Assimilation and Americanisation in the Progressive Era: Price,Waterhouse & Company in the US,1890–1914

Archival sources

The following analyses use data accessed from sources relevant to partners, contract staff, and temporary staff identified as PWCUS personnel between 1890 and 1914. ² Partners and contract staff form the core of the analyses and are as listed by DeMond (1951: 310–331). ³ Temporary staff were identified in DeMond (1951: 13–157) and Webster (1954: 327–399). Partner and contract staff lists in DeMond (1951: 310–337) provided employment dates and work locations, as well as occasional details of birth, apprenticeship and education. British professional qualifications and American work locations of qualified British accountants were taken from the associational directories, from 1890 onwards, of the Institute of Accountants and Actuaries in Glasgow, the Institute of Chartered Accountants in England and Wales (ICAEW), the Society of Accountants in Aberdeen, the Society of Accountants in Edinburgh and the Society of Incorporated Accountants and Auditors. ⁴ Birth, paternal occupation, immigration, naturalisation and marriage data ⁵ for British accountants were accessed mainly from Ancestry.com and Familysearch.com . The latter sources also provided data on birth, paternal occupation and marriage for American personnel. American qualifications of PWCUS personnel were found in Webster (1954: 327–399), AAPA annual yearbooks, ⁶ and photocopies of certification records supplied on request by state boards of accountancy. In addition, information about PWCUS personnel was found in notices and obituaries in The Accountant, The Accountant’s Magazine and Journal of Accountancy.

Assimilation and nineteenth-century America

Before proceeding to analyses of assimilation and Americanisation, it is useful to consider these processes from the perspective of American history of the period. Higham (1955) is best known for his study of American immigration and nativism between 1860 and 1925. He reveals a gradual diminution in the possibility of assimilation and equality for all white men and women until the Immigration Restriction Acts of 1921 and 1924 excluded foreigners from entry to the US on a permanent basis (Dinnerstein and Reimers, 2004: 3). In an article relevant to the current study, Higham (1981: 7) argues that “only at the end of the century did ethnic mixing arouse a sustained and urgent sense of danger”. The “danger” identified by evangelical Protestants was the threat of immigrants and other minority communities to the Puritan ideal of a “pure” and “clean” nation elected by God and comprising white Anglo-Saxon Protestants (WASPs) (Higham, 1981: 18). Due to industrialisation and urbanisation in the nineteenth century, Higham contends that assimilation had been greatest among minority groups such as immigrants and least among indigenous WASPs. More specifically, he argues that, despite a common creed based on founding principles, America until the 1890s was a decentralised nation of “island” communities effectively forming a scattered population that acted as a social check on assimilation and conflict (Higham, 1981: 13–14).

However, by the 1890s, economic interconnectedness in the US began to break down the separateness of different ethnic communities and the “wall of separation between opposing values in American minds gave way as well” (Higham, 1981: 19). “Island” communities of self-sufficiency were disappearing, an economic network within and beyond America was developing, and a “willingness to live with a divided heritage and an ambiguous national identity declined” (Higham, 1981: 19–20). As a result, the search was on for a homogeneous society based on WASP “purity”, in which the “compromises and constraints of the Victorian Age” were swept aside (Higham, 1981: 20–21). The Progressive Era was born and so too was a climate of nativism in which issues such as the assimilation of immigrants had to be addressed (Higham, 1981: 22).

PWCUS was formed and developed in this climate of nativism and, because of its reliance on immigrant accountants (particularly from Britain), had the major task of dealing with assimilation and Americanisation. Arguably, as immigrant accountants brought needed and respected professional qualifications and experience to PWCUS, and also fitted the WASP profile of native Progressives, assimilation should have been unproblematic (Miranti, 1990: 179–180). For example, all PWCUS personnel between 1890 and 1914 were white Anglo-Saxon males and, of the 19 partners in the period, 18 were Protestant by religious affiliation. ⁷ However, despite this bias, PWCUS attempted to Americanise in response to nativism and the potential loss of Progressive business clients.

