Memorandum of a conversation between Dr. Hjalmar Schacht, Conservative Minister of Economics and President of the Reichsbank of Germany and S.R. Fuller, Jr., 23 September 1935 at the American Embassy, Berlin.
Source: Nazi Conspiracy and Aggression, Vol. VII, (Washington 1946) p. 503-509.
F.: The President is desirous of knowing whether Europe, and especially Germany, is heading. What is her end? It is recognised, of course, that you can speak frankly, or you need not; and I can do the same. However, our world is in chaos; and somebody must use sense.
S.: Somebody must, Mr. Fuller.
F.: Else we shall all kill each other or be killed by others.
S.: Yes, it is true. I hope we may speak frankly... Speaking of Germany, what is it you wish to know of her ends? Do you mean her political, her economic or her moral ends?
F.: Are not the economic and political ends interwoven?
S.: Yes - of course, they are. Let me give you first the German present background then. The defeat of Germany at the end of the war left our people with their morale broken. The man (meaning Hitler) set about first to raise the moral standard of the nation. That is why I think him a great man; he has raised the moral standard of his people. I am a great admirer of Mr. Roosevelt. In many respects your problems and Germany's are the same. In both countries, unhappiness of the poor has occurred; their unrest has been obvious. In both countries, laws have been enacted to help the poor. But to get back to Germany, we do not want a socialistic state where all impulses of development come from the government and individual initiative is non-existent or stifled. That is not Hitler's idea at all. Nor do we want a free and un-trammelled permission given to every man to get all he can regardless of to what extent the state or other individuals may be hurt by his so doing. In the days before machinery, the great land owners might have exploited the people with some reasonable safety and justice - I am not sure. But today it has been demonstrated that this cannot be done. Hitler has put justice to all before the people as the first duty of the state and of the German citizen. He wants the individual effort of the citizen to be the impulses of the state, but with laws for the guidance and safety of all so that none will be hurt by these individual efforts. He is accomplishing this. He has reached his present position through the free votes of the people in the most democratic way. He does not want to be a dictator through force of arms. Because of the international character of Jews and Roman Catholics, the Jews and Roman Catholics have been a domestic problem throughout history in many states, as you of course know. This is sometimes not appreciated or is forgotten by countries where these problems are not for the moment immediate. In Germany they have been very great.
F.: But Germany's treatment of the Jews is resented greatly by many countries; especially is there resentment in the United States. How many have you in Germany, 500,000?
S.: Yes.
F.: Have you not, therefore, by your treatment of them made 500,000 martyrs? I never was in favour of our treatment of the Jews, but the new laws announced at Nuremberg give protection to the Jews. They are now guaranteed the same rights as any other minority within Germany, such as Poland, for example.
F.: But they are denied the rights of citizenship
S.: Yes.
F.: And their positions by these laws is an inferior one to the Germans? Yes, that must always be. I called Mr. Warburg [Jewish banker] in to see me the other day and explained to him the protection Germany now guarantees to Jews; they can engage in their businesses from now on, and they can go about their business and will have proper governmental protection. I told Mr. Warburg to have his people stop making a noise and accept this protection.
F.: But if he can't stop them from making a noise and the Jewish people do not accept the inferior position given them in Germany with equanimity, what then?
S.: (Dr. Schacht made a wry face and shrugged his shoulders) I don't know what may happen then.
F.: These restrictive laws refusing citizenship apply to the 100 percent Jews. What about the 50 percent and 25 percent Jews?
S.: They will be gradually eliminated because of the law against intermarriage with gentiles or extra marital relations with gentiles.
F.: Your economic situation appears to me to have some serious aspects to it.
S.: Undoubtedly. But we have reduced unemployment; by government work, I'll admit. We have been and are employing many in the manufacture of munitions.
F.: You can't continue making munitions indefinitely unless they are consumed.
S.: That is true. Food prices are high and rising in Germany.
S.: That is true. Of course, we have internal problems because we can't get sufficient raw materials. We haven't foreign exchange; therefore, Mr. Fuller, we must create a German world of the mark wherein we can produce our necessary raw materials; we cannot be so dependent upon others as we are now for our necessary raw materials. We must create a German world of the mark wherein the mark will purchase them and wherein our excess population can find satisfactory work. We intend to do this. We must have colonies.
F.: Can you get them through negotiations?
S.: We have already had preliminary talks with Great Britain and France, but no formal negotiations as yet. When you have produced all the munitions you require, what will become of those thrown out of employment thereby?
S.: Our colonies.
F.: You mean you will send them to the colonies?
S.: Yes.
F.: But suppose you cannot get such territory through negotiations?
S.: Colonies are necessary to Germany. We shall get them through negotiations if possible; but if not, we shall take them. ....
F.: Some foreigners feel that you are in danger of falling from power. They note the battle between Goebbel's and Streicher on the one hand, and you and the army on the other.
S.: The army is the Leader's.
F.: Yes, I understand, but ΓÇô
S.: I will not fall. To maintain oneself in power, one always must be conservative.
F.: And you are conservative?
S.: I am conservative, and the army is always conservative.
F.: Where will Hitler stand? Will he stand with the army?
S.: Without any doubt.
F.: Will the army be with him?
S.: Without a doubt. (Dr. Schacht spoke very forcefully and earnestly) Hitler is necessary to the German people. The German people are 95 percent for Hitler. They may disagree as to the regime, which surrounds him, but they want and need Hitler.
F.: to repeat, does the army really want him?
S.: Without a doubt. Hitler is a necessity to them and to Germany.
F.: Is Hitler turning toward the conservative side?
S.: Without a doubt. A statesman must be conservative to stay in power.
F.: Nuremberg (meaning the Party Rally just completed) looked like a turn to the left.
S.: Oh, no.
F.: But what about the radical speeches at Nuremberg spoken by Hitler? In front of 500,000 people one must always talk radically; must always give the mass something new. One cannot say to a mass be quiet; be careful; save money, and all will be right'. Have no fear of Hitler. He knows well how to play that piano.
F.: What of this conversation do you wish me to tell the President?
