-
facturing centres of Britain (ibid., p. vi). The
“second city of the Empire” was singled out
for particular attention.
The I nstitute of Accountants and
Actuaries in Glasgow
I f the London Committee’s message was to
find a sympathetic ear in Scotland it was likely
to find it in Glasgow. Many Glaswegian mer-
chants and industrialists were persuaded by
assimilationist measures intended to enhance
trade with England and support could be
found among Glasgow lawyers for measures
which would reduce the hegemonic position
of Edinburgh in the Scottish legal system
(Hutchinson, 1986, pp. 93-95). The London
Committee’s proposals to unify the law of
bankruptcy and increase local judicial control
over the administration of bankrupt estates
together with ancillary measures relating to
small debt procedures, were looked upon
favourably by the Glasgow Law Amendment
Society and the Glasgow and West of Scotland
Society for the Protection of Trade which had
petitioned in favour of Lord Brougham’s Bill
(Second Address, 1853, pp. 18-19).
Until the autumn of 1853 the agitation against
Brougham’s Bill was Edinburgh-centred. The
reactionary Bankruptcy (Scotland) Act, 1853
had reflected the interests of Edinburgh account-
ants, lawyers and merchants. That Act failed to
dampen the enthusiasm of the London Com-
mittee which promised the pursuit of its objec-
tives with renewed vigour. In late September
1853 further parliamentary debate on the bank-
ruptcy laws of Scotland seemed inevitable.
John Gilmour had organized a public meeting
in Glasgow for October to discuss Brougham’s
Bill. The younger accountants of Glasgow
needed to organize to protect their pecuniary
interests particularly as they practised in a city
where many of their fellow citizens were in
favour of law reform and assimilation.
Hence, 27 accountants who commenced
practice after 1841 requisitioned their more
senior colleagues to meet to consider the forma-
tion of an organization of professional practi-
tioners in Glasgow. The requisition stated that
organization was necessary now because of
“the late changes and contemplated alterations
in the Bankrupt Law of Scotland’, and “in order
that the practical experience of those parties
who have hitherto been entrusted with the man-
agement of Bankrupt Estates in the West of Scot-
land may be properly represented, and have due
weight in determining what changes require to
be made upon the existing Bankrupt Law” most successful political ideology in human
(Institute of Accountants and Actuaries in history” (Birch, 1989, p. 3); the antithesis of
Glasgow, Minute Book, 1853, p. 1). the harmonization of international law and
Two to three hundred attended the “great” the removal of institutional hindrances to
public meeting in Glasgow to discuss cross-border trade: nationalism. In order to
Brougham’s Bill in late October (Hansurd, 15 comprehend the seductive value of appeals to
May 1854, p. 299). Among the speakers was patriotic sympathies during the 185Os, the rele-
David McCubbin, one of the requisition&s of vant political context must be sketched.
the new Institute of Accountants. McCubbin
made a vigorous defence of the prevailing sys- Scotti sh nati onal i sm i n the 1850s
tem of bankruptcy administration in Scotland The period from 1850 to 1855 witnessed
but like Raleigh had done a year previously, “one of the first flickers of modem Scottish
conceded that it “is an evil in our current sys- nationalism” (Hutchinson, 1986, p. 91).
tem, and a great one too, that any man, what- According to Hanham, the mid-century
ever may be his abilities or qualifications, may national movement, which persisted until
be elected trustee” (Trade Protecti on Ci rcul ar, attention was deflected to the Crimean War,
October 1853, p. 25). McCubbin’s solution was was both romantic and radical. The patriotic
to compose a certified list of experienced trus- upsurge was inaugurated in 1849 by the
tees eligible for election (presumably the mem- neglect of Scottish measures in the English-
bers of the Glasgow Institute) and those with dominated legislature (Hanham, 1969, pp.
