The First Induction (1950)
Editor's Note: The paragraphs that follow describe the first Accounting Hall of Fame induction ceremony which took place at the Twelfth Annual Institute on Accounting held in Columbus, Ohio at The Deshler-Wallick Hotel on May 19, 1950. In the preface to the published proceedings of that conference, Hermann Miller notes, "Approximately 480 persons registered for this conference. Participation by members of local, state, national and international organizations followed the pattern of prior years. In addition, many business executives and other were in attendance." The proceedings volume contains a list of the registrants. (Proceedings of the Twelfth Annual Institute on Accounting, May 19-20, 1950. Columbus, Ohio: The Ohio State University, College of Commerce and Administration, 1950, pp. 53-59.)
The induction was conducted by Samuel J. Broad who chaired the first Accounting Hall of Fame Board of Nominations. At that time, he was chair of the AICPA's Committee on Accounting Procedure and Deputy Senior Partner in the national office of Peat Marwick Main & Co. (later, KPMG Peat Marwick). The proceedings of the Institute on Accounting were published annual by the Bureau of Business Research in the College of Commerce and Administration at The Ohio State University.
MR. SAMUEL J. BROAD: Before proceeding to the more pleasurable part of the program I think it would be appropriate for me to say a few words about the genesis, the organization, and the procedures of the Accounting Hall of Fame.
The Ohio State University, and particularly the Department of Accounting with its usual flair for doing things early and doing them well, decided that it would be a good thing for the development of the art of accounting to initiate a Hall of Fame whereby honor could be extended to those who had made outstanding contributions in that field.
With this objective in mind, a Nominating Board was appointed consisting of 15 practicing accountants, 15 accountants engaged in industrial and governmental work, and 15 accounting educators. All of the practicing accountants have been active in professional circles and half of them are men who have served as president of the American Institute of Accountants. The accounting educators are prominent professors at important universities, most of whom have held office in the American Accounting Association. The industrial and governmental accountants have been equally outstanding in their respective fields. It is indeed an honor to have been elected chairman of such a group.
Each member of the Nominating Board was asked to nominate five persons, taking into account certain criteria, among which were the following:
1. Contribution to accounting literature.
The ten persons receiving the highest votes in nomination (with some weighting for the order of preference) were submitted in a second ballot; and the second ballot on these ten resulted in the election of those receiving the highest preferential ballot.
The effect of the weighting for order of preference this year could have made no difference in the final result. The three candidates selected would have been elected in any event.
The University and the Nominating Board are both very conscious of the fact that the honor bestowed through election to the Accounting Hall of Fame and the prestige of the Hall of Fame itself are dependent upon the care which is taken in selecting outstanding candidates. If the results of the election in this, the first year, are any criterion, I am sure that you will agree with me that these objectives will be obtained.
MR. BROAD: President Bevis: (Howard L. Bevis was president of The Ohio State University from 1940 to 1956) The Nominating Board of The Ohio State University Hall of Fame presents William Andrew Paton.
Professor Paton is a graduate of the University of Michigan with a Ph.D. in Economics. He has a long period of service as a professor at that University, with which he has been associated, except for brief intermissions, since 1914. He also holds the degree Doctor of Letters from Lehigh University.
An erudite but easy teacher, he passed inspiration on to students, which, like ripples from a stone cast into the water, has spread in ever widening circles. Many of his former students are found in positions of high responsibility in academic, professional, and business fields.
Professor Paton was one of the early members of the "American Association of University Instructors in Accounting," later to become the "American Accounting Association"; he was president of the latter organization in 1922 and its research director from 1936 to 1939. He is the only member of the Committee on Accounting Procedure of the American Institute of Accountants who has served continuously since its establish ment. His objective and clear thinking approach to each question before this committee has commanded the utmost respect of his colleagues.
Numerous articles of his have appeared in the Journal of Accountancy, The Accounting Review, and elsewhere. A prolific author, his books, Essentials of Accounting and Advanced Accounting, in particular, are standard texts. With Professor A. C. Littleton, he write Introduction to Concepts and Standards of Corporation Financial Statements, which is one of the earlier and major expositions of accounting theory. The Accountants Handbook, to which he was the chief contributor and subsequently the editor of the second and third editions, is a standard reference book.
