HN 449 UC-NRLF ED SSfi ~"T 1 Wjfi Undesirable Results of German Social Legislation BY LUDWIG BERNHARD PROFESSOR OF POLITICAL ECONOMY AT THE University of Berlin (JULIUS SPRINGER, BERLIN, 1813) Translated by HAROLD G. VILLARD r orkmen's Compensation Publicity Bureau 80 Maiden Lane, New York 1914 Undesirable Results of German Social Legislation BY LUDWIG BERNHARD PROFESSOR OF POLITICAL ECONOMY AT THE University of Berlin (JULIUS SPRINGER, BERLIN, 1913) > V Translated by HAROLD G. VILLARD Workmen's Compensation Publicity Bureau 80 Maiden Lane, New York 1914 CONTENTS INTRODUCTION PART FIRST GOVERNMENTAL REGULATION AND PRIVATE HELPLESSNESS PAGE Chap. I. Governmental Authorization of Private Industrial En- terprises 7 Chap. II. Governmental Supervision of Private Industrial En- terprises - 15 Chap. III. Governmental Regulation of Private Industrial Enter- prises 23 Chap. IV. Government Acquisition of Private Industrial Under- takings 28 PART TWO THE STRUGGLE FOR INSURANCE PENSIONS Introduction 39 Chap. I. Medical Literature 40 Chap. II. Undesirable Results of Pension Insurance 45 Chap. III. Simulation 49 Chap. IV. Pension Mania and its Widespread Dissemination.,... 53 Chap. V. The Difficulty of Securing Reform Legislation 63 The Simplification of Procedure 64 The Restorative Treatment During the Waiting Period 66 The Abolishment of Appeals Free of Cost 68 The Reform of Small Pensions for Partial Disability 70 The Question of Lump Sum Payments 71 Conclusion 74 PART THREE THE MISUSE OF SOCIAL-POLITY INSTITUTIONS IN PARTY POLITICS Introduction 76 Chap. I. The Electoral Campaign 77 Chap. II. Party Rule 81 CONCLUSION The Limits of Social Legislation 88 M35298 INTRODUCTION. In the literature of all countries, this question always returns : How far may the freedom of movement of the individual, his spirit of enterprise, his independence and sense of personal re- sponsibility, how far may and should these sacred powers be re- stricted out of a proper regard for the interests of the whole body of the people? The philosopher, the politician, the clergyman and the technical man, all these are thinking of and discussing this question. But no one has determined with absolute certainty the point at which legislation in the interests of society as a whole should stop. Nor will anyone ever be in a position to do this, inasmuch as every period has its own peculiar requirements. For history reveals to us a changing struggle between the individual and society in an organized form; the individual contending first with the city commonwealth, then with the guild, again with the four estates and lastly with the socialistic community. We realize that this contest between individualistic and socialistic ideals has been an impelling force in the history of the world, perhaps the greatest impelling force. We recognize the highly beneficial effect of the guilds during the period in which they arose and throve, of this ironclad form of organization, to which the former glory of German cities was due. But we also know that later, when it was necessary to bring about a new ar- rangement, men of strong personality burst the fetters of the guild system, and that those countries made the fastest progress in which the individual struck out most freely and boldly into untrodden paths. Thus does history inform us of changes which at all stages were both welcomed and execrated. Every time such a change took place a flood of literature arose dealing with the old ques- tion : Where is the line to be drawn between the rights of the individual and the rights of society considered as a whole? And each time the writers finally had to admit that they knew of no answer. Today again we are encompassed with a mass of literary out- pourings in all civilized tongues, which ask the question, Where is the line to be drawn? After the old writers have had their say and have learnedly stated that "on the one hand" one ought not to destroy the spirit of initiative in the individual and that "on the other hand" one should exercise social justice, the younger writers come forward equipped with more polished phrases and with finer shades of meaning but say identically the same thing. Therefore, baffled by the hopeless outlook presented by this everlasting repetition of the same conclusions, I repaired to the factories and propounded to myself this sober question: Are there conditions in our modern industrial life which clearly show that the personal sense of responsibility and the needful freedom of movement is injuriously restricted out of social considerations? Are there concrete cases the facts of which, described in detail, will give us an insight as to where to draw the line of demarca- tion which should be observed today ? PART FIRST. GOVERNMENTAL REGULATION AND PRIVATE HELPLESSNESS. CHAPTER I. GOVERNMENTAL AUTHORIZATION OF PRIVATE INDUSTRIAL ENTERPRISES. Whoever has followed the controversy in regard to the grant- ing of concessions (a) might almost conclude that short-sighted heads of industry and a pettifogging bureaucracy were lined up in opposition to each other to the great detriment of the nation. It is not easy to pick one's way through the mass of requests and de- cisions, of debates and resolutions, of memorials and reports of proceedings, and it is still more difficult to determine thereafter who is really the "guilty party." On the one hand, we are informed that the bureaucratic inter- pretation of the rules for the granting of concessions "operates as a severe restriction on industry. It makes more difficult the installation and starting up of industrial undertakings and en- tails heavy costs." (*) We learn further that in the procedure for obtaining con- cessions there is widespread "a perfect mania for regulating and paragraphing everything" whereby "the limits of official powers are