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his approval. Not I but the Fuehrer is the guardian of eco

nomic reason.” (EC-503) On the occasion of the unveiling of Hitler's bust in the vestibule of the Reichsbank on 31 July 1935, Schacht said:

“Germany stays and falls with the success of the policy of

Hitler.” (EC-415) At a ceremony in connection with the creation of the Economic Chamber for Pomerania in Stettin on 19 January 1936, Schacht denied that there was any disagreement between Hitler and his collaborators, and went on to say:

"In Germany there is fortunately only one policy and one economic policy, namely that of Adolf Hitler; to work with him and for his goals is the highest satisfaction for every

member of the people's community.” (EC-502) In May 1936, Schacht was attacked by some of the more radical elements of the Nazi Party because he had rejected their "partially irrational ideas” concerning armament financing. In repelling these attacks, Schacht emphasized at a secret meeting of the Ministers on 12 May 1936, that his program of financing armaments had meant “the commitment of the last reserve from the very beginning"; and he announced that despite the attacks, he would continue to work because he

stands with unswerving loyalty to the Fuehrer, because he fully recognizes the basic idea of National Socialism and because at the end, the disturbances, compared to

the great task, can be considered irrelevant.” (1301-PS). So far as appears, Schacht did not become a member of the Nazi Party until January 1937. Franz Reuter, whose biography of Schacht was officially published in Germany in 1937, has stated that Schacht's becoming a regular Party member was only a question of secondary importance, and even part of a carefully planned policy, for,

"By not doing so—at least until the final assertion and victory of the Party—he [Schacht] was able to assist it (the Party] much better than he would have been able to do had

he become an official Party member.(EC-460) On 30 January 1937, Hitler bestowed the Golden Party Badge upon Schacht, in recognition of his "special services to Party and State.” Schacht accepted this hallmark of approval by the Fuehrer with effusive thanks and a pledge of continued support. In his speech of acceptance, Schacht stated :

“The presentation of the Golden Badge of the Movement is the highest honor the Third Reich has to offer. In honoring me as the head of the Reichsbank and the Reich and

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Prussian Ministry of Economics, it honors at the same time the two agencies which I am directing as well as the work of all those officials, employees and workers functioning in these two agencies.”

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“I think all my colleagues among the ranks of officials, employees, and workers for their faithfulness in the performance of their work, and appeal to all of them further to devote, with all their hearts, their entire strength to the Fuehrer and the Reich. The German future lies in the

hands of our Fuehrer.” (EC-500) The depths of adulation were reached in a speech which Schacht delivered on the occasion of Hitler's 48th birthday in April 1937. Schacht spoke as one of Hitler's “closest collaborators,” who had seen at first hand the difficulties which beset the Fuehrer in the relentless march toward his goals. In his speech, Schacht stated:

"With the limitless passion of a burning heart and the infallible instinct of the born statesman, Adolf Hitler has won for himself the soul of the German people in a battle fought for 14 years with unswerving consequence."

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“Only the closest collaborators of the Fuehrer know how difficult is the burden of this responsibility; how sorrowful are the hours during which decisions must be made which bear upon the well being and the fate of all of Germany." (EC

501) In November 1938, at a time Schacht now asserts he was plotting against Hitler, he stated in a speech:

"Instead of a weak and vacillating Government, a single, purposeful, energetic personality is ruling today. That is the great miracle which has actually happened in Germany and which has had its effects in all fields of life and not least in that of economy and finance. There is no German financial miracle. There is only the miracle of the reawakening of German national consciousness and German discipline, and we owe this miracle to our Fuehrer Adolf Hitler." (EC-611)

(2) Schacht favored the acquisition of additional territory for Germanypeacefully if possible, but by aggressive war, if necessary. Schacht had long been a German nationalist and

expansionist. As early as 1927, he spoke against the Versailles Treaty:

"The Versailles Dictate cannot be an eternal document, because not only its economic, but also its spiritual and moral

premises are wrong." (EC-415) He strongly favored the acquisition by Germany of both colonial territory and contiguous territory in Europe. At the Paris conference on 16 April 1929, he said:

"Germany can generally only pay if the Corridor and Upper Silesia will be handed back to Germany from Polish possession, and if besides somewhere on the earth colonial terri

tory will be made available to Germany." (3726-PS) In a speech in Danzig in June 1935, Schacht ascribed the economic difficulties which confronted Danzig to "historical errors of the greatest extent which were beyond the control of the German people”. He sought to comfort his listeners with the assurance that

“We Germans in the Reich today are looking with fullest confidence upon our comrades in the Danzig Free State, and maintain our people's fellowship with the interests, wishes and hopes of this territory which has unfortunately been

separated from us.” (EC-498) In January 1936, Schacht again publicly spoke against the Versailles Treaty, and impliedly threatened war unless its terms were revised in Germany's favor. At that time, he stated :

