862.50/877
The Ambassador in Germany ( Dodd ) to the Secretary of State
[Received April 19.]
Sir: I have the honor to report that on March 26 at a Congress of leaders of the German Labor Front at Leipzig, an agreement was announced between Dr. Schacht, who as Reich Minister for Economics has authoritative jurisdiction over the Reich Economic Chamber, and Dr. Ley, Leader of the German Labor Front, providing measures for the coordination of the economic and social policies of these two bodies. In principle the agreement is ostensibly a compromise between these two groups which, as is generally known, have not hitherto worked together in the closest harmony; some of the implications of the agreement, however, have given rise to speculation as to whether in its actual application a certain ascendency, more probably that of the Economic Chamber over the Labor Front, will not eventually assert itself.
The agreement, which was approved in a decree of the Führer issued the same day, provides for the creation of a Reich Labor and Economic Council to be formed of the Advisory Board of the Economic Chamber, consisting of the main group leaders in that body, and the Reich Labor Board, composed of Reich and district leaders of the Labor Front. The Ministers of Economics and Labor are to be invited to the sessions of the new body, whose primary purpose is the discussion of economic and social policies affecting both. The corresponding subordinate local groups of the two organizations are to be similarly joined together to form District Labor and Economic Councils.
[Page 259]A circumstance that raises the suspicion that economic rather than labor considerations are to have a predominant place in the new arrangement, is the provision that the office of the Reich Economic Chamber is to be at the same time the Economic Board of the Labor Front, the latter thus being subordinated to the Reich Economics Minister. In the same way the district offices of the Economic Chamber will act as the regional Economic Bureaus of the Labor Front.
Going still further, the agreement prescribes the pattern to be followed in the internal organization of the Labor Front itself. The leadership of all organs and sections of the Labor Front, including those formed on regional lines as well as according to individual industries, are, in accordance with this agreement, to be composed as far as possible of equal members of “plant leaders” (employers) and “members of the following” (workers). It is provided that, if the local head of the Labor Front is not a plant leader his deputy must be. At various intervals each local Labor Front unit is to call meetings of its members to listen to lectures by suitable personalities aimed at “awakening in the plant leaders a proper understanding of the just claims of their following and to awaken in the following an understanding of the situation of their particular plant, and thus to bring into being a real creative community of the people.” Opportunities are to be given for the discussion of the subjects lectured upon.
Within the various trades working committees are to be set up whose membership is not to exceed 12 in number; it is provided that they are to be composed of equal representation of plant leaders and the following. These committees may discuss questions of social policy with a view to the necessary adjustments being made, and the local competent “labor trustee” may attend or be asked to attend these meetings. If any decision is to be reached it must be taken solely by the “labor trustees,” the committee being competent merely to submit to him for his consideration the results of its discussions.
Both Dr. Ley and Dr. Schacht, who spoke before the Congress at Leipzig, emphasized the interdependence of social and economic policies and acclaimed the new agreement as a consummation of efforts to coordinate the two, and as a step towards bringing about a self-regulation of industry without immediate government supervision.
In the absence of specific regulations it is still uncertain how the scheme will be carried out. In particular, it is not known whether the new Reich Economic and Labor Council will be a supreme body entrusted with authoritative powers over both the component organizations, or whether it will be merely in the nature of a consultative committee. On the surface, however, the plan seems calculated to [Page 260] favor the employers’ interests for, while equal representation is provided for generally throughout the organs of the Labor Front, the balance would be definitely against labor as such in the combined Council. It appears significant, moreover, that the Reich Economic Chamber and its subsidiary branches are designated to serve as the economic bureaus of the Labor Front. Officials in the service of the Economic Chamber seek to convey the impression that their office will exert a controlling influence in the scheme and openly surmise that Dr. Schacht or a dominant personality in the Economic Chamber, will preside over the newly-created joint Council.
Respectfully yours,