862.00/8037
The Ambassador in Germany (Dodd) to the Acting Secretary of State
[Received July 27.]
Sir: In continuation of despatch No. 2524 of July 10, 1933,71 and with reference to despatch No. 2529 of the same date,72 I have the honor to report that the “end of the revolution” was officially proclaimed last week in a stern order issued by Dr. Frick, the Minister of the Interior, forbidding further revolutionary activity, especially interference with business, and threatening offenders with severe punishment. This was followed by other developments, which clearly show that Hitler realizes that any further attempts at Nazification of business and industry might throw German economy completely out of joint and thus imperil the existence of his régime. Inexorable economic laws have proved stronger than the Nazi monster known as Gleichschaltung, which in the course of five months has devoured almost everything in its path and has transformed Germany into a “totalitarian” Nazi State.
Dr. Frick’s unusual order was addressed to all the Statthalter and to the Governments of the German States. It pointed out that in recent speeches to the S.A.73 leaders and to the Statthalter, the Chancellor had [Page 278] made it clear beyond a doubt that the “German revolution” was finished. All political parties except the Nazi had dissolved themselves, and the Nazi Party had thus become the sole pillar of the State. All power was now concentrated in the Government, led by the Chancellor, and in it all decisive posts were occupied by reliable Nazis. The victorious German revolution thus entered the stage of evolution, that is, of normal, lawful constructive work.
This task, Dr. Frick’s order continued, was seriously impaired by further talk of a continuance of the revolution or of a second revolution. Whoever continued to talk about a second revolution must realize that by doing so he was rebelling against the “Führer” himself, and would be treated accordingly. Such utterances were clearly a sabotage of the national revolution, particularly calculated to expose the German economic system—which was now on the upward grade as a result of the Government’s measures to solve the unemployment problem—to new disquietude and thus to injure the whole nation. Any attempt to sabotage the German revolution, particularly by unauthorized interference in business and industry and by disregarding the orders of the authorities, must therefore be punished by the severest measures (at the least by Schutzhaft) on the basis of the Presidential Decree of February 28, 1933 (the decree issued after the burning of the Reichstag—see despatch No. 2223 of March 4, 193374). Interventions, in so far as they were necessary and justified, could be made only by the “bearers of the State authority,” at their express command and on their sole responsibility.
Dr. Frick then pointed out that it was the duty of the various Statthalter and the State Governments to prevent any organizations or officials of the party from arrogating to themselves governmental powers, declaring that he was especially charged by the Chancellor to request the Statthalter and the State Governments to oppose ruthlessly, with all means at their disposal, any attempt to undermine or even dispute the authority of the State. He specifically requested that the practice of installing commissars be discontinued, as the State apparatus, now completely under Nazi control, was in a position to deal with all matters alone. Commissars whom the Statthalter or State Governments might consider indispensable, the order stated, must be incorporated into the regular apparatus of the State, “as any form of auxiliary government is incompatible with the authority of the totalitarian State.”
The new Minister of Economics has now formally withdrawn the commission of Dr. Wagener as Reich Commissar for Business and Industry, which his predecessor, Hugenberg, was forced to grant him. Dr. Wagener’s collaborator, Herr Moellers, has also been dismissed. [Page 279] All powers transferred by them to subordinate commissars are automatically cancelled.
Even before Dr. Wagener’s dismissal was made public, it was announced that Chancellor Hitler had appointed Herr Wilhelm Keppler, a member of the German delegation to the World Economic Conference, an official in the Reich Chancellery as his special representative for economic questions. Herr Keppler was at the same time deputized by Hitler as his representative within the Nazi Party in charge of all Nazi economic organizations. Whereas Wagener was a theoretician inclined to economic experiments, Herr Keppler has acquired considerable experience as active head of various industrial enterprises.
In a speech to the regional Nazi leaders, to the labor trustees, and to the leaders of the Nazi Cells’ Organization, Hitler again urged moderation with respect to changes in the economic system. Political power, he said, had to be seized swiftly and at one blow. The field of economy, however, was governed by entirely different laws. In the field of economy the Government must proceed step by step. The German economic system could not be built up on bureaucratic schemes. Individual ability had made Germany great, and only by adhering to this principle could the present work of reconstruction succeed. The subordination of higher ability to lesser ability could not be tolerated. The task was to find a common denominator for National-Socialist ideals and the actual requirements of the economic system.
Vice Chancellor von Papen declared in a public speech that a continuous revolution was dangerous as it might lead to anarchy, and a nation like Germany, whose foreign political position was endangered, could least afford to run such a risk.
Finally, at a meeting of prominent leaders of German business and industry, Dr. Schmitt, the new Minister of Economics, expounded the new economic policy in unequivocal terms. The whole tone and content of his speech was clearly calculated to restore economic confidence and to encourage business and industry to greater activity and initiative. He condemned unauthorized interference in business, especially by the so-called Kampfbunde, and rejected all experiments by unauthorized persons. He declared that in order to restore economic stability even the work of organizing the various branches of German industry in line with the Nazi aim of a corporative State was to be discontinued temporarily.
To lend proper emphasis to Hitler’s exhortations and the admonitions of other members of the Reich Government, the Prussian Minister of Justice instructed the prosecuting authorities to drop temporarily all other matters, in order to bring to trial without delay persons guilty of rebelling against the “Führer” or of sabotaging the work of the Government [Page 280] by unauthorized interference in business or by talk of a second revolution. Such acts of sabotage are to be punished swiftly and with extreme severity. In certain cases the offender can be sentenced to long terms in the penitentiary, or even to death.
That the Government is from now on determined to pursue a more cautious economic policy was further demonstrated by the appointment of a special Council to advise it on all economic questions. The composition of this Council, which will meet from time to time on invitation of the Government, clearly shows the present intention to check revolutionary activity in business and industry.
Among the members of the Council are such prominent business leaders as Karl Friedrich von Siemens, Fritz Thyssen, Albert Vögler, Krupp von Bohlen und Halbach, and August Diehn, the head of the German potash syndicate. A less encouraging factor is that Dr. Ley, the head of the German Labor Front, is also a member of this Council. It is of interest that Baron von Schroeder, President of the Cologne Chamber of Commerce, at whose home, it will be recalled, the secret meeting was held between Hitler and von Papen which resulted in von Schleicher’s downfall and the Nazis’ accession to power (see despatch No. 2125 of January 13, 193375), is also a member.
In all justice to Dr. Hugenberg, who had helped to put the Nazis in power but had failed, as he had hoped, to harness them to his cart (see despatch No. 2504 of June 30, 193376), it must be said that Hitler is now doing precisely what Hugenberg had been vainly striving for during his brief and ill-fated career as Reich Minister. As long as Hugenberg was Minister, the Nazi leaders stressed their socialistic philosophy, thus encouraging those elements in their party who sought to translate into action the anti-capitalist points in the party’s program which had been hammered into them during the past fourteen years. Now that practically everything has been subordinated to Hitler and the Nazi Party has become identical with the State, the activity of overzealous subordinate leaders has proved to be a serious hindrance.
There is no doubt that many of Hitler’s followers will resent this sudden change of policy as a betrayal of the party’s program, which had helped to put him into power. Viewed in this light, Hitler’s latest action is undoubtedly a courageous step. Judging by his tactics in the past, he will seek to conceal his complete change of front by new slogans. However, the danger that the numerous extremists in the Nazi Party may get out of hand once they realize that they have been deceived, cannot be disregarded.
Respectfully yours,