GERMANY: Better Out Than In?

There was hardly a bigger story in Europe last week than this: Dr. Horace Greeley Hjalmar Schacht had laid his resignation before Herr Adolf Hitler and the Economics Ministry he wanted to resign had been physically taken over by Colonel General Hermann Wilhelm Gőring.

Meanwhile Dr. Schacht was motoring "for a few days" in Italy. His principal aides at the Economics Ministry were brusquely transferred to other departments of the German Government last week. Control of Germany's closely rationed imports of raw materials was taken over by officials directly responsible to Gőring. "Any further government role by Dr. Schacht—even as Acting Minister of Economics—is out of the question!" snapped a busy Gőring aide.

If Dr. Schacht is to have no further government role he is out presumably not only as Economics Minister but also as President of the Reichsbank, the post in which he won fame as "the ablest central banker in Europe." These many years Dr. Schacht has stood off Germany's creditors with phenomenal adroitness; he created and managed the trickiest set of currencies the world has ever seen, the various varieties of German marks; and more recently he has sewed up banks, governments and firms in many countries of the world in barter deals by which Germany, since she could not pay, got what she wanted by swapping. If trading were even remotely free on German stock exchanges there would have been panic and chaos last week as it was realized that Schacht was out—but iron, totalitarian Nazi control kept all quiet.

Although supple and enterprising to the point of being Machiavellian. Dr. Schacht has the mind and technique of an orthodox banker. As Economics Minister he has browbeaten by sheer personality and held in check other bigwigs such as Labor Front Leader Dr. Robert Ley who as long ago as 1933 proclaimed: "He who organizes the profit mentality must go; he is a mortal enemy of the nation!" Nazi radicals like Dr. Ley have been trying to "get" Dr. Schacht all these years, but last week it was not they who got him. so far as correspondents could discover.

This year, according to Schacht intimates, the Economics Minister & Reichsbank President has finally had to tell the German Government that in his opinion the sums being spent in Rearmament and on public works, party buildings and motor speedways throughout Germany must be drastically curtailed if the Reich is to keep up even its present show of Capitalist economy and stable money. The situation seemed to be last week that Herr Hitler remains no economist, and that Colonel Gőring will stop at nothing short of an actual crackup in his resolve to complete Germany's present Four-Year Plan to achieve Rearmament and Autarchy (TIME, Nov. 2. et seq.).

So smart is Dr. Schacht that his resignation was no good omen for the future of the Third Reich. He played the game of the Second Reich (which preceded the Nazis) adroitly for years—the game of Dr. Gustav Stresemann, "The Spirit of Locarno" and the Young Plan. When Dr. Schacht thought that game was up he resigned as President of the Reichsbank and appeared in the news less frequently—suddenly was found to be sitting on Adolf Hitler's bandwagon as President of the Reichsbank again (TIME, March 27, 1933).