Early PWCUS history

The early PWCUS history is described in DeMond (1951), Allen and McDermott (1993), and Jones (1995: 71–78, 90–97). These sources are the basis for the following summary of the firm’s development between 1890 and 1914. It is given as a prelude to analyses associated with assimilation and Americanisation. ⁸

Although the history of PWCUS began in 1873 with a visit to New York by PWC London staff on behalf of British clients, the principal catalyst for a permanent American presence was in 1889 when London partners and staff visited New York on behalf of a British investor planning to merge three American breweries. Visits such as these were described at the time as “sudden and surprising” (Anyon, 1925: 52) and Carey (1969: 27) labels them as the “British Invasion” of American public accountancy.

The 1889 engagement resulted in further American contracts with the same investor between 1889 and 1891 and the 1890 formation of a PWC agency in New York managed by English chartered accountant Lewis Davies Jones. Jones was a London manager who had visited America for PWC and was therefore suitable to manage its American affairs. He was instructed to conduct agency assignments on behalf of PWC and, when available, enter into other engagements in his name but on account for PWC. The agency was similar to those created in Chicago in 1890 by Charles Stuart and Arthur Young (Burton, 1948: 22), and in New York in 1900 by George Alexander Touche and John Ballantine Niven (Lee, 2002b: 86). ⁹

To cope with an expanding workload, Jones was joined in 1892 by William James Caesar, a Scottish chartered accountant with previous property investment experience in the US. Jones and Caesar opened a second agency office in Chicago in the same year. They were assisted at this time by London staff sent temporarily to the US because the PWC partners believed their British clients disapproved of American staff due to perceptions of lack of accountancy competence. In addition to referrals from PWC, Jones and Caesar built an American clientele and, in 1895, this was sufficiently large to justify forming JCC, with Jones and Caesar as general partners and English chartered accountant and Chicago contract staff member Sandys Birket Foster as junior partner. JCC was formed to attract American clients, encourage recruitment of American staff, and generate profits for its American-based partners. As part of a process of assimilation, the JCC partners gradually built long-term relationships with American bankers and lawyers in order to secure American corporate clients (DeMond, 1951: 48), a strategy similar to that of James Marwick in MMC (Wise, 1982: 5–6).

Staff employed in the PWC agency and JCC increased in the 1890s due mainly to British immigrant accountants and a small number of American recruits. However, as from 1898, appointments of British immigrants involved accountants resident in the US rather than transfers from PWC in London. As a response to nativism, the US federal government had introduced legislation to prohibit such transfers (Faulkner, 1960: 476; Allen and McDermott, 1993: 21). Despite this legal hurdle, the personnel of the PWC agency and JCC remained predominantly British.

The British identity of PWCUS continued when Jones died in 1899 and was replaced by JCC staff member and English chartered accountant Henry Walter Wilmot, and also when Caesar retired to France in 1901 and was replaced by English chartered accountant Arthur Lowes Dickinson. Dickinson began to Americanise PWCUS when he identified internal friction caused when JCC partner and contract staff positions were filled by British rather than American accountants (Allen and McDermott, 1993: 34). His objective was economic and political as he believed self-starting Americans familiar with US business were, despite their lack of professional qualifications, economically more beneficial to PWCUS than inexperienced albeit well-qualified British immigrants.

However, the continuing shortage of competent American accountants forced Dickinson to employ British immigrants and, less frequently, Canadian immigrants. The first American staff member in JCC was Robert Oscar Berger in Chicago in 1896. Berger joined as a messenger boy with no previous accountancy experience but was a partner by 1911. The first Canadian staff member was Donald Mackenzie McClelland in 1902. McClelland had been employed by a firm of Canadian chartered accountants since 1898 and became a PWCUS partner in 1914. Dickinson personally committed to Americanisation by obtaining American citizenship in 1906, becoming active in the AAPA, and obtaining certification as a public accountant in several states. The first American partner in JCC was Joseph Edmund Sterrett who joined in 1907 when his Philadelphia practice was purchased by JCC. Sterrett was a leader of the AAPA and involved in the organisation and certification of Pennsylvanian accountants (Ancone Associates, 1996: 9).

As a result of the above partnership changes, the firm’s title changed from PWC and JCC to PWC and Jones, Caesar, Dickinson and Wilmot (JCDW) in 1906 and PWC and Dickinson, Wilmot and Sterrett (DWS) in 1911. When Dickinson returned to PWC in London in 1911, he was replaced by English chartered accountant George Oliver May, a JCC contract staff member since 1897. As with Dickinson, May was active in the AAPA and became a certified public accountant in several states. The firm gradually set aside its formal title of PWC and DWS and became PWCUS by 1914.

