The Pennsylvania Railroad, 1849 and the 'Invention of Management'

In attempting to understand the genesis and scope of modern cost and management accounting systems, accounting historians adopting what has been labelled a ‘Foucauldian’ approach have been rewriting the history of key 18th and 19th century developments in the U.K. and U.S. through new evidence, new interpretation, and a refocusing of attention on familiar events. This is a research project in “disciplinary” history, a history which sees modern cost and management accounting as articulating a new kind of "expert disciplinary knowledge", as well as exercising a “disciplinary power”, in the construction of a new human accountability and thereby new forms of management control, strategic planning and ‘organization’. This paper identifies modern management as having been invented on the Pennsylvania Railroad (‘PRR’) in 1849, arguing that this invention in the US—the beginning of the ‘management revolution’—was a crucial complement to the significant technological inventions, particularly in the UK and US, of the Industrial Revolution. In doing so it focuses on how Chandler’s exposition of the central role of the early US railroads in the development of ‘multi-divisional’ management needs to be reformulated through this disciplinary approach in order to account for the ‘excessive’ administrative co-ordination that he observed was introduced on several of the major trunk lines—the Baltimore & Ohio RR (‘B&O’), the New York & Erie RR (‘NY&E’) and the PRR—between 1847 and 1857. In undertaking this reformulation, we are investigating the particular contribution of West Point graduate engineers. Chandler attributes the PRR’s contribution to its President, J. Edgar Thomson. Here we argue it was instead Herman Haupt (who graduated from West Point in 1835) who was the key historical figure in the implantation of practices of modern, cost, management and strategy focussed accounting—and thereby in the development of the discourse of ‘modern management’—on the PRR. We focus on the archival evidence, some of which has only recently become available