lesser experience might enter the list following 151-153). From 1850 to 1852 agitation against
examination and by finding security for their English hegemony in the machinery of govem-
intromissions as evidence of respectability. ment and the provincialization of Scotland
were compounded by complaints against the
irregular use of Scottish heraldic symbols. In
THE EMERGENCE OF A COUNTER May 1853 a National Association for the Vindi-
IDEOLOGY: SCOTTISH NATIONALISM cation of Scottish Rights was formed and by
November of the same year claimed 6000 mem-
The organization of accountants in Edinburgh bers. In its first Address to the Peopl e of Scot-
and Glasgow was insufficient by itself to l and, the Association resolved that the national
challenge the likely re-introduction of Lord laws and institutions of Scotland should be pre-
Brougham’s Bill in the parliamentary session served and that attempts “to subvert or place
of 1853-54. Conflict models reveal the impor- those institutions under English control, and
tance of developing group ideologies in order under the pretence of a centralizing economy
to enhance collective consciousness and to to deprive her of the benefit of local action”
elicit the support of other interests. Hence, (1853, p. 33) should be strenuously resisted.
the occupational groups with a vested interest The centralization of governmental functions
in the maintenance of the existing system of in London and the attempts to assimilate the
Scottish insolvency administration had to pre- laws of Scotland with those of England were
sent a convincing case against the proposals deeply held grievances particularly in Edin-
which had emanated from the London Commit- burgh. One member of the National Associa-
tee of Merchants. A rhetorical discourse tion for the Vindication of Scottish Rights
founded on self interest - the deleterious stated at its first public meeting that “Our man-
pecuniary consequences of Brougham’s Bill ners and our customs may assimilate, but our
for insolvency trustees - was incapable of laws and our religion are essentially different,
penetrating the utilitarian banners of free trade and our own” (J usti ce to Scotl and, 1853, p.
and assimilation. Rather, the accountants 32). Hanham has concluded that “the main
reverted to what has been described as “the function of the national movement was to
300 S. P. WALKER
GENESIS OF PROFESSIONAL ORGANIZATION IN SCOTLAND 301
remind the nation that Scotland was a cultural
and political entity, and to fight against the
more blatant forms of assimilation with Eng-
land” (1%7, p. 177).
The leaders of the mid-century Scottish
nationalist movement were primarily Tory pro-
tectionists who were marginalized by the con-
firmation of free trade and reformist policies in
1852-53 (Hutchinson, 1986, pp. 91-92).
Among the supporters of the National Associa-
tion for the Vindication of Scottish Rights were
those directly threatened by assimilationist
pressures: accountants. One of the principal
agitators, John Grant, was allegedly an accoun-
tant (Hanham, 1967, p. 159). The membership
lists of the General Committee of the National
Association include the names of five members
of the SAE and I AAG (see Adciress to the Peo-
ple of Scotland, 1853, 1st and 2nd editions).
The secretaries of the Edinburgh and Glasgow
branches of the National Association -
Frederick H. Carter, CA, and George Wink,
CA - were “leading spirits” of the movement
(Hanham, 1967, p. 170). Robert Christie, senior,
who mysteriously resigned as a member of the
Institute of Accountants in Edinburgh shortly
after its formation, wrote a scathing pamphlet
on the inequitable distribution of government
expenditure between England and Scotland
(Christie, 1854).
The nationalist retort to assimilation
In the increasingly patriotic atmosphere of
the early 185Os, Scottish accountants and their
allies who were confronted by assimilationist
measures in insolvency law, embraced the
nationalist pennant. In addition to highlighting
the specific technical defects of the London
Committee’s proposals, the accountant pamph-
leteers of 1852-53 expressed considerable
resentment at the attempted imposition of the
English system of bankruptcy administration on
Scotland.
Samuel Raleigh argued that the assimilation
of the bankruptcy laws ignored the peculiar-
ities of the Scottish character and the indigen-
ous legal system which would not readily
accommodate “imported methods and foreign
systems of procedure” (1852, p. 5). The “vie
lent and wholesale substitution” (1854, p. 18)
of the Scottish system of bankruptcy by the
English and the consequent introduction of
alien legal institutions with no tradition in Scot-
land would disrupt the whole judicial process
north of the border. Further, it was argued that
such contentions were not motivated by a self-
ish desire to protect the income of trustees:
“the question is not whether professional
interest shall give way to public good, but
whether what has grown up among us -
what adapts itself in many ways to our means
and existing institutions, - instead of being
improved and perfected, should be at once
abolished, and a system demonstrably worse
put in its stead” (1854, pp. 22-23). Raleigh
was offended that demands for the overhaul
of the Scats bankruptcy laws had emanated
from London and not from those north of the
Tweed who had an intimate and practical
knowledge of their own national laws and
institutions (1852, p. 30).
