1990 MANUSCRIPT AWARD
Moyra J. M. Kedslie UNIVERSITY OF HULL

MUTUAL SELF INTEREST — A UNIFYING FORCE; THE DOMINANCE OF SOCIETAL CLOSURE OVER SOCIAL BACKGROUND IN THE EARLY PROFESSIONAL ACCOUNTING BODIES

Abstract: This paper examines the range of activities undertaken in the mid-1850s by the men who formed the early professional accounting bodies. It also highlights the social differences that existed between the founding members of the Edinburgh and Glasgow chartered accountants’ societies. In spite of the differences that existed both in the work undertaken by and the social differences between the two groups, they responded jointly to any outside threat to their professional body.

INTRODUCTION

By the mid-1850s, Post Office Directories show that Scotland had at least four hundred men calling themselves accountants. The initial membership of the professional accounting bodies in Edinburgh and Glasgow at that time, however, was just one-third of that number. Indeed, it was not until the 1880s that their joint membership reached four hundred. Only a small part of the discrepancy can be explained by the geographical location of these accountants, for Glasgow and Edinburgh were by far the most dominant commercial centers in Scotland. The main explanatory factor was the exclusivity adopted by the new bodies immediately upon formation and maintained for at least a century thereafter.

The purpose of this paper is to examine the range of activities which were regarded as accounting in the mid-1850s and to explain the factors which brought about the narrowing of that definition in respect of the new professional bodies. These factors were largely social, yet, given that the Edinburgh and Glasgow societies were the forerunners of similar societies in England and Wales and in many countries around the world which were subject, either directly or indirectly, to British influence, they have assumed an importance which far transcends their initial Scottish confines.

Finally, the paper highlights the continuing concern of the two bodies with professional closure, a further preoccupation which has characterized the activities of the numerous accounting bodies which can trace their existence back to the Scottish societal formation of the 1850s.

EARLY NINETEENTH CENTURY ECONOMIC DEVELOPMENTS

Several industries played a role in the development of accountants in early Scotland. The most prominent are listed below:

Canals and Railways

The development and construction of canals provided a great deal of work for men called accountants who might have been more appropriately called cashiers or book-keepers [Hadfield, 1971]. Apart from bringing together enormous volumes of employees and capital, canal companies also had large numbers of shareholders from diverse backgrounds. This necessitated the monitoring of construction costs often using elaborate systems [Gibb, 1935, pp. 186-7] and the preparation of either printed annual reports or more basic reports to be read to shareholders of smaller companies [Hadfield, 1955, p. 84]. While the role of the bookkeeper/cashier/accountant was important to the company, neither as a group nor individually do they appear to have had any impact on the Professionalization of accountancy. Only sixteen canals were completed in Scotland and only eight were still operating when the first accounting society was formed [Lindsay, 1968, pp. 210-13]. In addition, no canal accountants appear to have been of sufficient status to be listed in any of the professional or trade directories of that period.

From the 1840s onwards, the essential role of canals as a means of more efficient transportation of goods and passengers was rapidly overtaken by railway companies. Again, the complexities of work, capital and shareholders necessitated the employment of cashiers and accountants during the construction phase as well as the efficient running of railway companies, and parliamentary records show that there was steady employment of approximately thirty cashiers/accountants on Scottish railway lines opened and under construction [BPP 1847-55]. Their employment

had undoubtedly been encouraged by the Railway Clauses Consolidation Act of 1845 which required the preparation of annual accounts of receipts and expenditures and a statement of the balance of the account. The Act also produced another area of work for accountants in that it required these accounts to be audited. All of the Scottish railway lines which listed auditors consistently appointed at least one described as an accountant [Bradshaw’s 1848 etc.].

Before 1854, the employment opportunities open to accountants in railway concerns were limited because of the small number of companies. One interesting difference, however, can be observed in those employed as accountants. None of the men who was employed in the internal management accounting of the companies were considered to be of sufficient importance to be listed in any of the city directories — an indication of their relatively low status. On the other hand, many of the accountant-auditors became founder members of the Scottish professional societies — an indication of their higher social status. Perhaps this difference arose from several factors. It was generally the case that auditors were required to hold shares in the company they were auditing. The availability of capital, therefore, was an essential prerequisite for the position. Second, the majority of the shares in such companies were often held by the directors, who would automatically appoint an auditor from their own class.

