Reviewed by Robert R. Locke University of Hawaii at Manoa

In this collection of pre-1914 articles, nineteen reprints taken primarily from the Engineering Magazine and the Transactions of the ASME, the editor, M. C. Wells, seeks to show how American electrical and mechanical engineers “gave the development of costing methods and cost accounting the impetus which has brought it to its present position of prominence.” (p. 4) Accordingly, the articles are grouped to reveal the interest that engineers had (1) in the financial aspect of efficiency (articles by F. P. Goddard, H. R. Towne, R. H. Thurston, C. E. Emery and E. R. Spedden), (2) in the problem of pricing (articles by G. F. Fowler, H. M. Lane, A. W. Farnsworth and R. S. Hale), (3) in the development of cost records for internal shop management purposes, as opposed to more formal cost accounting procedures per se (articles by H. Metcalfe, H. M. Morris and H. Roland), and (4) in the elaboration of costing principles (articles by H. Roland, J. G. Newton, P. Longmuir, P. J. Darlington, A. H. Church and H. R. Towne).

Although the contribution of the engineers to cost accounting is undeniable (and hence the publication of these reprints most welcome), significantly some of the articles reproduced are not by engineers. That by Dr. E. R. Spedden, “Is the Study of Economics Useful for Engineers,” is a case in point, for, if its publication in an engineering periodical indicates a growing awareness of economic science in engineering circles, its contents and authorship show how deficient the engineers were in this respect. Indeed, this collection of essays demonstrates the extent to which engineers remained ignorant of economic principles (opportunity costs, marginal analysis, etc.) that would have helped them solve many costing problems.

It is easy, of course, to make this criticism from our perspective. But contemporaries were aware of the engineers’ failure to incorporate economic principles into their work on cost accounting. The great German business economist, Eugen Schmalenbach, repeatedly pointed this out in his reviews of books by engineers on cost accounting. He stressed, for example, the importance of marginal analysis in pricing, something, which these essays prove, American engineers did not take into consideration in their cost accounting.

Wells’ assessment of the American engineers’ contribution to cost accounting would have been improved, had the editor, in his intro-duction, examined their work more critically within the context of contemporary comment.