Another original member of the SAE,
Christopher Douglas, also prepared a pamph-
let in 1853 which advocated a nationalistic
defence of the Scats bankruptcy law. Douglas
argued that although in many respects England
and Scotland were a single country, on the law
of bankruptcy “no two countries scarcely can
bear less resemblance to each other” (p. 4).
Despite the Union of 1707 the Scats had deep
affection for their independent laws and were
firmly resolved not to have unsuitable English
jurisprudence thrust upon them (ibid.).
Cross-occupational alliances
The nationalist ideology became a rallying
call to other collectivities such as merchants
and lawyers who (as trustees) had a direct
interest in the maintenance of the Scottish
bankruptcy procedure. The result was the for-
mation of a cross-sectional coalition of accoun-
tants and other organized occupational groups
which succeeded in mobilizing public opinion
north of the border against the London Com-
mittee’s proposals.
A patriotic ideology was advanced by the
302 S. P. WALKER
mercantile community in Scotland. The Trade
Protecti on Ci rcul ar considered that the assim-
ilation of commercial laws might prove advan-
tageous but not when “always, and in every
instance, made at the expense of Scottish
interests” (13 November 1852, p. 163). The
CdrcuZar protested that it “could not conceive
a greater evil falling upon any nation than an
attempt, rashly to overturn its fundamental
laws, and the principles of its judicatories”
and their replacement by “a blind and indis
crlminate imitation or adoption of English
principles or practices” (26 March 1853, p.
278). The mercantile interest was particularly
aggrieved by the apparent intent to use Scats
bankruptcy law as an early test of assimilation.
The Edinburgh Chamber of Commerce objected
that the London Committee was attempting to
make Scotland “a sort of experimental garden
of legislation for England, on a bill prepared by
English parties” (Alexander, 1853, p. 21).
In order that the initiative for bankruptcy
law reform should shift to Scotland and that
any legislation would not simply reflect the
interests of English merchants, Samuel Raleigh
suggested in late 1852 that “the parties chiefly
interested and best informed on our bank-
ruptcy administration, should themselves take
this subject into their own hands” (1852, p. 30)
and devise their own proposals for reform. The
result was The Edinburgh General Committee
on Bankruptcy Law Reform which met on 18
February 1853. The General Committee com-
prised a forum for the cross-occupational alli-
ance which fought the London Committee’s
proposals under the ideological banner of the
protection of national Interests. The General
Committee immediately appointed a 34 man
subcommittee (chaired by Raleigh) containing
bankers, merchants, lawyers and four accoun-
tants (who were particularly active in the
affairs of the early Edinburgh institute) to inves-
tigate the bankruptcy laws in Scotland, suggest
“sound practical reform” and to watch any
measures brought into Parliament on the sub
ject (Report by the Sub-Committee, 1853, p. 1).
The resulting report, which made many sugges-
tions later incorporated into the Bankruptcy
(Scotland) Act, 1856, was agreed on 31 March
1853 and remitted to the Lord Advocate (ibid.,
P. 6).
The appeal to patriotism also enlisted the
support of Scottish Members of Parliament
and policy-makers, the most important of
whom was the Lord Advocate, James Mon-
creiff. During the legislative progress of his
Bankruptcy (Scotland) Bill, 1853, Moncreiff
displayed an anti-Anglican streak which sur-
prised contemporaries (The Law Magazi ne,
August-November 1853, p. 328). He conceded
that assimilation might prove advantageous but
not if it meant merely imposing the laws of one
country on another (ibid., p. 324). The Lord
Advocate stressed the superiority of Scottish
jurisprudence, chastised the amateurish nature
of the proposals from the London Committee of
Merchants and urged those “anxious to pre-
serve the nationality of Scotland” to exert them-
selves in order to “prevent our legal system
from being . . . altogether upset by crude and
rash importations from the other side of the
Tweed” (ibid., p. 327).
It is testimony to the extent to which Scottish
opinion was mobilized on the issue that com-
mentators in England were astonished by the
public Interest shown north of the border in
the apparently mundane subject of assimila-
tion (The Law Magazi ne, 1854, p. 119).