Banking, Stockbroking and Insurance

From the time of their foundation, all Scottish banks em-ployed people designated as accountants, although it is difficult to establish exactly what was meant by the term. The lack of reference to them in directories of the day and in the first history of Scottish accounting [Brown, 1905] suggests that, although this specialist group was probably quite important in its own area, it was considered insignificant in the development of the accounting profession in Scotland. Banks differed from railways in their attitude toward auditing and generally did not have a system of independent audit since there was a strongly held view that this would interfere with the privacy demanded by the bank’s customers [Tyson, 1974, p. 126].

Stock exchanges did not appear in Scotland until the 1840s, although the first recognized stockbrokers began trading in the mid-1820s. The attitude of early accountants toward this work was divided geographically. In Edinburgh, few accountants became involved in this work, which was viewed as being high risk and of low status [Michie, 1981, p. 17]. In Glasgow, which had a mercantile character and consequently closer links between accountants and industry, almost forty percent of the original members of the Glasgow stock exchange became professional accountants [Records of Glasgow Stock Exchange, 1927].

In the middle of the nineteenth century, much of the great expansion in Scotland in various kinds of insurance business was attributed to accountants [Brown, 1905, p. 195; Stewart, 1977, p. 18]. By 1854, eighty-one insurance companies were listed in Edinburgh and one hundred and fourteen in Glasgow. The involvement of chartered accountants was much stronger in Glasgow, where at least fifty-two percent of those involved in insurance work became chartered accountants. Even more significant is the fact that sixty-seven percent of the signatories of the application for the Royal Charter for the Glasgow Institute were involved in this type of work. Such employment, however, generally formed only a small part of the work load for any professional accountant of that period. He was more likely to be involved in the audit of insurance companies, which were quicker than banking companies to realize the importance of audit by professional accountants.

Bankruptcy

Men styling themselves as “accountants” had been involved in the settlement of bankrupt estates in Scotland from the latter part of the eighteenth century1 and by the mid-nineteenth century had grown to be the most important occupational group so involved, being appointed trustees in 55 percent of the total number of cases and earning 78 percent of the total fee income. Sixty-nine percent of the cases dealt with by accountants were undertaken by men who later became members of one of the bodies of Scottish chartered accountants, and it is of note that they administered the most remunerative estates, taking 81 percent of the fees earned by accountants (Table 1).

1A History of the Chartered Accountants of Scotland, Edinburgh (1954) p. 11. Advertisement dated 1778 for John Gibson of Glasgow offering to act as accountant on
“Settling of Copartnery or Other Disputes, Making Out Accounts of the Rankings of Creditors, and the Division of Subjects.”

Kedslie: Mutual Self Interest — A Unifying Force
Table 1
Analysis of Cases Awarded and Fee Income Earned on Pre-1851 Sequestrated Estates per Occupational Group

Occupational Group
Accountants — later chartered Other Accountants % Total Cases
38 17 % Fee Income
63 15
Total Accountants 55 78
Legal Profession Banking Miscellaneous (non-professional) 13
5
27
100 8 3 11
100
Total Cases = 1,155 Total Fee Income £89,000
Source:

Not only were there differences between the number of trusteeships awarded to the two different groups of accountants, there were also significant differences between the awards in Edinburgh and Glasgow accountants. Although there was no significant difference between the numbers of the two groups of accountants who were involved in such work in the two cities, it is immediately apparent that Glasgow accountants, in both groups, dealt with a much larger proportion of cases than did their counterparts in Edinburgh (Table 2). This fact is not really surprising since the Bankruptcy (Scotland) Act of 1839 gave extensive bankruptcy jurisdiction to the Sheriff Courts which resulted, in most cases, in the trusteeship being awarded in the county where the bankrupt traded. Glasgow was considerably larger as a center of population and trade and therefore gave rise to more bankruptcies.

