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   Nazi Conspiracy and Aggression, Volume Two, Chapter XIV

                                                  [Page 761]

(1) His resignation as Minister of Economics and General
Plenipotentiary for War Economy. In November 1937, Schacht
resigned his offices as Minister of Economics and General
Plenipotentiary for War Economy. At the same time, he
accepted appointment as Minister without Portfolio, and
continued as President of the Reichsbank. It is submitted
that the evidence shows at Schacht's resignations were
merely the outgrowth of a clash between two power-seeking
individuals, Goering and Schacht, over methods of creating a
war economy. and over who should have final authority to
direct the completion of the task. So far as appears,
Schacht was in full accord with the other conspirators upon
the desirability of providing Hitler with the means by which
he eventually could carry out his planned aggressions.

The basic differences between Schacht and Goering date from
a period shortly after Goering became head of the Four-Year
Plan Office. The latter office was created by Hitler in
September 1936, and in connection therewith, Goering was
"given far reaching powers to issue directives to all the
highest offices of the State Party". Goering conceived of
his function as head of the Four-Year Plan Office "within
four years to put the entire economy in a state of readiness
for war" (EC-408).

Schacht was in agreement with the "aim and idea" of the Four
Year Plan. He promised Goering his complete support and
cooperation, and urged that Goering draw upon Schacht's long
experience in economic affairs. Thus, in Schacht's letter of
5 August 1937, to Goering, he said:

     "The aim and the idea of the Four Year Plan were and
     remain entirely correct and necessary! It stands,
     essentially, for the application of increased energy to
     the efforts already undertaken by my ministry since
     1934 with the results shown in the above statistics. As
     you will remember, I welcomed it when your energy, my
     dear Prime Minister, was recruited by the Fuehrer for
     these tasks, and from the very beginning I gave you my
     most loyal support and cooperation, with the particular
     plea that I be given a hearing from time to time, since
     I believed that my more than thirty years of experience
     in economic life, half of them in public service, could
     be of value to you." (EC-497)

Goering, however, failed to avail himself of Schacht's offer
of services. "I can only regret," said Schacht in the

                                                  [Page 762]
tioned letter, "that you have made so little use of my
offer" (EC-497). Instead, Goering began to encroach upon
powers which had been delegated to Schacht, and they became
embroiled in a bitter jurisdictional conflict. On 26
November 1936, Goering issued a directive regarding raw and
synthetic material production, where by he undertook to
assume control over large economic areas previously within
Schacht's province

Schacht did not supinely accept Goering's intrusions upon
his powers. Goering's directive was countered by an abrupt
order from Schacht to all supervisory offices to accept
orders from him alone

The conflict reached such dimensions that it threatened to
retard the pace of the conspirators' armament program. The
military sided with Schacht, who had provided the means for
their rapid rearmament. They submitted proposals which would
have assured to Schacht as Plenipotentiary General for the
War Economy the responsibility for "unified preparation of
the war economy as heretofore" (EC-408;

In January 1937, the German Military Weekly Gazette
published an article warmly praising Schacht's achievements
in rearmament. The timing of the article indicates that it
was a further attempt by the military to tip the scales in
Schacht's favor. The article

     "The German Defense Force commemorates D. Schacht today
     as one of the men who have done imperishable things for
     it and its development in accordance with directions
     from the Fuehrer and Reich Chancellor. The Defense
     Force owes it to Schacht's skill and great ability
     that, in defiance of all currency difficulties, it,
     according to plan, has been able to grow up to its
     present strength from an army of 100,000 men." (EC-383)

Shortly thereafter, Schacht attempted to force a showdown
with Goering by temporarily refusing to act in his capacity
as Plenipotentiary. Schacht plainly was using his prime
importance in the conspirators' program of economic planning
and preparation for war as a lever. In a letter to Hitler
dated 22 February 1937, General von Blomberg, the Minister
of War, suggested a settlement of the jurisdictional fight
under which Schacht would fully retain his powers as General
Plenipotentiary of War Economy, and concluded by stating:

     "If you, my Fuehrer, agree with my view regarding these
     jurisdictional questions, it may be possible to induce
     Reichsbank President Dr. Schacht, whose cooperation as
                                                  [Page 763]
     potentiary for preparation of war is of great
     significance, to resume his former activity." (EC-244)

As a further demonstration of the community of interest
between Schacht and the top German military authorities,
Schacht attended the secret "War Economy" games at Godesberg
in the latter part of May 1937. The purpose of the games was
to demonstrate "how the action of the soldiers in total war
is influenced by economy and how on the other hand, economy
is completely dependent on military operations". Schacht's
attendance was acclaimed at the games as

     "renewed proof that you are willing to facilitate for
     us soldiers the difficult war-economic preparations and
     to strengthen the harmonious cooperation with your
     offices." (EC-174) .