Whereas mercantile law reform in England was
the exclusive domain of lawyers, in Scotland,
with its jealously guarded separate legal sys-
tern, such issues “have a more general and
stirring effect” and the lawyers “are not left
alone, but the people individually, collec-
tively, and under various forms of organiza-
tion, offer their sentiments” (ibid.). Hence
Brougham’s insolvency Bill “is all but univer-
sally condemned” (ibid.) not only by groups
with a direct professional interest in the sub
ject but also by chambers of commerce, local
authorities and at public meetings.
THE DEFEAT OF THE ASSIMILATION OF
BANKRUPTCY LAW, 1854-56
Having received the support of the Lord
Advocate and successfully enlisted a majority
GENESIS OF PROFESSIONAL ORGANIZATION IN SCOTLAND 303
of interested public opinion against the assimi-
lation of bankruptcy law, the coalition of pro-
fessional and commercial groups in Scotland
were advantageously placed to confront the
re-introduction of Lord Brougham’s Bill in the
House of Lords on 10 March 1854.
Parliamentary debate on the Bill during the
spring of 1854 centred on Brougham’s claim
that “the Bill had the sanction of all classes
both in England and Scotland, who were inter-
ested in the question” (Hansurd, 10 March
1854, p. 588) and, in particular, that the Bill
was universally supported by the mercantile
interest. By 1854, however, the appeal of a
nationalist-based ideology had ensured that
the proponents of the Bill were almost exclu-
sively from England. In 1853 six petitions in
relation to Brougham’s Bill were presented to
Parliament by organized interests in Scotland:
three supported the measure and three were
opposed to it. By contrast, in 1854, 16 peti-
tions were presented from Scotland of which
only one was in favour of the Bill.
Despite such evidence to the contrary,
Brougham argued that there was wide support
for his Bill among the commercial community
in Scotland, that opposition was restricted to,
and driven by, self-interested accountants and
lawyers (Hansard, 15 May 1854, pp. 301-302)
and that the lack of support from the Lord
Advocate could be disregarded as an inevitable
symptom of that official’s natural afRnity with
the Edinburgh-Parliament House view (ibid.,
11 April 1854, p. 822).
Although Brougham’s Bill passed its Second
Reading in the Lords in April 1854, the weight
of Scottish opposition and the luke warm
response of the Government, ensured that it
proceeded no further in 1854. The subsequent
progress of the Bill was effectively scuppered
by the Lord Advocate who, later in 1854,
requested the Faculty of Advocates to prepare
a report on the Scats bankruptcy laws. The
resulting document, following extensive discus
sion with interested organizations in Scotland,
engendered the Bankruptcy (Scotland) Act,
1856, which subsisted as the primary insol-
vency statute north of the border until 1913.
ASSIMILATION AND PROFESSIONAL
FORMATION IN ENGLAND
The Bankruptcy (Scotland) Act, 1856, does
not mark the conclusion of the assimilation
debate and its consequences for the organiza-
tion of the accountancy profession in Britain.
Paradoxically, the assimilation of bankruptcy
law was to be achieved in 1870 not by the
imposition of English laws on Scotland but by
the adoption of Scottish insolvency practice in
England via the Bankruptcy Act, 1869.
The English procedure of vesting bankrupt
estates in the hands of official assignees under
the aegis of courts of bankruptcy, which per-
sisted after 1831, was criticized for its depar-
ture from the fundamental principle that the
creditors should occupy the central role in
the realization and distribution of the debtor’s
estate (Littleton, 1933, pp. 278-280). The defi-
ciency was remedied by the Bankruptcy Act,
1861, which placed administration in the
hands of a “creditor assignee” elected by the
creditors. In practice, the legislation of 1861
served only to increase the expense of bank-
ruptcy administration as unpaid and inexper-
ienced “creditor assignees” tended to
delegate the management of insolvent estates
to knowledgeable and remunerated solicitors.