A comparison of the cases dealt with by the group who later became CAs shows quite clearly that the more lucrative cases were dealt with by the Edinburgh CAs. This might be explained by the fact that complicated cases were often referred to the Court of Session in Edinburgh and such cases were almost always awarded to Edinburgh accountants. There can, however, be no doubt as to the importance of bankruptcy work to the first chartered accountants with 70 and 83 percent of founder members in Edinburgh and Glasgow being so involved.

This analysis of the areas of work undertaken by accountants in the mid-1850s suggests that, with the exception of the bank-

6
6
The Accounting Historians Journal, December 1990
Table 2
Comparison of Pre-1851 Sequestration Work Undertaken by Two Groups of Accountants per Location

Later CAs Non CAs
Location No. of % Accountants Cases % Fees No. of Accountants % Cases % Fees
Edinburgh Glasgow Aberdeen Dundee
Others 32 36 1 3
0 27 70 <1 3 0 59 39 2 not disclosed 0 21 25 0 4 16 16 63 0 8 13 7 75 0 7 11 100% 100% 100% 100% Total 72 448 £56,811 66 196 £13,070 cases cases Source: ruptcy work in both cities and insurance and stockbroking in Glasgow, there was a clear distinction between the work under-taken by accountants who became members of the chartered societies and those who were excluded, perhaps reflecting the mid-Victorian view expressed by Trollope's Mrs. Marrable "... that when a man touched trade or commerce in any way he was doing that which was not the work of a gentleman" [Lewis & Maude, 1952, p. 48] and the chartered societies certainly saw themselves as being open only to gentlemen. FACTORS SIGNIFICANT IN SOCIETAL FORMATION Edinburgh Societal formation began successfully in Edinburgh on January 17, 1853 when A. W. Robertson sent a letter to fourteen accountants in practice in the city inviting them to a meeting in his office. The wording of his letter suggests that he was acting as spokesman for a few accountants who had been discussing the possibility of a society for some time. Those approached had an average age of forty-four, but only three of them were over the age of fifty. They had two common areas of professional interest, in that 67 percent were actively involved in insurance work of some description and 87 percent had an involvement in bankruptcy Table 3 Analysis of Professional Interests of Early Edinburgh Chartered Accountants Significant Events No. Bankruptcy Insurance Stock Exchange January 17, 1853 Recipients of letter and sender 15 87 67 0 January 20, 1853 First meeting 8 88 63 0 January 22, 1853 Discussion of rules and regulations 12 92 58 0 February 4, 1853 Council and office bearers 11 64 82 0 October 23, 1854 Charter Signatories 61 62 66 0 Source: The Alphabetical Compendium of Scotch Mercantile Sequestrations, 1851; Edinburgh and Leith Post Office Directory, 1853-54, pp. i-xlii. work [Edinburgh and Leith Post Office Directory 1853-54, pp. i-xlii]. Six of the men approached, plus one who was presumably approached verbally, attended the meeting in Robertson's office on January 20, 1853 and determined that, although previous at-tempts to form a society had failed, the time was now ripe for incorporation. Robertson and his unknown group had prepared well since they produced a draft constitution and rules and regulations at this meeting and arranged to discuss these at a further meeting two days later. The meeting on January 22 was attended by eight recipients of the original invitation along with Robertson and three others who had been approached personally. Again the group had a strong interest in insurance, in which 58 percent were involved but, more significantly, 92 percent were active in bankruptcy work [Edinburgh and Leith Post Office Directory, 1853-54, pp. i-xlii]. This small group was charged with the task of targeting practicing accountants considered suitable for membership of what was envisaged as a prestigious new society. They were apparently successful in this since 47 men attended the next meeting on January 31. However, since the Edinburgh and Leith Directory for 1853-54 listed 132 accountants, the nucleus formed by Robertson was very selective in extending its invitations. This larger group was unanimous in appointing James Brown to the chair, although he had not previously been involved in the formation activities, and agreed that the society be called the Institute of Accountants in Edinburgh [Institute of Accountants, Sederunt Book, Council Minutes, No. 1, p. 5]. At the next meeting on February 4, office bearers and members of Council were appointed. This group of eleven accountants differed from the previous groups in several ways. First, five of them had not been on the list of those originally approached by Robertson