Between 1890 and 1914, PWCUS grew as a result of American corporate clients attracted to British-style audits and the reputation of British auditors (Reckitt, 1953: 32). In other words, despite nativism, the British identity of the firm became a major asset. The number of partners and contract staff expanded year by year, as did temporary staff and the office network across the US. The rate of expansion forced Dickinson and then May to recruit British accountants either from within the US or directly from parts of the UK where there was an over-supply of qualified accountants (Lee, 2009: 255). Thus, a major issue for the firm was the continuing shortage of competent American accountants (Miranti, 1990: 29–68). With other British public accountancy firms such as MMC and AYC recruiting in the US (Burton, 1948; Wise, 1982), and American firms such as Haskin and Sells expanding, competent American accountants were in great demand and remunerated at higher levels of salary than those of PWCUS (Allen and McDermott, 1993: 34–35). For example, by 1914, a large majority of MMC staff positions were held by Americans at what Marwick believed were the highest salaries in American accountancy (Wise, 1982: 10).

Recruitment at PWCUS

Although histories such as DeMond (1951) and Allen and McDermott (1993) comment on personnel recruitment, they do not provide an overview such as Table 1. This is based on geographic origin and focuses on the recruiting of immigrant and native-born accountants.

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Table 1.

Recruitment at PWCUS 1890–1914.

Geographical origins	Partners	Contract staff	Temporary staff	Total personnel
Scotland	8	16	20	44
England and Wales	6	45	36	87
Britain	14	61	56	131
Canada and Europe	1	10		11
Total immigrants	15	71	56	142
America	4	44	4	52
Total personnel	19	115	60	194

Sources: As per “Archival sources” section above.

This study identifies 194 accountants employed by PWCUS between 1890 and 1914 – that is, 19 partners, 115 contract staff and 60 temporary staff. ¹⁰ The total comprises 131 (67.5%) British immigrants, 11 (5.7%) other immigrants (that is, eight Canadians, two Dutch, and one South African) and 52 (26.8%) Americans (28 or 53.8% with British or German immigrant parents and 24 or 46.2% with American-born parents). Of the permanent personnel, 14 (73.7%) of 19 partners and 61 (53.1%) of 115 contract staff were British immigrants. Eight (57.1%) of 14 British partners were Scottish chartered accountants despite the English origins of PWCUS. ¹¹

Table 2 details PWCUS personnel and other data for selected years between 1890 and 1914 – that is, 1890 (the first year of the PWC agency), 1895 (the first year of JCC), 1901 (the first year of Dickinson as senior partner), 1911 (the last year of Dickinson’s tenure) and 1914 (the final year of this study). In addition to permanent personnel, Table 2 reports totals for temporary staff, clients and profits as reported in DeMond (1951: 13–130), Allen and McDermott (1993: 13–51), and Jones (1995: 71–78, 90–99). By combining these data, estimates are made for total personnel in 1895, 1901 and 1911, clients in 1890, 1895, 1901 and 1906, and profits in 1890, 1895, 1901, 1906, 1911 and 1914.

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Table 2.

PWCUS in selected years 1890–1914.

Date	Partners	Contract staff	Temporary staff	Office staff	Total personnel	Offices	Clients	Profits $
1890	0	1				1	6	0
1895	3	1	12	5	21	2	50	600
1901	3	13	17	11	44	3	100	60,000
1906	6	53				5	400	102,000
1911	9	90	55	45	199	12		250,000
1914	14	101				12		288,000

Sources: As per “Archival sources” section above.

PWCUS started in 1890 as an agency managed by a British contract staff member in New York, assisted by an unknown number of visiting staff from London, and with six London-referred clients, yielding no profits. By 1895, there were three British partners, one British contract staff member, 12 temporary staff, five office staff, offices in New York and Chicago, 50 clients and profits of $600. By 1901, three British partners managed 13 contract staff (including six Americans), 17 temporary staff and 11 other staff in three offices, with 100 clients generating profits of $60,000. ¹² In 1911, there were nine partners (including two Americans), 90 contract staff (including eight Canadians and 34 Americans), 55 temporary staff and 45 office staff, giving a total of 199 personnel located in 12 offices contributing profits of $250,000. Corresponding data for 1914 are 14 partners (including a Canadian and four Americans) and 101 contract staff (including eight Canadians, two other non-Americans, and 40 Americans).