In June 1937, Keitel implored Hitler to accelerate a final
agreement between Schacht and Goering. Speaking of
arrangements concerning cooperation of these two key
figures, Keitel said:

     "I know that a necessary practical basis for it [the
     arrangement for cooperation between Schacht and
     Goering] has already been found, and only a formal
     agreement is needed in order to carry on the common
     "*** to waste time in our situation would be the
     greatest reproach that history could make upon us.
     "May I beg, therefore, once more that the arrangement
     mentioned be expedited, and that I be notified
     accordingly." (EC-248)

Finally, on 7 July 1937, Schacht and Goering signed an
agreement of reconciliation in Berlin, wherein it was said
that the tasks of Goering and Schacht "are being solved in
closest mutual cooperation," and that "no doubt exists about
the fact that the Commissioner General for War Economy has
the position of a supreme authority of the Reich"

Schacht resumed his duties as General Plenipotentiary with
renewed vigor. On the day following his formal agreement
with Goering, he wrote to General von Blomberg on "Measures
for the preparation of the conduct of war," pledging
continued cooperation in their mutual

     "*** by the direction of the supreme authority for the
     conduct of war, the coordination of the conduct of war
     will be assured in its execution through mutual
     agreement between you and me, which I look upon as a
     matter of course
                                                  [Page 764]
     in the Central Authority and without which I cannot
     envisage any conduct of war. The direction of the
     economy by the plenipotentiary would in that event
     never take place entirely independent from the rest of
     the war mechanism but would be aimed at the
     accomplishment of the political war purpose with the
     mustering of all economic forces. I am entirely
     willing, therefore, to participate in this way in the
     preparation of the forthcoming order giving effect to
     the Reich Defense Act [Reichsverteidgungsgesetz]." (EC-

However, Schacht and Goering were soon again in
disagreement. After a sharp exchange of letters in which
each sought to justify his particular economic program as
the best means of making possible the attainment of Hitler's
objectives (EC-497; EC-493) Schacht suggested to Goering in
a curt letter dated 26 August 1937, that he (Goering) assume
sole charge of economic policies. In this letter, Schacht
rationalized his precipitate action as follows:

     "To me it does not seem to be of decisive importance to
     raise questions of competence and initiative, but it is
     of decisive importance that the Fuehrer's economic
     policy should be carried out in a coherent manner, and
     with the least amount of friction." (EC-283)

Despite the uncompromising tenor of the latter
communication, Schacht was still amenable to an arrangement
with Goering which would have permitted him a measure of
autonomy in economic planning and preparation for war. On 1
November 1937, he attended a conference with

     "*** which led in an entirely friendly manner to the
     working out of a series of proposals, which *** Goering
     promised to have presented to me [Schacht] in writing
     on the following day *** so that, after having reached
     an agreement we could present a mutually approved text
     to you, my Fuehrer." (EC-495)

But the written agreement was not forthcoming as Goering had
promised, and Schacht repeated his request to be relieved
from the Ministry of Economics, "in the interest of a
uniform government management" (EC-495). Hitler finally
accepted Schacht's resignation as Minister of Economics on
26 November 1937, simultaneously appointing him Minister
Without Portfolio. Schacht's resignation was also extended
to his position as Plenipotentiary for War Economy (EC-494).

In subsequent interrogations, both Schacht and Goering have
confirmed the fact that Schacht's withdrawal was simply the

                                                  [Page 765]
sult of a losing struggle with Goering to retain personal
power (3730-PS;

There is nothing to indicate that Schacht's withdrawal from
the Ministry of Economics and the Office of Plenipotentiary
for War Economy in any sense represented a break with Hitler
on the ground of contemplated military aggression. He
consented to retain his position as President of the
Reichsbank, where he remained undisputed master, and
accepted the post of Minister of Portfolio, in order to be
Hitler's "personal adviser." In the letter accepting
Schacht's resignation as Minister of Economics, Hitler said:

     "If I accede to your wish it is with the expression of
     deepest gratitude for your so excellent achievements
     and in the happy consciousness that, as President of
     the Reichsbank Directorium, you will make available for
     the German people and me for many years more your
     outstanding knowledge and ability and your untiring
     working strength. Delighted at the fact that in the
     future, also, you are willing to be my personal
     adviser, I appoint you as of today a Reich Minister."

