The Transfer Agreement (27 page)

In an attached memo, Moltke listed proof that Poland was readying should the decision to invade be affirmed. Poland's war industry had increased production
100
percent since Hitler took office, placing large orders for airplane engines, munitions, field kitchens, and the other staples of war. Polish representatives were even then in France purchasing heavy artillery and antiaircraft guns. Reserve officers had been called up. And troops due to be discharged had been kept on for additional months of duty. In an ominous show of force, the government had ordered the rapid deployment of
30,000
soldiers and artillery at Vilna just the day before.
¹³

On April
25,
at
I2:45 P.M.,
German Ambassador Walter Koch in Czechoslovakia dispatched an urgent telegram to Berlin:
"THERE IS NO DOUBT THAT A PREVENTIVE WAR IS BEING CAREFULLY CONSIDERED AT THE PRAGUE CASTLE WHERE THE THREADS OF ALL INTERNATIONAL PLOTS AGAINST GERMANY COME TOGETHER. . . . RECENTLY [PRESIDENT] MASARYK SPOKE OF WAR AS A MATTER OF COURSE. I AM CONVINCED THAT POLAND'S INFLUENCE HERE IS CONSTANTLY PRESSING FOR A PREVENTIVE WAR, AND THAT THE CZECHS HAVE THE INTENTION TO INTERVENE ACTIVELY."
¹⁴

Koch's telegram was received in the Foreign Ministry at 4:00 P.M.
Two
hours and forty-five minutes later, Hitler and the entire cabinet assembled to consider the prospect of an imminent invasion.
¹⁵
As they saw it, Poland would act to protect her borders. Czechoslovakia would take advantage of the situation and at the same time strike at German anti-Semitism. France might move to counter border tensions and preclude any plan to discontinue reparations.

Von Neurath pleaded, "The situation is so tense that provocations from our side must under all circumstances be avoided."
¹⁶

The Jewish question and the anti-Nazi boycott were a common aggravating factor in Germany's intensifying economic and military problems. Polish Jews had successfully inflamed Poland from defensive concern to war hysteria through their violent anti-German boycott and protest movement. German officials were in fact astonished that the historically anti-Semitic Polish people would allow Jewish persecution in Germany to become the pretext for a war. But
it
was happening. The anti-Nazi movement in Czechoslovakia was encouraging Masaryk's government to join the opportunity. Masaryk believed anti-Semitism to be an evil unacceptable to Christianity. The international boycott was frustrating every Reich effort to earn the foreign exchange needed to keep France at bay. Events were fitting into the Nazi conception of war: a cataclysmic conflict caused by Jews through economic and propaganda means. But Germany simply was not ready.

The Third Reich had raging problems. Perhaps cunning diplomacy and the self-interest of the world could dampen many of those problems. But at every turn the anti-Nazi protest and boycott movement threw fresh fuel on the fires. There was no longer any doubt. The boycott would have to be stopped.

F
OLLOWING
the lesson of April First, Nazi leaders sought to avoid noisy anti-Semitic outbursts that would provoke more headlines and retaliation. Instead, they planned the methodical destrucation of Jewish existence in Germany—not through riots, no longer through declared boycotts, but through exclusionary regulations and private purges. Julius Streicher sadly admitted when the anti-Jewish boycott was rescinded, "I have a feeling that the boycott battle will not be further taken up.... This will prove a disappointment to millions of Germans. . .. It was not easy to yield, but Adolf Hitler can only proceed one step at a time."
¹

Yet as in any radical movement, NSDAP activists were constantly trying to outdo each other. In this vein, a hysterical drive for Nazi purity was announced April
12:
So-called un-German books would be burned in giant bonfires across Germany on May
10.
²

In response, Stephen Wise and the Congress on April
19
called an emergency meeting of
1,000
Jewish delegates representing
600
New York-area Jewish organizations. As usual, the delegates shouted for the Congress to finally proclaim the boycott. Jewish groups could then begin organizing. But once more Wise refused the call.
³

