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The Chargé in Germany (Kliefoth) to the Secretary of State

15. Yesterday evening I dined with Dr. Schacht at his invitation. He stated that Hitler had urged him to become Minister of Finance in his Cabinet. He declined because he prefers to be President of the Reichsbank intimating that Luther will be eventually forced out. Schacht took pains to impress me with the fact that he is Hitler’s financial and economic adviser and that he is constantly in consultation with the new Chancellor. He stated further that Von Krosigk was retained as Minister of Finance upon his advice.

I asked him if it were true that Hugenberg would be the guiding spirit in the new government. He replied that Hugenberg was taken in largely for tactical reasons, that he is expected to cause much trouble in the Cabinet but it is hoped that this will lead eventually to his elimination as the leader of the Nationalist Party. Hugenberg’s policies will receive little consideration and Schacht himself will make it a point to kill Hugenberg’s proposal for a drastic reduction of interest rates on foreign private debts.

He assured me that in the field of economics and finance the Nazis will make no attempt to carry out any of their well known demagogic reforms, that they will not be permitted to engage in experiments likely to jeopardize big business and banking in Germany and that American business in Germany had nothing to fear. He told me that all big business viewed the new regime with sympathy. I have good reason to believe, however, that this statement is an exaggeration. A leading executive official of the Reichsverband der Deutschen Industrie told me only this morning that the 4-year plan announced by Hitler last night was an absurdity and that this organization viewed the latest political developments with scepticism and reserve.

I gathered from Schacht’s remarks that Hindenburg obtained assurances from Hitler that he will observe the Constitution.

Kliefoth