The data in Tables 1 and 2 suggest PWCUS grew substantially between 1890 and 1914, with partner and contract staff positions held by a majority of immigrants and a minority of Americans. Growth in offices, clients and profits correspond to expansion in personnel. Using data for 1895, 1901 and 1911, it is clear that the personnel structure of PWCUS changed significantly in the period of study. As percentages of total personnel of 21, 44 and 199, respectively, the proportion of partners fell from 14.3 per cent to 6.8 per cent to 4.5 per cent; contract staff rose from 4.8 per cent to 29.5 per cent to 45.2 per cent; and temporary staff fell from 57.1 per cent to 38.6 per cent to 27.6 per cent. Only office staff remained relatively constant at 23.8 per cent, 25 per cent and 22.6 per cent. Thus, as the firm grew, its operations were conducted proportionally less by partners and temporary staff and proportionally more by contract staff.

With respect to assimilation and Americanisation, data for 1901 and 1911 demonstrate PWCUS assimilating numerous British and other immigrants and partially Americanising by recruiting American personnel. In 1901, 16 partner and contract staff positions were filled by 10 (62.5%) British and six (37.5%) American accountants. The corresponding data in 1911 for 99 partner and contract staff positions were 55 (55.6%) British, eight (8.1%) Canadian and 36 (36.3%) American. These figures evidence how Dickinson managed a relatively stable situation in which British accountants held the majority of permanent positions, with Americans occupying approximately one in every three. The situation by 1914 under May was little different, with Americans holding 45 (39.1%) of 115 partner and contract staff positions.

Assimilation at PWCUS

Between 1890 and 1914, the large majority of PWCUS personnel were immigrants. This raises the issue of assimilating these foreign accountants into an American-based firm and, more generally, the American public accountancy profession. To consider the issue in detail, the following analyses examine characteristics of immigrant personnel in PWCUS associable with assimilation. The main focus is on 134 permanent personnel but, where relevant, 56 temporary staff are included. ¹³ The characteristics are: (a) prior professional qualifications and experience of immigrants that could be put to immediate use by PWCUS in its provision of client services; (b) social class origins of immigrants that were of potential benefit to the firm and profession as they signalled prior education and training and possible social and business connections leading to future client engagements; and (c) tenure and work locations that explicitly indicated commitment to the firm and therefore signalled assimilation.

Social class

The PWCUS recruiting of British immigrants between 1890 and 1914 resulted in a majority of partners and contract staff with social class origins different from those of an American minority born and raised in a country uncomfortable with class distinctions (Steinbach, 2012: 113–118). In late nineteenth- and early twentieth-century British society, class represented a generally accepted way of placing individuals hierarchically in social and economic terms. It is therefore reasonable to argue that social class origin is a personal characteristic and potential benefit that requires consideration in relation to assimilation at PWCUS. By 1929, for example, the social class origins of prospective members of the American Institute of Accountants (AIA) formed an institutional strategy to ensure candidates “had a broad cultural grounding and could easily interact with Wall Street’s sophisticated bankers and lawyers” (Miranti, 1990: 125). As Miranti (1990: 75–76) argues, Dickinson and other chartered accountants of his generation were insecure as members of a “new professional class in an old ascriptive society”, particularly with respect to the “active support of the more established élites” such as “lawyers, bankers, landed aristocrats, and the industrial magnates.”

Social class is defined as the hierarchy of categories used to differentiate the relative status of specific groups in a community – i.e. upper, middle, and working class (Steinbach, 2012: 116). The variable typically used by researchers to measure social class origins of the nineteenth century is paternal occupation because of its propensity to capture variables such as education, training, qualification, income and influence (Goldthorpe et al., 1974: 134–136). In the context of assimilation at PWCUS, paternal occupation is used to measure the backgrounds of partners and contract staff that could be assimilated into the firm and profession. Of particular interest are social class origins of immigrant personnel likely to assist PWCUS in its client relationships.

