February 2004

A Torchbearer of Accounting Education

By Allan M. Rabinowitz

April 13, 2004, marks the 125th anniversary of the birth of Homer St. Clair Pace, a pioneer in the field of accounting education. Born in a log cabin in Rehoboth, Ohio, in 1879, he went on to become an accomplished educator, an author of widely read accounting literature, a leading practitioner and professional, and a charismatic inspiration to thousands of accounting students and colleagues in a broad variety of pursuits.

Homer Pace assisted his father, a Civil War veteran, educator, and journalist, in publishing a weekly newspaper in Chase, Michigan; this ended after two years with his father’s death in 1896. This was followed by two years of work as a law firm stenographer along with law studies in Michigan; several months of varied office responsibilities at a Texas lumber company; a War Department civil service appointment in St. Paul, Minnesota; and a position as private secretary to the president of the Chicago Great Western Railroad.

In January 1901, Pace, now a family man, relocated to manage the railroad’s New York City office. He soon became the railroad’s assistant secretary, the secretary of an affiliated line, and later the railroad’s corporate secretary. While at the railroad, he acquired some financial experience and began to recognize the value of having a formal business education. Obtaining copies of high school Regents exams, he studied for them on his own, passed them, received a high school diploma, and enrolled in a CPA preparatory course. On May 26, 1904, he wrote the following in a letter to a lifelong friend:

I found that in doing this C.P.A. work that New York afforded very little and very poor instruction along these lines, and I found that the accounting literature in the United States was practically nil. I have bought probably $75 worth of books, nearly all English. In studying I have prepared literature on different branches of accounting and, with a lawyer friend of mine, have prepared lectures on various law matters. These treatises have reached considerable volume, and several accountancy students are now studying them for the June examinations … I have been considering the advisability of opening up a school in New York for coaching in accountancy.

During 1904, Homer started tutoring CPA examination candidates at his Brooklyn home, and he passed the June 1904 exam. In 1906, he left the railroad, and in October, with $600 borrowed from the railroad’s treasurer, he opened a one-classroom school serving 12 students in the Tribune Building at 154 Nassau Street in Manhattan, alongside the Brooklyn Bridge and across the street from City Hall. This partnership venture, titled Pace & Pace, included his lawyer brother Charles and had as its prime objective the preparation of candidates for the New York State CPA exam.

Initially, the course of study comprised classes held two nights a week for 66 weeks, consisting of lectures on accounting, law, and applied economics. Over the ensuing years, the brothers continually enhanced and updated these lectures. They also agreed to furnish faculty and texts for new accounting classes at the 23rd Street YMCA in New York City. These efforts met with quick success: Their very first student, James F. Hughes, went on to establish his own CPA firm, become the president of both the New York State (1935–37) and New Jersey State societies of CPAs, and become an accounting instructor at Columbia University.

Leading New York City accountants showered compliments on the Pace brothers’ texts. The schools’ enrollments increased due to referrals by accounting firms and satisfied students as well as the brothers’ excellent marketing skills. Within three years, hundreds of students were enrolled in the courses that were now being offered in a number of YMCA schools. These successes led to additional YMCA extension and Pace private schools in major cities throughout the country, all featuring the Pace standardized courses. They advertised that instruction was being provided by practicing attorneys and CPAs. By 1919, more than 4,000 students were taking these courses in just the New York City metropolitan area; by 1921, they were offered in more than 50 schools.

In 1921, concerned with maintaining the highest standards of quality, the brothers decided to confine their efforts to the Pace private schools. A few years later, they further determined to devote their attention only to their first school, although several other schools continued to offer Pace courses under a franchise arrangement. The first school continued to expand its business curriculum, eventually becoming Pace Institute. It added to its liberal arts offerings, in 1935 becoming a corporation, in 1942 a nonprofit institution, in 1948 a college, and in 1973 a university with campuses in New York City and Westchester County. It is probably the only major U.S. university that had its beginnings as a school of accounting.

Homer Pace was the top administrator at Pace & Pace and served as the president of Pace Institute. During World War I, in 1918–19, he went to Washington, D.C., as acting deputy commissioner of what we now know as the IRS, and developed the operations of the Income Tax Unit. He was an accomplished writer and editor, playing founding and central roles for the Pace Student, an accounting, business, and career-advice publication that first appeared in 1915, and for the American Accountant, which succeeded it in 1927. The latter publication, catering to the interests of practicing accountants, had a broad subscription base and ran until 1933, when the economics of the Great Depression brought it to a halt.

Pace & Pace, the accounting firm founded in 1906, was succeeded in 1928 by the international accounting firm of Pace, Gore & McLaren, an affiliation of 40 local independent accounting firms with offices in every state and Canada, Europe, and Cuba. Again due to the Great Depression, the affiliation was dissolved in 1933. A highlight of Homer Pace’s distinguished career was his service as president of the New York State Society of CPAs from 1924 to 1926.

Homer Pace was noted for his superb organizational skills, excellent writing and public speaking abilities, ability to motivate and inspire, public relations expertise, professional standards, and high moral character. The accounting texts he authored were frequently updated during his lifetime and covered a four-year curriculum that included bank, stock brokerage, municipal, nonprofit, estate, and insurance accounting as well as public auditing. They remained in print for half a century.

Homer Pace was revered by his colleagues and students alike because of his profound positive career and personal influence on countless thousands of them, many of whom he also trained to become competent instructors. He was a tireless worker and possessed a rare blend of morality, practicality, foresight, and creativity. The light from the torch of knowledge that he lit continues to shine brightly as Pace University prepares for its centennial celebration this year.

He died in May 1942 at the age of 63. His tombstone reads, “Homer St. Clair Pace, Teacher.”

Allan M. Rabinowitz is a professor of accounting at the Lubin School of Business, Pace University, New York, N.Y.

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