In 1864 a House of Commons Select Commit-
tee conducted an extensive inquiry into the
working of the Bankruptcy Act, 1861, and con-
cluded that economy and efficiency in winding-
up would be secured by the introduction into
England and Wales of the Scottish system of
paid, creditorelected trustees which had
been successfully defended by accountants
and their allies in 1853-54. Several witnesses
to the Select Committee attested that the
administration of insolvent estates by compe-
tent trustees would be of considerable benefit
to accountancy practitioners in England who at
present assumed a comparatively limited role
(compiling the debtor’s balance sheet) in the
bankruptcy process compared with lawyers
(Minutes of Evidence, pp. 171, 263, 308). The
reforms suggested by the Select Committee
were incorporated in the Bankruptcy Act,
304 S. P. WALKER
1869. In introducing the Bankruptcy Bill to the
House of Commons, the Attorney-General con-
ceded that “the English system of bankruptcy
had substantially failed” and “the Scotch sys-
tem of bankruptcy had substantially suc-
ceeded. The conclusion naturally pointed to
the adoption of the Scotch system” (Han-
surd, 5 April 1869, p. 780).
The Bankruptcy Act, 1869, made no provi-
sions concerning the qualifications of trustees.
As in Scotland the choice of trustee and his
remuneration was to be a matter for the cred-
itors. The extent to which this unregulated
environment might attract canvassing and tout-
ing for trusteeship from a host of doubtful char-
acters was considered less important than the
potential advantages of competition for produ-
cing greater economy in bankruptcy adminis-
tration.6 Further, the Select Committee of 1864
had recognized that the potential dangers of
open trusteeships had been mitigated in Scot-
land by the appointment of respectable profes-
sional accountants to trusteeships. The Attorney-
General expressed the hope that in England the
effect of introducing the Scottish system would
“be to create a similar profession, so that there
would be no difficulty in the way of creditors
in the choice of able and efficient trustees”
(Hansard, 5 April 1869, p. 781).
Demands for the institution of professional
associations in England based on the Scottish
model had also been made in lYbe Tfmes in
1867 and 1868 following public concern over
the appointment of liquidators. Although 47%
of liquidations under the Companies Act, 1862,
were awarded to six eminent Iirms of public
accountants (see Report of the Select Commit-
tee on the Limited Liability Acts, 1867, Minutes
of Evidence, p. 59) a large number of the
remainder were in the hands of men who had
been attracted by the potential to make “very
large fortunes” (ibid., p. 84) and comprised “a
swarm of pettifoggers whose only qualitication
for the duties of accountants has been obtained
by a series of personal experience of faihue in
every occupation they have tried” (The Times,
28 December 1867, p. 28). The remedy advo-
cated by The Tfmes to prevent the further
encroachment into accountancy of the un-
qualified and Iinancially immoral was the forma-
tion in London of a professional organization to
emulate the successful professionalization pro-
ject of the accountants of Edinburgh (ibid., 9
January 1868). The passing of the Bankruptcy
Act, 1869, offered the prospect of a substantial
expansion in the “herd of disreputable per-
sons” (ibid.) offering their services as public
accountants.
On 1 January 1870 the new Bankruptcy Act
came into force and in the same month the ftrst
of the local English societies of accountants
was formed in Liverpool. The extent to which
accountants in England organized during the
1870s in order to protect their occupational
status and gain socioeconomic advantage over
the expected (and realized) influx of unquali-
fied applicants for trusteeships following the
introduction of the “Scotch system” of bank-
ruptcy administration is deserving of further
investigation and indicates the potential limita-
tions of histories of the English profession
which commence in 1870 and fail to take cog-
nizance of earlier developments north of the
border (Kirkham & Loft, 1993, p. 524).
Commentators in the late nineteenth century
certainly considered that the 1869 Act was the
principal inducement to the organization of
accountants in the major commercial and
industrial centres of England. In 1895 it was
asserted that following the Bankruptcy Act,
o Expectations of greater economy and efficiency in En@& insolvency arM&tration following the implementation of the
Bankruptcy Act, 1869, were soon disappointed. In 1877 the Comptroller in Bankruptcy was remitted to invest&ate the
escalating expense of bankruptcy administration. The Comptroller reported a chaotic state of alTairs in which costs had
risen as bankruptcy had been placed “in the hands of some 20,000 scattered trustees” (Supplemental Report, p. 19).
