I have chosen this subject, because it gives an outstanding inside view of the, for its time, social attitude of the Carl Zeiss Foundation (Stiftung). It is unbelievable to read about the social status of Zeiss workers from the managing directors down to the craft-men in the factories.
It gives also an exceptional inside view in the way of thinking about the behaviour of "share holders in general", which even nowadays sometime is being practised!
It covers aspects of the Carl Zeiss Works history, from mid 1800s up to the end of the 1920s
Please consider also Hans Jucker's comments (at the bottom-end of this page), on how the statute of the General Radio Company in the US had been influenced by the idea behind the Carl Zeiss Foundation.
Transcription of some pages of the interesting post war report:
CIOS No. XXIII-51;
CIOS Target Number 28/7.107
Cios Trip No: 251
REPORT ON THE FIRM OF CARL ZEISS, JENA
This report covers investigations into the various aspects of the activities of the Carl Zeiss organisation of Jena and several of the associated factories and kindred organisations.
A similar investigation into the affairs of the associated firm at Schott & Genossen, Jena, is the subject of a separate report.
The mission assembled at the 12th Army Group Headquarters, Wiesbaden on 25th May, 1945, and proceeded via Camp Dentine to Jena, the following day.
The directors and the various departmental heads of Carl Zeiss were interrogated during the following ten days and details are included in this report under the following headings:-
Section I The Carl Zeiss "Stiftung" (Commemorative Foundation).
II Carl Zeiss and Associated Companies.
III Summary of Zeiss production (1939 - 1944)
IV Building Construction of Carl Zeiss:.....
X Collaboration with Japan...
The world-wide reputation of the products of the Zeiss Stiftung and its Associated firms is of sufficient interest to merit close investigation and analysis of the Stiftung’s political set-up and organisation.
Carl Zeiss, instrument maker to the Jena University, had established his first workshop by 1846. He was joined by Professor Abbe who, on the death of Doctor h.c. Carl Zeiss in 1888 and the retirement of his son, Dr. Roderich Zeiss in 1889, acquired the sole control of the concern.
In 1891 Prof. Abbe created the Carl Zeiss Stiftung to which he transferred the ownership of the Optical Works and controlling share in the Glass Works of Schott and Genossen. He transferred his entire personal estate and accepted the position on the Board of Management.
In handing over the Statute of the Carl Zeiss Stiftung to all employees engaged in the Works of Carl Zeiss and Schott and Genossen, Prof. Abbe said:-
"I would request the employees of the Optical Works in particular the regard this Statute and the guarantees of the continuance of those principles (which have ever been in vogue in the direction and administration of the firm) offered them therein as a gift which I, as former part proprietor of the Firm offered to the whole body of my co-workers to commemorate the Fiftieth Anniversary of its activity.
"It is my earnest desire and hope, that the Optical Works and the Glass Works may flourish and thrive upon these principles, place both organisations to the advantage of all who enter their portals, to the service of the common weal, to the honour of German precise technical industry".
Quoting from the Statute of the Carl Zeiss Stiftung, "The objectives of the Carl Zeiss Stiftung are:-
Within the Works.
Aim 1. To cultivate the branches of precise technical industry, which have been introduced into Jena by the Optical Works, and the Glass Works with the co-operation of the founder of the Stiftung and thereby maintain the said industrial establishments under an impersonal title of proprietorship: that is to say:
Aim 2. Permanent solicitude for the economic security of the above undertakings as well as for the conservation and further development of their industrial labour organisation - as a source of subsistence in the service of scientific and practical interests;
Aim 3. To fulfill higher social duties, than personal proprietors would permanently guarantee, towards the totally of co-workers in its employ, in order to better their personal and economical rights.
Outside the Works
Aim 1. To promte the general interests of the branches of precise technical industry as indicated above not only within the sphere of action proper of the Stiftung’s Works but aslo outside of it;
Aim 2. To take part in organisation and measures designed for the public good of the working population of Jena and its immediate neighbourhood;
Aim 3. To promote study in natural and mathematical sciences both as regards research and teaching.
The objects of the Stiftung as enumerated under A are to be carried out by the Stiftung by virtue of the statutory administration of its own industrial undertakings exclusively and within the scope of these undertakings.
Respecting carrying out the objects of this Stiftung as enumerated sub B, these shall be limited to such surplus funds as may be available after the provisions as detailed sub A have been provided for."
For details of the Stiftung’s organisation and administration the reader is referred to:-
"The Statute of the Carl Zeiss Stiftung"
(partly to be transcribed, AOB)
Amendments have recently been made to the Stiftung under Nazi influence and these are included in German, together with English translation on page... .
The intrinsic merit of the Stiftung is likely to be the subject of continious debate. It will therefore be found in this report that whole paragraphs are taken from the German texts in order to avoid the introduction of opinion. It will be for the reader to study the ideals and aims of Dr. Abbe in relation to the Stiftung’s accomplishments and from his own views as to the part played by the former.
The present commercial undertakings of Carl Zeiss, Stiftung are the Optical Works of "Carl Zeiss"and the Glass Works of "Schott and Genossen"in Jena.