often exceeded." ( 2 ) "The methods of the officials in charge of concessions," it is asserted, "present a picture which could hardly have been more variegated even under the regime of the old government police system. The procedure for securing concessions has become so long-winded that frequently it is impossible to take advantage of favoring circumstances in proper season." ( 3 ) The assertion is made that "in many cases an industry in a foreign country will have long made use of a new invention be- C 1 ) Cf. the circular address on Sept. 7, 1909, to the members of the Deutscher Handelstag by their President (printed in "Handel und Gewerbe" of Sept. 25, 1909). ( 2 ) Report concerning the Result of an All Around Inquiry Addressed to the German Blast-Furnaces (printed in "Stahl und Eisen," 1909, No. 19). ( 3 ) From an address dated June 10, 1910, of the Zentralverband Deutscher Industrieller to the Prussian Minister of Commerce. (a) Translator's Note. In Germany no industrial establishment may be initiated without first securing a "concession" or, as we would call it a "license." fore a German industrial employer will have even received the official permission to put the invention to profitable use in his own establishment." (*) Similar complaints are to be found in almost all branches of industry, and they often contain the most bitter accusations against the officials. ( 2 ) If, in order to form an impartial opinion on the subject, we should next ask the authorities for their answer, we would be told that in the opinion of the officials a great part of the blame is to be ascribed to the industrial owners themselves. The result of the investigations of the Prussian appeal court showed that the officials had acted improperly in only very rare instances. On the other hand, the cases have been very frequent in which the industrial heads had made insufficient explanations and had complicated the procedure by improper proposals. An extra- ordinary ignorance of the law and of the method of procedure prevailed among the industrial owners in consequence of which much time was lost in calling for necessary counter-explana- tions. ( 3 ) Thus do both sides accuse each other, and one might almost come to the conclusion that all shortcomings would disappear if both parties would improve their methods. But conditions are much more complicated in reality ; for the officials and industrial owners have long been endeavoring to improve matters as far C 1 ) Vossen Das Recht der konzessionierten gewerblichen Anlagen Hannover, 1911, p. 34. ( 2 ) The following organizations have expressed themselves on this point either alone or in conjunction with others : Der Verein zur Wahrung der Interessen der chemischen Industrie Deutschlands, which precedes all others in the effort to obtain a simplification of the rules for securing in- dustrial concessions and which already discussed the question at its general meeting in Kiel in 1895 ; further the Verein fur Ton, Zement und Kalkin- dustrie, which has been engaged for years in submitting propositions look- ing to a simplification of procedure; in addition, the Verein Deutscher Portland Zementfabriken, Verband Deutscher Tonindustrieller, Verein der Kalksandsteinfabrikanten, Verein Deutscher Marmorwerke, Bergische Fabrikanten Verein, Fabrikantenverein Hannover, Oberschlesische berg und huttenmannische Verein, Verein Deutscher Zellstoff fabrikanten, Verein Deutscher Motorfahrzeng-Industrieller ; and others. ( 3 ) On November 23, 1910, a conference took place in the Prussian Ministry for Commerce and Industry, at which the higher officials were represented by the Under Secretary and several privy councilors, and German industry by several heads of large industrial establishments and by the general secretaries of various industrial organizations. At this meeting the complaints of German industry concerning the procedure in matters of concessions were carefully discussed and two reports have been issued in regard thereto. The shorter one of the two bears simply the signature of the Under Secretary, while the other is signed by a repre- sentative of the industrial owners. Both reports, which are not intended for publication, were before me at the time this pamphlet was written. In addition, the officials have expressed themselves concerning this question quite a number of times in periodicals, especially Gewerbe Assessor Dr. Tittler, in the periodical Sozialtechnik for 1911, Nos. 8 and 9. 8 as lay in their power and yet all their efforts appear to have been of little effect. In vain does the official notice of May 1st, 1904, direct that requests for authorization of industrial undertakings "are to be treated as rush matters and are to be designated as such in the ordinary course of business," and in vain did the Prussian Min- ister of Commerce, on July 19th, 1911, issue on order which proved beyond all doubt that he is thoroughly disposed to hasten and to simplify the procedure for obtaining concessions. (*) The industrial owners too are doing everything that lies in their power. Connected with the unions formed for the purpose of promoting the interests of our leading industries, central bureaus are to be found, which as ''law committees" or as "com- mittees for concessions" give advice to the industrial heads, draw up and revise requests for concessions, and thus endeavor to smooth the way for the speedier dispatch of applications for concessions. And yet, as daily experience proves, despite all this, the good intentions of the officials and industrial owners are by themselves insufficient. No one doubts, indeed, that the accelerating direc- tions of the leading officials and the efforts of the industrial unions are of help. Yet everyone who is at all familiar with the practice in vogue, knows that the kernel of the question is