The Ambassador in Germany (Dodd) to the Secretary of State

No. 464

Sir: In amplification of my despatch No. 451 of January 18, 1934, I have the honor to report that the so-called “law for the regulation of national labor” enacted on January 20, 1934, which virtually constitutes a new labor charter, was published on January 23. The new law is an attempt to solve the problem of capitalism and labor in accordance with National Socialist tenets and to do away with class struggle, strikes and lockouts. It is an important departure from the old type of labor legislation.

The Nazis contend that the materialistic individualism of the postwar era of liberalism was responsible for the rise of Marxism which led to class struggle, and one of the principal features of the new [Page 259] law is that employer and employee are to form a community of interests; both are to be held responsible by the Government for the welfare of the shop or factory.

Unlike Mussolini’s Carta del lavoro, the German labor charter is not based on the corporative system. The trade unions have been completely eliminated. Like all social, cultural and economic organizations in the Third Reich, the new labor charter is based on the principle of authoritarian leadership. In every factory the head of the concern or his representative is the Führer of his men. However, his position with respect to his employees and workmen is not that of an absolute dictator. To safeguard the interests of the latter the law provides for the establishment in each place of business with more than 20 employees, of a so-called “confidential council,” which is to look after the interests of the workers. No factory is to have a confidential council of more than ten members. These “men of trust” are elected by the workers. The list of candidates is prepared jointly by the Führer of the shop or factory and the leader of the Nazi Cell Organizations, and the balloting procedure is the same as that employed in the general elections of November 12, 1933. The workers in a shop or factory can vote either yes or no for the whole ticket. In case a majority votes in the negative, the members of the confidential councils are appointed by the trustee of labor (see Embassy’s despatch No. 2441 of May 27, 193352).

The law gives the trustees of labor who are appointed for labor districts, not for industries, especially important functions and far-reaching powers. Their primary task is the maintenance of industrial peace. They are now in effect social-political representatives of the Reich Government, and in order to lend emphasis to the importance of their authority they have been given the character of Reich officials. The trustees of labor must watch over the activities of the confidential councils. They must also examine the regulations issued by the Führer of a shop or factory with respect to wages and conditions of work. They have power to rescind these regulations and issue new regulations themselves if requested by a majority of the confidential council. They can interfere in cases where large dismissals of men are contemplated and are empowered to postpone dismissals for four weeks and in certain cases to prolong this period to two months.

A novel feature of the new labor code is the “court of honor” consisting of a legal official (as chairman), an employer and a representative of the workers. These courts deal with a long list of specified offenses, characterized as injuries to social duty. Appeals from the decisions of these courts are to be made to the Supreme Court of Honor [Page 260] in Berlin. The trustee of labor can appeal to the higher court in every case. On the other hand, the defendant (employer or employee) can appeal only if the fine exceeds 100 marks, if the lower court rules that the head of a concern or his representative is not capable of being a Führer, or that a workman is not fit to be on the confidential council, or if the court decides upon the dismissal of an employee.

In commenting on the new labor code, Dr. Ley, the head of the German Labor Front, intimated that during deliberations on this law the experts representing employers offered many objections. It is not known what the nature of these objections was. Public opinion was not consulted in drafting the law, and few persons in Germany, if any, will have the courage to criticize it openly now.

Though the new labor code is no doubt intended to give the impression that it is genuinely socialistic, it has all the earmarks of a compromise between the capitalist and socialist tendencies in the Nazi Party. It is a flexible instrument, and much will depend upon its application. It is probable that the chief motive for its enactment was political, namely the desire of the National Socialists to obtain the support of the laborer and to strengthen thereby their own position. It remains to be seen whether the workman will be contented with a law which deprives him of the right to strike and gives so much power to the trustees of labor.

Respectfully yours,

William E. Dodd
  1. Not printed.