Manawatu Evening Standard. TUESDAY, JAN. 24, 1939. REMOVAL OF DR SCHACHT.

Manawatu Standard, Volume LIX, Issue 47, 24 January 1939, Page 6

Manawatu Evening Standard. TUESDAY, JAN. 24, 1939. REMOVAL OF DR SCHACHT.

Oi' ilie most profound significance to tfie German nation in particular and indirectly to tfie whole of Europe is the announcement that Dr Schacht has been relieved ox his post as President of the lieichsbank in favour of the Minister of Economics (Dr Eunk), who succeeded him in the latter position in September, 1937. The change, it is feared, does not bode well for tranquillity, and it is certainly symptomatic of a grave breach in the ranks of the German leaders, signalising another triumph for the extreme section of the Nazi Party. Taken in conjunction with the removal of other bank officials and the appointment of Captain Wiedemann (a moderate) to San Francisco the importance of the decision cannot be underestimated. The lieichsbank is to be completely converted into a central bank and Dr Funk has had his instructions to bring it into total subjection to the sovereignty of the State. In other words, the German rulers are determined to achieve their ends by any means within their power, eschewing orthodoxy and risking economic collapse. Dr Schaclit, experienced and tried financier, had realised that the nation could not stand the strain of even heavier demands for defence, but had proposed additional taxation as an orthodox means of solving the problem. Herr Hitler, afraid of the public reaction to further burdens in this direction, took the spectacular way out of the difficulty, simultaneously obtain carte blanche to mould the country’s economic system nearer to his desires. Dr Schacht is by no means experiencing his first break with the Nazi Party or other heads of the German State. His resignation in 1937 was brought about bydisapproval of the policy of concentrating on armaments and public works in preference to agricultural and industrial production—the “guns before butter” occasion-—and subsequent events have not proved him wrong. In 1930 he resigned the Presidency of the lieichsbank on the grounds that he could not fulfil the promises of the Government at The Hague Conference, but was recalled by Herr Hitler. A. year later he survived a demand that he be tried for high treason after declaring that the lieichsbank had falsified its returns. Able, cool, far-sighted, ruthless, and as orthodox as it has

been possible to be, Dr Scliacht has figured prominently in German linancial policy since the occasion in 1923 when he saved the nation from chaotic conditions by inventing the Rentenmark to stabilise the currency. The traits he then displayed—caution and foresight—have characterised his administration, and undoubtedly tins is where the break has come again with Herr Hitler, who is recorded as having once declared that “in the relationship between the nation and economics thei’e is only one thing unchangeable, that is the nation. Decisive is the will to assign to economies always the role of serving the nation.” The Fuehrer, it seems, expects to find Dr Funk more amenable to his demands, as he has proved himself since his appointment to the Economies Ministry, but German banking and industrial circles and the outside world may await with apprehension the verdict of whether or not the economic system of the Reich will survive its greatest test since the War.