The Transfer Agreement (15 page)

But Wise did agree that no comments about their meetings would be released to the press. He was determined to keep the pressure on, but was also willing to allow the diplomats a few days. The American Jewish Committee was quietly but forcefully lobbying the administration to demand that the German government halt organized anti-Semitism in Germany.
³⁶
If the FDR government was going to act, it would be now.

Shortly after Wise left Phillips' office on March
30,
the undersecretary discussed the crisis with Secretary of State Cordell Hull. At
7:00 P.M.
Washington time, Hull wired a response to Gordon's earlier cable requesting permission to meet with and reassure Hitler personally. Instead Hull instructed Gordon to call formally on Foreign Minister von Neurath. "You should make it clear that it is not the purpose of this government to interfere in ... the domestic concern[s] of Germany," Hull's cable directed, detailing the diplomatic language to be used. "The situation which is now developing, however certainly without the intention of the German government, has
assumed an international aspect." Hull's message added, "I am informed that a retaliatory boycott is even now under serious consideration in certain American cities. More important, however, the German Government should appreciate that the human element involved in the situation is such that the friendship of the people of the two countries might not remain unaffected."
³⁷

Hull had chosen cautious words to convey as strong a statement as the circumstances and his basic philosophy would allow. He was against posing obstacles to foreign trade and meddling in the domestic affairs of another country. But the circumstances demanded this official involvement. Hull ended his cable to Gordon: "You may express to the Minister of Foreign Affairs my deep concern and ask him whether ... there is anything which the two governments might do either jointly or separately to alleviate the situation."
³⁸
Hull's cable arrived in Gordon's office in the middle of Berlin's night. No action could be taken until Friday morning—the day before the boycott.

While the United States government was trying to avert the April First boycott, the British were also active that Thursday, March
30.
The British government earnestly wanted to avoid any involvement unless British citizens were concerned. They felt they were all too often pinpointed as the "guardian angel" of the Jews because of their Palestine mandate. Viscount Hailsham, Secretary of State for War, said as much in Parliament that day: "I assure you ... [no] British subjects of Jewish descent have been ill-treated in Germany, and the government does not think it has any right to make representations in Germany regarding German citizens."
³⁹

Nevertheless, in a meeting that March
30
with German Ambassador Leopold von Hoesch, Foreign Secretary John Simon strongly hinted that Britain's official disinterest might not last much longer, especially since the British public and Parliament members—Jewish and non—Jewish-were strongly against Nazi anti-Semitism. Ambassador von Hoesch answered that he had already met with leaders of British Jewry to argue against continued anti-Nazi protest measures, especially a British boycott of German goods. He tried to explain the anti-Jewish boycott as a reaction to economic threats against the Reich, especially American threats. But, added von Hoesch, even if calmer minds prevailed and the anti-Jewish boycott was canceled, Jewish expulsions in Germany were imminent. Simon answered that he could only hope that the anti-Jewish excesses would not push Great Britain and Germany into a public confrontation neither government wanted.
⁴⁰

The British government's publicly neutral attitude outraged Lord Reading, a prominent Jewish member of the House of Lords, and president of the Anglo-German Association. That morning, Lord Reading made a strong appeal before Parliament declaring that he could no longer remain silent and that popular sentiment favored an official British protest about the impend
ing anti-Semitic boycott. The House echoed with cheers of encouragement. Later, the Archbishop of Canterbury, among others, endorsed the appeal.
⁴¹

Even as Lord Reading denounced the Nazi regime, senior German Foreign Ministry official Hans Dieckhoff convened an emergency inter-ministerial conference to discuss the accelerating protest and boycott movements around the world. Attending were representatives of the ministries of Economics, Interior, Propaganda, and Transport. Dieckhoff told his colleagues that the latest consular dispatches showed no "organized boycott movement," but rather an un coalesced gamut of actions by individuals and small groups. More alarming to Dieckhoff, however, was the fact that many of these boycott agitators were non-Jewish, "particularly Anglo-Saxon competitors" who were enthusiastically backing a popular ban on German goods to achieve a lasting competitive edge.
⁴²

