Accounting for gold and sliver mines: The development of cost accounting

              The Accounting Historians Journal
Vol. 13, No. 2
Fall 1986
Glenn Vent UNIVERSITY OF NEVADA, LAS VEGAS
ACCOUNTING FOR GOLD AND SILVER MINES: THE DEVELOPMENT OF COST ACCOUNTING
Abstract: This study found evidence which supports the thesis that cost account-ing techniques evolved rapidly during the last quarter of the nineteenth century. The cost accounting system employed by the leading mines of the Comstock Lode during the 1870's is compared to a system used in the Cripple Creek district of Colorado during the first decade of the twentieth century. The cost accounting techniques of the mining industry appear to have developed rapidly during this period from crude to sophisticated systems.
Introduction
Littleton [1977, p. 340] stated that the bookkeeping texts of the first three quarters of the nineteenth century presented very inade-quate cost accounting techniques. Garner [1976, p.67] maintained that developments in "industrial accounting were at a low ebb in the period 1840-75." It was only in the last quarter of the century that well organized cost systems were developed in response to an in-creasingly complex business environment. Chatfield [1977, p.160] expressed the following similar view: "Between 1885 and 1920 cost accounting evolved from a level where the methods used seem al-most as remote as medieval bookkeeping, to a point where most of the descriptions in today's texts were approximated by the best practice." On the other hand Johnson [1972, p.469] found evidence of an elaborate fully integrated cost accounting system that was em-ployed by a small textile mill prior to 1860. Johnson's research raises the question of whether industrial practice developed more quickly than Chatfield, Garner and Littleton have indicated. This is the issue addressed in this study.
In 1954 Garner [1976, p.69] declared that very little study had been made of the accounting records of nineteenth century indus-trial firms. Twenty years later Johnson [1972, p.466] expressed a similar opinion. Johnson [1972, p.468] argued that such studies are needed because this type of research provides the most reliable