MONTHLY

LABOR REVIEW

U. S. BUREAU OF LABOR STATISTICS

VOL. 32, NO. 1

WASHINGTON

JANUARY, 1931

IN

National Economic Councils

'N SEVERAL countries of Europe attempts have been made in recent years to provide for the special representation of the varied interests of the country, as well as to bring into play the specialized knowledge of various groups and individuals, through the formation of councils with advisory and consultative powers. These councils, which are in close relation with the chief officials and the parliaments of the different countries, serve largely as advisory and investigative bodies as regards proposed legislation or other questions affecting the social or economic welfare of the people.

The present article gives a brief description of the national council system in France, Great Britain, Germany, and Italy. In France the National Economic Council organized in 1925 has functioned successfully, particularly in regard to the comprehensive plan for coordinating and putting upon an efficient basis all the elements entering into the economic life of that country. In England and Italy the establishment of such councils is more recent while in Germany although a provisional economic council was organized in 1920 a bill providing for a permanent council which has been pending before Parliament for several years is not yet enacted into law.

Other countries in which such councils have been formed include Czechoslovakia, Spain, and Japan. In Czechoslovakia a consultative commission composed of 150 members chosen by the Government and representing employers' and workers' organizations and economists gives its opinion either on its own initiative or at the request of the Government, upon questions of general economic importance. A Council for the National Economy was appointed in Spain by royal decree in 1924. This organization, which acts entirely in a consultative capacity, is composed of 24 members representing the various commercial and producers' organizations of the country. In Japan the Imperial Economic Council is presided over by the Prime Minister and has for vice presidents the Ministers of Finance, Agriculture, and Commerce, the other members being designated by the cabinet and chosen among public officials and representatives of producers' organizations. The scope of the activities of the council. are very wide, embracing economic subjects, protection of the workers, and the general industrial development of the country. In still other countries, notably Norway, Hungary, Poland, and Portugal, some attempts at the constitution of similar organizations have been made

while in Russia the Superior Council of National Economy forms one of the basic institutions of that Government.

A national economic council was recently established in Belgium to study and advise on problems connected with the economic welfare of the country. Unlike the councils in other countries, however, it will not have the character of a body representing the various economic interests of the country. The council will serve to coordinate the work of existing institutions and will, to a certain extent, be superimposed on these institutions. The members will be chosen for their knowledge and personal authority and the Prime Minister and the governmental departments concerned with the economic policy of the country will be represented so that contact will be insured with those departments which will ultimately be required to give effect to the proposals made by the council.

National Economic Council, France 1

THE French National Economic Council (Conseil National Economique) was established by a decree dated January 16, 1925. The organization of such a council, having for its purpose the orientation of the political and social development of the country, had been urged by the General Confederation of Labor (Confédération Générale du Travail) since the close of the war. As a result of this demand by organized labor for the establishment of an economic council with executive powers the commission was appointed in 1924 to study the matter and after a series of meetings in which the scheme for the organization was drawn up, the cabinet took up the matter, making such changes in the plan as were necessary to bring it into line with the constitutional and legislative organization of the country. The plan adopted provided that the National Economic Council should not be subordinate to any particular ministry but should be attached to the Prime Minister's Department, although the money for its administration would be paid from the budget of the Ministry of Labor, it having been found impossible to satisfy the demand of the committee that the council should be a financially independent office with its own budget. The practical independence of the council is secured through its freedom to decide upon questions to be studied and because its members are not chosen by the Government but are merely appointed by it on the nomination of the different interests represented.

Although the proponents of the plan considered that the council should be given large powers of initiative and the right to lay its opinions and proposals before the chambers of Parliament, the Government felt that such a procedure might be unconstitutional and that the freedom of the Government might be lessened if it were required to introduce bills dictated by the National Economic Council. The decree, therefore, specified that the recommendations of the council should be transmitted to the Prime Minister who should, within one month, inform the council of the action taken or refer the question back to the council for further consideration. While the actual power of the council was therefore limited, the risk of rivalry

This section is based upon Ministère du Travail, Bulletin, Paris, Jan.-Feb.-Mar., 1925, pp. 30*-33*; Revue d'Économie Politique, Paris, Juillet-A out, 1930, pp. 1172-1191; dan Le Perfectionnement de L'Outillage National, by Roger Francq.

between the council and Parliament was avoided. But a possible widening of the scope of the activities of the council to include problems touching other nations is found in the provision that the council may consider questions which are of economic interest either from a national point of view or because of their international bearing.

The council, as established by the decree, is composed of 47 members representing the different economic and social groups of the country, as follows: Nine representing the consumers and the general public, selected from consumers' cooperative societies and consumers' leagues, mayors' associations, users of public services, and heads of families; 30 representing labor and industry, including (a) intellectual labor and teaching, (b) management in industry, agriculture, commerce, transportation, the cooperative movement, and the public utilities, (c) wage-earners, including officials, technical workers, and general labor in industry, commerce, agriculture, and transportation, and (d) artisans in city and rural trades; and 8 representing capital, including (a) industrial and commercial capital, (b) real estate (rural and city), and (c) banks, the stock exchange, and insurance and savings funds. The members are chosen in each class by the most representative organization or organizations, these organizations being named by the Government on the recommendation of the Minister of Labor after consultation with the different cabinet officers concerned.

The term of office of members of the council is two years and members must be French, at least 25 years of age, and in possession of full civil and political rights. Women are eligible under the same conditions as men.

