Schacht Settlement

Acute anxiety has racked German businessmen for months as they tried to find out whether famed Dr. Hjalmar Horace Greeley Schacht was being forced out as Minister of Economics, and as Dr. Schacht repeatedly offered his resignation, even told reporters at cocktail parties that he had resigned (TIME. Nov. 8). At long last Adolf Hitler, mystical and intuitive as ever, settled the question last week in his own good time and in his own characteristic words. Accepting the resignation of Dr. Schacht as Minister of Economics but not as Reichsbank President, Der Fuhrer next appointed Dr. Schacht to be his Personal Counselor with full Cabinet rank.

Thus with masterly ambiguity Adolf Hitler bounced Hjalmar Schacht out of the Cabinet, also bounced him back in again.. Effect of this was to retain for Germany some of the kudos of Schacht's name in world finance.

By further decree of the Fuhrer last week, No. 2 Nazi Hermann Wilhelm Goring will exercise the functions of Acting Minister of Economics until January 15. On that date Herr Walther Funk, considered a Goring henchman and today a state secretary in the Propaganda Ministry, be- comes Economics Minister.

Uneasy Berlin rumor had it that General Goring's insistence upon expenditures for rearmament greater than Dr. Schacht considers "possible." has brought the Nazi state to a fateful consideration of whether it must now resort to inflation. In Nazi oratory the inflation of the German mark after the War by Socialists has always figured as "criminal." If this crime should have to be committed again, Nazis must try to distract German public opinion from it by scoring some particularly huge "success"--such as recovering German colonies or absorbing Austria. Up to 1914 the total number of Germans resident in the Kaiser's colonies was only 24,000--less than the number of German residents in Paris. The Fatherland's trade with all German colonies in 1914 amounted to only 1% of Germany's total trade. Today such facts of economic history are flung by Germans on the scrap heap. In Hamburg last week an especially vehement colony-demanding speech was made by General Goering. Roared he: "Germany is entitled to colonies--the same as other nations--and we shall not rest until our just claims are fulfilled!"

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