and six of them had attended neither of the two formation meetings. In addition, the group's 82 percent involvement in insurance was stronger than any previous group while its involvement in bankruptcy was, at 64 percent, significantly lower. Clearly, the five members of this group who had not been involved in the initial stages of the society had been identified as being important to it. They were, with an average age of 58, a little older than the other founding members, four of them had an involvement in insurance work, but only one had an interest in bankruptcy. It would appear that their selection for office was based on the long experience that they had in accountancy practice in the city. At the date of societal formation, Brown had been in practice for 40 years and appears to have been the doyen of Edinburgh accountants of that period. Three of the others had been in practice for 30 years and the fifth for almost 20. As a group, they brought to the new society long experience and their no doubt well-established respectability in their professional field would reflect on the image of the group they had been invited to join [Brown, 1905, p. 205]. Having settled the most immediate matter of determining entry procedures, qualifications and cost, the Institute of Accountants in Edinburgh moved rapidly, on April 8, 1853, to a discussion on the matter of most concern to them — the proposed changes in bankruptcy law, which would have abolished the office of Interim Factor (which was often undertaken by an accountant) and passed its duties to the Sheriff Clerk, a legal officer. By May 11, a report had been prepared, and the extent of the society's interest evidenced by the claim that five-sixths of all Scottish bankrupt estates were dealt with by accountants — at that time averaging about 250 cases per year. The report was subsequently submitted to the Lord Advocate and clearly had the desired effect, for,when the Bankruptcy (Scotland) Act was passed on August 4, 1853, the offending clause had been removed and the Act did no damage whatsoever to the work previously undertaken by accountants [Scottish Records Office CS 322/1 etc. Annual Report of The Accountant of Bankruptcy in Scotland]. Once the threat of one of their main sources of fee income had been removed, the Council of the Edinburgh Institute met on May 29, 1854, to discuss applying for a Charter. The Charter was dated October 23 and registered December 11, 1854, under the name of the Society of Accountants in Edinburgh. Sixty-one members signed the Charter, 66 percent of whom were involved with insurance work and 62 percent in bankruptcy [Edinburgh and Leith Post Office Directory, 1853-54, pp. i-xlii]. Glasgow The Professionalization of Glasgow accountants began from an initiative in September 1853 by 27 accountants already established in practice in the city contacting a further 14 accountants of similar experience. From this group, a steering committee met and discussed and agreed to the proposal that a society of accountants be formed in Glasgow. A President was appointed and a small committee entitled the "Committee of Elder Members" was formed to ensure the rapid transformation of the idea into actuality. Within six weeks, office bearers had been elected and a Constitution agreed upon, and within two months of its formation the members of the society had appointed a committee to examine the proposed changes in Scottish bankruptcy law [Institute of Accountants in Glasgow, Minute Book, No. 1, p. 14]. No record survives to indicate which one of the 27 accoun-tants who signed the requisition was responsible for bringing the group together, but the members did share several professional areas of interest. Seven of them were members of the Glasgow stock exchange and, presumably, met from time to time at the exchange. Seventeen of them were actively involved in insurance activities within the city, generally as managers and agents. Most significantly, 23 (85 percent) of them were active in bankruptcy work, which they were no doubt anxious to protect for themselves [The Alphabetical Compendium of Scotch Mercantile Sequestrations, 1851]. Although no minutes survive, this group or its representatives must have had at least one meeting to determine a strategy that would result in the successful formation of a society, at which they Table 4 Analysis of Professional Interests of Early Glasgow Chartered Accountants Significant Events No. Bankruptcy Insurance Stock Exchange September 1853 Signatories of invitation 27 85 63 26 Recipients of invitation 14 64 57 64 October 3, 1853 Steering Committee 9 67 44 67 Committee of Elder Members 3 100 33 100 November 9, 1853 Committee and office bearers 9 56 44 67 November 14-18, 1853 Signatories of