profit. These effects are well summed up in a Report of the Ministry for Economic Affairs: 1 "The method of the so-called war socialism," said Rudolf Wissell, Secretary of State for Economic Affairs,2" proceeded on the fundamental mistake of organising industry not organically from below upwards, but, so to speak, bureaucratically from above downwards. This is no accident; it was very anxiously desired to avoid carrying out organic alterations of the economic system which would have made it impossible or at least difficult for industry to return to pre-1914 conditions, which was generally desired. In constant expectation of an immediate cessation of the war, it was believed unnecessary to make large alterations in the economic structure. Policestate measures were, as a matter of fact, employed, which, beginning timidly in certain directions, ended with the control of the whole of industry by central administrative authorities more or less bureaucratically controlled and knitted together by a network of orders and penalties. From this condition of a police-state and bureaucratically directed industrial system, which recalls the bygone times of the limited intelligence of the subject, we must as soon as possible attain to a self-governing organisation of German communal-industry built up from below on the living forces of economic life." And the central point of that organisation was to lie, as will be shown later, in a Federal Economic Council.

A glance at a still more important union of forces is urgently necessary to our purpose. The great central associations of employers and workers, hostile before the war, made tariff contracts inviolable for the war period and began a civil peace." Alliances between both.

sides arose in several trades to concert measures for dealing with the unemployed and war-disabled men, but

1 Period, January to July 1919.

2 Report, March 5, 1919, to the Committee for Economic Affairs of the National Assembly, Wissell, op. cit. p. 22.

2

the attempt of the General Commission of Trade Unions in 1914 to bring about the establishment of a central alliance failed.1 The Trade Unions (the four biggest Trade Union groups) satisfied themselves for the time being with a socio-political alliance among themselves and the employees' organisations. The alliance secured an appreciable economic and moral power as a united front against the employers. The workers further had cooperated well with the employers on the joint works' committees set up compulsorily under the Hilfsdienstgesetzes (Auxiliary Service Law), and the Arbitration Committees to settle controversies between masters and men, as the law bound the working men to their place of employment unless they could show special reasons for leaving. Soon the transition period towards a peace economy loomed into view. When in 1918 the Imperial Ministry of Economic Affairs began the preparation for reconstruction, the employers, infuriated with bureaucratic management, decided that, better than State regulation, alliance with the Trade Unions was to be taught, "because at least they understand the needs of industry!" The Unions hoped much from State regulation. It is to be noticed that the workers now stood for the State and many employers against it. The former, too, argued that vocational self-government was preferable to bureaucratic regimentation. Their terms of alliance, set out in deliberations with the employers in October 1918, included the employers' recognition of the Unions as the appointed workers' representatives in industrial arrangements; the unlimited right of association; the joint and equal regulation of labour information; the setting up of joint and equal 5 arbitration

1 Cf. Paul Umbreit, " Die Magna Charta der deutschen Gewerkschaften," Recht und Wirtschaft, January 1919 (Berlin), p. 23. 2 December 1916.

3 Cf. Umbreit, loc. cit.; also Sinzheimer, "The Development of Labor Legislation in Germany," Annals of the American Academy of Political Science, Nov. 1920, and Korrespondenzblatt des Deutschen Allgm. Gewerkschaftstund, Berlin, Jan. 31-Feb. 21, 4 Umbreit, loc. cit.

1920.

5 From this point the expression "joint and equal" will be indicated by the term

F

boards; and the conclusion of wage contracts in all industries; and lastly, the employers were no longer to foster the "industrial peace Trade Unions."1 After an agreement had been reached on the conditions and project of agreements embodying them in November 1918, the first Industrial Alliance began to operate, formally, on December 12, 1918. Contracted between the workers' unions on the one side and a group of the Imperial industrial employers' associations on the other, it was called the Central Industrial Association of Industrial and Trade Employers and Employees of Germany. A translation of their charter appears in Appendix II. From it will be seen that the alliance, represented in Joint Central Councils for each industry, and in a Central Executive Committee of 46 "paritatically," of employers and employed, deliberates on the joint solution of economic, political and socio-political questions. The Councils and Committee express their attitude towards all legislation and administrative affairs which concern individual industries and trades therein represented. They exist, it has been said, to maintain creative will.4 "Free from all party evils the difficult reconstruction problems are to be solved purely technically." "' 5

On December 11, 1919, followed an alliance—the Central Alliance of the German Transport and Communications Trade; on February 20, in agriculture, arose the Imperial Industrial Alliance of Agricultural and Forestry Employers' and Workers' Associations; and in

"paritatic," a translation of the German paritätisch, meaning joint and equal representation and power. Parity we have in English, but not a manageable adjective derived therefrom. 1 Cf. Leibrock, Die Arbeitsgemeinschaft, p. 21 (Berlin, 1920).

