Ernst & Young has donated its historical archives dating back to the early 1900s to Case Western Reserve University.
The collection will be going to Case Western’s Kelvin Smith Library in Cleveland and will be known as the Ernst & Young Founders Archive.
Ernst & Young is the product of a 1989 merger between Ernst & Whinney and Arthur Young & Company, but the company origins go back to 1903, when Ernst & Ernst was founded by the Cleveland-born brothers Theodore and Alwin C. Ernst. Arthur Young & Co. was founded in Chicago by another pair of brothers, Arthur and Stanley Young, three years later.
The archive that EY is donating includes a variety of accounting memorabilia, including hand-written accounting ledgers detailing firm transactions from the early 1900s, firm advertising from the 1920s, Ernst & Ernst employee and management communications dating back more than 90 years, awards, vintage photos, Arthur Young’s personal cash book and many other historical items.
The gift was made possible through the efforts of Case Western accounting professor Gary Previts, along with Lee Thomas, a managing partner in EY’s Cleveland office, and Hank Kohout, an EY associate director of branding, marketing and communications, who is also based in Cleveland.
“It doesn’t get any more original than this, unless we had A.C. Ernst standing here,” Previts said in a statement.
The collection also contains internal correspondence from Ernst & Ernst that addressed some of the bygone tax issues facing the country in the early 1900s. One bulletin from February1926 discusses a tax law change that had recently been passed by Congress, increasing personal exemptions while reducing tax rates to 1.5 percent on the first $4,000 of net income, 3 percent on the next $4,000 and 5 percent on the remainder.
The bulletin also refers to “the projected end of the bull securities market,” three years ahead of the 1929 stock market crash. Other bulletins emphasized proper staff conduct at client sites, the importance of integrity and independence in dealing with clients and described the operational and professional rules to be followed at the firm. Other documents hinted at the economic pressures faced by accounting firms and their clients as the Great Depression tightened its grip on the country. Additional archival materials, including internal legal documents never before publicly available, may also shed light on the origins of the two firms and key episodes in their early history.
“In the University Archives, we have information on how accounting was taught,” Tatem said. “This collection provides information on how it was actually practiced. Who led the innovations and changes in accounting practices: the teachers or the practitioners? This archive will provide an interesting opportunity to compare and contrast the history from both perspectives.”
The connection between Case Western Reserve and its Weatherhead School of Management to Ernst & Young is long-standing, extending to the firm’s new global chairman and CEO, Mark Weinberger, who earned his JD and MBA at the school in 1987.
Previts, a well-known historian of the accounting profession who teaches at the Weatherford School, has edited a series of books exploring how accounting developed around the world. He collaborated with Dale Flesher, a board member of the American Accounting Association, on a manuscript history of Deloitte. So far, no one has written a comprehensive history of Ernst & Young, but the archive may make that possible, according to the school.
“Jill and Arnold moved quickly with EY representatives to cement an agreement that established the archive,” Previts said. “What a great feeling to get these historic materials into the right hands, ensuring they will be preserved and made available far into the future.”