The German officials admitted that nothing could be done to stem the anti-Reich boycott movement except to propagandize against "the horror stories" and avoid anti-Semitic incidents that would "feed the boycott." They agreed that April First was precisely the sort of action that would escalate the popular refusal of German exports. Unless it was canceled, German trade would suffer "far-reaching and serious consequences."
⁴³

But the men conceded that there was no way of stopping the Nazi boycott against the Jews unless somehow all anti-German agitation abroad ceased at once, and unless German fears of Jewish-led economic punishment dissipated. This they knew was becoming impossible. Party leaders were keeping the rank and file in an emotional state. That day's issue of
Volkischer Beobachter
continued to warn of Jewish economic moves to wreck Germany's new regime. Page one's banner headline claimed that the Jewish boycott against Germany was actually organized by the Communist party. Elsewhere in the paper, commercial leaders denied anti-Semitic actions and pleaded for an end to Jewish-led economic reprisals. Nazi press articles describing real or exaggerated anti-German protests instigated by Jews solidified the resolve of the rank and file to execute the April First
aktion,
and intensified daily Jew-baiting and random violence. In turn, each such incident only convinced more foreigners to refuse German goods. Goebbels' own newspaper bristled that March
30
because
it
saw "no visible effect" on anti-Nazi agitation. "On the contrary,"
Der Angriff
complained, "Germany's countermeasures are being answered with a renewed demand for a boycott of German goods."
⁴⁴

Dieckhoff adjourned the March
30
conference on a desolate note, anticipating an economic calamity unless the April First campaign was canceled. But each man left hoping something could be done to change Hitler's mind and forestall the crisis.

A few hours later, Hitler agreed to meet with Reich Savings Commissioner Friedrich Saemisch and Hjalmar Horace Greeley Schacht, Reichsbank president. Hitler trusted few of his associates. But one he did trust was the economic wizard Schacht.

Born in a northern German province of a naturalized American father, Schacht, despite his American roots, was seen by Hitler as a good Aryan and a devoted Nazi. He had served Germany during the pre-Hitler era in several key banking positions, including Reichsbank president. But in
1930
he resigned from the Reichsbank to protest government approval of the Young Plan for finalizing war reparations. Overnight Schacht became a controversial exponent of political economics highly attractive to the rising Adolf Hitler. In a
1931
meeting, the two became enamored with one another. Schacht pledged himself to boost Hitler to the chancellorship by introducing him to the money powers of Germany and by successfully managing the NSDAP's destitute finances. He signed "Heil" to his earliest letters to Hitler.
It
was Schacht who had coaxed millions of reich marks in desperately needed campaign support from leading industrialists just before the Reichstag fire. It was Schacht who now pledged to his Führer to reestablish Germany's financial integrity and build a war economy designed for territorial and racial aggression.
⁴⁵
Schacht was a polished gentleman with a fine German education, who in later decades would fool many into thinking he was just caught up in the Hitler regime, not a real Nazi. Yet in truth, Hjalmar Schacht was the indispensable, enthusiastic player without whom the Reich could not have commenced its genocidal conquests.

Now Schacht, along with Savings Commissioner Saemisch, would argue that the April First boycott threatened all economic recovery. Schacht warned Hitler that the economic damage would be severe, perhaps lasting.
If
the anti-Jewish boycott and a counter anti-German boycott continued for just thirty days, said Schacht, at least 1 million non-Jewish Germans would be forced out of work by the economic disruption. Moreover, the drop in exports, the disappearance of dependable daily Jewish bank deposits, and the ensuing downward spiral would place a wholly intolerable burden on the nation's finances, especially foreign exchange.
⁴⁶
Foreign currency for raw materials was the key to rearming the German war machine. So whatever short-term satisfaction would be derived from economic war against Germany's Jews would quickly frustrate overall Nazi ambitions.