not to be reached through such directions and efforts, for the causes of the existing great shortcomings lie far deeper. In order to understand this fully, it should be remembered that the regulations concerning the authorization of industrial enterprises are based on the conception of "industrial freedom," which was laboriously attained after a fifty-year struggle. Ac- cording to this idea, enterprises which might be a source of danger or objectionable to the general public have to be officially authorized. With the granting of a concession, however, they are protected against the imposition of supplementary burdens and protected against excessive police regulations. The struggle cen- tred about this question ; and, in an expose of the reasons for an industrial code, it was expressly stated that the legislator was es- pecially anxious to replace the police regulations, which "arc often so multiform and so vexatious," by a new series of rules, and to guard those engaged in industry against "supplementary requirements and restrictions." (!) The order of July 19, 1911, which is devoted to a detailed dis- cussion of the complaints of German industry, begins with these words: "The complaints which have long been made in industrial circles regarding the manner in which the procedure for the authorization of industrial undertakings is conducted as prescribed in 16 ff. of the Gewerbeordnung, have decided me to discuss hereafter verbally with representatives of the industries affected all questions which have given cause for grievance. ^ If these verbal discussions have not resulted in any changes thus far being suggested in the provisions of the law, nevertheless it appears to me very desirable that one should work with the greatest possible energy in official channels for the abolition of disadvantageous methods of procedure." On the surface, these concession-rights secured in the struggle for industrial freedom are still in existence today. (*) In reality, however, the simplified and abbreviated procedure has gradually become confused and distorted, and official technical difficulties have been created I would almost say artificially which cannot be done away with by mere ministerial decree. These changes in procedure, which are severely felt es- pecially in a period of industrial development and of interna- tional competition, date their origin to the enactment of the provisions calling for the protection of the workingmen. For with the object of energetically developing schemes of social betterment, a triple division of authority has been devised, which, thanks to the unexampled stupidity displayed by those in charge, has impeded in a marked degree the procedure for ob- taining concessions. How has this come to pass? According to law a concession can be granted only when all provisions intended for the workers' protection shall have been complied with. But this method of development was not deemed sufficient, and the following regu- lation was inserted in the industrial code by the supplementary law of June 1st, 1891. "The proper police authorities are empowered to compel through directions for individual enterprises the carrying out of such measures as may appear desirable and in the interest of workmen's protection, feasible of execution." ( 2 ) In addition, the Imperial Insurance Code provides that "the employers' associations are obligated to promulgate the necessary rules concerning the contrivances and regulations which the members have to adopt for the purpose of avoiding accidents in their establishments." ( 3 ) Concession officials Police officials. ( 4 ) Employers' associa- tion. (*) 16 ff. of the Gewerbeordnung. ( 2 ) 120 d of the Gewerbeordnung. ( 8 ) This provision of 848 of the Imperial Insurance Code was already contained in the accident insurance law of July 6, 1884 (78) and in the industrial insurance law of June 30, 1900 (112) : "The associations are empowered and can be compelled through a system of inspection to issue directions 1. Concerning the measures and rules to be adopted by members in their establishments for the purpose of avoiding accidents under risk of incurring in case of violation, either a money penalty of 1,000 marks or of having their establishments transferred into a higher risk class or, in case they are already in the highest risk class, of having the amount of their premiums doubled." ( 4 ) In Prussia, the officials in charge of concessions are either the circuit or the city council and, in the case of a city situated in a country circuit and having more than 10,000 inhabitants, the mayor and alderman (collegial community board). In certain cases, the district council acts. These officials are authorized to hold investigations right on the spot, to cite witnesses and experts and to examine them under oath, in short, to pursue all necessary investigations to the fullest extent. More particularly, these authorities ask for reports from a building department official, also IO The legislator himself foresaw that this triple division of authority would lead to confusion,^ 1 ) but experience alone has shown how detrimental this "triple assurance of having the workingman safeguarded" has in reality proven to be. To make several bodies responsible for one and the same matter is contrary to one of the elementary principles of correct administration. Not only do the regulations thereby lose in unity, but disputes as to jurisdiction arise, which delay proceed- ings and entail all the evil consequences of "too much govern- mental red tape." How the safeguarding of the worker suffers thereby can be easily seen. While the concession-granting body is engaged in inserting in the terms of the concession far reach- ing measures for the workers' protection, the activities of the employers' association are shoved in the background. At the same time, the employers' associations are accused of "not issu- ing sufficiently complete directions for the prevention of acci- dents.'