INTERNATIONAL LABOUR
OFFICE
GENEVA

The Essen Memorandum
ori the Socialisation of the Coal Mines in Germany
INTRODUCTORY ÍTOTE.

The Essen Memorandum, a translation of lohich follows,
contains, definite
proposals and considerations
on the
socialisation of the coal mines in Germany. It is an outcome
of the laborious efforts of the Commission established on the
9th May by the Federal Economic Council and the Coal Council
jointly, with a view to framing schemes for the socialisation of
mines. This Commission sat at Essen. It consisted of seven
members : three employers'1 representatives, the industrial
magnate, Hugo Stinnes, Mr. Albert Vogler, Director of the great
metal working and mining undertaking of the Ruhr (DeutschEuxembourg), Dr. Silversberg of Cologne, and three workers,
delegates, Mr. Imbuseh (Christian Miners'1 Union), Mr. Wagner
(Socialist Miners'' Union) and Mr. Werner (Federation of Socialist Unions), and was presided over by a public official, Mr.
Barthold.
The employers' delegates endeavoured to persuade the
workers'1 delegates to accept their view,that is to say,the principle
of the co-operation of the industrial and financial forces of
Germany in poiverfnl autonomous groups, and the participation
of the working class in these groups by the granting of shares
of the nominal value of 100 marks.
The discussion was long and exhatistive. Finally the two
manual workers'1 delegates refused to sign the scheme ichicli had
been prepared. The non-manual icorkers'' delegate, Mr. Werner,
even presented a counter-scheme. The Essen
Memorandum,
therefore, represents the point of view of the German employers
on the question of the socialisation of the coal mines.
It is in
sharp opposition to the two schemes prepared by the second
Socialisation Com m ission.
Readers tvho desire a detailed commentary on it will find one
in an article by Dr. Silversberg, published in the special number
dealing with the question of the socialisation of the coal mines
of the "Wirtschaftliche Nachrichten aus dem Ruhrbezirk ",
the ornan of the Chamber of Commerce of the Ruhr district.

CL0-SR/B5
30?.' 3

Studies and Reports
Series B
No. 5

T H E ESSEX MEMORANDUM ON THE SOCIALISATION
OF THE COAL MINES

6th November, 1920

The question of the socialisation of the coal mines,
particularly for conquered Germany, is a question which
concerns not only the mining industry but also the whole
economic system. The settlement of the question would
contribute to the stabilisation of the economic system.
From this point of view socialisation must be understood
to mean securing that the means of production are employed
as rationally and completely as possible in the interest of the
community, that everyone concerned in production participates therein Avith equal rights, and shares in the direction
of industry and its responsibilities.
To understand by socialisation simply the transfer of
the ownership of the means of production from particular
physical or juridical persons to an organism legally representing
the community, is to assimilate socialisation to State socialism.
Only new economic forms, capable of ensuring the best
possible employment of the means of production by common
labour in the interests of the community, capable, also, of
giving to all who participate in production the place to which
they are entitled, could justify an interference with the
existing order of things.
After the collapse of Germany, the union of the moral and
economic forces of the country in a determined endeavour is
the only means of assuring the future of the German people.
The concentration of these forces is indispensable, for nothing is left to the German people but its man-power, its
intellectual and manual work, and its means of production.
Means must be sought for securing this concentration of
moral and economic forces. Labour must be more rationally
organised, its results must acquire a greater value. A better
organisation of Joint Stock Companies must provide facilities
for the people as a whole to participate in the largest measure
possible in the enterprises of Germany.
The coal industry, Avhich forms at once the starting point
and the basis of all production, must not hold a place apart
from the general economic system. Such isolation could
only prevent the concentration of economic forces and the
participation of all in the common task. It would also
prevent the organisation of the mining industry, in the interest
of the community.
The coal industry is the fundamental industry upon which
all other forms of production rest. It is in that industry,
therefore, that the effort must be made to secure the organisation and development of the economic system.
Such a development of the economic forces of the
community cannot be obtained unless by the application of
the following principles :

