862.5043/10–2845: Telegram

The United States Political Adviser for Germany (Murphy) to the Secretary of State

866. Now that the land reform has been almost completed the KPD and the Free German Trade Union League in the Soviet Zone of Germany have thrown into high gear a drive for social revolution in the industrial and commercial fields. Refer to my despatch 786 of August 16, 194580 and to recent press telegrams, particularly 589, [Page 1066] Sept 22.81 Their disciplined and wide-spread campaign both in propaganda and in action is now concentrated on the following immediate objectives:

Election in all plants of works councils which will have an equal vote with management in all matters, and enactment of a new works council law. The initial appeal of the FDGB in June discouraged for the time being the further formation of works councils but called for democratic worker representation in directing economic reconstruction. In the succeeding months the KPD and SPD Berlin press reported instances of trade union participation in factory management and actual operation of abandoned plants. On Aug 29 Walter Ulbricht (KPD) in a comprehensive program speech to the FDGB local conference at Halle announced the new line, saying: “After the fall of the Hitler rule the workers and salaried employees in all parts of the Reich created works councils or committees—naturally these works councils can be successful only if they support themselves on the organization of the Free Unions in the enterprises and if leading trade union officers also belong to the works council.” The workers, continued Ulbricht, must have a vote in management (Mitbestimmungsrecht) beginning with the single enterprise and including the highest point of the central economic organization. The works councils should bring the experience of workers, employees and technicians to bear in production planning and negotiations, of management with state authorities, help denazify management and liquidate concerns and cartels, and prevent secret war production. The Deutsche Volkszeitung immediately began the campaign for works councils and reported various meetings which demanded them, but the other Berlin papers remained silent on the subject. On Sept 17 a conference of 600 shop stewards at Erfurt laid down detailed rules concerning the election and functions of works councils. The initial issues of the newspaper Die Freie Gewerkschaft Oct 9, 12, 16, 19 and 23 are filled with articles calling for workers representative bodies and report numerous factory meetings which demanded works councils with managerial power. The second delegates conference of the FDGB for Province Brandenburg on Oct 7 unanimously resolved in favor of a works councils law which will secure fully the rights and democratic freedom of those who work. Conference of the metal workers and other individual unions have passed similar resolutions. As a result of this campaign it has just been announced in the Berlin press Oct 23, that the Thuringian Govt has passed a new works councils law which adequately secures the interests of the workers vis-à-vis management. Other laws of a like character will probably be promulgated soon in the rest of the Soviet Zone.
Radical breaking-up of large concerns and elimination from managerial positions of all Nazis and militarists and of those who allegedly delay reconstruction. The effort is being made in KPD and FDGB propaganda to include all industrialists in these categories. Ulbricht keynoted this theme in his Halle speech. Schlimme SPD in Die Freie Gewerkschaft of Oct 16 wrote: “The leaders of the German economy stand in great part next to the political and military originators of the world catastrophe and are small and hateful before the [Page 1067] courts of the Allied Powers. The bourgeoisie, embodied in capitalism, have with the help of National Socialism dug their own grave. It is the trade unions in which all the forces for reconstruction of the economy and the state are to be found.” Moericke, President of the FDGB for Province Brandenburg, said at the Oct 7 conference: “Not the employers, no, the workers, eager to build, brought about the reopening of enterprises and carried through under great sacrifice, without counting the cost.” Then the conference resolved that all monopolies, and concerns, especially those of mining and heavy industry, as well as all enterprises whose directors are gone, should be expropriated by the state, and that the German economy should be centralized in accordance with the Potsdam Agreement. Numerous individual employees have been singled out for special attack and not a few have been forced out and replaced by trade union leaders and others. Moreover, the local organs of the FDGB are helping to administer many abandoned enterprises, including all the lignite mines and briquette plants of central Germany.
Trade union participation in chambers of commerce and industry, other industrial groupings, public enterprises, and state economic offices. This part of the program has to a large extent been achieved. The FDGB has helped develop reconstruction programs for various industries and participate in all state economic planning in the Soviet Zone. Its local committee outside of Berlin handle all the labor placement work formerly done by the labor offices (Arbeitsämter). According to a reliable source, the new plan for a unified social insurance system for the Soviet Zone in the preparation of which the FDGB participated and which is now before Gundelach, provides that the FDGB should have sole control, just as the unions in the USSR manage its social insurance scheme.

The above developments reinforce other indications that within a few months the Soviet Zone of Germany will be virtually a socialized state, which will exert great pressure in the direction of similar changes in western Germany.

Sent to Dept as 866, to Moscow as 59. Copy to Vienna by pouch as 25.

  1. Not printed, but see footnote 47, p. 1044.
  2. Not printed.