Constitution 13 69 62 77 May 16, 1855 Charter Signatories 49 71 67 35 Source: The Alphabetical Compendium of Scotch Mercantile Sequestrations, 1851; Glasgow Post Office Directory 1853-54, pp. 557-561; Records of the Glasgow Stock Exchange Association 1844-1926, Appendix I. prepared a list of accountants who would be targeted for support. The average age of the members of the first group was 36, with several being in their late twenties or early thirties. The group approached for support, and presumably considered essential to the success of any accounting society in the city, had an average age of 48. Of the fourteen recipients of the requisition suggesting the formation of a society, nine were members of the stock exchange, eight were involved in insurance and nine were involved in bankruptcy work. As far as social background is concerned, there was little difference between the two groups with, if anything, a slightly stronger commercial background being found amongst the older of the two groups (See Table 6). As a result of the requisition and the response to it, one of the signatories, McClelland, called a meeting on October 3, 1853, which was attended by nine of the fourteen accountants approached, who could be viewed as a steering committee. The strongest link between them was that six had been founding members of the Glasgow stock exchange and could presumably be expected to put this experience to good use in ensuring that efforts to form a society would finally be successful. Since the business center of Glasgow was extremely compact in the 1850s, the nine were probably well known to one another, particularly since four were involved in insurance work and six in bankruptcy. In addition, three of them had trained with McClelland who was also on the committee, who is credited with having been the prime motivator behind the society and who was appointed its first President. The steering committee appointed a small sub-committee of three named the Committee of Elder Members, to progress the detail of the plan. Since the average age of this group was forty, the term "elder" must have referred to experience rather than age. All of them were involved in bankruptcy work, all were founder members of the stock exchange, and two of them had trained with McClelland [Stewart, 1977, pp. 123, 125]. On November 9, 1853, a committee and office bearers were appointed, not one of whom had been a signatory of the original requisition, but all of whom had been recipients. At a general meeting on November 15, 1853, the Constitution was signed by all but one of the 14 accountants approached to form the society. Thus the Glasgow Institute came officially to life, fulfilling the objective of the younger practicing accountants in Glasgow who had recognized that the experience and reputation of the older, established members of the accounting community was essential for the society to achieve its objectives. [Institute of Accountants in Glasgow, Minute Book, No. 1, p. 1]. It was not until July 4, 1854, that the Council of the Glasgow Institute resolved to apply for a Royal Charter. The lapse of time between societal formation and the consideration of a charter can be explained by examining the main issues concerning the society in the interim period. Apart from their initial determination of entry barriers such as work experience, acceptability to founding members and entry fees, the members were concerned with only one matter — the proposed changes in bankruptcy legislation, which they were determined to petition against. The first action taken by them on December 2, 1853, was the formation of a committee to monitor these proposals, to suggest changes, and to cooperate with other interested bodies. This committee was the first example of a joint action between the two original groups involved in the Institute's formation and consisted of four established accountants and five younger members. On March 21, 1854, the committee called a Special General Meeting to discuss the pro-posed changes in the nomination procedure for Interim Factors and the election of trustees on bankrupt estates and determined to discuss a course of action with the Society of Accountants in Edinburgh. This meeting was reported at the reconvened special general meeting on March 29 at which the petition was presented to the members. The argument put forward by the accountants was that it would be "injurious to the interests of the Mercantile Community of Scotland" [Institute of Accountants in Glasgow, Minute Book, No. 1, p. 33] to proceed because there was, at the same time, a Commission of Enquiry investigating the improvement of some areas of Mercantile Law including Bankruptcy Law. The Commission had not yet reported and it was argued that