— 3 —

(A) Concentration of the means of

production

1. The object of production is the creation of the highest
possible values in the home country. This is the only means
of ensuring to as large a number as possible of the
population opportunities for work, and the highest remuneration for such work. It is the only Avay to secure to
the community generally, the means of subsistence. The
methods of production should, therefore, be brought to the
highest degree of perfection, both as regards quality and
quantity.
2. In order to discharge our obligations to foreign
countries, we must, so far as possible, export only the output
of this highly perfected production, unless the needs of foreign
countries for coal or considerations of transport demand the
exportation of coal.
3. Methods of production of such a kind must, therefore,
be established that the cost of production will allow the
greatest possible profits on our exports, and will at the same
time enable us to satisfy as economically as possible the needs
of the home country.
4. For this purpose it is indispensable that the necessary
fuel of the best quality should be placed at proper prices at
the disposal of the industries using raw materials and the
industries producing finished articles. At the same time
these industries should be put in a position to exercise a direct
and beneficial influence on the coal mining industry.
5. Only by this means can the following results be
obtained.
(a) The most complete exploitation of the industries
engaged in the production of finished articles, that is,
the highest possible production at the lowest possible
cost for the satisfaction of home requirements.
(b) The highest possible rate of production at the lowest
possible cost leaving the highest possible profits on
exportation.
6. It follows from the foregoing that, from purely financial
considerations, the formation of associations between the
coal mining industries and the manufacturing industries is
the only means of ensuring the highest rate of production.
In saying this, we exclude every form of Trust. This holds
good as much for industries, such as those engaged in the
distribution of water, gas and electricity, and in transport
services, which work solely for the internal requirements of
the country, as for the industries whose products are intended
for export. If the mining industry is organised in this way
it will be possible to attain the highest rate of production
with the lowest possible working expenses. For this purpose,
it will be desirable to leave for their own use at the disposal
of the mining industries the greater part of the amount of coal
extracted in excess of the amount hitherto considered

— 4 —

necessary for meeting general requirements. The coal
necessary for the requirements which have a prior claim to
satisfaction will continue to be delivered to the consumers
by the existing systems of distribution.
7. The industries producing finished articles which benefit
by the work of the mines must promote in every possible
way the development of the coal mining industry out of
the profits realised by their own production.
This is true both on the technical and on the social sides
of the question. On the technical and economic side, the
principle applies to the development of existing industries,
to perfecting the coal industry, which is still in its infancy,
and to the establishment of new systems of mining.
On the social side, it applies to the development of housing
and education, especially vocational éducation. In the event
of the individual interests of the undertakings in question
being insufficient to obtain the desired results, it would be
necessary to secure them through proper supervision by the
classes interested in production, exercised in the Boards of
Control (Aufsichtsräte) of the said undertakings.
(B) As regards the Persons directly participating in Production.
I t is certain that no production is possible without
discipline and without a systematic division of labour between
management on the one hand and work involving the carrying
out of instructions on the other. Work involving the carrying
out of instructions cannot be fruitfully postponed unless the
persons executing it are conscious of the higher aims affecting
the economic system as a whole, Avhich should be the final
object of all labour.
Only clear-sighted collaboration in
Avork can lead to the desired result. Economic activity is
made for man, and not man for economic activity.
Experience proves that, in order to attain this end, it
is necessary to combine moral and material progress. I t is
necessary, also, that the worker should be able to see the
immediate tangible result of his work. It is, therefore, necessary that :
1. Manual and non-manual workers should have shares, in due
proportion, in the capital of great undertakings, Avhich have
become impersonal economic combinations, and consequently
should also share in their profits. Legislation should furnish
the necessary foundation for such profit-sharing, by allowing
the issue of shares of a nominal Avalué of 100 marks, or of
provisions participating certificates A\Thich might later be
comTerted into shares, according to the nature of the
undertakings.
2. The extent to Avhich manual and non-manual Avorkers
ha\Te a share in the capital will furnish the real basis for their
representation on the Boards of Control.

3. The Works Councils created by law must obtain the
necessary means for realising the objects for which they were
established.
4. Besides the improvement of the conditions of the
working class, their moral progress must also be secured by
means of education.
(C.) As regards the Goal Industry

in

particular.