Canvassing was rife: “I believe that accountants, quite as frequently as solicitors, canvass on their own account, and that
from the increased numbem of the lowest class of “touts” there is an inkdtely treater amount of ‘touting’ than under any
former system” (ibid., p. 10). The Bankruptcy Act, 1883, rc~troduccd judicial control.
GENESIS OF PROFESSIONAL ORGANIZATION IN SCOTLAND 305
1869, established practitioners viewed with
“alarm and disgust” the “great influx of men
into the ranks of accountancy who had little or
no capacity and fitness for the duties they
assumed’ (A Guide to tbe Accountancy Profes-
sion, p. 5). Respectable accountants were
induced to combine in order to protect “the
public and themselves from a recurrence of
such evils” (ibid). Similarly, Dicksee (1897)
claimed that the 1869 Act encouraged those
devoid of morals and good conduct to enter
the occupation to the detriment of reputable
public accountants: “the presence of a black
ship the midst of the body naturally resulted
in the more respectable Accountants, forming
various Associations for mutual protection, and
for the purpose of affording to the public some
sort of guarantee as to the standing of those
whose services they employed” (p. 3).
If, as seems probable, the Bankruptcy Act,
1869, was instrumental in the formation of
the first societies of accountants in England
(and Boys has recently suggested as much
(1994, p. lo)), then the successful preserva-
tion of the Scottish process of insolvency
administration in 1853 assumes a more than
parochial significance in the history of pro-
fessionalization in Britain’ - it comprises a
common theme which links professional for-
mation in England and Wales with previous
developments in Scotland.
CONCLUSIONS
It has been shown in this paper that a criti-
calconflict based analysis of occupational orga-
nization which examines illSt.itUtiOti
developments in their historical, socioeco
nomic and political contexts offers new
insights into the motives for professional forma-
tion. The institution of the SAE and IAAG in
1853 constituted organizational responses to
the activities of a London-based group whose
proposals, if enacted, posed a substantial threat
to the interests of accountants in Scotland.
Further, the ideological justifications for the
law reforms advocated by the opponents of
Scottish accountants’were founded on the domi-
nant economic philosophy of mid-Victorian
Britain (free trade) and required that the accoun-
tants devise an equally mesmeric counter-
ideology (nationalism) as a basis for mobilizing
cross-occupational support for the engagement
of antagonistic interests in the political arena.
Scottish accountants were compelled to par-
ticipate in a political conflict precipitated by a
challenge to what was perceived as their occu-
pational property. Their organization was not
based on functionalist imperatives, it was
necessary for the mobilization of an occupa-
tional collectivity and its potential allies for
engagement in a clash of ideologies. The
events which resulted in the formation of the
ftrst organizations of accountants in Scotland
and later in England suggest that institutionali-
zation was essentially motivated not to achieve
collective social mobility or to promulgate job
monopolies but to protect established eco-
nomic and social statuses from assaults by exo-
genous parties such as the London Committee
of Merchants (as in Scotland) or occupational
usurpers (as in England).
The explanation for the organization of the
SAE and L4AG related above does not, how-
ever, result in the total redundancy of the tradi-
tional explanations for professional formation
in Scotland. Rather, the foregoing analysis
provides a connecting threat which weaves
together certain pertinent tenets of the conven-
tional histories.
In so far that the essential backdrop to the
assimilation movement was the maintenance
of separate laws and institutions in Scotland
’ The surviving minute books of the local societies of accountants which formed the ICAEW in 1880 state that organization
was prim&ly induced for the protection and preservation of occupational status (Incorporated Society of Liverpool
Accountants, 1870; Manchester Institute of Accountants, 1871; Sheffield Institute of Accountants, 1877; or for the eleva-
tion of occupational starts (Institute of Accountants in London, 1870) (Habgood, 1994, pp. 201-205).
306 S. P. WALKER
after the Act of Union, then the traditional
explanation for the early professionalization
of accountants in Scotland based on the differ-
ent legal systems north and south of the bor-
der is relevant.
A connection between structural economic
change and the organization of accountants in
Scotland can also be found. Industrialization
and commercial expansion ensured Britain’s
economic supremacy (Perkin, 1969, p. 408)
and the existence of an increasingly numerous
and wealthy middle class (Rublnstein, 1993,
p. 147). During the early 1850s the energetic
commercial, financial and manufacturing com-
munities sought the affirmation and further
extension of those Free Trade policies which
had underpinned British economic hegemony.