^ 2 ). The response thereto is a misplaced competition be- tween the official bodies, a bureaucratic race, as a result of which superfluous directions are issued, such as, for example : "Drivers of vehicles are not allowed to fall asleep while en route." "In going down hill, brakes are to be properly applied." "The use of unsafe ladders is forbidden." "Workmen who have to use a hand or fore-hammer must assure themselves before striking a blow, that no one is standing behind them, whom they can hit." Quite rightly has one of the most experienced exponents of accident prevention exclaimed :( 3 ) "If we wish to be honest, we must admit that we carry around with us, in the form of these rules, an amount of ballast which we would do better to discard today than tomorrow. We ought to cease being proud of this humbuggery and of possessing a set of shadowy paper para- graphs which would minutely regulate every movement and would turn each individual into a puppet; all these are of per- (1) when it was enacted: "If the regulations (of the police) should be contrary to the directions issued by the appropriate employers' associa- tion for the prevention of accidents, the executive committee of the associa- tion is authorized to start the necessary legal remedies." ( 2 ) Proceedings in the Prussian Ministry of Commerce (November 23, 1910). ( 3 ) Heretical Idea,s as to Accident Prevention, by Karl Klein, mana- ger and technical inspector of Section I of the Machinery Employers' As- sociation in the Zeitschrift fur Gewerbehygiene, for 1909. No. 6. from a factory inspector and, as a rule, also from a health department official. Finally, in certain cases the proper veterinary official must be called upon as one of the reporting experts. If taken within 14 days, an appeal is permissible from the decision of the concession-granting board. The Minister of Commerce decides as to these appeals : "The Minister of Agriculture must be consulted in ad- dition, if the erection of a dam is contemplated, affecting in any way agricultural interests." In Bavaria, the district authorities act; and, in Saxony, the high dis- trict constabulary and the municipal council, etc. II nicious import and ought to disappear. For the increasing mania for regulating everything makes the workman so depen- dent that he regards as permissible all that is not directly for- bidden." As far as the protection of the worker is concerned, how much better would it be if a single body assumed the entire responsibility. Then at a critical stage it could n^t be said: The employers' association is a fault in this matter! No, the police authorities! No, the concession-granting officials! Fur- ther, there should be done away with the many superfluous directions which make it so difficult for the workingmen thor- oughly to familiarize themselves with the really necessary regulations. As a matter of fact the safeguarding of the worker is but little enhanced by this system of "triple assurance." Now one might assume that as the boards in charge of the granting of concessions were for the most part in a position to delegate to the police authorities or to the employers' associa- tion questions involving the protection of the workingman the procedure for obtaining a concession would have been simplified to that extent. Nevertheless, just the opposite has occurred. The authorities know that they can exert more pressure in com- pelling the adoption of such directions as are incorporated in the conditions for the granting of a concession because the ap- plicant submits quietly to such conditions in order to be able to begin construction promptly. On the other hand, he invokes his legal remedies against the police regulations. The officials, therefore seek, if possible, to make all workers' protective meas- ures a part of the proceedings for securing a concession^ 1 ) But this activity on the part of the concession-granting boards does not secure the owner against further supplemental requirements, inasmuch as the other two "authorized bodies" are in a position to demand supplemental changes. Thus it has happened that, in a time of industrial progress and international competition, a retrogression has taken place in the proceedings for the attainment of an industrial concession. The fundamental principle underlying the idea of industrial con- cessions has been forgotten, as well as the saying, which was incorporated half a century ago in a statement of the reasons for the adoption of an industrial code : namely, that the law- makers were anxious to replace the police regulations which "are so multiform and so vexatious" by a new set of rules and "to secure" those engaged in industrial pursuits against "supplemen- tary requirements and restrictions." The question will now naturally be asked, is our system of legislation so ineffectual that it is unable to do away with such (*) Prof. Bernhard's lengthy footnote at this point is omitted be- cause it relates to the interpretation of some technical provisions in the German concession rules and police regulations that would not interest American readers. Translator's Note. 12 patent defects? Adequate and suitable proposals have indeed been made by experts with the object of simplifying and ex- pediting the system of granting concessions and to accommodate it to the requirements of the times. ( x ) The chemical industry es- pecially lays stress on the right of proving by an operative test that the anticipated defects which stand in the way of granting a concession would not in fact occur. In such instances, in- dustrial owners would run the great risk of having equipped their establishments to no purpose. This