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more and more to the tendencies of organization. The idea is steadily gaining ground that the economic activities of a people form one great organism, and that for this reason a general economic administration is necessary in order to put production on a rational basis and to promote social justice. But how can the State perform the tasks of general industrial administration, seeing that it is overwhelmed by other duties? The methods of the State are political methods, but the management of economic enterprises requires special technical knowledge and business methods. The idea of a general management of economic enter- prises is therefore inseparable from the idea of a special economic constitution with independent machinery to enable it, on behalf of the State, to fulfil these general economic functions. The machinery of a separate economic constitution of this nature is to consist of the Councils referred to in Art. 165 of the constitu- tion of the Reich.

The second principle is the ideal of an economic democracy. Up to the present time economic enterprise has been the private affair of the persons engaged in it. They were the creators of the industries and to them alone the products of labour belonged. They alone were responsible for what took place in the economy of the enterprise; the employees were not regarded as cooperating with them, but merely as their assistants who could act only in accordance with the wishes of those conducting the business. They received their wages; the method of conducting the busi- ness was no concern of theirs. They had no voice in framing the regulations affecting relations between employer and employed; they had nothing to do with the way in which the enterprise was conducted. " Industry," " commerce," and " agriculture " were alike represented, not by employers and employees, but solely by employers. Economic democracy, however, calls upon the employee to join in determining not only the conditions on which labour is hired but also questions concerning the manage- ment of the business. Such questions are to be regarded as the concern both of employer and of employed. The employee must not only concern himself with his own particular task, but he must also consider the object of all labour, which is to provide the whole community with economic products. Hitherto Ger- mans have been living in a period of economic autocracy; now a constitution had to be framed which should give the employee the right of cooperating in the sphere of business management and social welfare. This was implied in the first paragraph of Art. 165, by which the workers and salaried employees are entitled to " cooperate on equal terms with the employers in regulating conditions of work and wages and also in the whole economic development of productive capacity."

The third principle is the construction of a system of represen- tation of labour in accordance with the principles of association and of community of interests. Social life is comprised in two manifestations of the human will. In the one man is opposed to man, group to group, interest to interest. The struggle for exist- ence is the essence of it. In the other, connexions are formed between individuals and between groups, which are subordinated to a higher unity in order to achieve a common object. In this manifestation the guiding principle is that of mutual aid. If this two-fold object of the forms of social life be applied to the organ- ization of labour, the legislator finds himself confronted by two distinct tasks. On the one side he must institute organs of repre- sentation by means of which labour may look after its own special interests in the face of interests which conflict with them. On the other hand he must institute for labour such means of repre- sentation as may enable it to cooperate with, and to have a say- ing in, the decisions of other organizations for their mutual bene- fit. It will be seen, therefore, that, according to Art. 165 of the constitution of the Reich, two kinds of councils have to be insti- tuted. In the one kind the workers and salaried employees ob- tain, " for the protection of their social and economic interests, legal representation on Industrial Factory Councils and also on Regional Workers' Councils and in a Workers' Council for the whole Reich." In the other kind the District Workers' Councils and the State Workers' Council, " in order to fulfil their economic tasks as a whole and to cooperate in the execution of socialization

laws, shall meet the employers' representatives and delegates from other sections of the people concerned in District Economic Councils and in an Economic Council for the whole Reich. These District Economic Councils and the Economic Council for the Reich shall be so constituted that all the leading groups of trades are represented on them in accordance with their economic and social importance."

The fourth principle is concerned with the future relations of these councils with other forms of organization by which employ- ers and employed have hitherto managed their mutual affairs. Economic and social life is not organized by the State alone; it organizes itself in various forms. One of the most important is the collective-wages tariff. Since the end of the war another form of self-determination has arisen, that of joint labour organizations, in the shape of unions of employees' and employers' associations (Arbeitsgemeinschaften) for the purpose of dealing with questions connected with particular trades which affect both parties, more particularly economic questions. There are joint organizations of this kind for industry, commerce and agriculture. Collective- wages contracts and joint labour organizations constitute the voluntary bodies for self-administration in the constitution, which was the object of the legislation in regard to councils. The councils legislation does not aim at suppressing the activities of this social self-determination, but at maintaining it, and at link- ing it up with the economic structure as a whole. This is the meaning of the second sub-section in Sect, i of Art. 165 of the constitution of the Reich by which the organizations of both parties and the agreements between them are " recognized," and of the final sentence of this article in which the adjustment of the relations between the statutory councils and these social autonomous bodies is regarded as the business of the Reich.

Up to the autumn of 1921 the Factory Councils Law of Feb. 4 1920 (Reichsgesetzblatt, p. 147) had been the only piece of legis- lation enacted to carry out Art. 165 of the constitution; the Economic Council of the Reich had been instituted provisionally; its functions had not yet been defined in detail. Arrangements for the formation of the District Economic Councils were still proceeding; they were bound up with more extensive plans for administrative organizations, in particular with the question of the formation of so-called industrial provinces. The main lines of the Factory Councils Law are as follows:

Factory councils are to be established in all factories employing as a rule a minimum of 20 workers. These councils deal with the conjoint economic interests of the employees (wage-earning workers and salaried employees) in their relations with the employer, and are to assist him in carrying out the objects of the industrial enterprise in which they are engaged. For the protection of the particular economic interests of the workers and salaried employees in their relations with the employer, separate workers' councils and salaried employees' councils shall be established in all factories where factory councils exist in which workers and salaried employees are represented. Public officials and candidates for official posts are not regarded as employees. Home workers who, in the main, work for the same factory and do not themselves employ others have a special council in those factories where a minimum of 20 home workers are employed. The establishment of special industrial councils for those who are employed in maritime and inland navigation is contem- plated. By the term " factories " (Betriebe) is understood all fac- tories, businesses, and managements both publicly and privately owned that is to say, not households, but State and communal factories, in so far as workers and salaried employees not officials are employed. The factory council consists of at least 3 and at most of 30 members, according to the size of the factory. Those members of the factory council wno, as workers and salaried employees, are also members of the workers' or the salaried employees' council are chosen by direct and secret vote on the system of proportional representation; they are elected for a period of one year, and are eligible for reelection.

All male and female workers over 1 8 years of age who enjoy full civil rights have the right to vote. Electors over 24 years of age who are citizens of the Reich, who have passed the stage of apprentice- ship, and who on the day of election have been employed in the factory or business for at least 6 months, and have been engaged in that particular branch of industry or occupation for at least 3 years, are eligible for election. The members of the factory council and their representatives are to fulfil the duties of their office with- out payment and as honorary officials. In factories where, as a rule, less than 20, but more than 5, workers having the right to vote are employed, of whom at least 3 are eligible for election, a factory