George Hillis Newlove THE UNIVERSITY OF TEXAS AT AUSTIN (EMERITUS)
IN ALL MY YEARS: ECONOMIC AND LEGAL CAUSES OF CHANGES IN ACCOUNTING
"Changes are coming from within and from without, and concern over how to handle changes being pressed by divergent forces pervaded the 96th annual gathering of commercial bankers."1 The idea of change affects all business and related professions. This short article suggests a few of the changes in business conditions that materially affected the evolution of accounting in hope that accounting historians will emphasize why changes in accounting occurred as well as when they were developed.
Household Economy as Factory Economy. During the reigns of the Tudors in England, the members of the Guilds took materials to their homes, where they spun yarn and were paid by businessmen (usu-ally piece-rate) upon the delivery of the yarn. The businessmen needed to know that they were receiving all the yarn they were due for the material supplied to the workers, therefore, "standards of material cost" were developed early in the evolution of cost ac-counting.2
As factory manufacture developed, the efficient use of the factory space and equipment became so important that production engi-neers developed "scientific management." The most prominent of these production engineers developed incentive methods of paying labor costs; these wage systems were named after the engineer who developed them.3
S. P. Garner wrote that in 1887 "Garcke and Fells4 showed a thorough understanding of the accounting for materials, and that their system has been little improved on since that time ... however, they were not so clear on the handling of overhead."5 Garcke and Fells also treated very carefully the flow of labor costs through the ledger accounts, and were among the earliest cost accountants to recommend a strict tie-in between the cost accounts and the general accounts.6
Most of the voluminous writings of the production engineers who developed the subject Scientific Management, are found in the