Accounting for the history of Wellcome

‘Eureka!’ It’s not often that the opening of a cardboard box evokes Archimedes’s famous exclamation, but one day in November 1999 it seemed the only possible response.

Tilli Tansey and I had just begun our project on the history of the Burroughs Wellcome Company. The box contained a document with the unprepossessing label ‘ACC 82/1 Wellcome Foundation: miscellaneous historical collections. Finance: BW Co. Balance Sheet: 31 Aug 1885 – 1 Dec 1887. BOX 23’. It was cause of some consternation to us that these accounts covered only 28 months’ transactions, and that any other financial data to survive would be in code (the recollection of a previous archivist).

However, when we removed the lid, there sat an extremely bulky leather-bound ledger, closed by a large brass lock. Far from being the record of two years in the life of the company, this survivor of the London blitz was the account book of Burroughs Wellcome & Co. between 1880, when the partnership was formed, all the way up until 1940.

This thrilling find contained 240 quarterly balance sheets, each comprising between two and six pages of accounting information. Although badly discoloured and stiff from fire and water damage, the pages appeared to be intact, the copperplate writing just about readable. Because of the delicate state of the covers, the Glaxo Wellcome archivist judged the contents of the book to be inaccessible for copying. Fortunately, the Trust’s conservation department came to the rescue, skilfully removing the covers so the pages could be scanned and digital images transferred to CD-ROM.

Our sense of euphoria at the discovery was justified by the absence from the archives of a continuous set of minutes of meetings of the Board of Directors – usually a key source for business historians. Partly because Burroughs Wellcome was not a limited company, and partly because of managerial preferences, these did not exist until the formation of the Trust. Even then, until 1940 at least, the minutes are brief and, disappointingly, supporting documentation has disappeared.

We are the first historians to use the account book. What might it reveal? The Wellcome pharmaceutical company was, of course, the original source of the assets of the present Wellcome Trust, but when, how, and how large was the wealth the company generated? We hope to be able to throw light on such matters as the sources of additional capital from banks and other businesses, the profitability of the business, the rate of financial return on investment, and the profits ploughed back into the business.

Profits withdrawn for non-business expenditure (and Wellcome’s personal and other expenditure) are also of interest, as are the financial relations between the Burroughs Wellcome subsidiaries in the USA, Australia, Canada, and the English parent (for example, who subsidised whom, when, and by how much?). Answering such questions is fundamental to the interpretation of other sources, most of which have told us little or nothing about business activity or, for example, the financial relationships between research, manufacture and distribution.

According to one school of thought, company accounts are a dubious historical source. More recently, however, scholars have applied modern accounting concepts to historical balance sheets and profit-and-loss accounts, enabling a company’s long-term financial history to be analysed with a considerable degree of confidence. Without this new source, it would have been impossible to compare Burroughs Wellcome with other companies. Nor would it have been feasible to test the theories expounded by other historians interested in Wellcome, who have been concerned primarily with biography, medical research, or the Trust. Discovery of this single document will allow us both to assess the company’s place in the history of the pharmaceutical industry and write a complete and credible history of the firm – warts and all.

Roy Church is in the Wellcome Unit for the History of Medicine at the University of East Anglia. He and Tilli Tansey of the Wellcome Trust Centre for the History of Medicine at University College London have been funded by the Wellcome Trust to research and write a business history of the Burroughs Wellcome company.

See also

• History of Medicine research at the Trust

External links

• Wellcome Trust Centre for the History of Medicine at UCL: Research interests of Tilli Tansey
• History of Medicine Unit at the University of East Anglia: Research interests of Roy Church