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   Nazi Conspiracy and Aggression, Volume Two, Chapter XIV
                                                  [Page 944]
(3) Conclusion of the Agreement of 11 July 1936 merely
constituted another step towards Anschluss. Prior to 1936,
sponsorship of political subversion was not the only
pressure applied by Germany in its efforts to gain control
of Austria. The German Government in addition had placed
certain economic barriers against trade between German and
Austrian subjects, the most serious of which was the 1000
mark law, which crippled the Austrian tourist traffic by
levying a 1000 RM tax on any German citizen crossing the
border into Austria. The effect of these pressures was to
induce the Austrian Chancellor, Kurt von Schuschnigg, to
seek from Hitler an agreement to "lift the 1000 Mark barrier
he had levied against Austria and reassure Austria that he
had no political designs concerning our state, Austria"

The result was the agreement of 11 July 1936 between Germany
and Austria, which was negotiated by von Papen as Hitler's
representative. The published form of this agreement

     "Being convinced that they are making a valuable
     contribution towards the whole European development in
     the direction of maintaining peace, and in the belief
     that they are thereby best serving the manifold mutual
     interests of both German States, the Governments of the
     Federal State of Austria and of Germany have resolved
     to return to relations of a normal and friendly
     character. In this connection it is
     "(1) The German Government recognizes the full sover-
                                                  [Page 945]
     eignty of the Federal State of Austria in the spirit of
     the pronouncements of the German Fuehrer and Chancellor
     of 21 May 1935.
     "(2) Each of the two Governments regards the inner
     political order (including the question of Austrian
     National Socialism) obtaining in the other country as
     an internal concern of that country, upon which it will
     exercise neither direct nor indirect influence.
     "(3) The Austrian Federal Government will constantly
     follow in its policy in general, and in particular
     towards Germany, a line in conformity with leading
     principles corresponding to the fact that Austria
     regards herself as a German State.
     "By such a decision neither the Rome Protocols of 1934
     and their additions of 1936, nor the relationships of
     Austria to Italy and Hungary as partners in these
     protocols, are affected. Considering that the detente
     desired by both sides cannot become a reality unless
     certain preliminary conditions are fulfilled by the
     Governments of both countries, the Austrian Federal
     Government and the German Government will pass a number
     of special measures to bring about the requisite
     preliminary state of affairs." (TC-22).

More interesting was the secret part of this agreement, the
most important provisions of which have been summarized by

     "Austria would (1) appoint a number of individuals
     enjoying the Chancellor's confidence but friendly to
     Germany to positions in the Cabinet; (2) would devise
     means to give the 'National opposition' a role in the
     political life of Austria and within the framework of
     the Patriotic Front, and (3) would amnesty all Nazis
     save those convicted of the most serious offenses."

Especially interesting was the manner in which this
agreement contained German economic concessions and further
solemn assurances regarding Austrian independence and
integrity, on the one hand, alongside far-reaching political
concessions to the Nazi movement (2994-PS). The effect was
to place Austria completely at the mercy of German good
faith. Von Papen has correctly described it (in an
interrogation at Nurnberg, 8 October 1945) as "the first
step" toward preparation for Anschluss, notwithstanding his
clear understanding at the time that the Austrian government
desired and intended to retain its independence.

The Germans lost no time in making the most of their new
opportunities, solemn assurances notwithstanding, The agree-

                                                  [Page 946]
ment merely heralded a new era in "legitimizing" the German
fifth column in Austria. Thus, the immediate amnesty to
political prisoners in itself presented serious police
problems. The freedom granted to political demonstrations
and organization by German Nazis made it difficult to police
the propagandizing of Austrians. And the agreement
specifically gave the German Nazis an opening wedge to
representation in the Austrian government. The terroristic
activities and pressure of the illegal Nazis continued
without interruption under German sponsorship, until their
hand was strengthened to the point of openly asking for
official recognition (812-PS; 1760-PS; 2994-PS).

The importance of this agreement to the Germans was
underscored by the promotion of its negotiator from
Gesandter to Botschafter, at the time of its signing
(Announcement, Das Archiv, XXVIII, p. 571).