This section uses Steinbach’s (2012: 116) argument that, in Victorian Britain, “classes were simultaneously economic, cultural, and discursive” and “an important way in which Victorians attempted to understand themselves and their society”. Steinbach (2012: 114) further argues that “class was important in Victorian Britain to a degree that is difficult for people living in the twenty-first century to comprehend” and “Victorian Britain was a deeply classed society; everyone was aware of class, admitted that it was a meaningful social reality, and identified themselves as a member of a class”. Because 131 (67.5%) of 194 PWCUS personnel in this study were British immigrants and therefore citizens of Victorian Britain prior to immigration, it is reasonable to argue that paternal occupation is relevant to assess social class as a potential resource or benefit for assimilation into the firm and profession. ¹⁵

The following classification of paternal occupation uses Checkland’s (1964: 215–322) study of late nineteenth-century British classes. His categories are “landed élite” or upper class (for example, nobility and landowners); “middle ground” or middle class, comprising an upper-middle class of traditional professionals (for example, doctors and lawyers) and large business owners, financiers and senior business managers, and a lower-middle class of service professionals (for example, accountants and architects) and small business owners, shopkeepers and tenant farmers; and “lower orders” or working class (including small business managers, large business foremen, commercial clerks, craftsmen and artisans, and semi-skilled and unskilled workers). These categories are applied to 194 accountants in Table 1 and summarised in Table 3. ¹⁶

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Table 3.

Social class of PWCUS personnel 1890–1914.

Paternal occupations	British	Other non-Americans	Americans	Total
Partners
Upper-middle class	7			7
Lower-middle class	4	1	1	6
Working class	3		3	6
	14	1	4	19
Contract staff
Upper-middle class	10		3	13
Lower-middle class	14	2	14	30
Working class	37	8	27	72
	61	10	44	115
Temporary staff
Upper-middle class	12		1	13
Lower-middle class	20		3	23
Working class	24			24
	56		4	60

Sources: As per “Archival sources” section above.

British partners typically had middle-class origins – that is, 11 (78.6%) of 14, with seven (50%) being upper-middle class. This contrasts with three (75%) of four American partners with working-class origins. There is greater consistency across categories for contract staff – that is, 37 (60.7%) of 61 British accountants had working-class roots, as did eight (80%) of 10 other immigrants and 27 (61.4%) of 44 Americans. Overall, of 115 contract staff, 102 (88.7%) had either lower-middle or working-class origins. Only British data are available for a meaningful analysis of temporary staff. Of 56 British accountants, 32 (57.1%) were middle class, with 12 (21.4%) being upper-middle class – suggesting the class origins of temporary staff were more compatible with PWCUS partners than contract staff.

The principle features of Table 3 are biases to the middle class for British partners and working class for all contract staff irrespective of whether they were immigrants or natives. The partner data are consistent with the social class origins of PWC partners in London (Jones, 1995: 63–68) and the founding partners of British-owned competitor firms in the US such as MMC (Wise, 1982: 4–7), AYC (Burton, 1948: 3–13) and TNC (Lee, 2002b: 85–86). This suggests that firms such as PWCUS at partner level preferred accountants with social backgrounds compatible with those of their clients and other professionals with which they had business relations (for example, lawyers and bankers). Contract staff data, on the other hand, are consistent with data of the same period for Scottish chartered accountants (Lee, 2004: 47) and ICAEW founders (Anderson and Walker, 2009: 38–39). ¹⁷ PWCUS thus typically assimilated British middle-class partners and lower-middle and working-class British, other immigrant and American contract staff (Allen and McDermott, 1993: 34).

A further comment about these differences relates to the 14 British partners and 52 (85.2%) of 61 British contract staff who had paternal origins specifically associated with professions and business ownership or management. In other words, most British immigrants were raised in a professional or business environment that may well have included links of potential long-term benefit to PWCUS – particularly as the firm developed in an American economy that, during the period of study, was beginning to expand globally into foreign markets such as in the UK (Miranti, 1990: 34).

Americanisation at PWCUS

In addition to recruiting American accountants, Americanisation at PWCUS took the form of recommendations by Arthur Lowes Dickinson (DeMond, 1951: 97, 112). These were that partners particularly should obtain American public accountancy qualifications and citizenship and participate in American professional associations. These characteristics go beyond the assimilation of immigrant personnel into the firm and wider profession and, instead, provide explicit evidence of attempts to appear similar to American accountants – that is, not only to assimilate but also be seen to assimilate.