risk, however, they regard as less costly in the end than the long delays in granting concessions. In addition, it has been proposed to concentrate the issuance of accident preventive regulations in the hands of one bureau and thus not only to make proceedings for obtaining concessions easier, but also to bring about uniformity in the methods of guarding against accidents. Why do the legislative instrumentalities pay hardly any atten- tion to these proposals? The answer to this question is to be found herein: The parliamentary situation makes the enact- ment of such relief measures impossible. The representatives of the agricultural interests take the position that the industrial world, which has to have regard in such a marked degree to social-polity demands, should to the same extent respect the demands of agricultural interests. Every proposed simplification, mitigation or acceleration of concession proceedings are not only vigorously opposed by the agricultural representatives, but steps are actually taken to make the proceedings more compli- cated and difficult. ( 2 ) Inasmuch as the powers that be both in Social Democratic as well as in Agrarian political circles, make more cumbersome, the proceedings for industrial concessions, and obstruct a proper development of this branch of administration, the industrial representatives find themselves in a very difficult position. On this question, they are always opposed by a par- liamentary majority, no matter whether the subject of conces- C 1 ) Thus, for example, it has been proposed that experts from in- dustrial circles should take part in the proceedings. Again, on behalf of those engaged in industry, attention was called to the fact that besides the preliminary permission to build contained, in 19 a, the permission to make an operative test would be of great importance. ( 2 ) The best example of agriculturalist aims is to be found in the "proposition Spec." On February 12, 1907, Count Spec proposed, on behalf of the Centre Party and von Pappenheim, on behalf of the Conservatives, first, that agricultural experts should take part in all proceedings for the grant of an industrial concession, and, secondly, that the Minister of Commerce should not decide these matters solely, as heretofore, but "in conjunction with the Minister for Agriculture, Domains and Forests." This impeding of concession obtaining methods was always to occur whenever "agricultural interests would be affected by the author- ization of the industrial establishment." In spite of the determined op- position of the Minister of Commerce, the proposition was accepted by the house of representatives, but rejected by the government. 13 sions is discussed in the Reichstag, which has jurisdiction of matters arising under the industrial code, or in the Landtag, which has to be consulted in reference to the Prussian "directions for carrying out the law." Almost all the present existing dif- ficulties are to be traced to the unfavorable political situation in which the industrial interests find themselves. Not only are the regulations for the grant of concessions themselves affected by the power of the political majority, but their interpretation is in- fluenced by the groupings of the parliamentary factions. It is, therefore, by no means proper, as in fact so often occurs, to hold certain individuals or certain groups of officials re- sponsible for the condition of affairs, and to blame them for being "hostile to industry" and for pettifogging. There is not the slightest reason for doubting that the officials entrusted with the execution of the laws, especially the factory inspectors, endeavor to be impartial and desire to act conscientiously and with con- sideration. Leaving everything personal aside, the following ought to be borne in mind : The officials have to take into account the provisions of the law, which they cannot circumvent. They are allowed to exer- cise and that is the kernel of the matter "independent dis- cretion." Nor does this mean a limited range of action. For example, 25 of the industrial code provides that the reap- proval of a concession is in order "when there have been ap- preciable changes in the operating methods." The officials are called upon to decide in each separate case what are to be deemed "appreciable changes." An attempt has been made to limit the scope of this activity and the Prussian court of appeals has tried in several instances to define or to circumscribe the term "ap- preciable changes." But the law courts finally left it "to the judgment of the officials to be exercised in conformity with their oath of office to decide whether the reapproval of a concession was in order or not.'X 1 ) At other stages in the proceedings for obtaining the approval of a grant, and indeed just at the critical points (examinations of foundation plans, determination of con- ditions), the officials are allowed a wide scope within which to exercise their judgment. No one, no matter whose interests he may be called upon to represent, could entertain the idea of abol- ishing this official freedom of action, which allows the "interests affected" space to turn around in. These would suffer if a "strict letter of the law" interpretation were adhered to. What are, however, the "interests affected"? In answering this ques- tion, the officials are consciously or unconsciously influenced by the public sentiment, which has come to assert itself most strongly. Even though the Minister of Commerce, who has the final say in matters affecting concessions, should be ever so de- 0) Cf . on this point, Tittler : "The Efforts to Bring about a Change in the Methods of Approving Concessions for Industrial Establishments," in the periodical Sozialtechnik for 1911, No. 9. 