Each firm carries on permanently with separate assets for their working capital and in independent management und their own Board of Management, which comprise:-
"Schott & Genossen"
Dr. Erik Schott
The Deputy of the Stiftung is Dr. Esan, last heard of in Berlin. His present whereabouts are unknown and he may even be dead.
N.B. If the facilities and staffing of the Department under Prof. Bauersfeld and Prof. Joos ... are read in conjunction with Section VI, "Education and Training"... it might be said that the "Stiftung" is well on its way to meeting Aim 1 and 3 of Objectives "B" of the Statute....
Carl Zeiss Stiftung (= Commemorative Foundation)
(Translated from the Text of the Revision of 1906)
I have omitted some sections(chapters) of this very comprehensive report, to concentrate on the core of the benefits of the "Carl Zeiss Stiftung", AOB
Restrictions contained in the contracts as to the occupation after leaving the service of the business of the Stiftung can only be imposed on officials with life contracts in conformity with 59.
Hours of workmen.
The labour contracts of those in receipt of weekly wages in the business of the Stiftung is only to be for a definite working period of the day, which is not to be exceed nine hours while the Works are running.
No one is required or can be compelled to do overtime or work during statutory holidays, except in the case of a breakdown having occurred in the Works.
Agreements for temporary overtime during the regular running of the Works are not to be made for longer period than four working weeks.
All employees in the business of the Stiftung over 18 years of age and not being apprentices under contract are entitled to an annual holiday of 12 working days, the season taken being agreed upon beforehand with the Boards of Management of the business or their representatives.
The granting of leave of absence not exceeding three working days in a single case and within a month can only be refused on the ground of of it being particularly prejudicial to the Firm or other employees of the business.
General restriction of all claims to leave of absence to certain periods of the year is only permissible in the case of those working with fires going night and day, or else take part in work, the interruption of which is always attended with special disadvantages.
Employees of the business, workmen and officials, who are elected to honory positions in the service of the Empire, State or Municipality, must upon their request, always be given the necessary leave of absence to regularly attend to the duties of such office.
107.Height of expenditure for scientific purposes relatively to the state of the Reserve Funds.
So long as the Reserve Funds of the Stiftung have not reached the amount indicated in 45 (not shown, AOB) of this Statute, or, subsequent to a fall, have not been raised again, the amount spent on pure scientific purposes is to be left to the discretion of the Special Board, other interests of the Stiftung being sufficiently safeguarded.
When the Reserve Fund exceeds the amount allowed for and its further endowment be restricted to the limitations imposed by 49 and 49 (not shown, AOB) of this Statute, so long as the University of Jena is in existence, there shall on an average of every three years the half of the surpluses be applied in favour of the University.
The other half of these surpluses shall according to the intentions of the founder and according to the suppositions, under the which others have promoted the enlargement of the sphere of action of the Stiftung, primarily be kept at the disposal of the objects of the Stiftung laid down in 101 and 103 (not shown, AOB). But so far as problems of such nature, the fulfilment of which would be serviceable to an enhanced general benefit in the sense of the objects of the Stiftung, may not for the moment be forthcoming, it shall be permissible to apply [part of the second half of the surplus also for scientific purpose of the University.
Amendments of the Carl Zeiss Stiftung
Foundation Statutes of the Carl Zeiss Stiftung in Jena
Original Form (Translation)
The rights and duties of the Special Board shall pertain to the Department of the State service of the Grand Duchy of Saxe-Weimar under which the affairs of the University of Jena are, for the time being, placed.
Political and religious neutrality
The practical activity of the Carl Zeiss Stiftung according to paragraph 103 (not shown, AOB) is to observe at all times strict neutrality towards political and religious parties.
(remarks, this had been cancelled in 1935 by Third Reich directions, AOB)
There are many sides to this aspect of the Zeiss Stiftung’s activities. It is felt that we cannot do better than repeat here a translation of a lecture given by Dr. Schomerus at the Technical University of Berlin in 1930: at that date there could have been no significant element of Nazi thought. Dr. Schomerus entered the Zeiss concern in 1906 and has been the leader of the Personnel Department for many years. He was displaced by the Nazis on account of his lack of sympathy for their views, but has since the collapse been reinstated in his post, his successor having been arrested. It may, therefore, be agreed that the matter of his lecture has full sanction of the Deputy of the Stiftung.