The council meets regularly four times each year for 10 days, and extra sessions may be called by the Prime Minister, who is ex officio president of the National Economic Council. A permanent committee of 10 members is elected by the council to take care of current business between sessions, to carry out the decisions of the council, and to prepare the agenda for the meetings of the council. The law provides that the council shall have a permanent headquarters and that the general secretary shall be appointed by decree, on the recommendation of the Prime Minister, after consultation with the Minister of Labor and the executive officers of the council. Experts are appointed from a list established by the different Government departments concerned, from the Superior Labor Council and the Council of National Defense, and also including the French Government representative at the International Labor Office. When a question concerns an economic or industrial class not permanently represented on the council, representatives of such a class may be appointed, under the rules governing appointments, to share in the investigation. All the ministerial departments, undersecretaries of State, high commissioners, and the competent committees of the Chamber and the Senate are entitled to be represented in the deliberations of the council and its permanent committee. The council, likewise, has the right to be heard by the competent committees of either branch of Parliament as well as by the ministers and members of the Government and to require them to send representatives to the meetings of the council and the permanent committee in case no delegates have been appointed.

It is provided that the Prime Minister shall consult directly with the Economic Council, and the proceedings and decisions of the council in the form of reports or recommendations shall be published in the Journal Officiel. Decisions reached by the council must receive a two-thirds vote of the members present and are then transmitted to the Prime Minister. The Government transmits to the National Economic Council, for purposes of information, all bills of economic interest after these have been tabled, and every law of an economic nature passed may provide for the compulsory consultation with the council in regard to the framing of the regulations necessary for its enforcement.

The Prime Minister and the ministers of foreign affairs, labor, finance, commerce and industry, agriculture, public works, and the colonies are all associated in the administration of the decree.

The council, since its establishment in 1925, has completed various studies relating to the "national equipment" (l'outillage national). The first study undertaken by the permanent committee was an investigation of the housing problem. In connection with this study an advisory committee on rents was appointed, which was empowered to codify and consolidate existing legislation and measures relating to rents, to consider the laws relating to cheap housing, and also to prepare a building program to meet public needs. A complete technical, administrative, and financial plan for the construction of dwellings was developed by this committee. After the completion of this work the council broadened its activities to cover all phases of the national economy for the purpose of establishing a program of action and deciding upon methods which appeared to be essential to put the "national equipment" into the fullest operation. In this "equipment" are included not only works created by the people as a whole but also all of the natural resources made use of by human labor and institutions designed to increase the production, circulation, and consumption of goods, as well as the basic industries which affect the entire national economy. Thus the council is concerned in the development of the means of transport (roads, rivers, seaports, aeronautics) and of communications (posts, telephones and telegraph, and radio) as well as the strengthening of power sources (hydraulic power and power distribution, solid and liquid fuels).

The council has also studied the improvement of agricultural production, studying successively the development of water power, production and use of fertilizers, electrification of rural districts, cooperative institutions, mutual associations, and agricultural credits. It is also interested in the development of these facilities in the French colonies, in the organization of the colonial markets, and in the possibility of the immediate utilization of colonial imports. Finally the council has endeavored to draw up a plan for the financing of this program and two plans-the Tardieu bill and the plan of the National Economic Council itself-were introduced into Parliament during 1930.

English Economic Advisory Council 2

ON JANUARY 27, 1930, the English Government issued a Treasury minute, recording its decision to establish a new body, known

? This section is based upon Economist (London), Feb. 1, 1930, and Manchester Guardian, Jan. 30, 1930.

as the Economic Advisory Council. This is to be a standing body, reporting to the cabinet. The Prime Minister is to be its chairman, and other members are to be the Chancellor of the Exchequer, the Lord Privy Seal, the president of the Board of Trade, the Minister of Agriculture, and other ministers whom the Prime Minister may from time to time summon. In addition, there are to be other persons, not cabinet members, chosen by the Prime Minister by reason of their special knowledge and experience in industry and economics. Its purposes are thus defined:

To advise His Majesty's Government in economic matters.

To make continuous study of developments in trade and industry and in the use of national and imperial resources, of the effect of legislation and fiscal policy at home and abroad, and of all aspects of national, imperial, and international economy with a bearing on the prosperity of the country.

The council is to be subject to the general directions of the Prime Minister, but is not to interfere with the functions or responsibilities of any of the ministers or departments, and is to have no administrative or executive powers. It is to keep in touch with departments affected by its work, with a view to the concerted study of economic problems of national interest. It may set up standing committees and such special committees as may be required. It may initiate inquiries into and advise upon any subject falling within its scope, including proposals for legislation.

The council shall also cause to be prepared a list of persons with industrial, commercial, financial, and working-class experience and persons who have made a special study of social, economic, and other scientific problems who might assist the council by serving on committees or as advisers in matters of which they have expert knowledge or in other ways.

Its reports and its work are to be confidential, unless the council advises the Prime Minister otherwise. It is to have a secretary and assistant secretaries, at least two of whom must be economists, and such other staff as may be found necessary. It is estimated that it will cost less than £6,000 per annum, for which provision will be made in the regular budget.

In commenting upon the creation of the new body, the Manchester Guardian points out that it goes far toward removing the reproach often brought against the English system of government that "there is no regular channel through which men with ideas and experience, who are not politicians, can get into contact with the Government. of the day." The Liberals and the Labor Party had both called, in the official statements of their programs, for the establishment of some such body as this as a means of formulating "a consistent and comprehensive policy for the development of national resources, and to coordinate the work of the departments on which the executive duties would fall." In the opinion of the Manchester Guardian, "The council is a step in the direction of more scientific handling of economic problems-a way of making the economist appreciate political difficulties and the politician realize economic necessities." Since the work and reports of the council are confidential, it is impossible to give any résumé of its activities. One indication of the lines along which it is working, however, appears in the fact that beginning with August, 1930, the Ministry of Labor Gazette has published a quarterly supplement of economic and industrial informa