Extracts from Dodd's diary, on Schacht's comments about German militarism and his wish that the United States would "leave Germany to have her way in Europe"

Ambassador Dodd's Diary 1933-1938, edited by William E. Dodd Jr. and Martha Dodd with an introduction by Charles A. Beard. Victor Gollancz Ltd., London, 1941.
[Pages 175-177] September 19, Wednesday: I called on Dr. Schacht, on request of our Secretary of State at 11 o'clock. He was very cordial. When we had greeted each other, I said very frankly that the relations of our two countries could hardly improve so long as everybody in the United States was convinced that Germany was making ready to precipitate another war. What good can I do in Berlin if all Germany is moving towards a world or European conflict ? If I am to fail here, would it not be better to return home and stay? He was a little stunned and replied: "You must not retire; it would do harm". But what can one, of my way of thinking, do in a country where the atmosphere is so disagreeable?
He then said: "All the world is combining .against us; everybody is attacking Germany and trying to boycott her". Yes I replied, but you know the way to stop such things is not to arm to the teeth. If you went to war and won, you would lose more than
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you could gain. Everybody would lose. When he declared that the Germans are not arming so intensively; I said: Last January and February Germany bought from American aircraft people $1,000,000 worth of high class war flying machinery and paid in gold. He looked embarrassed and was about to deny it, but as he saw I was going to produce a document, he said: "Yes, I suppose you know all about it, but we must arm".
He then acknowledged that the Hitler Party is absolutely committed to war, and the people, too, are ready and willing. Only a few government officials are aware of the dangers and are opposed. He concluded: "But we shall postpone it ten years. Then it may be we can avoid war".
I reminded him of his Bad Eilsen speech some two weeks ago and said: I agree with you about commercial and financial matters in the main. But why do. you not, when you speak before the public, tell the German people they must abandon a war attitude? He replied: "I dare not say that. I can only speak on my special subjects."
How, then, can German people ever learn the real dangers of war if nobody ever presents that side of the question? He once more emphasized his opposition to war and added that he had used his influence with Hitler, "a very great man", he interjected, to prevent war. I said: The German papers printed what I said 'at Bremen about commercial relations between our countries, but not a word about the terrible effects and barbarism of war. He acknowledged that and talked very disapprovingly of the Propaganda Ministry which suppresses everything it dislikes. He added as I was leaving: "You know a party comes into office by propaganda and then cannot disavow it or stop it."
On my return to the Chancery, I left my car standing near the Brandenburger Tor and walked into the British Embassy on the Wilhelmstrasse. Sir Eric Phipps was in his office and I talked fifteen minutes about the accumulating evidence in our office of Germany's intense war activity. His consular officials seem not to have given him information we have received from ours, especially from Stuttgart and Munich. He pretended to be surprised when I gave him the facts about German purchases of aircraft from the United States in the last six months.
I also let him know that Schacht had acknowledged to me the war purposes of the Nazi party. My talk with Phipps was confidential and preparatory to future conversations with him if President Roosevelt tries again to bring American arms manufacture under government control. My hope was to enlist him in
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a move to persuade his government to set up an investigation like that of Senator Nye, now causing so much excitement in all countries. Although I knew England had protested against this exposure of the corrupt practices of its arms and manufacturers, I bluntly alluded to the good effects of the Nye exposures. He agreed, though he did not indicate a desire to say anything further. The arms manufacturers over the world are the cause of most of this trouble in Europe.
At 2.30 I went as guest of the Foreign Office to the Kroll Opera House to hear discussions of the great road work now going on in Germany. A number of Germans were present, as also the English and French Ambassadors. It turned out to be merely an occasion for Von Neurath to explain German foreign policy, "and peaceful purposes. The Fuehrer desires peace above all else". The idea was to explain Germany's attitude towards Russian admission to the League and the forthcoming plebiscite in the Saar Territory where the people are to decide January 11, I believe, whether they will return to the fatherland or remain under League of Nations rule.
All the members of the diplomatic corps were present and remained in their places until Von Neurath had finished. When the translator began to give English translations, the British and French Ambassadors retired. A little later the Italian and I left. We had had enough of it. Von Neurath was not bad, but no one believed his assertions about the peace purposes of the present regime.
[Pages 446-447] December 21, Tuesday: At a luncheon given us today as a farewell by Dr. Schacht, conversations were as free and critical as I have ever heard in Germany. Dr. Schacht's removal from his directorship of Economics Ministry may be taken as one cause. But the head of the International General Electric Company here as well as others from banks and industrial plants were even more outspoken. They were most fearful of the Hitler regime. One thing which worried the electric company chief was the order by Hitler to give up his great administrative building which represents a 10,000,000 mark investment for the company. The company is to be allowed only 6,000,000 marks. He said he told Hitler's official spokesman: "Then I will leave Germany and settle in eastern France". What Hitler said when told this was not stated, but it is clear enough that the electric man would be imprisoned if he tried-to leave Germany.
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Schacht spoke of the defeat of Germany in 1918 as wholly due to Woodrow Wilson's bringing America into the World War. But I said: Wilson's Fourteen Points were the one great promise of international peace and co-operation and every country on both sides had helped to defeat his purpose. Don't you think Wilson, fifty years from now, will be regarded as one of the greatest Presidents the United States has ever had? He evaded an answer but turned his attention to the Japanese-Chinese war and opposed Germany's alliance with Japan. Then he showed the true German attitude: "If the United States would stop the Japanese war and leave Germany to have her way in Europe, we would have world peace."
I did not comment and others also failed to make remarks. Schacht meant what the army chiefs of 1914 meant when they invaded Belgium, expecting to conquer France in six weeks: i.e., domination and annexation of neighbouring little countries, especially north and east. Much as he dislikes Hitler's dictatorship, he, as most other eminent Germans, wishes annexation—without war if possible, with war, if the United States will keep hands off. Much as I admire Schacht for some of his courageous acts, I am now afraid he would not make a good American if he migrated.