NAZI FINANCIAL BRAIN

Evening Post, Volume CXXIV, Issue 62, 10 September 1937, Page 9

NAZI FINANCIAL BRAIN

ENORMOUS FEATS

DR. SCHACHT'S CAREER

Dr. Hjalmar Schacht has been President of the Reichsbank since March, 1933 (when Dr. Hans Luther, recently in Mew Zealand, resigned from that post on the ground that close cqllabO' ration between him and the Nazi Government would b<? difficult), and has been Reich Minister of National Economy since 1934. Dr. Schacht commenced his public career in 1913, •when he entered the National Bank as director of the Department of Securities, and after its fusion in 1922 with the Darmstadter Bank he made it one of the leading banks in the country. Then he entered 'the political arena. He took a prominent part in the discussions for the restoration of the mark. After the Ruhr invasion. Herr Stresemann wished to make him Minister of Finance, but political events prevented this. instead, Dr. Schacht became Commissar for the Currency. A little later the then President of the Reichsbank died and Dr. Schacht was suggested as his successor and performed the miracle of Germar currency stabilisation. He headed the delegation of German experts sent to Paris in 1929 to negotiate a settlement of the reparations issue, and when Germany was forced to accept the Young Plan he was bitterly disappointed. During the negotiations he came into conflict with his Government and on his return to Germany in 1930 he refused to continue to work with the Administration. Towards the close of 1930, on his return from a lecture tour of the United States, he was brought into contact with Herr Hitler. The effect was immediate. The doctor gave Herr Hitler his support, and in 1933 was made President of the Reichsbank once again.

THEIR FINANCIAL BRAINS

In that capacity he has long been recognised as the financial brains of the Nazis. He has had enormous feats to perform but has performed them by a sort of financial legerdemain. He financed internal business by loans which amounted to forced loans. He borrowed from savings banks and insurance companies. He defaulted on foreign debts. He expanded trade by a system of subsidies from industry to the exporters. He expanded trade further by the simple process of allowing Germany to run into debt with :he Balkan countries and then negotiating trade agreements with them.. He bought up crops in Greece and sold them under world parity in Holland, in order to create the foreign credits necessary to enable Germany to import essential "aw materials. He has been invaluable. But at the same time he has been known as one of the moderate Nazis, aligned against the extremists. And the Four-Year Plan of economic self-sufficiency has caused his difficulties to mount.

At the end of last year the Berlin correspondent of the London "Daily Telegraph" stated that Germany's financial difficulties were multiplying so fast that before long Dr. Schacnt might be forced to declare a cessation of payments on all commercial debts. Export trade had become much more difficult as the result of the devaluation of the currencies of France, Holland, Switzerland, and Czechoslovakia, and the export subsidy on goods sent to the last-mentioned country was now 40 per cent. Foreign securities held by German nationals were being called up. Exports have been falling and imports rising, though at the same time the imports of consumption goods have fallen away. The establishment of clearing systems by foreign countries to which Germany owes money has made the task of esablishing foreign credits still more difficult For every 100 francs Germany established in France only 25 francs is available for German purchases there. And now there has been a poor harvest.

These circumstances would appear to have led to disagreement over the continuance of the Four-Year Plan, or at all events the continuance of it at its present pace. For when addressing the International Chamber of Commerce in Berlin at the end of June Colonel-General Goering, Commission-er-in-Charge of the Plan, declared emphatically that Germany had no intention of changing her economic policies. Since then it has been announced that Gex*many means to develop her own iron ore deposits "in accordance with National Socialist principles" which, being interpreted, means that Germans. will have to pay about 400 per cent, more for iron since it costs four times as much to smelt as good., Swedish ore.

so headed has appeared In "The Times" and Is cabled to Australia and New Zealand by special permission. It should be understood that the opinions are not thoae of "The Times" unless expressly stated to in to,