The Contributions of Accounting to the Early Success of the Harmonists

ACCOUNTING IS A PRODUCT of its environment.Large business firms typically use advanced management reporting systems because they are a necessity for the efficient operation of the business.Small firms usually have less rigorous accounting systems, since one or two individuals are capable of overseeing all aspects of the operation.Because of this many accountants feel that managerial accounting was very poorly developed in the United States during the early 1800's.This is a natural belief, since the American economy was made up of small mercantile establishments and cottage industries.These small firms had little need for sophisticated managerial accounting systems.But far out on the American frontier, there were groups that did have a need for managerial accounting information, and that need was met, occasionally, by what could be considered even today a rather modern system.The primary focus of this paper is on the Harmony Society (also known as the Rappites) and an analysis of its accounting system.The results of this analysis will then be compared to the accounting system employed in other communistic societies.Finally, the progress of the Harmonists will be evaluated in light of the accounting systems in use in the United States during the same period of time.The members of the Harmony Society came to the United States from Germany in 1804.The group was led by George Rapp.In Germany Rapp had advocated a social order which he had derived from the New Testament.He and his group of followers had suffered persecution for these ideas.Thus, at the age of forty-six, Rapp brought his life savings to buy land in America.He purchased 5,000 acres of land north of Pittsburgh.Six-hundred of his followers arrived in that same year.In 1805, they formed the Harmony Society.Because the society had