Von Papen himself participated in this pressure game by
maintaining contact with the illegal Nazis, by trying to
influence appointments to strategic cabinet positions, and
by attempting to secure official recognition of Nazi "front"
organizations. Reporting to Hitler shortly after conclusion
of the 11 July 1936 agreement, he succinctly summarized his
program for "normalizing" Austro-German relations under the
regime of the new agreement:

     "The progress of normalizing relations with Germany at
     the present time is obstructed by the continued
     persistence of the Ministry of Security, occupied by
     the old anti-National Socialistic officials. Changes in
     personnel are therefore of utmost importance. But they
     are definitely not to be expected prior to the
     conference on the abolishing of the Control of Finances
     [Finanzkontrolle] at Geneva. The Chancellor of the
     League has informed Minister de Glaise-Horstenau, of
     his intention, to offer him the portfolio of the
     Ministry of the Interior. As a guiding principle
     [Marschroute] I recommend on the tactical side,
     continued, patient psychological manipulations, with
     slowly intensified pressure directed at changing the
     regime. The proposed conference on economic relations,
     taking place at the end of October will be a very
     useful tool for the realization of some of our project.
     Discussion with government officials as well as with
     leaders of the illegal party (Leopold and Schattenfreh)
     who conform completely with the concordat of July 11, I
     am trying to direct the next developments in such a
     manner to aim at corporative representation of the
     movement in the
                                                  [Page 947]
     fatherland front [Vaterlaendischen Front] but
     nevertheless refraining from putting National-
     Socialists in important positions for the time being.
     However such positions are to be occupied only by
     personalities, having the support and the confidence of
     the movement. I have a willing collaborator in this
     respect in Minister Glaise-Horstenau."

This activity continued through 1937. In fact, by 14 January
1937 the negotiations with the Austrian Minister of Security
and the development of "front" organizations had proceeded
so far that "a very intensive crisis has arisen for the
illegal party" with respect to its future program. In urging
a patient attitude toward these problems, von Papen appeared
less concerned with the legitimacy of their position under
the 11 July 1936 agreement than with his fear that

     "a too strong and far-reaching connection (with a
     proposed conservative 'German Action' front
     organization) would be understood neither in our own
     ranks nor could it be of use to the action itself."

On the other hand when an Austrian cabinet minister failed
to show sufficient energy to suit von Papen's purpose, he
showed no hesitancy, under the terms of his 11 July 1936
agreement, to urge replacement by a more cooperative
individual. Thus, von Papen has summarized his efforts to
remove the Austrian Minister of the Interior (monograph

     "I had tried to persuade Schuschnigg to appoint another
     minister to his cabinet beside Herr von Glaise, who was
     not very active. The new minister was to act as trusted
     liaison man between the two governments, able to work
     on innumerable problems directly without diplomatic
     intervention. This simplification would also bring the
     men on both sides of the fence closer together."

By the beginning of 1938, the Nazi hand had been so
strengthened in Austria, and the differences and
misunderstandings regarding the agreement of 11 July had
become so serious and frequent, that Chancellor Schuschnigg
found it expedient to accept von Papen's invitation to meet
Hitler at Berchtesgaden, notwithstanding serious misgivings
on the part of Schuschnigg (2995-PS). Von Papen showed no
hesitancy in extending this invitation despite the fact that
he knew Hitler's "idea to swallow Austria", despite his
knowledge of Schuschnigg's distrust of Hitler, and despite
his own doubts concerning the value of Hitler's word.
Notwithstanding the situation, he found it possible even to
urge Schuschnigg that Hitler was a man upon whom Schuschnigg
could rely. And in making these representa-

                                                  [Page 948]
tions, he was fully aware of the extent of German rearmament
and of its possible use as a diplomatic pressure device
(according to interrogations, Nurnberg, 19 September 1945
and 8 October 1945).

On 11 February 1938, Schuschnigg left for Berchtesgaden to
meet Hitler. At this meeting the severest pressure was
exerted to extort far-reaching concessions from Austria,
including reorganization of the cabinet, appointment of
Seyss-Inquart as Minister of Security and the Interior, and
a general amnesty to Nazis convicted of crimes (2995-PS;
2461-PS; 1544-PS; 1780-PS).

It was at this meeting that Papen urged upon Hitler the
appointment of Seyss-Inquart as Minister of Security and the
Interior (according to monograph "Austria").

Thoroughly entrenched in the government, the Nazis were now
able to seize upon Schuschnigg's plebiscite as an excuse to
seize power, and to call for military intervention by
Germany (812-PS; 2996-PS). (See also Section 3 of Chapter IX
on Aggression Against Austria.)

Thereafter it was only a matter of hours before Austria
became a province of the Reich -- by a law signed by von
Papen's man, Seyss-Inquart (2307-PS).

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