14 sirous of helping the growth of industry, he has always, as a member of the ministry, to include the influential parties in his reckoning. Even though the industrial privy councillor should endeavor to act altogether conscientiously, he will nevertheless perhaps involuntarily advocate views which will coincide with those of the prevailing political groups. And even if all the in- calculable and unassailable political influences were removed to- day, the tendency of the times would yet remain to exert an active influence. Fifty years ago this influence was struggling towards liberty of action and for industrial freedom ; but nowa- days influenced by the course of social development it is laying stress on the "needful interference of the state." Whoever considers all these factors, the loading down of the proceedings for obtaining the grant of a concession with social- polity requirements, the delays caused by agrarian political con- siderations and finally the unavoidable tendency of the times, which affects the independent judgment of the officials whoever considers all these, will not deem it a matter of passing occurrence should he perceive that proceedings for the obtaining of a con- cession have become more and more difficult, complicated and protracted. He will not be astonished to learn that industrial owners have to wait eight months as a rule before their conces- sions are granted (*) and cannot commence construction until after the competing English plants have been long in operation. Nor will he be amazed to hear that the approval of applications is made dependent on improper conditions or such as even cannot be performed, and that the records in a case grow in the end into a mound of documents in which are recited a multitude of condi- tions, covering from 30 to 40 separate paragraphs. CHAPTER II. GOVERNMENTAL SUPERVISION OF PRIVATE INDUSTRIAL ENTERPRISES. So long as there were no officials to supervise the execution of the laws, social-polity legislation existed only on paper. Ever since the time factory inspection was first introduced in England in 1833 all other industrial countries have met with the same experience. Germany possesses today a system of factory inspection which can be compared in all confidence with the system in vogue in England. To be sure, it is not easy, indeed it is scarcely possible 0) Many cases occur in which proceedings for a concession last for more than a year, indeed more than V/ 2 years. All the indications, therefore, point to the same conclusions, namely, that the involved proceedings for attaining governmental approval of new private industrial enterprises have become a veritable danger for the com- peting power of German industry. 15 for no comparable figures are in existence (*) to make an effect- ive comparison between international methods of factory inspec- tion. But whoever may happen to read the factory inspection reports published by various nations cannot fail to be convinced that the German system of inspection is carried out more care- fully and thoroughly than that of any other country. In making this statement, I am only considering the actual contents of the reports and am not taking into account the much greater number of inspectors relatively speaking to be found in the German Em- pire. A knowledge and discernment of details appears in the German reports, which far exceed the simple determination of the fact whether the laws are being observed or not. On the other hand the reports appearing in most other countries are con- fined in the main to a statement of the manner in which the laws are observed. With this conclusion, the observations of German engineers employed abroad coincide, and often one hears with what astonishment the great difference is noted between the dis- creet control exercised by the factory inspectors in England and the intrusive examination customary in Germany. Indeed, the German inspectors go so far in their zeal for examination that they sometimes even cause misgivings to arise among the work- men. Thus for example, all the Prussian factory inspectors started an inquiry into whether the workmen had breakfasted before beginning work or not. The outcome of this investigation was not altogether certain, because the workers "often from a false sense of shame," as an industrial privy councillor remarked "resented" such an intru- sion into their private affairs and "hesitated to give to others an insight into their household matters." When the foremen were then applied to, they "very frequently refused to give any infor- mation on the ground that they did not consider it advisable to mix themselves in such personal matters of their workmen." The question may be left undecided whether it would really have marked a step in advance from a social standpoint if the workmen had laid aside their "false sense of shame," and had expressed themselves freely upon the question, to what extent the matter, "in the case of those married, depended on the wife's capabilities." At least, the inquiry enables one to perceive the zeal for regulation displayed by the higher Prussian factory in- spection officials. Alongside of the control exercised by the factory inspectors, a system of regulation by written documents has grown up in the course of time, which, with its "notices," "schedules" and "statistical information," "forms a triple extension of factory in- spection methods." For example to describe the form of "notice" if the em- 0) Nevertheless, the following figures may be of interest: In England there is one inspector for every 23,000 miners, in Prussia one in- spector for every 3,430 miners. 