2 Zentralarbeitsgemeinschaft der industriellen und gewerblichen Arbeitgeber und Arbeitnehmer Deutschlands.

3 Of which there were fourteen in the Central Alliance. See Appendix II. 4 Leibrock, op. cit. p. 88.

5 Ibid.

6 Zentralarbeitsgemeinschaft des deutschen Transport- und Verkehrsgewerbs.

7 Reichsarbeitsgemeinschaft land- und forstwirtschaftlicher Arbeitgeber- und Arbeits

nehmervereinigungen.

November 1920 the Imperial Industrial Alliance of the Milk Trade1 was founded. Attempts to secure an alliance in commerce and the clothing industry have failed so far; in the former owing to the lack of unity in the workers' associations, in the latter owing to the lack of unity in the employers' organisations. There is much dislike of the Alliances, of course, by 'extremists on both sides, but the German Ministry of Labour entertains a high opinion of the value of the Alliances to the community and the Government.2

3

Here, then, were Parliaments of German industry already being constituted by the parties to industry themselves. Their influence towards a recognition of industry as an estate capable of and entitled to exercise a control over the actions of the Imperial Parliament in its relations to economic and social affairs is easily and abundantly to be discerned by a reading of the debates in the German Constituent National Assembly of 1919– 1920. Again and again speakers of the most varied political attitudes of mind emphasise the importance of the Industrial Alliance idea-industry in conference must in future speak for itself and aid Government by its counsel. The idea of a vocational representative body forcefully broke through the present-day influences of the party and electoral policy, and through the influence of catchwords and doctrines, which candidly make it impossible to establish objectively right decisions in economic affairs." It was but a short step towards the establishment of a more comprehensive Parliament for Industry.5

4

Nor did immediate plans for such a step lack expression. Discussion, "already began during the war in

1 Reichsarbeitsgemeinschaft im Mölkereigewerbe.

2 Cf. 25. Sonderheft (already cited), p. 34 et seq.

3 Leibrock, op. cit. p. 29.

4 Ibid. p. 117.

5 Cf. remarks on the English National Alliance of Employers and Employed, and the Industrial League and Council, infra, Chapter VIII.

the offices of the Ministries and Imperial Departments, in the bureaux of the big enterprises and in various political clubs, at the time when the small yellow-book Deutsche Gemeinwirtschaft, by Wichard von Möllendorff, afterwards Under - Secretary of State, was to be found open-hidden, it is true, by many uneasy people-among official documents, circulating on the writing-desks and even in the rooms of the Heads, Ministers as well as industrial leaders." This book was published in 1916, and contained a scheme for an economic Parliament composed of technical experts, leaders of industry, based upon self-governing economic organisations within an economic system ordained by the State. "A permanent Economic Council," said Möllendorff," "along with its committees of second and third rank, would in its full realisation mean nothing else than economic selfgovernment, as it was already forecasted by Stein 3 and Bismarck, and whose understructure was indestructibly built during the war. . . . A whole A whole army of experts in war economy has been raised. It would be a sad matter were we not able to expect to see issue therefrom an able army of fellow-workers in the economy of peace-time." The scheme was further presented in a number of the Vossische Zeitung. There, in an article entitled A German Federal Economic Council," the author showed how, during the war, industry had been made the organ of State administration; how, then, to prepare for reconstruction, a Department of Economic Affairs had been set up at the end of 1917, outside the particularistic interests and

3

1 Glum, "Das Problem des Reichswirtschaftsrats," Recht und Wirtschaft, February 1921, p. 35 et seq. 2 Op. cit. pp. 22, 23. Möllendorff was a Professor in the Technical High School, Hanover, till his appointment as Under-Secretary of State for Economic Affairs in September 1918. He resigned July 1919.

3 A pioneer in self-government in the municipal sphere. Cf. Möllendorff's Von Einst zu Einst (Jena, 1917), a collection of extracts from Frederick the Great, Fichte, von Stein, List, Bismarck and Lagarde on German national economy.

4 September 14, 1918.