For a group of powerful London merchants
aggrieved at losses suffered under the Scats
law of bankruptcy, those laws were advocated
as being part of “the huge, heterogeneous, in-
efficient, and expensive pile of institutions and
institutional gaps which clogged the road of
progress” (Hobsbawm, 1968, p. 228). In the
intoxicating days of the Great Exhibition of
185 1 one prescription for the further creation
of the optimum conditions for the operation of
international capitalism was the assimilation of
commercial law. In attempting to defend their
pecuniary interests by the maintenance of
existing laws and institutions, Scottish accoun-
tants came into conflict with the prevailing
spirit of liberalizing commercial relations and
law reform.
The analysis of events which resulted in
the formation of societies of accountants in
Edinburgh and Glasgow in 1853 also partly con-
cords with the contention that organization
was induced by attempts by practitioners to
achieve social closure. The central objection
of the London Committee of Merchants was
the expensive administration of sequestrated
estates in Scotland by trustees. The London
Committee argued that many trustees were
educationally unfit for office and were of ques
tionable social standing. Further, those practi-
tioners who were reputable had no formal
professional qualification to justify their elec-
tion as trustees. The necessity of distinguishing
the professional from the non-professional trus
tee was recognized by the opponents of the
London Commitee. The accountant pamphle-
teers of Edinburgh, the Edinburgh General
Committee on Bankruptcy Law Reform and
activist accountants in Glasgow, concurred
that all unqualified and incompetent parties
should be excluded from the office of trustee.
The offensive by the London Committee
against the competence of insolvency trustees
was utilized by Scottish accountants as a justi-
fication for the imposition of closure practices.
It was proposed that the creditors should
choose their trustee from an approved list of
qualified practitioners. One means of ensuring
that the unorganized occupational group
which filled most trusteeships - accountants
in public practice - could claim evidence of
professional respectability, fitness for office
and appearance on a register, was membership
of a qualifying association.
The evidence suggests, however, that initl-
ally, the formation of quaZiJj&zg associations
by accountants was a secondary objective.
The accountants of Edinburgh had fleetingly
organized in 1834 and, together with their pro-
fessional brethren in Glasgow, associated on a
more permanent basis in 1853 in order to form
protective occupational groups geared for a
political contest. As instituted in 1853, the
Edinburgh and Glasgow organizations of
accountants were agencies for the mobiliza-
tion of participants engaged in a conflict to
preserve collective socioeconomic interests.
Hence, the first constitution of the Edinburgh
Institute was chastised in legal circles for its
absence of contemporary “professional” attrl-
butes. Provisions relating to education and qua-
lification were omitted and the constitutional
arrangements as a whole were considered to
be “hastily and crudely concocted” (see
Walker, 1988, p. 301). Once the challenge to
their dominance in the market for the provi-
sion of insolvency services had been repelled,
and on the acquisition of Royal Charters, the
SAE and IAAG began to assume the persona
of qualifying associations by the establishment
GENESIS OF PROFESSIONAL ORGANIZATION IN SCOTLAND 307
of structures for the testing of professional
knowledge in 1855 (Walker, 1988, pp. 312-
317; Kedslie, 1990a, p. 200) and by operating
other closure strategies based primarily on
credentialism (Walker, 1991).
This paper has confirmed the heuristic value
of examining professional formation and
behaviour within critical-conflict models and
the need to Investigate the organizational
development of occupations as opposed to
the narrow profession-centred frame of refer-
ence which characterizes functionalist-based
analysis. It has revealed the dynamic and poli-
tical nature of the organizational objectives of
the SAE and IAAG and confirms the fluid
nature of professional ideologies. Moreover,
the foregoing reiterates that “organizations
are the outcome of struggles, reflect the
social relations of wider society, and are thor-
oughly permeated by the inequalities and
contradictions of that society” (Davies,
1983, p. 181).
BIBLIOGRAPHY
Ati ress to Tbe Peopl e of Scotl and and Statement of Gri evances by The Natfonal Assocfal fon for i be
Vi ndi cati on of Scotti sh Ri ghts