Elijah Watt Sells - Accounting Pioneer

Elijah Watt Sells was a Baker student before he became one of the pioneers of the accounting profession. He was the co-founder of the accounting firm Haskins & Sells in 1895 and served as the managing partner of the firm until his death in 1924. After a merger, the firm became Deloitte Haskins & Sells and was a prominent member of the so called “Big Eight” of international accounting firms. Subsequently, the firm merged with Touche Ross and became Deloitte & Touche and is known today as simply Deloitte, one of the remaining four large international firms. This firm is near and dear to me, having spent 25 years as a consultant with Touche Ross and then Deloitte & Touche from 1977 to 2002.

Elijah Watt was born March 1, 1858 in Muscatine, Iowa to Elijah B. Sells and Isabelle Watt Sells. To understand Elijah’s upbringing, it is important to know more about the career of his father, Elijah B. Elijah B Sells was born February 5, 1914 in Dublin, Ohio. In 1833 he moved to Illinois and in 1835 he married Isabelle Watt there. In the late 1830’s he moved his family to Iowa where he was in the business of manufacturing stoneware. He began his political career by successfully running for office in the first Iowa legislature in 1846 and he was reelected in 1852. At the Whig Party county convention of Muscatine County, he introduced a platform incorporating the doctrine of “no more slave territory” and this principle was adopted by the next Iowa Whig Party state convention and was embodied in the national platform of the Republican party. He then held several state and national offices as a political appointee, including:

• Secretary of State of Iowa 1856-63

• Adjutant General of Iowa 1856-58

• Paymaster of the Navy

• Commander of the USS Grampus in Cincinnati

• Third Auditor of the Treasury Department in Washington appointed by Abraham Lincoln

• Auditor of the Treasury for the Post Office Department

• Superintendent of Indian Affairs for the Southern Superintendency 1865

Although he was Superintendent of Indian Affairs for only about a year, he instituted reforms in the Indian Territory and negotiated a treaty with the Indians who had served in the Confederate Army and negotiated a treaty with the Osages whereby a portion of Southern Kansas was acquired.

It was during this time that Elijah B moved his family to the Baldwin City area presumably because most of the oversight of Indian affairs involved tribes in Kansas and Indian Territory (which became part of Oklahoma). The Sells family occupied 67 acres of land just to the west of the Baldwin City limit and just north of the railroad station. While in Kansas he engaged in the lumber business and had a lumber yard in Lawrence. He was elected to the state legislature three times and served as a Trustee of Baker University from 1869 to 1871. In 1872, Elijah B’s wife, Isabelle, also got involved in helping Baker by being the first President of an organization called the “Ladies’ Endowment Society of Baldwin City.” The purpose of the group was to raise funds for the purpose of endowing a lady professor’s chair for Baker University.

In 1874, Elijah B divorced Isabelle and moved to Salt Lake City where he married Harriett Wetmore. In Utah, he was president and general manager of a silver mining company and from 1878 to 1894 he was engaged in the lumber business. In 1889, he was appointed Secretary of Utah Territory holding that office until 1893. Elijah B died March 13, 1897 in Salt Lake City.

While his father was experiencing success in business and politics, Elijah Watt Sells was enjoying a privileged upbringing. Beginning in 1866, he attended Baker University’s Academy along with his brothers George and Butler Sells and his sister Lucy Sells. In 1871, he was sent away to Le Roy Academic Institute, a boarding school in upstate New York. By 1874, he was back in the Baldwin area and whether it was because of his mother’s reduced circumstances or his own desire to begin his career, he left school at the age of 16 and went to work for the Leavenworth, Lawrence and Galveston Railroad at the Baldwin Depot as a telegrapher. He was quickly promoted to bookkeeper and cashier of the railroad and in 1875 he was put in charge of the freight and passenger business. He subsequently held jobs with a series of railroad companies, including: cashier, paymaster and general bookkeeper of the Chicago, Clinton, Dubuque and Minnesota; auditor of the Oregon Railway and Navigation and the Oregon Improvement companies at Portland Oregon: assistant comptroller of the Kansas City, Fort Scott and Memphis Railroad Company at Kansas City; and secretary and auditor of the Colorado Midland Railroad. In all of these offices Elijah Watt devoted the greater part of his time to reorganizing the systems of accounts and introducing new methods. He also made special investigations of the affairs of other companies and gained a reputation as one of the foremost experts in this line of work in the country.

On April 24, 1884, Elijah Watt was married to Mabel Elizabeth Graves in Dubuque, Iowa. Mabel was the daughter of Rufus Elbridge Graves, President of the Commercial National Bank of Dubuque, and she was considered the belle of the city. After the wedding the couple immediately left for California where Elijah Watt was working with the Oregon Transportation Company. The couple had two daughters, Marjorie born in 1887 and Dorothy born in 1893. Marjorie married General Arthur Hazelton Carter, born in Hillsboro, Kansas, who became the managing partner of Haskins & Sells after he left the military. Dorothy married Leroy Daniel McMorris, the Kansas City based artist who worked in oil, watercolor, charcoal, and pen-and-ink, creating portraits (including many of prominent Kansas Citians and benefactors and chancellors at The University of Kansas), murals (for the Kansas City Public Library, a local Sears store, and the city hall of Houston, Texas, among others), sketches, and street scenes, as well as some sculptures. He devoted years to projects at The Nelson Atkins Museum of Art and Liberty Memorial

In 1893, he and Charles Waldo Haskins were selected by the Joint Commission of the Fifty-Third Congress to revise the accounting system of the United States government with a view to simplifying and expediting the public business. Their recommendations were adopted, their system of departmental accounts was installed, and their radical innovations in pre-existing methods were officially praised by the accounting officers of the government departments. In many respects it was the most extensive and important undertaking of the kind in the history of the country and was the first instance of the employment of professional accountants in so important an undertaking by the Federal government.

On March 4, 1895, after their work for the government was officially completed, Elijah Watt and Charles Haskins entered into a partnership and opened up a small office in New York City. In 1896, the State of New York passed legislation creating the professional designation of “Certified Public Accountant” and both Haskins and Elijah Watt satisfied the criteria to become among the first “CPA’s” in the country. A significant part of the firm's practice was in govern- mental accounting, including the city of Chicago. In 1901 the firm opened an office in London. In 1908 he investigated the financial system of the Philippine Islands. Elijah Watt helped his partner, Haskins, in establishing the School of Commerce, Accounts, and Finance at New York University in 1900. When Haskins died in 1903, Elijah Watt became the senior administrator of the firm.

Elijah Watt became one of the leaders in the growing profession of public accounting. In 1906 and 1907 he was president of the American Association of Public Accountants - forerunner of today’s American Institute of Certified Public Accountants (AICPA). The AICPA continues to honor him through the Elijah Watt Sells Award, which is given to those with superior grades on the CPA exam. Elijah Watt was also a thought leader in establishing important standards for public accountants. In 1921, for example, he called for the increased use of the natural business year by American businesses, and also stressed the role played by accountants in keeping businesses in a state of financial health. In 1915, he pushed for the selection of public auditors by stockholders and urged accountants to run for public office so they could bring their expertise to public administration. In 1909 Elijah Watt, like many of the accounting pioneers, urged the adoption of an up-to-date costing system by manufacturers. He advocated federal recognition and regulation of the accounting profession. In 1914 he spoke out for certified quarterly statements to offset the effect on investors of the "muck-rakers,", and in 1912 he presented a call for tax reform.

In 1909, Baker University honored him by bestowing a Master of Arts degree and 1916 New York University presented him with an honorary doctorate. He continued on as the senior administrator of the firm he founded until his death in 1924.