it would be better to deal with the changes as a whole rather than on a piece-meal basis. By April 28, 1854, the two societies of accountants had reached agreement on their tactics and submitted their views to the Lord Advocate. Once this urgent threat had been dealt with, the Institute be-gan to discuss the possibility of applying for a Royal Charter. By July 4, 1854, the membership had increased to almost 50 and the contact that several members had experienced with the Edinburgh accountants perhaps encouraged them to apply for the elevated status assumed to come with a successful charter application. Out of a total population of approximately 150 accountants practicing in Glasgow in 1855, 49 signed the charter application, the first to sign were the recipients of the original requisition proposing the formation of the society. Thirty-five percent of the signatories were also members of the stock exchange but the two strongest common areas of interest were insurance, with 67 percent of membership involvement and bankruptcy, with a 71 percent involvement. Given this last figure, it is little wonder that a charter application was considered of less immediate importance than attempting to prevent financially damaging changes in bankruptcy legislation. The strong involvement with insurance and the undoubted desire to signal to the business community their intention to retain this considerable interest explains the title of the Institute of Accountants and Actuaries in Glasgow. Society Comparison The most obvious difference between the work undertaken by the two groups of accountants is the total absence of stockbroking activities in Edinburgh compared with a significant interest in Glasgow, a reflection of the fact that Glasgow was at the center of a large industrial and commercial area. In addition, the records of the Glasgow society make it clear that it was not uncommon for accountants to be employed by companies [Institute of Accountants in Glasgow, Minute Book, No. 1, p. 37] and several of the early accountants are noted as having been involved in the formation and running of railway and utility companies [Stewart, [1977] p. 17]. Both groups were strongly involved in insurance in their re-spective cities. There were differences, however, in the kind of involvement. In Edinburgh, it was much more likely to be as an auditor or director; whereas in Glasgow, it was often as an agent and less likely as a director. SOCIAL ORIGINS The fact that the men who formed and were early members of the first Scottish accounting societies were broadly involved in the same areas of work might lead to the expectation that they would have come from broadly similar family backgrounds. However, this is not the case although the differences became less obvious as the societies developed. Edinburgh Table 5 confirms that the early members of the Edinburgh society were predominantly upper to upper-middle class with the most significant group coming, in all cases, from a legal background. It is perhaps not surprising to find this to be the case in Edinburgh which was the center of the Scottish legal system. Different sections of the legal profession, such as advocates and writers to the signet, had long standing professional associates with which the Edinburgh accountants would be familiar. In addition, many early members trained in legal offices and much of the work eventually carried out in accounting offices was previously performed in legal offices. Since the accounting profession in Edinburgh had for many years been viewed as a section of the legal profession, this preponderance of legal parentage is not surprising, particularly in the pre-charter period. The strong legal ties would be significant in establishing the social status of the members of the new society since "The real leaders of Edinburgh Society, however, were not to be found among merchants and tradesmen but among professional men: and among the professions there were none, in numbers, wealth or prestige, to equal the lawyers" [Smout, 1969, p. 375]. Table 5 Social Origins of Significant Groups of Early Edinburgh Chartered Accountants Original First Rules and Council & Charter Letter Mtg. Regs. Mtg. Officers Signatories CA — — — — 1.6 Other Accountants 6.7 12.5 4.9 6.7 12.5 — — 6.5 Legal profession 26.7 25.0 33.3 27.3 18.0 Banking & insurance 6.7 12.5 8.3 18.2 4.9 Church 13.3 — 16.7 18.2 16.4 Government & Armed Service 13.3 12.5 8.3 9.1 9.8 Landowner 13.3 25.0 16.7 9.1 16.4 Other profession 80.0 87.5 83.3 9.1 91.0 3.3 75.3 Merchant — — — — — 80.0 87.5 83.3 91.0 75.3 Manufacturer — — — — 1.6 Craftsman/ Tradesman 6.7 12.5 8.3 4.9 Miscellaneous — — — — — Unknown 13.3 — 8.3 9.1 18.0 100% 100% 100% 100% 100% Number 15 8 12 11 61 Source: Scottish Records