1. The organisation of the individual coal mining
undertakings must be perfected. For the establishment of
new mining undertakings companies with unlimited capital
capable of increase at any time by a simple process, must
be recognised as the most suitable form. But Joint Stock
Company is the proper form for the development of existing
mining undertakings with an assured return. The Joint
Stock Company is, however, capable of improvement by the
creation of shares Avith limited dividends and of shares of
small denomination, in addition to the ordinary shares.
2. The organisation of the coal-mining
industry,
notwithstanding the progress that has been made in dealing
with the output through syndicates, does not meet all the
technical and economic requirements. I t is necessary :
(a) To amalgamate small and partially worked-out mines
for the purpose of more rational and complete
development.
(b) To amalgamate productive undertakings with coal
fields which are being opened up, or which it is intended
to open up. I t is assumed that the working of such
coal-fields is necessary in the general economic interest.
(c) To combine undertakings of varying productivity
on the basis of compensation.
(d) To combine undertakings whose output is likely to be
exhausted Avithin a calculable period, so as to enable
them, by means of the concentration of moral and
material resources, to undertake in co-operation at the
proper time the neAv shaft-constructions necessary
in the general interest.
(e) To amalgamate mining undertakings in such manner
and in such measure as may be necessary to constitute
coal-mining enterprises of a sufficient size for the
purposes of coal-consuming and coal-utilising industries.
3. The participation of the community in the profits of
the mining industry should be secured by means of taxation.
The existing coal tax should be indiA'idualised and deA'eloped
on economic principles.
The proposals put forAvard by the Socialisation Commission
start from the conception that the coal-mining industry is
capable of an existence of its OAvn, independent of the general

— 6 —

economie system. This conception does not take into
account the actually existing conditions and economic
necessities. I t tends to weaken or, at least, under the provision
of Scheme I I , to narrow the natural connections between
the mining industry on the one hand and the coal-utilising
industries and consumption generally on the other. It would
thus hinder or altogether suppress the further technical and
organic development of the process of production in general.
The carrying out of Schemes I and I I would make the
necessary concentration of economic and productive forces
impossible.
The view& here set forth in regard to the necessary organic
development of the process of production must be carried
out by means of legislation so far as necessary. It will be
for the Federal Economic Council and for a Government
equal to the calls and the economic necessities of the moment
to establish the validity of these principles by the results
obtained from them. Any centralised administration and
any interference by such an administration are to be depreciated
as hindering and hampering influences. The economic life
of conquered Germany can be restored so as to be the foundation
of culture and well-being, only if the spiritual and material
energies of our people find for themselves the way to a new
life.

STUDIES AND REPORTS
already issued.
Where the English or French text of a Report has not yet been published it
will be issued at a later date.

Series A.
N° 1.

T H E AGREEMENT

BETWEEN

T H E S P A N I S H W O R K E R S ' ORGANI-

SATIONS, issued on September 25th 1920. English
"

2.

T H E D I S P U T E I N THE METAL INDUSTRY IN I T A L T .
TRADE
UNION CONTROL OF I N D U S T R Y , (First part) issued on Sept-

ember 25th 1920. English
"

3.

ANNUAL

MEETING

OP

and French.

T H E TRADES

UNION

issued on October 4th 1920. English
"

4.

and French.

CONGRESS 1920,

and French.

I N T E R N A T I O N A L CONGRESS O F WORKERS IN T H E FOOD AND
DRINK T R A D E S , issued on October 11th 1920. English
and

French.
"

5.

T H E B R I T I S H GOVERNMENT AND T H E M I N E R S ' FEDERATION O F
GREAT B R I T A I N . CONFERENCE B E T W E E N S I R ROBERT HORNE
AND T H E M I N E R S ' F E D E R A T I O N , issued on October
11th

1920.

English

and French.

"

6.

T H E CONGRESS OF THE LABOUR AND SOCIALIST I N T E R N A T I O N A L ,

"

7.

T H E M I N E R S ' INTERNATIONAL CONGRESS, issued on October 19th

issued on October 14th 1920. English
1920.
"

8.

English

and French.

T H E INTERNATIONAL LABOUR ORGANISATION.

issued on October 21st 1920.
"

9.