It was hard to resist the economic advice of Schacht, but Hitler would not yield. Nor could he. There was now a question of whether greater spontaneous violence might be unleashed if the bloodthirsty Storm Troopers were deprived of the chance to strike German Jewry and muscle their way into the Jewish economic niche.
⁴⁷

The only hope now seemed to lay in the presidential palace. President Hindenburg summoned Hitler to an urgent conference. Whether feigned for public consumption or real, Hitler was known to greatly respect the aging war-horse Hindenburg. For sixty minutes, Hindenburg pleaded and demanded that Hitler call off the April First action. Hindenburg's arguments were supported by Schacht, von Papen, and von Neurath, but Hitler held fast. But the anti-German boycotts abroad were accelerating unabated. Der Führer still held the German Jews responsible for an international economic plot against the Reich. In Hitler's view, the anti-Jewish campaign was still self-defense. Hindenburg refused to accept Hitler's obstinacy. The fate of Germany rode with the ultimate decision. Nonetheless, despite what German diplomats would later call a near "presidential crisis," this meeting also ended in a stalemate.
⁴⁸

Friday morning, March
31,
Foreign Minister von Neurath and the other seven non-Nazi members of the German cabinet were confronted with a frightening situation. Within twenty-four hours, the Nazis would unleash a total national boycott that within months would force Germany's Jews into pauperism. The action would be accompanied by mob violence that would perpetuate the image of a barbaric Germany. A Leipzig newspaper had already warned Jews against defiance or provocative self-defense. "Should a shot be fired at our beloved leader, all Jews in Germany would immediately be put against the wall, and bloodshed would result which, in its ghastliness, will exceed anything the world has ever seen."
⁴⁹

Economic vacancies would be created, but they would be filled by unqualified rank and file Nazis. For example, in Berlin alone, about 75 percent of the attorneys and nearly as many of the doctors were Jewish.
⁵⁰
Who would take their place? Most importantly, the worldwide retaliation for Germany's anti-Jewish boycott was clearly to be a massive counter-boycott pursued by millions of people who would otherwise limit their protests to petitions and marches. Governments themselves might even be dragged into trade sanctions by popular demand for higher tariffs on German goods and even outright bans. Such initiatives were already under way in the U.S., Poland, and France.

Intervention by the Allied powers for Versailles Treaty violations was even a possibility. Polish anti-Nazi boycott groups were urging military action at that moment to preclude Hitler's threat to occupy the Versailles-guaranteed corridor to the Danzig area. And British groups were talking about a League of Nations petition to enforce the minority guarantees Germany had agreed to.
⁵¹

Waiting for von Neurath the morning of March
31
was an urgent message from U.S. chargé Gordon. A host of other embassies were lodging messages of concern or protest. Fearful German industrialists and bankers were hoping von Neurath and other cabinet moderates could avert the economic consequences the Nazi action would trigger.

The entire cabinet and numerous senior officials were on hand for the fateful March 31
emergency session. Of the eleven cabinet members, only Chancellor Hitler, Interior Minister Frick, and Minister Without Portfolio Goering were Nazis and in favor of the anti-Jewish boycott despite the risks. The remaining eight, led by von Neurath and von Papen, were vehemently opposed. The debates ensued, with tempers rising and accusations flying.
The Justice Ministry warned that the boycott was patently illegal and that the courts might enjoin the entire affair. Finance Minister Schwerin von Krosygk complained that the closure of Jewish enterprises would produce a ruinous loss in sales tax. Hitler answered that the tax revenues would be made up from other sources, Christian sources. Minister of Transport Paul von Eltz-Rubenach told of German ships, such as the
Bremen
and
Europa,
sailing nearly empty because of Jewish-led retaliation. Von Neurath warned of massive diplomatic and economic reprisals, many of which were already under way. Schacht and von Papen supported the ministries, but were unable to convince the Chancellor of the disaster that would follow. Hitler simply continued assuring that the
boykottaktion
would be conducted under the strictest discipline and without violence.
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