Professor Paton has had the conviction throughout the years that accounting principles should have a basis in economic theory. Also, he has had an appreciation of the importance of reliable accounting data in measuring economic activity and in observing economic trends. In his writings and teachings, he has made a significant contribution to the development of realistic economics and to the formulation of accounting principles consistent with that concept.
The Nominating Board, with genuine pleasure, presents William Andrew Paton, an inspiring teacher, notable author, and one whose leadership has been a real force in the development of accounting theory, for The Ohio State University Hall of Fame.
PRESIDENT BEVIS: Mr. Paton: For your outstanding contributions to the development of the accounting profession, upon the recommendation of the Nominating Board and under the authority of the University, I have the honor to inform you that your name has been placed in The Ohio State University Hall of Fame. In testimony thereof, I present you with the appropriate certificate duly signed and with the official seal of the University.
MR. BROAD: Mr. President: The Nominating Board of The Ohio State University Hall of Fame presents Robert Hiester Montgomery.
A native of Pennsylvania, Colonel Montgomery was one of the founders of the firm of Lybrand, Ross Brothers and Montgomery, in which he is still active. He pioneered in accounting education as a member of the faculty of an evening school sponsored by the Pennsylvania Institute of Accountants as early as 1902. This subsequently led to the organization of a School of Accounts and Finance at the University of Pennsylvania where he later lectured during the school year, 1905 1906. He participated in organizing the first International Congress on Accounting held in St. Louis in 1904 ; he was chairman of the International Congress on Accounting held in New York in 1929; and he represented the American Institute of Accountants at the International Congress on Accounting in London in 1933. In addition, he was official representative of Columbia University at the International Congress on Accounting held in Amsterdam in 1926. As a professor at Columbia University from 1919 until 1931, he challenged the students in his classes to be faithful to their professional trust. Chaucer would have said of him: "Gladly would he learn, and gladly teach."
In the Spanish American War, Colonel Montgomery took part in the Puerto Rico Campaign. As a lieutenant colonel in World War I, he rendered distinguished service in the office of the Director of Purchases and elsewhere. Later, he served as executive secretary of the War Policies Commission in Washington and as director of research and planning under the NRA.
Over a span of 40 years or more, Colonel Montgomery has earned and received about all of the honors which the accounting profession can bestow and he has accepted and conscientiously discharged all of the responsibilities assigned to him. He was president of the American Association of Public Accountants, the predecessor of the American Institute of Accountants, from 1912 to 1914 and also held the presidency of the American Institute from 1935 until 1937. His books on federal taxes and auditing have become accounting classics.
As one of the founders of this profession in the United States, as one who has been steadfast in the demand for high ethical standards especially during its formative years, as a teacher and author, and finally as a still active elder statesman who has been a continual source of inspiration to the young men and women entering the accounting profession, Mr. Montgomery has gained our wholehearted admiration. The Nominating Board is privileged to present for The Ohio State University Hall of Fame, Robert Hiester Montgomery.
PRESIDENT BEVIS: Mr. Montgomery: For your outstanding contributions to the development of the accounting profession, upon the recommendation of the Nominating Board and under the authority of the University, I have the honor to inform you that your name has been placed in The Ohio State University Accounting Hall of Fame. In testimony thereof, I present you with the appropriate certificate duly signed and with the official seal of the University .
MR. BROAD: Mr. President: The Nominating Board of The Ohio State University Hall of Fame presents George Oliver May.
Born in England, where he received his early accounting training, Mr. May has been one of the real builders of the profession in this country. As senior partner of the firm of Price, Waterhouse and Company from 1911 until 1940, he envisioned through the years the professional character of public accounting, and he has been untiring in his efforts in building an edifice worthy of this foundation.
Mr. May has served as president and director of the National Bureau of .Economic Research, as vice president of the American Economic Association, as director of the American Statistical Association, and as director of the Council on Foreign Relations. He has, in addition, been a lecturer on the faculty of the Graduate School of Business Administration at Harvard University .Conscious of the social responsibility of the public accountant in an economy of free enterprise, he has made noteworthy contributions to federal legislation and administrative regulations concerned with accounting concepts and determinations.