The first analysis shows the extent to which British and other immigrant personnel committed to the firm and profession by membership of the AAPA (then the National Association of Public Accountants) and/or state certification as public accountants. By the end of 1914, 12 (85.7%) of 14 British partners and the Canadian partner were AAPA members and/or certified public accountants. This compares to three (75.0%) of the four American partners and reveals the importance of demonstrating Americanisation among immigrant partners. Equivalent data for contract staff are 29 (47.5%) of 61 British, two (20%) of 10 other immigrant and 15 (34.1%) of 44 American. In other words, this form of Americanisation was recognised by almost one-half of British contract staff (many of whom were qualified as professional accountants pre-immigration) and about one-third of Americans. Perhaps less surprisingly, eight (14.3%) of 56 British temporary staff had qualified as American public accountants by 1914.

Senior immigrant personnel of PWCUS were also active in the institutional side of the American public accountancy profession. Lewis Davies Jones, for example, became a charter member and first president of the Illinois Association of Public Accountants (later Illinois Society of Certified Public Accountants) (ISCPA) in 1897 (Reckitt, 1953: 55). Having rejected the requirement to pass an examination to become a certified public accountant in New York, Dickinson became involved in the ISCPA and, by 1903, one-third of its members were PWCUS personnel (Miranti, 1990: 61). Dickinson also became first president of the Federation of Societies of Public Accountants in the United States (FSPAUS) in 1904 (Allen and McDermott, 1993: 37– 38). When FSPAUS was absorbed by the AAPA in 1905, Dickinson served on several AAPA committees before his return to London. Miranti (1990: 73–75) identifies Dickinson and his American partner Sterrett as the principal leaders of the AAPA from 1906 during a period in which that body transformed its earlier “vague commitment to the ideals of chartered accountancy into a comprehensive and dynamic program of professionalism”. As an American, Sterrett was particularly effective in arguing that British ethical standards were relevant to the American profession (Previts and Merino, 1998: 203).

A further analysis of Americanisation relates to the number of British PWCUS personnel who became American citizens by the end of 1914. On arrival in the US, Dickinson and his partner Wilmot were refused state certification as public accountants in New York on the grounds they were not American citizens (Miranti, 1990: 57). According to available sources, British immigrants with American citizenship by 1914 included eight (57.1%) of 14 partners, 17 (27.9%) of 61 contract staff and 13 (23.2%) of 56 temporary staff, giving a total of 38 (29%) of 131 British personnel between 1890 and 1914. On the basis of this evidence to 1914, it appears that British partners were more likely to become citizens than either British contract or temporary staff. This was particularly true for the period from 1901. Whereas partners such as Jones and Caesar never became American citizens, their successors, Dickinson and May, achieved this status in 1906 and 1909 respectively. ²⁰

PWCUS and British standards

The previous sections evidence PWCUS transforming from a British agency in 1890 to a national firm by 1914. In this year, 70 (60.9%) of 115 permanent personnel were British. The firm’s attempts to Americanise by recruiting Americans in a period of nativism had, by 1914, therefore resulted in no more than four out of ten permanent personnel being American. In addition, given continuous British control of the firm throughout the period, the professional training and experience of most British personnel, coupled with the British influence on Canadian accountancy (Richardson, 1989; see also Edwards and Walker, 2008), it is unsurprising that, instead of attempting to further Americanise with American standards, PWCUS applied British standards in all American engagements at all times.

Jones and Caesar initially managed PWCUS and had differing attitudes to this role. Jones favoured staff adapting to American conditions and becoming involved in local accountancy associations. Caesar saw PWCUS as a London firm practising in the US (Allen and McDermott, 1993: 21) and regarded his connection to the American business community and profession as temporary (DeMond, 1951: 15). This situation was complicated by the PWC partners in London insisting that Jones and Caesar apply British accountancy standards at all times. Caesar was committed to this approach and tensions between himself and brewery clients in Chicago led to their request for his removal from engagements in 1893 (DeMond, 1951: 21; Allen and McDermott, 1993: 16). The matter was resolved in 1894 when Caesar swapped offices with Jones and moved to New York. However, the confusing identity of PWCUS as a British-owned practice located in the US persisted. For example, the PWC agency was described on letterheads as a British chartered accountancy practice while JCC was labelled an American firm of certified public accountants (Allen and McDermott, 1993: 102).

