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 the country, and which co-operates with the Production Councils of the various trades and industries. It is now a matter of organizing the Production Councils in the provinces, as the work of establishing the democratic control by the workers is practically completed in Budapest. Perhaps from the standpoint of efficiency the problem of managing human labour is closely allied to the amount of democratic control which can he established.

"There is now a special organization of factory workers to look after the hygienic conditions of the workers. Until now there were no women inspectors, in spite of the great number of women employed in the factories during the war. It is essential, in my opinion, that those who do the work best should have the greater financial return, at least now during this state of transition, until real socialism is established. We have therefore established categories of workers with minimum wages, but the good worker gets higher wages, and those who commit 'American sabotage,' by working slowly lose in the end. Generally speaking, time rates, instead of piece work has been established.

"Another of our important problems is the distribution of raw materials. We cannot say that we have sufficient raw materials, but we have enough to fill present requirements, and we can hold out for a considerable time with our own production. We have made a thorough inventory and only those factories are supplied which are held to be absolutely in need. It is no longer possible for different factories to receive separate orders, as all orders must be transmitted through the Central Production Council, which assigns the order to the factories best fitted to fill them. The organization of a separate raw material department has become necessary, as it is a most difficult thing to furnish small establishments without the district distribution centre, and this is the only efficent method of rationing and controlling production."

The distribution of finished products is outside of his department, Havesi says, but there are already organized district offices for the distribution to the individual co-operative societies of the finished product. He states that the co-operative