Office: Certificates of Birth, Marriage and Death; Census of Population Records 1841,1851. Other significant groups among the charter signatories were the Church, landowners and government and armed services. What is also important is that none of the early members came from a commercial background and very few from manufacturing or trade. The social origins of members were such that the Edinburgh society could not fail to gain immediate social status which was then imputed to subsequent members. Glasgow It is clear from Table 6 that the social background of the early chartered accountants in Glasgow was significantly different from that of those in Edinburgh. The largest group in all cases in Glasgow came from a mercantile background, reflecting the fact that Glasgow was an industrial city, while the representation of a manufacturing background was negligible in Edinburgh. The legal profession, the Church, and landowners were also represented, but at a lower level than in Edinburgh, and the overall impression that emerges from Glasgow is a society with a lower proportion of upper and upper-middle class members. SOCIETY CONCERNS The distinct differences in the social origins of the founder members of the two societies and the different emphasis in the work undertaken by them might lead to an expectation that they would have developed in different directions. As professional bodies, however, their concerns were very similar. The first area to be tackled by both groups was that of professional closure. Several instruments were utilized to ensure that the societies were elitist and therefore of high professional and social reputation. Entry to the societies was initially limited to those who had been approached personally to join and who were generally in the same social class as the small groups of organizers. Subsequently, membership for practicing accountants depended on their ability to convince existing members of their suitability for admission. For apprentices, the barriers were the necessity to find a member to whom he would be indentured; the cost of paying for his indenture, which amounted to an average of one hundred guineas in 1853; and the ability to pass the informal or formal examinations. Both societies adopted very similar systems of entry as a means of controlling their quality and size. Because both groups of chartered accountants had an involvement in bankruptcy and insurance work that was higher than the Table 6 Social Origins of Significant Groups of Early Glasgow Chartered Accountants Sigs. Recipients Steering Const. Charter of Reqn. of Reqn. Committee Sigs. Sigs. CA Other Accountants 7.4 14.4 11.1 7.7 8.2 7.4 14.4 11.1 7.7 8.2 Legal profession 11.1 7.1 11.1 7.7 8.2 Banking & Insurance 3.7 7.1 7.7 4.1 Church 7.4 14.4 — 15.4 8.2 Government & Armed Service Landowner 18.5 7.1 11.1 7.7 12.2 Other professions 7.4 4.1 55.5 50.1 33.3 46.2 45.0 Merchant 3.7 35.7 44.5 38.4 16.3 59.2 85.8 77.8 84.6 61.3 Manufacturer 14.9 7.1 11.1 7.7 8.2 Craftsman/ Tradesman 2.0 Miscellaneous 3.7 — — — 4.1 Unknown 22.2 7.1 11.1 7.7 24.4 100% 100% 100% 100% 100% Number 27 14 9 13 49 Source: Scottish Records Office: Certificates of Birth, Marriage and Death; Census of Population Records 1841, 1851. average for all accountants in either city, they were anxious to increase their proportion of available work, or at least prevent its decrease. The first example of their activities in this area was in April 1854 after the new Bankruptcy (Scotland) Act came into operation, when both societies provided the Lord Advocate's clerk with a list of members, described as a list of the accountants in the two cities who were experienced to deal with sequestrations from the Court of Session. This obvious attempt to exclude from this work accountants who were not members of the two societies was successful in the long run: by 1900, Edinburgh chartered accountants had a virtual monopoly of Edinburgh bankruptcy work and Glasgow chartered accountants dealt with the majority of cases in their area. The exclusivity of the new societies led to the formation of rival institutions. Two such institutions emerged in Scotland, the Scottish Institute of Accountants in 1880 and the Corporation of Accountants in 1891. Both were formed by accountants who were not eligible for entry to the chartered societies [Stacey, 1954, p. 33]. The Corporation of Accountants encouraged it members to designate themselves CA — corporate accountants. Since the members of the Edinburgh and Glasgow societies had agreed in 1855 to use the same designatory letters, and had done so with some consistency, they were concerned at the confusion that might be caused by the Corporation's directive. The Corporation, however, refused to desist from using the