As President of the Reichsbank, Schacht continued to carry
out Hitler's policies. As previously shown, he participated
in the planning of the invasion of Austria by fixing the
conversion rate the Austrian Schilling in advance of the
invasion; and under direction, the Austrian National Bank
was merged into the Reichsbank. He publicly approved the
absorption of Austria and acquisition of the Sudetenland. He
continued to finance armaments by "mefo" bill credits until
April 1938, and thereafter, until his resignation in January
1939, authorized an increase of approximately 2.6 billion
Reichsmarks in bank notes in order to discount commercial
paper which was used in connection with the armament
program. (EC-438)

 (2) Schacht's dismissal from, the Presidency of the
Reichsbank. Schacht was dismissed from the Presidency of the
Reichsbank in January 1939. The evidence indicates that
Schacht engineered his dismissal in order to escape personal
responsibility for what he believed to be an impending
financial crisis; he was not dismissed because of
disagreement with the ultimate objectives of the conspiracy
or common plan.

Schacht had always feared an inflation in Germany. As early
as 8 May 1936, he emphatically stated that he would "never
be party to an inflation" (1301-PS). In January 1939,
Schacht was convinced that ruinous inflation was, in fact,
imminent (EC-369). There was, it appears, ample basis for
his fear. The Finance

                                                  [Page 766]
Minister, von Krosigk, had already recognized the situation
in September 1938, and had written to Hitler warning that we
are steering towards a serious financial crisis, the
forebodings of which have led already abroad to detailed
discussions of this weak side in our economic preparations
and to an apprehensive loss of confidence domestically. (EC-

Schacht was not only afraid of a financial crisis; he was
even more fearful that he personally would be held
responsible for it and his prestige would suffer a crushing
blow. One of his associates at the Reichsbank has stated:

     "When Schacht saw that the risky situation which he had
     sponsored was becoming insoluble, he was more and more
     anxious to get out. This desire to get out of a bad
     situation was for a long time the 'leitmotif' of
     Schacht's conversations with the directors of the
     bank." (EC-348)

In the end, Schacht deliberately stimulated his dismissal
from the Presidency of the Reichsbank by arbitrarily
refusing an end-of-the-month loan in a relatively small
amount to the Reich, contrary to well established practice
(3730-PS; 3731-PS).

Despite differences of opinion concerning the limits to
which the German economy might be pushed without plunging
the country into inflation, Schacht continued to enjoy
Hitler's confidence. In his letter to Schacht dated 19
January  1939, Hitler stated:

     "On the occasion of your recall from Office as
     President of the Reichsbank Directory, I take the
     opportunity to express to you my most sincere and
     warmest gratitude for the services which you rendered
     repeatedly to Germany and to me personally in this
     capacity during long and difficult years. Your name,
     above all, will always be connected with the first
     epoch of the national rearmament. I am happy to be able
     to avail myself of your services for the solution of
     new tasks in your position as Reich Minister." (EC-

On his side, Schacht evidenced his abiding faith in Hitler
and his continued agreement with his aggressive policies, by
remaining as Minister without Portfolio until January 1943.
As such he received a large salary from the Nazi Government
and enjoyed the emoluments of public office (3724-PS).

(3) Conclusion. Schacht's assistance in the earlier phase of
the conspiracy was an important factor in enabling the
conspirators to seize the German state and thus pave the way
for their later crimes. His 'work was indispensable to the

                                                  [Page 767]
ment of Germany and to the economic planning and preparation
required to launch the German wars of aggression. As long as
he remained in power, he worked as eagerly for the
preparation of aggressive war as any of his co-conspirators.
He personally was favorably disposed towards aggression, if
"Lebensraum" for Germany could not otherwise be attained. He
knew that Hitler intended to and would break the peace, and
with this knowledge, he willingly and purposely contributed
his efforts. His withdrawal from three of his four posts
reflected no moral feeling against the use of aggressive
warfare as an instrument of national policy; he withdrew for
reasons wholly unrelated to Hitler's program of illegal
aggression. By the time of his withdrawal from these three
positions, he had already provided his co-conspirators with
the physical means and economic planning necessary to launch
and maintain their wars of aggression; and he continued in
his lucrative fourth position (Minister without Portfolio)
until January 1943-until, in short, it became doubtful ether
the conspirators could maintain the successes which they had
gained in the wars they had illegally launched and were

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