Wise felt that the formal boycott was so valuable a weapon it should be held back just a little longer while the spontaneous, unorganized movement hinted at the damage to come. And he wanted to announce the formal boycott as part of a worldwide Jewish retaliation declared by an international Jewish body convened in a dramatic flourish for that very purpose. Specifically, Wise envisioned a World Jewish Conference in Geneva during September
1933.
And deep inside, he probably harbored doubts stemming from Zionist pressures to hold back on the boycott.
⁴

So Wise answered the shouters: "The time has not yet come for an official boycott—we still have other weapons." When delegates insisted on stronger action, Wise pleaded with them: "We are not going to disclose our campaign so that Hitler ... will know our next move. I will not be your leader if I cannot be trusted."
⁵
Instead of launching the official boycott, the delegates unanimously agreed to a monumental parade to take place the night of the Nazi book burnings.
⁶

Newspapers on April
27
carried the announcement that the
600
New York-area Jewish organizations would ask their
2
million members to march through Manhattan in a display perhaps equal to the Victory parade of
1919.
⁷
The performance would have to be impressive, if only for one spectator who would be in America at the time: Hjalmar Schacht.

Schacht was coming to the United States in early May to confer with American officials. The Reich hoped somehow to maintain good economic relations with the United States. Exports and foreign currency—these were the precious remedies to massive German unemployment, a weak, unarmed German military, and a continuum of material shortages. Schacht's mission was therefore all-important.

The May I0
parade in many ways was a repeat of the Madison Square Garden effort. The American Jewish Committee and B'nai B'rith opposed every detail. However, this time their disapproval was not waged privately, but in the media in a desperate attempt to dissuade millions of Jews throughout the country who wanted to organize against Hitler. Of the many public attacks the Committee launched against the May
10
plans, the first major condemnation said it as well as any: "We nevertheless consider such forms of agitation as boycotts, parades and mass meetings and other similar demonstrations as futile. They serve only as an ineffectual channel for the release of emotion. They furnish the persecutors with a pretext to justify the wrongs they perpetrate and ... distract those who desire to help with constructive efforts."
⁸

At the height of the parade preparation, in a rebuke to the Committee, the April
29
New York Times
editorialized in favor of protest—Jewish and non-Jewish—as the only means of making Nazi leaders take note. "The thing that must drive home most surely to the mind and conscience of Germany's rulers is the outcry of the non-Jewish world.... The Nazi rulers do know ... that the heads of Christian churches everywhere have been foremost in the protest."
⁹
The editorial reinforced Wise's strategy of making Jews the vanguard of a larger, interfaith movement. Shortly after the editorial, non-Jewish participation in the march accelerated. By May 4, in addition to
250,000
Jews,
50,000
mostly non-Jewish AFL unionists promised to march.
¹⁰

That day, May 4, the luxury liner
Deutschland
was tugged into the docks of Manhattan. Wealthy German industrialists and prominent German politicians were aboard. But once the lines were tied, the reporters who assembled on the deck were not seeking out magnates or mayors. They were looking for Reichsbank president Hjalmar Schacht, the man the German media called "the Wizard." When they found him, at breakfast in the dining room, the question was immediately put: Is the Reich planning a propaganda campaign to counter reports of German atrocities?
¹¹

"What atrocities?" Schacht demanded defensively. "I have not seen any." "Why don't your papers enlighten you?" he barked. "Why don't your papers tell the truth? Why do your papers spread warlike feelings?" The Wizard then pulled out a
New York Times
clipping from the day before about a planned Nazi demonstration in honor of a German shot by the French during their
1923
occupation. Another article in the same
Times
edition mentioned tensions on the Franco-German border. With Schacht's voice rising in ferocity, he declared, "When you print stories like this you are stirring up warlike feeling. That kind of stuff makes for war!" Unable to control himself further, Schacht crumpled the
Times
clipping and ceremoniously threw it on the deck.
¹²