“But the memory of war weighs undiminished upon the people's minds. That is because deeper than material wounds, moral wounds are smarting, inflicted by the socalled peace treaties. Material loss can be made up through renewed labor, but the moral wrong which has been inflicted upon the conquered peoples, in the peace dictates, leaves a burning scar on the people's conscience. The spirit of the Versailles has perpetuated the fury of war, and there will not be a true peace, progress or reconstruction until the world desists from this spirit. The German people will not

tire of pronouncing this warning.” (EC-415) Later in the same year, Schacht again publicly advocated "Lebensraum" for the German people in terms not unlike those employed by Hitler. In his speech at Frankfurt on 9 December 1936, Schacht said:

Germany has too little living space for her population. She has made every effort, and certainly greater efforts than any other nation, to extract from her own existing small space, whatever is necessary for the securing of her liveli

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hood. However, in spite of all these efforts the space does

not suffice.” (EC-415) Schacht had hoped, it is believed, that his desire for additional space for Germany would be realized without resort to war. In Austria, for example, he had authorized 200,000 Marks a month to be set aside for the National Socialists in Austria, hoping thereby to facilitate the absorption of Austria into Germány without war. But if Germany's neighbors would not accede to the conspirators' demands for additional space, Schacht was willing to go to war to fulfill those demands.

Thus, on 23 September 1935, Schacht told S. R. Fuller, Jr. at the American Embassy in Berlin:

“Colonies are necessary to Germany. We shall get them through negotiation if possible; but if not, we shall take

them.” (EC-450) In January 1937, Schacht, in a conversation with Ambassador Davies, impliedly threatened a breach of the peace unless Germany's demands for colonies were met. The conversation is related as follows in a report under date of 20 January 1937, by Ambassador Davies to the Secretary of State:

He (Schacht] stated the following: that the present condition of the Germany people was intolerable, desperate and unendurable; that he had been authorized by his Government to submit proposals to France and England which would (1) guarantee European peace; (2) secure present European international boundaries; (3) reduce armaments; (4) establish a new form of a workable League of Nations; (5) abolish sanctions with new machinery for joint administration; all based upon a colonial cession that would provide for Germany an outlet for population, source for food stuffs, fats and raw material.

*" (L-111) The inference was clear: without a colonial cession, peace could not be guaranteed. Equally clear was the inference that it would be Germany in its search for "Lebensraum" that would disturb the peace.

On 21 December 1937, Schacht indicated to Ambassador Dodd that he desired the annexation of neighboring countries, without war if possible, but with war, if necessary. The pertinent portion of Ambassador Dodd's notes on this conversation are as follows:

“Schacht meant what the Army chiefs of 1914 meant when they invaded Belgium, expecting to conquer France in six weeks; i.e., domination and annexation of neighboring little countries, especially north and east. Much as he dislikes

*

Hitler's dictatorship, he, as most other eminent Germans, wishes annexation-without war if possible, with war, if the United States will keep hands off.” (EC-461)

(3) Schacht knew of Hitler's plans to wage aggressive war and wilfully provided the means whereby such a war might successfully be waged. Whether or not Schacht personally favored war, it is clear that he at least knew that Hitler planned military aggression and that he was providing Hitler with the instrument by which those plans could be executed. Even before Hitler's accession to power, Schacht knew from a reading of Mein Kampf that Hitler was bent upon expansion to the East by force of arms (3727-PS).

In the course of his frequent contacts with Mr. Messersmith, United States Consul General in Berlin from 1930 to 1934, Schacht emphasized that the "Nazis were inevitably going to plunge Europe into war" (EC-451).

In September of 1934, Ambassador Dodd recorded in his diary a conversation with Sir Eric Phipps at the British Embassy in Berlin, wherein he stated that "Schacht had acknowledged to me the war purposes of the Nazi Party" (EC-461).

Schacht has admitted that in the course of his numerous talks with Hitler from 1933 to 1937, he formed the impression that "in order to make his hold on the Government secure, the Fuehrer felt that he must present the German people with a military victory” (EC-458).

These admissions by Schacht are fortified by other evidence which shows that Schacht knew that Hitler planned military aggression. After his appointment as Minister of Economics, Schacht became a permanent member of the secret Reich Defense Council. The function of that Council, as shown in other connections, was secretly to mobilize all of the human and material resources of Germany for war (EC-177).

Shortly after his appointment as the Plenipotentiary General for the War Economy in May 1935, Schacht was entrusted by the Reich Defense Council with the “preparation of economic mobilization" in connection with the proposed re-occupation of the Rhineland. Schacht and those officials who were charged with the purely military aspects of the re-occupation were enjoined to proceed with the utmost secrecy because of assurances given by Hitler to the French that no military action was contemplated in the de-militarized zone of the Rhineland (EC-405).

At the 11th meeting of the Reich Defense Council, on 6 December 1935, which was attended by a number of representatives

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