A contributing factor in this situation was the fact that British accounting and auditing standards were considerably higher than those of American accountants (Editorial, 1906; Previts and Merino, 1998: 187; see also May, 1915a; Montgomery, 1939: 462–466; Carey, 1969: 23–35; Brief, 1987). This was undoubtedly a problem for PWCUS, and the London-dictated policy of using British standards at all times led initially to a decline in American-based clients, particularly when the firm issued a qualified or no-opinion report because a client insisted on using American standards (DeMond, 1951: 36). In this respect, American business managers frequently expected contingency fee arrangements in which they paid fees only for favourable opinions (DeMond, 1951: 24–25; Allen and McDermott, 1993: 31; see also May, 1915b: 248; Anyon, 1925: 44). PWCUS also found its services were occasionally not renewed even when the client was satisfied with the quality of service (Allen and McDermott, 1993: 50). Clients also from time to time obstructed or resisted accounting changes proposed by PWCUS or attempted to pressure the firm into reducing its fees (DeMond, 1951: 56–57, 79–80). Unsurprisingly in these circumstances, May (1915b: 251) recognised the danger of being too rigid in an accounting dispute with a corporate client because this could result in the publication of financial statements without amendment or the appointment of another auditor. On occasion, PWCUS declined an engagement when the proposed fee meant the service could not be provided according to British standards (DeMond, 1951: 79).

PWCUS partners also found American business managers and public accountants routinely behaving contrary to ethical standards prevalent in the British profession. For example, Jones and Caesar, and later Dickinson, competed against American public accountants who were accustomed to directly advertising and marketing their services in a competitive bidding environment (Allen and McDermott, 1993: 15 and 31). Dickinson initially adopted the policy imposed by PWC partners in London of not soliciting for clients or making competitive bids (DeMond, 1951: 112). However, in 1907 and 1908, with experience of American business conditions, he notified PWC in London that he was about to advertise PWCUS services and bid competitively for contracts (Allen and McDermott, 1993: 31, 33, 36–37). This outcome is consistent with the experience of MMC at the same time (Wise, 1982: 11).

As mentioned previously, the quality of American accounting practices lagged behind those of British accountants during the period of study. For example, depreciation was not a practice routinely used by American companies (DeMond, 1951: 22–23; Previts and Merino, 1998: 218–219) and capital expenses were often categorised as revenue expenditure (DeMond, 1951: 33; Brief, 1987: 150). May (1915a) is publicly recorded as regarding depreciation as a complex accounting problem involving asset valuation and usage. For American groups of companies, only holding company balance sheets were typically reported, whereas Dickinson (1906) advocated disclosure of consolidated financial statements (DeMond, 1951: 60, 63; see also Zeff, 1996: xxv–xxvi). Contrary to American accountants, Dickinson also argued against the prescription of accounting rules and for the use of replacement cost depreciation (Previts and Merino, 1998: 207, 217, 219). Differences such as these led American business managers and accountants to claim initially that British accounting standards were not applicable to American companies (DeMond, 1951: 36–38). In his history of early American public accountancy, Miranti (1990: 34–35) argues that this created tensions and professional disputes during periods of crisis (for example, in the early 1900s between the AAPA and the New York State Society of Certified Public Accountants) (see also Wise, 1982: 8–12; Previts and Merino, 1998: 192–193). Eventually, however, the efforts of Dickinson and May led to improved American accounting and auditing standards based on British practices (DeMond, 1951: 113; Carey, 1969: 34; Miranti, 1990: 179–180; see also Previts and Merino, 1998: 175–234). ²¹