On May 6, at noon, Schacht visited Secretary of State Cordell Hull's Washington office. They spoke briefly with Hull expressing confidence that Germany and the United States would enjoy a new economic partnership. At
I:00 P.M
.,
Hull and Schacht drove up to the White House. Standing in front was FDR. Photographs of smiling men were snapped. They walked into the vestibule as a military band played the German national anthem and martial divertimenti. Lunch was served promptly. With Schacht seated next to the president, the two talked for some time about economic problems affecting both countries.
¹³
At one point, Roosevelt stood up and proposed a toast to President Hindenburg. Schacht returned the gesture by proposing his own toast to Roosevelt and conveying the best regards of Adolf Hitler. A half hour remained for some private talk, away from the crowd and the White House photographer. Schacht sat on the sofa next to Roosevelt. FDR immediately made it plain that Hitler's policy toward Jews had been costly to Germany's economic and political recovery. The American people, said the president, were quite unsympathetic to Germany, not even liking the newsreel scenes of Nazis marching in uniform. FDR called American outrage a hurdle to be cleared if economic success was to be achieved for Germany.
¹⁴

Reminding Schacht that Secretary of State Hull was a believer in free trade, Roosevelt alluded to an extraordinary increase of mutual trade. Schacht asked how? FDR answered that the details would be worked out later, but it would allow Germany to repay its massive debts to other countries.
¹⁵

That night, just before midnight, Schacht cabled the Foreign Ministry in Berlin detailing all that Roosevelt had said.
¹⁶

When Schacht went to bed, late on May 6, there were scintillas of encouragement in the air. But the next day, the news was again bad. Larger boycott groups were organizing. And
I.
G. Farbenindustrie, one of Germany's colossal conglomerates, publicly admitted an extraordinary export slump due to anti-Nazi trade reprisals. Sales of some Farben commodities had fallen by as much as half. Farben, a leading foreign-currency earner, was one of the few sources Schacht had been relying upon to buy time.
¹⁷

As a crowning touch that May 7, the American Jewish Congress cabled Schacht a courteously humiliating summons:
"RESPECTFULLY INVITE YOU TO JOIN REVIEWING STAND OF HUGE DEMONSTRATION TO BE HELD IN NEW YORK ON MAY 10 ... TO DEMONSTRATE EXTENT OF SOLIDARITY OF AMERICAN CITIZENS OF ALL FAITHS IN RESPECT TO POLICY OF YOUR GOVERNMENT IN REDUCING ITS JEWISH POPULATION TO SECOND-CLASS CITIZENSHIP."
¹⁸

Later, Schacht reportedly confided to a friend, "Is there nothing in America to talk about but the Jewish question? That's all I hear: Jews, Jews, Jews and the Jewish question!"
¹⁹

The next day, the Munich Chamber of Commerce released a report verifying that drastic adverse trade developments were indeed due to the worldwide anti-German boycott. The report concluded with a plea for the German government to counteract.
²⁰

That same day, May 8, Schacht met in FDR's office with the president, Secretary Hull, and German Ambassador Hans Luther. There was perhaps one way Schacht could stunt the anti- Nazi boycott movement. The gamble would have to be taken before the May
10
protest matured into a formal declaraton of economic war against the Reich. The gamble involved American creditors holding either German municipal bonds or general German commercial debts. Schacht had warned before that Germany would be unable to pay its debts if a boycott deprived it of the normal trade required to amass foreign exchange. At this rate, Germany would indeed run out of foreign currency within weeks. There was now nothing to lose.

So Schacht surprised FDR, Hull, and Luther by announcing that Germany would soon stop paying interest on American loans, and then stop paying all external debts generally. Ambassador Luther nervously resettled himself in his chair, waiting for FDR's response. Hull became visibly agitated. Schacht himself mentally prepared for Roosevelt's outburst. But Schacht was amazed when FDR just slapped his thigh in a jovial display and laughingly roared, "Serves the Wall Street bankers right!"
²¹
The president of the United States did not comprehend.