GREAT

BRITAIN.

and French.

CONFERENCE

GOVERN-

and French.

and French.

T H E FOURTH INTERNATIONAL CONGRESS OF BOOKBINDERS, issued

on November 26th 1920. English

and French.

T H E MINERS' STRIKE IN GREAT BRITAIN, issued on December 21th

1920,
" 14.

THE

ALLIANCE, issued On

T H E D I S P U T E I N THE METAL I N D U S T R Y I N I T A L Y . T R A D E UNION
CONTROL O F INDUSTRY. (Second part) issued on Novem-

ber 4th 1920. English

" 13.

BETWEEN

INDUSTRIAL

October 26th 1920. English

" 12.

A COMPARISON,

and French.

T H E B R I T I S H GOVERNMENT AND T H E M I N E R S ' F E D E R A T I O N O F
MENT ANT THE TRIPLE

" 11.

English

T H E INTERNATIONAL CONGRESS O F METAL W O R K E R S , issued on

October 22nd 1920. English
" 10.

and French.

XV

English and French,

o

CONGRÈS DE LA CONFÉDÉRATION GÉNÉRALE DU TRAVAIL
(FRANCE) ORLÉANS, 27 septembre-2 octobre, issued on De-

cember 23th 1920. French only.
"15.

T H E INTERNATIONAL CONGRESS OF GENERAL FACTORY WORKERS,

issued on January 24th 1921. English and French.

Series B.
N° 1. COAL PRODUCTION

IN THE RUHR

DISTRICT.

Enquiry

by

the

International Labour Office, end of May 1920, issued on September 1st 1920. English and French.
"

2. P A P E R S RELATING TO SCHEMES OF INTERNATIONAL ORGANISATION FOR T H E DISTRIBUTION OF RAW MATERIALS AND FOOD

"

3.

STUFFS, issued on October 5th 1920. English

and French.

T H E CONDITIONS OF LABOUR AND PRODUCTION IN THE UPPER SILESIAN

COALFIELD, issued on December 10th 192 >. English and French.
"

4.

T H E SOCIALISATION OF THE COAL MINES I N GERMANT, issued on

January 25th 1921. English and French.
Series C.
N° 1.

BRITISH

LEGISLATION

ON UNEMPLOYMENT

on October 26th 1920.
"

2.

INSURANCE,

issued

English and French.

GOVERNMENT ACTION I N DEALING WITH UNEMPLOYMENT IN ITALY,

issued on October 27th 1920. English and French.
"

3.

T H E BULGARIAN

LAW ON COMPULSORY

vember 4th 1920.
"

4.

T H E ACTION

LABOUR, issued on No-

English and French.

O F THE SWISS

GOVERNMENT

I N DEALING

WITII

UNEMPLOYMENT, issued on November 13th 1920. English and
French.
Series D.
N° 1.

S T A F F REGULATIONS ON T H E FRENCH R A I L W A Y S , issued on Sep-

tember 4th 1920.

English and French.
Series H.

N° 1.

CONSUMERS'

CO-OPERATIVE

SOCIETIES

IN 1919 (Denmark

Sweden), issued on September 8th 1920. English
"

2.

SEVENTn

CONGRESS

OF T H E B E L G I A N

issued on September 25th 1920.
"

3.

and

and French.

CO-OPERATIVE

OFFICE,

English and French.

T H E NATIONAL CONGRESS O F F R E N C H CONSUMERS' CO-OPERATIVE

SOCIETIES, issued on November 24th 1920. English

andFrench.

Series K.
N° 1.

F I R S T INTERNATIONAL CONGRESS O F L A N D W O R K E R S ' UNIONS
A F F I L I A T E D TO T H E INTERNATIONAL F E D E R A T I O N OF TRADE

UNION, issued on November, 1920. English and French.
"

2.

AGRARIAN CONDITIONS I N S P A I N , issued on November 10th 1920.

English and French.
"

3.

SMALL HOLDINGS IN SCOTLAND, issued on November 12th

1920.

English and French.
"

4.

T H E EIGHT-HOUR DAY IN ITALIAN AGRICULTURE, issued on

cember 17th 1920. English and French.

De-

}