THE DECISION TO USE armed force against Austria and Czechoslovakia even if it involved Germany in a war with Great Britain and France, which Hitler laid down on November 5, came as such a shock to his Foreign Minister that Baron von Neurath, easygoing, complacent and morally weak though he was, suffered several heart attacks.1
“I was extremely upset at Hitler’s speech,” he later told the Nuremberg tribunal, “because it knocked the bottom out of the whole foreign policy which I had consistently pursued.”2 In this frame of mind, and despite his heart attacks, he sought out General von Fritsch and General Beck, Chief of the General Staff, two days later and discussed with them what could be done “to get Hitler to change his ideas.” The impression on Beck of Hitler’s harangue, according to Colonel Hossbach, who informed him of it, had been “shattering.” It was agreed that Fritsch should again remonstrate with the Fuehrer at their next appointment, pointing out to him the military considerations which made his plans inadvisable, while Neurath would follow up by again stressing to Hitler the political dangers. As for Beck, he immediately committed to paper a devastating critique of Hitler’s plans, which apparently he showed to no one—the first sign of a fatal flaw in the mind and character of this estimable general who at first had welcomed the advent of Nazism and who, in the end, would give his life in an abortive effort to destroy it.
General von Fritsch saw Hitler on November 9. There is no record of their talk but it may be presumed that the Commander in Chief of the Army repeated his military arguments against Hitler’s plans and that he got nowhere. The Fuehrer was in no mood to brook opposition either from the generals or from his Foreign Minister. He refused to receive Neurath and took off for a long rest at his mountain retreat at Berchtesgaden. It was not until the middle of January that the stricken Neurath was able to arrange an appointment with the Leader.
On that occasion I tried to show him [Neurath later testified at Nuremberg] that his policy would lead to a world war, and that I would have no part in it … I called his attention to the danger of war and to the serious warnings of the generals … When despite all my arguments he still held to his opinions I told him that he would have to find another Foreign Minister … 3
Though Neurath did not then know it, that was precisely what Hitler had decided to do. In a fortnight he would celebrate the fifth anniversary of his coming to power and he intended to mark it by cleaning house not only in the Foreign Office but in the Army, those two citadels of upper-class “reaction” which he secretly distrusted, which he felt had never completely accepted him nor really understood his aims and which, as Blomberg, Fritsch and Neurath had shown on the evening of November 5, stood in the way of realizing his ambitions. The last two gentlemen in particular, and perhaps even the accommodating Blomberg, to whom he owed so much, would have to follow the inimitable Dr. Schacht into retirement.
For the crafty financier, the early enthusiast for Nazism and backer of Hitler, had already fallen.
Schacht, as we have seen, had devoted his energies and his wizardry to financing Hitler’s speedy rearmament. As Plenipotentiary for War Economy, as well as Minister of Economics, he had concocted any number of fancy schemes, including the use of the printing press, to raise the money for the new Army, Navy and Air Force and to pay the armament bills. But there was a limit beyond which the country could not go without becoming bankrupt, and by 1936 he believed Germany was approaching that limit. He warned Hitler, Goering and Blomberg, but to little avail, though the War Minister for a time sided with him. With Goering’s appointment in September 1936 as Plenipotentiary for the Four-Year Plan, a farfetched scheme to make Germany self-sufficient in four years—a goal which Schacht regarded as impossible—the Luftwaffe chief became, in fact, the economic dictator of Germany. To a man as vain and ambitious* and as contemptuous of Goering’s ignorance of economics as Schacht was, this made his own position untenable and after months of violent controversy between the two strong-minded men Schacht asked the Fuehrer to place the further direction of economic policies solely in his rival’s hand and to allow him to resign his post in the cabinet. To add to his discouragement had been the attitude of many of the nation’s leading industrialists and businessmen, who, as he later recounted, “crowded into Goering’s anteroom in the hope of getting orders when I was still trying to make the voice of reason heard.”4
To make the voice of reason heard in the frenzied atmosphere of Nazi Germany in 1937 was an impossible task, as Schacht realized, and after a further exchange of blows with Goering during the summer in which he denounced as unsound “your foreign-exchange policy, your policy regarding production and your financial policy,” he traveled down to the Obersalzberg in August to submit his formal resignation to Hitler. The Fuehrer was loath to accept it in view of the unfavorable reaction both at home and abroad which the departure of Schacht would almost certainly bring, but the battered Minister was adamant and Hitler finally agreed to release him at the end of two months. On September 5 Schacht went on leave, and his resignation was formally accepted on December 8.
At Hitler’s insistence Schacht remained in the cabinet as Minister without Portfolio and retained the presidency of the Reichsbank, thus preserving appearances and blunting the shock to German and world opinion. His influence as a brake on Hitler’s feverish rearmament for war, however, had come to an end, though by remaining in the cabinet and at the Reichsbank he continued to lend the aura of his name and reputation to Hitler’s purposes. Indeed, he would shortly endorse publicly and enthusiastically the Leader’s first gangster act of naked aggression, for, like the generals and the other conservatives who had played such a key role in turning over Germany to the Nazis, he was slow to awaken to the facts of life.
Goering took over temporarily the Ministry of Economics, but one evening in mid-January 1938 Hitler ran into Walther Funk at the opera in Berlin and casually informed him that he would be Schacht’s successor. The official appointment of this greasy, dwarfish, servile nonentity who, it will be remembered, had played a certain role in interesting business leaders in Hitler in the early Thirties, was held up, however. For there now burst upon the Third Reich a two-headed crisis in the Army which was precipitated by, among all things, certain matters pertaining to sex, both normal and abnormal, and which played directly into the hands of Hitler, enabling him to deal a blow to the old aristocratic military hierarchy from which it never recovered, with dire consequences not only for the Army, which thereby lost the last vestiges of independence which it had guarded so zealously during the Hohenzollern Empire and the Republic, but eventually for Germany and the world.