designation until the chartered bodies raised a successful action against them in the Court of Session. Similar concern had been raised in 1880 on the formation of the Institute of Chartered Accountants in England and Wales. Some Glasgow accountants who were debarred from membership of the Scottish chartered bodies were admitted to the English Institute and henceforth designated themselves as 'Chartered Accountants' as contained in the Institute's Charter. The Edinburgh and Glasgow societies cooperated on dealing with this problem and took legal advice on the matter. Interestingly, they were advised not to pursue the matter since they were unlikely to succeed [Institute of Accountants in Glasgow, Minute Book, No. 2, p. 131]. CONCLUSION This study has highlighted the social differences that existed between the men responsible for the formation of the Edinburgh and Glasgow chartered accountants' societies, two of the founder members of the Institute of Chartered Accountants of Scotland. Similarly, it has indicated the difference in the involvement of each group in the main areas of professional work at that time. The distinct differences in pre-societal formation were of secondary consideration when the new societies faced any outside threat, however, for such threats were often responded to jointly. The matters of joint concern to them were similar to those facing any new professional body. Primarily, they wished to ensure that the new societies had a recognized status in their respective communities, which they accomplished by inviting membership only from men of proven social and professional standing. Once the societies had achieved the desire status, it would be imputed to future members. It was necessary, also, to prevent the societies from overly rapid growth which might have diluted the quality of performance and the amount of work for each member. This was achieved by restricting entry to those who had the proper social background and the money and education that usually accompanied that background. The other common threat to the chartered societies was that posed by other accounting societies being formed and by the members of one of them adopting the designatory letters 'CA'. Again the societies acted together to repel these problems. Thus, while the societies remained separate for about a century, prob-ably because of the different social characteristics of Edinburgh and Glasgow, in times of adversity the social differences were submerged and common interests successfully pursued. REFERENCES The Alphabetical Compendium of Scotch Mercantile Sequestrations 1851, London, Longman, Brown, Green & Longmans (1851). Bradshaw's Railway Almanac, Directory, Shareholders' Guide and Manual, 1848, etc. [An annual directory of British and Foreign Railway Companies giving details of each company's capital structure, office bearers and significant financial events.] BPP 1847 (597) LXIII, 101; 1849 (249) LI, 101; 1850 (165) LIII, 277; 1851 (102) LI, 255; 1852 (153) XLVIII, 395; 1852-53 (253) XCVII, 229; 1854 (105) LXII, 559; 1854 (495) LXII, 599; 1854-55 (511) XLVIII, 631. Brown, R. (ed.) A History of Accounting and Accountants, T. C. and E. C. Jack, Edinburgh 1905. Edinburgh and Leith Post Office Directories, 1853 etc. Gibb, Sir A., The Story of Telf or d: The Rise of Civil Engineering, Glasgow: Maclehose (1935): 186-7. Glasgow Post Office Directories, 1853 etc. Hadfield, C, "Sources for the History of British Canals", Journal of Transport History (1955): 84. The Canal Age, London: Pan Books Ltd. (1971): 22-25. History of the Chartered Accountants of Scotland, Edinburgh, Institute of Chartered Accountants of Scotland (1954): 11. Institute of Accountants of Edinburgh Sederunt Book, Council Minutes, No. I. Institute of Accountants in Glasgow, Minute Book, No. 1, [No. 2, 131]. Lewis, R. and Maude, A., Professional People, London: Phoenix House Ltd. (1952): 48. Lindsay, J., The Canals of Scotland, Newton Abbot: David & Charles (1968): 210-13. Michie, R. C, Money, Mania and Markets, Edinburgh: John Donald Ltd. (1981): 17. Records of the Glasgow Stock Exchange Association 1844-1926, Glasgow: Jackson, Wyllie & Co. (1927): Appendix I. Scottish Records Office: Annual Report of the Accountant of Bankruptcy in Scotland. Census of Population 1841, 1851. Certificates of Birth, Marriage and Death. Smout, T. C, A History of the Scottish People 1560-1830, London: Collins (1969): 375. Stacey, N. A. H., English Accountancy 1800-1954, London: Gee and Company (1954): 33. Stewart, J. C, Pioneers of a Profession, Edinburgh: Institute of Chartered Accoun-tants of Scotland (1977): 17, 18, 123, 125. Tyson, R. E., "The Failure of the City of Glasgow Bank and the Rise of Independent Auditing", The Accountants' Magazine (1974): 126.