A farseeing and statesmanlike representative of the accounting profession and a deep student of economic theory, Mr. May has been pre - in the development of accounting principles and was the first chairman of the committee on accounting procedure of the American Institute of Accountants. His underlying philosophy holds accounting to the pragmatic test of usefulness to the economy as a whole and demands a virility strong enough to develop and grow and to change if necessary to meet the needs of a changing economy.
The literature of accounting has been enriched by his numerous articles in professional journals and by his books, Financial Accounting and Twenty Five Years of Accounting Responsibility. To him, public accounting has always been a public trust.
Since his retirement from active practice, Mr. May has been performing yeoman service as research consultant for the Business Income Study Group, a body composed of economists, businessmen, lawyers, and accountants, which, under the sponsorship of the American Institute of Accountants and the Rockefeller Foundation, is striving to find the most useful concepts of business income.
The Nominating Board is proud to present Mr. George Oliver May, one of the country's outstanding practitioners, also an author and farsighted leader in the development of the basic philosophy of accounting, for The Ohio State University Hall of Fame.
PRESIDENT BEVIS: Mr. May: For your outstanding contributions to the development of the accounting profession, upon the recommendation of the Nominating Board and under the authority of the University, I have the honor to inform you that your name has been placed in The Ohio State University Accounting Hall of Fame. In testimony thereof, I present you with the appropriate certificate duly signed and with the official seal of the University .
GEORGE O. MAY: (Editor's Note: Mr. May did not attend the conference, but the proceedings reproduced this letter of response, which may have been read to the conference assembly. Both Professor Paton and Mr. Montgomery are listed among those attending the conference but any response they may have made was not entered in the record.) I appreciate the honor which my fellow accountants have done me in selecting me as one of those who have "made outstanding contributions at any time to the field of accounting." Such contribution as I have been able to make has been largely in relation to Financial Accounting and the determination of income.
The task which Financial Accounting has faced, has been to move in the direction of certainty and simplicity in an economy which was moving rapidly in the direction of complexity and uncertainty, if not confusion. The task may be likened to that of the billiard player in "Mikado" - to control, as it were, the cue ball (of accounting classification) to bring together in proper relation the two object balls (of revenue and cost) on a cloth untrue (of contractual relations indefinite or deceptive in expression) with the twisted due (of ambiguous terminology and conventions) and the elliptical billiard ba11s (of an unstable monetary unit). And this has to be done for an audience which is wholly unaware of the defects of the equipment provided and which has been led to believe the task is easy.
The profession has striven earnestly to improve the "cue" of terminology and convention over which it has some measure of control. But even in this, it has been hampered by the fact that it is not autonomous, that it has no exclusive vocabulary, and that its conventions must always, in practice, be a compromise between theory and practicability.
I am happy that the Nominating Committee has seen fit to honor workers in this unrewarding field who cannot point to such contributions of demonstrable usefulness as have been achieved in Recording, Administrative and Tax Accounting.
My friend and contemporary, Robert Montgomery, whom I am glad to see honored today, has to his credit achievements in all the fields. He, like myself, drew inspiration from Arthur Lowes Dickinson, who brought us together in the work of the First International Congress of Accountants in 1904.
The contributions of William A. Paton have extended over a shorter period, but no one familiar with his record can fail to recognize the courage, insight, imagination, and scholarship that he has displayed.
The value of an award is measured, in part, by the quality of those into whose company one is received. In this case, the awards are being made for the first time, but the standing of the other recipients is such as to enhance the honor that has been done me. It is good augury for the new project of the University that they should be among the first nominees, and I am grateful that my name should be associated with theirs in completing the list. It is, I think, a common characteristic of the three that all have displayed that readiness to reexamine one's own first principles that has been said by Mr. Justice Holmes to be the mark of a civilized man
I extend to the University, whose accounting graduates are earning high praise for it, and to the Nominating Committee my thanks for their generous appraisal of my efforts. I regret that it has been impossible for me to be present to receive the award myself; I hope that in the near future I may be able to express my appreciation on a personal visit to the University.