16 ployer intends to employ women or children, he is obliged to make out a written notice before the employment begins. In this notice there has to be stated the kind of establishment, the week days on which the intended employment is to take place, the time when work is to begin and to cease and the rest hours in between, as well as the nature of the employment. This docu- ment has to be handed to the local police, which transmits it then to a factory inspector. The latter sees whether the notice con- tains all the prescribed information and, if such be not the case, he causes it to be made complete. Finally, the notice is returned to the police authorities. Then, as is stated in the directions for enforcement, the inspector has to notify the employer in writing that, in the rooms where women or children are employed, an extract from the provisions of the industrial code must be posted and, in the rooms where children are employed, a copy of the "notice" which was transmitted to the police in addition. The activity of the officials does not stop there, however. For the first mentioned extract, the employer has to make use of Form "N," and for the second notice, of Form "O." There are certain kinds of establishments, however, for example, motor ve- hicie factories, for which Forms "R" and "S" are prescribed in place of Form "N." Other workshops call for the use of Forms "T" and "U," and finally there are others that require the choice of Forms "V" and "W." The foregoing should be well noted! Thus it has come to pass that the employer is not only supervised by the police author- ities and the factory inspectors, but that an indirect control by the workmen themselves occurs in addition. These are able to watch whether the statements made in the posted "placards" are in reality true or not. The law, therefore, has expressly provided that the placard must be posted in a workshop "at a place where it is likely to attract the eye." Methods of control having thus been carefully provided for, the employer is not allowed to change the stated hours (whether hours of work or rest hours), but is obliged if business makes an increase or a shortening of the number of working hours ne- cessary to make out a new "notice" concerning the proposed change, in which event the same formalities have to be gone through with. This suffices for the "notice." A milder form of written regulation is the "schedule." Thus, for example, if the employer desires to have certain kinds of work carried out on Sunday which cannot be deferred to some other day (urgent repairs, certain kinds of cleaning, etc.), he has to start a "schedule" in which there has to be carefully set out the number of workmen em- ployed, the time for which they were employed as well as the na- ture of the work carried on. The statement has to be made out in so detailed a form that the official who has oversight of the matter can tell from the statement itself whether the work per- 17 formed was of such a nature that it could not be deferred. The "schedule" is to be so kept (Form "J") that one can see on glancing at it all work of this kind which has been undertaken in the course of the calendar year. Alongside of these two carefully prescribed forms of written regulation, a third form exists the "statistical information" which is left to the officials to determine. The employers are obliged to give the factory official or the police authorities "such statistical information concerning the situation of their workmen as may have been prescribed by the Bundesrat or the Landeszen- tralbehorde.'X 1 ) The South German Volkspartei was the only party which early, but in vain, sought to check the flow of ink which streams from these three sources. In a very effective speech delivered in the Reichstag, Payer one of its members took exception twenty-one years ago to the excessive amount of written regula- tion. "Does not that which has already been imposed on the employer suffice?" exclaimed Payer. "Has not the moment ar- rived when, instead of merely thinking of safeguarding the worker, one ought also to consider protecting the manufacturer against such tasks and burdens which, in my opinion at least, could be dispensed with?" Such an impression was made by Payer's speech that a ma- jority of the Reichstag applauded him and it almost appeared as though one of the new "written regulations" which had been ap- proved in committee would be rejected by the Reichstag when in full session. ( 2 ) Only through an unsual combination of statesmen was it pos- sible to overcome the effect of this speech. The Prussian Minister of Commerce, Baron von Berlepsch, and the leader of the Social Democrats, August Bebel, opposed Payer's proposition, and, as the third member of the combination, appeared the parliamentary head of the great industrial interests, Baron von Stumm. Stumm feared, at the time, that if the system of written regulations were done away with, the official boards would then endeavor to make the consent of the police authorities requisite for the performance of any extra work.( 3 ) Stumm's attitude, therefore, was assumed purely from tactical reasons. On the other hand, the speeches of the Prussian government representatives and of the leader of the Social Democrats showed in their general tendency a very characteristic conformity. August Bebel, as well as the speaker for the government, acknowledged that they regarded the "sched- ule" not only as a method of regulation, but also as a means of C 1 ) 139 b of the Gewerbeordnung. ( 2 ) The Volkspartei had proposed to strike out 105 c, clause 2, con- cerning the "schedule." Reichstag debates of February 14 and 16, 1891. ( 3 ) The government representative had indeed threatened to do this after the great impression produced by Payer's speech. 