Accounting by decree: The impact of government policy on cost practices in the United States of America – 1933 to 1939

This article explores the impact of federal government policy and societal trends on cost practices and management techniques used to support business structures within the United States between 1933 and 1939. These dates reflect the influence of the Great Depression in the USA. Specifically, we explore the influence of the National Industrial Recovery Act (1933) on the development of costing and pricing policies from the perspective of the social rule system theory. Using this theory and source documents from the ‘New Deal’ period and the National Industrial Recovery Act, the article explores the costing assumptions underlying the Act's definition of ‘cost’. The Act was enforced through government policy (1933 to 1935) and supported by the Blue Eagle symbol throughout the period. This resulted in a pseudo-competitive market structure where Blue Eagle costing (full cost recovery and earning a ‘fair and reasonable’ profit) became the basis for market pricing and business management.