The early British influence on American standards was assisted by PWCUS partners and contract staff writing journal articles in which British standards were advocated, and presenting on these matters at accounting and business conferences (Allen and McDermott, 1993: 37). Dickinson in particular led the way with publications on accounting principles and practices (DeMond, 1951: 113; see also Zeff, 1996: xxv–xxviii; Previts and Merino, 1998: 207, 217, 219). He founded the Auditor as the journal of the ISCPA in 1904 and transferred it as the renamed Journal of Accountancy to the AAPA in 1905 (Miranti, 1990: 75–79; see also Previts and Merino, 1998: 191). Dickinson, and later May, used the Journal to focus on major accounting and auditing issues, advocate specific standards and improve practitioner relations. Although Dickinson’s Journal efforts to improve professional standards met with considerable opposition from American practitioners (Miranti, 1990: 79), their reputational effect eventually resulted in client opportunities for PWCUS involving new accounting systems and emerging industries (Allen and McDermott, 1993: 39–40), and for American managers and investors to demand more of their public accountants (Allen and McDermott, 1993: 45). A specific case of the influence of British standards used by PWCUS are the accounting improvements and innovations made by its client the United States Steel Corporation (DeMond, 1951: 61; see also Vangermeersch, 1971–72: 57; Miranti, 1990: 74; Zeff, 1996: xxv–xxvi).

Summary and conclusions

This history of PWCUS starts in 1890 with a New York agency servicing London referrals of American engagements on behalf of British investors. It ends in 1914 with PWCUS as a leading national firm. Most of the intervening period coincided with the Progressive Era of American history and PWCUS services were provided predominantly by British immigrants because of a shortage of competent American accountants. At no time between 1890 and 1914 did Americans control PWCUS, and the firm used British standards continuously in business engagements, with the single exception of advertising and marketing client services. In the short term, this British focus resulted in a loss of clients but, longer term, American managers and investors were attracted to the quality of British standards, and this provided a foundation for what later became known as generally accepted accounting principles in the US.

The assimilation of British immigrants brought needed skills and experience to PWCUS and the American profession at a time when there was a shortage of such qualities among Americans. Particularly for British immigrants, prior professional qualifications and work experience compensated for any lack of familiarity with American business. In contrast, other immigrant and American accountants in PWCUS brought significant prior work experience to compensate for lack of prior qualifications.

The predominance of British immigrants in PWCUS meant most partners and a large minority of contract staff had middle-class origins closely associated with professions and business. In contrast, other immigrant and American personnel were typically from lower-middle and working-class families. The successful assimilation of middle-class British accountants, particularly as partners, into the firm and wider profession is consistent with Miranti’s (1990: 179–180) observation that leaders of the American profession at the time were attracted to British traditions of superiority and elitism, thus keeping “the ‘good people’ in control and traditional values intact in America”. In other words, a large British middle-class presence in PWCUS coincided with the Progressive Era in which, according to Higham (1981: 21), WASPs attempted to avoid what they perceived as the “pollution” of American ideals by immigrants. It also coincided with what Brogan (1985: 459–460) describes as a “new middle class” in the US with a “rapidly developing need for professional services” that, in turn, resulted in a “mushroom growth in professions”.

The successful assimilation of British immigrants into PWCUS is evidenced by the fact that most of these accountants remained with the firm throughout their careers, while, with few exceptions, the remainder left to work elsewhere in American accountancy. In addition, of the British personnel who remained with PWCUS, many were employed in multiple offices, thus enabling their skills and experience to influence wider American professional and business communities. To reinforce their assimilation, many British immigrants in PWCUS Americanised with professional qualifications, citizenship and involvement in American professional associations. Indeed, with respect to American qualifications, British partners and contract staff were more likely than their American colleagues to acquire them.

A major conclusion about this early history of PWCUS in relation to assimilation and Americanisation is that these social processes assisted the firm as an important change agent in the more general history of the American public accountancy profession during a turbulent period in American history. The inability of the American profession to generate sufficient competent accountants to satisfy the demand for personnel by American-based firms was at least partially balanced by PWCUS’s assimilation and Americanisation of qualified British accountants. Professional services provided by the firm during its first quarter-century were also managed with some adaptation to American business conditions but no loss of commitment to British standards. The influence of British accountants in this respect was largely achieved by partners and contract staff with long-term careers at PWCUS. However, it is also attributable to former PWCUS personnel remaining in the US and completing their careers elsewhere in the American profession, as well as by American partners and staff practising British standards. This early history of PWCUS therefore reveals how a British public accountancy firm created an American identity without losing its British character. It assimilated and Americanised immigrant accountants as the American profession and business became used to standards imported from the British profession. In this way, PWCUS coped with and survived the social turmoil of the Progressive Era without compromising on accountancy standards and without threatening the aspirations of the Progressives.