The social policy of the Zeiss Works
On the fourteenth of January we commemorated the twenty-fifth anniversary of Prof. Ernst Abbe’s death. The large hall in the Volkshaus at Jena was packed to overflowing with Zeiss Works employees of every grade and kind, assembled to pay homage to the memory of this singular man who had been fated to exercise decisive influence on the life of many thousands. The University and the Trades Unions had deposited laurel wreaths at his memorial. As it is now, so it was then: When Prof. Abbe retired from the control of the firm in 1903 for reasons of health, the workers as a body gave him a torchlight parade, and when he died, two years later, workmen kept the guard of honour at his coffin day and night. Why this unflagging loyalty to a departed industrialist, - a loyalty of which fresh evidence is daily to be seen and which is extended also to the Zeiss Works? We at Jena love and honour our Ernst Abbe not alone for his rare unselfishness and the purity of his motives, we esteem him not only for his achievements in science and industry, but we do so especially and particularly because he has left us Works constitution, a charter, based on human dignity and a regard from human personality, and shaped to provide lasting employment. How, indeed, could close ties develop between Works and the worker when he may be dismissed any day, even any hour? What good is all talk about Works community when the worker does not know whether he will belong to it tomorrow or day after, when every retrograde movement of business conditions may supply the cause that will part him from his job and deliver him over to the mercies of the unemployment fund and welfare board? On the strength of the system which Prof. Abbe has left us, we at Jena are able to carry on Works on a policy which has every right to be termed social because it knows itself responsible, in every measure it takes, for the capacity and the future of the Works, as well as for the Works staff and the good of the Community. The ground on which such a social Works policy can grow is this:
In the midst of private capitalistic surroundings, we have at Jena two "foundation" firms, i.e., two large plants, the Zeiss Works with a total of 6,300 employees - of whom 350 are detailed to agencies abroad - and the Jenaer Glaswerk Schott & Gen. with 1,650 employees. Both of these works belong neither to a single private capitalist nor a company as such, but to a Foundation, the Carl Zeiss Stiftung. This Foundation, which was instituted by Prof, Abbe in 1889 in honour of Carl Zeiss, the founder of the enterprise, is the owner of the two firms. The excess earnings which ordinarily go to enrich private persons, are here in part devoted to the Works, in part go to secure the rights of the Works staff, while the remainder flows into the Foundation, which uses them for common good. This fact alone is of very great importance for the spirit of the Works staff, that every man from the first to the last knows that he is not working for persons more or less foreign to the works community, but first and foremost for himself and his family, next for the preservation of the Works with which his fortune is intimately linked, and, finally, through the Foundation for the Community. The character of the foundation system, however, means even more. The control of the Works is independent of banks, exchanges, and stock market movements. No speculator can be interested in it or can get control. Our management need never fear that a block of shares has changed ownership overnight and the majority has gone over into other hands, so that outside monetary powers will make themselves felt.
Let us now take a closer look at this social Works policy, starting at the top. In a Foundation-operated plant, there are no bonus payments for members of the Board of Directors, nor any of the high managers’ salaries of which one hears and reads in the case of stock companies. The Foundation statute says that the highest annual income which may be paid to leading officials, inclusive of the Boards of Managers, shall not exceed ten times the average yearly income of all workers who are above twenty-five years of age and have been employed in the Works for over three years. The Zeiss Works therefore produce no rich people, but instead a good middle class. There are differences in earnings, but they are subject to reasonable limitations which are bearable from the social political standpoint.
Just as good manners already in prewar (First World War of 1914 - 1918, AOB) times demanded that the leading men accepted no orders and honours which they might otherwise have had by the dozen, there are also to-day within the Foundation plants none of the usual German honory titles, but only general managers, department heads, and plant engineers. This ansence of titles has in no way depreciated the authority and the respect accorded to the leading personalities, but it has operated to facilitate collaboration between man and man.
Every worker is engaged at fixed weekly wage which rises with the worker’s age, his period of service, and his performance. A wage once paid may not be reduced at any subsequent time and when the worker grows old, and therefore as it were represents a minimum basis of existence. This basic wage is guaranteed for piecework and for any necessary short-hour work. It is paid for time missed through unavoidable and unintentional absence from work such as are inseparable from political and family life, on the first day of an illness, during nay unpaid activity in the service of the State and community, and on similar occasions. ...... Vacations which are fixed in the Foundation statute of six days for workmen, now gradually increase with the service age to as long as three weeks and are recently being paid for with an addition of 30 per cent to the fixed weekly pay. Overtime on week days is subject to an extra pay of 30 per cent, and on Sundays of 60 per cent of the fixed weekly wage.
This fixed weekly wage also serves as basis for calculating pensions. .............. After five years, every Zeiss employee and worker can claim 50 per cent of his weekly wage for pension in case he is invalided, and after ten years of work this claim rises on per cent per year, up to a finalk maximum of eighty per cent of his wage earnings. The pension of the widow is 50 per cent of the husband’s pension after five to ten-year service period and rises one per cent for each additional year to a maximum of 60 per cent after twenty-year term of service. No dues are paid by the plant employees for these pensions.
The history of the Carl Zeiss Works is a fascinating story, which Melville Eastham the founder of the former American General Radio Company first heard in the middle twenties and which later took him to Jena to study that company’’s policies and practices. What he found there impressed him greatly, reinforced his own viewpoints on employee relations, and stimulated new ideas about ownership.
The two owners Melville Eastham and Henry Shaw stimulated from their study of Zeiss begun to transfer some of their holdings to the Chief Engineer and in December 1929 to seven other employees. From this has grown the company’’s later widely disseminated internal ownership, which has contributed so strongly to employee morale and incentive to produce.
I liked that company as it was in the sixties and seventies with the great sense for precision, I was several times out there at Concord MA (approx. 30 miles west of Boston). Unfortunately as many other companies for early electronic measurement instruments they let slip the connection to nowadays technology.
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