18 exerting pressure. The inconvenience caused by it was to induce the employer to desist as much as possible from all work out of regular hours. Bebel, therefore, considered the "schedule" to be entirely too mild in form and advocated with all his power the introduction of police lists. ( J ) Here is an instance where one can clearly observe how even the fundamental principles of government administration are affected by social policies. If the carrying out of administrative formalities causes annoyance and trouble, it is generally con- sidered as an indication of bureaucratic shortcomings. The principle, therefore, usually laid down is that all formalities should be carried out with the least possible amount of trouble or red tape. However, this elementary principle of government administration is set aside by the exigencies of social politics. As soon as an administrative requirement has the secondary aim of bringing pressure to bear in a given direction, the desire to simplify and facilitate its execution disappears. The inconven- ience suffered is intended to produce an effect. The annoyance which has to be undergone is just what is expected to cause the employer to desist from undertaking any unusual work. If one consider merely social-polity aims, this method can doubtless be defended. Indeed, fineness and subtlety can justly be ascribed to this arrangement. On the other hand, however, it should not be overlooked that through the introduction of this new principle everything of a bureaucratic and pettifogging na- ture in administrative methods is furthered and aided. An offi- cial who takes his time in attending to formalities, finds fault with every little trifle and delights in requests for further particulars, can quiet his conscience with the thought that it is one of the "secondary purposes" of his bureaucratic employment to frighten off the employer from undertaking any extra work. This "frightening off theory" influences also the best of the officials. It injures the character of government administration ; and an es- pecial danger lurks therein, that the branch of administration affected is just the one which is the means of connecting the government with the pulsating, industrial world. The danger is also enhanced by this fact, namely, that bureau- cratic tendencies are reinforced by the efforts of the socialists, who are always endeavoring to place industrial undertakings more and more under official control. Thus Hue, one of the Social Democratic members of the Reichstag, requested the im- C 1 ) Bebel proposed that the employer should be compelled to furnish the authorities with a copy of the "schedule" at the end of every month. Payer observed as to this: "You, gentlemen," (turning to the Social Democrats) "are the ones who are calling for the police. * * * That agent of government administration who, on account of his functions, is obliged to intrude in matters affecting industry, you term, when this intrusion is distasteful to you, servant of the police ; whenever this intrusion is agree- able to you, he is Mr. Inspector." 19 perial government during the session held on February 6th, 1906, to have a statistical inquiry made concerning the hours of labor required and the overtime incurred in the larger iron mak- ing establishments. The Reichstag eagerly accepted this sug- gestion, and, on February 13th, 1906, passed a resolution calling on the Imperial Chancellor to start the necessary statistical in- quiries. After the matter had been carefully considered and in- formation gathered through proposed drafts how such an inquiry was to be carried out and, after the Reichstag had twice admon- ished the government (during the discussion of the budget for the years 1907 and 1908), the Bundesrat finally issued an ordi- nance on December 19th, 1908, which provided as follows: In the various large iron establishments, schedules were to be kept in which the names of all workmen were to be entered, who were employed beyond the regular working hours. For each individ- ual workman, there was to be noted : 1. The number of usual working hours, and 2. The number of hours of overtime occurring each day. At the end of every month, the schedule was to be transmitted to the local police. An idea of the excessive amount of writing caused by this ordinance can perhaps be obtained simply by glancing at the annexed formulas^ 1 ) In the large establishments, where many hundred or even several thousand workmen are employed, the keeping of these schedules has become a permanent source of trouble, more especially because requests for further informa- tion are often necessary in order to determine through the fore- man whether "overtime" really took place in a given case or not. But this sort of checking system, although it goes into such minute details gives no idea of the real conditions existing. In order to keep the large establishments up to the mark, certain repair and cleaning work must be regularly undertaken on Sun- days. For the performance of this work, certain workmen are employed who are allowed a corresponding period of rest during the week days. Their Sunday work, therefore, cannot be termed "overtime work" in the sense of calling for a long protracted period of work, and, as a matter of fact, has never been con- sidered as "overtime," even by the workmen themselves. Never- theless, the ordinance of the Bundesrat requires that these figures should appear in the "schedule of overtime." According to my researches, this regular form of work constituted from 70 to 75 per cent of the reported "hours of overtime." Thus the actual number of hours of overtime shrinks to 25 or 30 per cent of the total hours reported. Even the hours remaining, however, do not give a picture of the real condition of affairs, for no account C 1 ) See post, pages 21 to 23. With some slight changes, these forms are taken from the commentary on the Bundesrat's ordinance of December 19, 1908, prepared by Government and Industrial Privy Coun- sellor. Opperman. 2O K "a i ^** 1 in I w w I O w CO O ffi 1 & $ O W I Reference Number "a Al 2 i 00 CD 2 I CO