862.5043/11–2245: Telegram
The United States Political Adviser for Germany (Murphy) to the Secretary of State
[Received 3:05 p.m.]
1072. It appears that the drive for social change in the Soviet Zone of Germany, reported in my 866 of October 28 has already begun to pass from words to action. Though solid facts on status of property relations are scanty, and though many de facto changes have not yet been legally established, it seems clear that urban eastern Germany is now experiencing the beginning of social revolution. Perhaps the most important change so far is psychological. Radical workers, supported by Soviet MG, seem to be in ascendancy, employers are under restraint, and the workers are taking possession of the economic instruments of power.
John Scott on November 15 wired Time, Inc., that best estimates say 90 percent of board members and managers of economic enterprises in the Soviet Zone fled when Red Army came or were eliminated [Page 1073] as Nazis within a few weeks thereafter. According to Scott, in perhaps half of cases works councils put factories back into production, and these councils are becoming most important factor in economic life of Soviet Zone. The “big five” banks are still closed and Soviet MG has created municipal cooperative and state banks to replace them. In spite of these changes and Soviet removals of equipment, the Ministers for the Soviet Zone reported to Zhukov in a conference November 12–14, that industrial production is about 20 percent of 1938 levels. This figure seems doubtful, however.
According to Hans Jahn, title to most of the enterprises now managed by works councils or trustees has not been transferred and still theoretically belongs to former owners. Die Freie Gewerkschaft recently has reported several instances in Berlin where alleged Nazi owners have returned and usually been refused permission by the workers or the city authorities to resume their directing positions but were not expropriated. When any industrialist returns with a Soviet MG certificate that he is not a Nazi, he is reinstated with full property rights.
FDGB, KPD and SPD press campaign to identify big business as such with Nazism and militarism has continued. The first consummation of the campaign occurred November 14 when the Govt of Bundesland Saxony, where land reform is complete, officially proclaimed: “The principal guilt for the criminal Hitler war policy rests on German monopoly capital, which for decades, ruthlessly employing its economic power position, used state organs to carry out private capitalist interests. The only possibility to prevent German monopoly capitalism from plunging the world into the misfortune of a new war for the third time is the economic disenfranchisement of the German monopoly capitalists and the use of their means of production for the welfare and interests of the entire people.” The proclamation decreed the expropriation without indemnity and state ownership of all the property of Friedrich Flick within Saxony. No judicial process preceded this act. On November 17 the Land Saxony Govt proclaimed the taking over of all the hard coal mines there. It has also acquired a good part of the inland shipping fleet. As of October 1 the Wilhelm-Gustloff Werke were made a workers’ cooperative by the Thuringian Govt.
Thuringian works councils law of October 10, 1945, just received, provides, as did the German law of 1920, that two members of works council shall sit on control board (Aufsiehtsrat) of each company having such a board, and shall have two votes. No employment or dismissal can be made without approval of works council. Disputes over such questions shall be settled in labor courts. Works councils shall cooperate in production programs and receive quarterly reports from management, and eliminate Nazi ideology among employees, [Page 1074] negotiate grievances, supervise execution of safety rules, cooperate in setting up and managing social services, and cooperate closely with the FDGB committee. The law virtually states that the FDGB shall he the only union in Thuringia, while Soviet MG will not permit any employers’ associations in its zone. Campaign for works councils with voice in management continues undiminished elsewhere in Soviet Zone. Under title “Building Workers Create New Legal Foundations”, Die Freie Gewerkschaft, November 6 reported three collective agreements in Berlin embodying provisions similar to Thuringian law. In addition, one agreement provided that all shop rules needed works council approval and another gave works council right to participate with management in discussion on production with German and Allied officials. Proposed contract presented to Aschinger Firma Berlin by food workers union would give works council two out of three votes on directing board and enlarge present two man control board to six, one of whom would represent works council, one trade union, two city govt. This proposal is now being negotiated.
Hans Jahn states railroaders union now has equal voice with management of Reichsbahn from bottom to top in Soviet Zone.
Text of Thuringian law going forward by despatch.91
Sent to Dept as 1072 repeated to Moscow as 74.
- Sent to Department under cover of despatch 1435, December 1, from Berlin, not printed.↩