FACTORY COUNCIL LAW

FACTORY COUNCIL LAW (Betriebsrategesetz); a product of the Workers' and Soldiers' Councils* of the November Revolution,* it was introduced in the National Assembly* on 21 August 1919. Article 165 of the new Constitution* gave workers and salaried employees the minimal hope of creating factory councils for the defense and promotion of economic interests. The law, designed to make reality of this hope, required worker representation on industrial supervisory boards and the annual audit of corporate books by factory councils. But such provisions were opposed not only by corporations, which viewed them as an intrusion upon management prerogative, but also by the KPD and the USPD, which believed that they would ‘‘ease the workers back into their capitalistic yoke.'' On 13 January 1920, during the bill's second reading, a huge left-wing demonstration against the legislation resulted in a bloody battle with police on the Reichstag* steps; 42 were killed and 105 injured. Nevertheless, given the strength of the ruling Weimar Coalition,* the law was passed on 18 January by a 213–56 vote. The law never fulfilled its promise as a step toward socialism. Not only did corporations find loopholes in the law, but as time passed, partisanship undermined the unity of those who had supported the bill. Ultimately, the SPD was to blame for failing to induce institutional reform during the period when it possessed sufficient power to do so.