Emil Lederer: Discussion Contribution on Coal Mining (1920)

Emil Lederer’s recorded commission intervention presents a collective vote on the socialization of coal mining, followed by qualifications concerning the latest formulation of the competing proposals. Its point of departure is the majority plan of the Socialization Commission appointed by the Council of People’s Representatives. Lederer maintains that subsequent experience and expert testimony strengthen, rather than displace, that plan. The intervention proceeds from a diagnosis of existing coal regulation to a five-part critique of the proposal advanced by Rathenau, Vogelstein, and Wissell. Its central distinction is between public supervision of private enterprises and a transformation of ownership and productive authority capable of serving the economy as a whole.

The Coal Economy Act, Lederer argues, has established administrative machinery without achieving socialization. The Reich Coal Association functions principally as the syndicates’ business office, lacking both the powers and the organs necessary to intervene directly in production. Price negotiations expose this weakness: syndicates propose increases, accept limited modifications, and leave the Economics Ministry to object on the basis of contested production-cost calculations. Workers’ representatives support increases because employers make wage rises conditional upon them. Organized producer interests therefore prevail without representing the general interest.

Die Erfahrungen des letzten Jahres zeigen auf das deutlichste, daß die Organisation, welche das Kohlenwirtschaftsgesetz geschaffen hat, keine Sozialisierung in sich schließt.

English translation: The experiences of the past year show most clearly that the organization created by the Coal Economy Act contains no socialization.

This judgment concerns the distribution of effective power, not simply institutional complexity. Cost-plus pricing can guarantee returns and reward expensive production, while ministerial objections are too blunt to provide continuous economic direction. Coal scarcity also prevents the closure or consolidation of inefficient mines: available labor must sustain even poorly yielding operations. Once production recovers or world-market competition resumes, the extraordinary scope for administered prices will diminish. Yet the syndicates will retain their prewar business policies. Emergency price supervision thus neither establishes collective control nor supplies an enduring strategy for production.

Lederer considers organizational simplification useful but insufficient. Abolishing the Coal Association, transferring its powers and those of the coal commissioner to the Reich Coal Council, and subordinating syndicates to that council might improve consumer protection. Even this arrangement would lack the apparatus and authority for comprehensive production policy.

Man kann eben nicht die privatwirtschaftlichen Unternehmungen weiter bestehen lassen und zugleich, ohne Anteil an den Produktionsmitteln zu haben, gemeinwirtschaftliche Wirtschaftspolitik machen.

English translation: One simply cannot allow private enterprises to continue to exist and at the same time pursue economic policy in the common interest without having a share in the means of production.

The decisive conceptual move is from balancing interests to changing their institutional basis. Compelling representatives of private and collective interests to cooperate does not abolish their opposition. If private interests prevail, socialization recedes; if supervisory bodies override entrepreneurs while leaving their responsibilities intact, production may suffer. Severe controls can disable private initiative without creating the capacities of collective economic organization.

The Rathenau proposal reproduces this contradiction by preserving private enterprises, combining syndicates into a central syndicate, and attaching public supervision and eventual ownership transfer. Lederer’s five objections concern pricing, syndicate functions, the Coal Council’s powers, expropriation, and governing composition. He explicitly notes that the collective vote preceded the proposal’s latest formulation, qualifying his interpretation of its institutional details.

The pricing critique distinguishes accounting transparency from substantive conflicts of interest. Disputes concern whether wage increases justify immediate increases in other costs, which mines determine the price benchmark, and whether restoration and new investment belong on operating or capital accounts. Consolidated bookkeeping would address only part of this problem. Corrections following annual accounts would arrive too late to benefit consumers, while mixed industrial enterprises would remain difficult to audit. A territorial trust might offer a more coherent organizational counterpart than the proposed syndicates, but bookkeeping reform alone cannot produce effective public control.

The syndicate risks becoming merely a settlement office, reimbursing producers for costs that the Coal Council must accept as given. Reducing those costs would require deep intervention in management, approaching a duplicate administration. Meanwhile, favorable mines would retain differential rents, and reimbursement of actual costs would weaken incentives to economize. Bonuses for additional output are likewise no substitute for restructuring: scarcity already encourages production, and further incentives could divert attention from necessary development work.

Verbesserungen nach dieser Richtung wären daher nur durch eine weitgehende Reorganisation des ganzen Kohlenbergbaues zu erreichen, welche bei Weiterbestehen der privaten Besitzverhältnisse unmöglich ist.

English translation: Improvements in this direction could therefore be achieved only through a far-reaching reorganization of the entire coal-mining industry, which is impossible while private ownership relations continue to exist.

The proposed gradual acquisition of the mines is equally dependent on exceptional market conditions. An annual amortization charge included in coal prices would purchase the industry through payments imposed on consumers. World-market competition could make that mechanism untenable. Even where feasible, the decades-long transition would leave ownership politically unsettled and encourage operators facing eventual transfer to neglect efficient management or exhaust resources.

Gerade dieser Teil des Vorschlages muß daher den größten Bedenken unterliegen.

English translation: Precisely this part of the proposal must therefore give rise to the gravest reservations.

The closing discussion leaves governing composition uncertain but identifies a possible shift toward leadership by industrial managers and state representatives, rather than the commission’s proposed coal council. Lederer’s contribution is significant for its insistence that socialization must confer productive initiative, not merely supervisory authority. Its detailed treatment of prices, rents, investment, and ownership explains why administrative compromise could preserve private power while accumulating public responsibilities. The intervention defends the earlier majority plan chiefly by demonstrating the structural limits of its alternatives.