Letter to Goering on the need to increase exports, proposing a committee to settle cases of conflicts between exports and the needs of the Four Year Plan and the armament progragram

REICH AND PRUSSIAN MINISTER OF ECONOMY
TO PRESIDENT OF THE MINISTERIAL COUNCIL GENERAL [GENERALOBERST] GOERING—COMMISSIONER FOR THE FOUR-YEAR PLAN—BERLIN.
[STAMP]
Prussian President of the Ministerial Council Chief Rec'd. 18 May 1937
Berlin W 8, the 17 April 1937 Behrenstrasse 43
Files [pencil]
My Dear Mr. President of the Ministerial Council!
I have gathered from your kind communication of 12 April— St.M.Dev. 2218—that you agree with me, that Germany should utilize to the full the export opportunities offering themselves at this time, in order thereby to secure above all the fulfillment of the food and armament requirements for the future. Hereby you aim at an increase of about iy2 Billion Reichsmark in the export proceeds for the calendar year 1938. I am of the same opinion as you, that an increase in exports on this scale is necessary, if we are to succeed in decisively unburdening the German raw material and foreign bills of exchange situation and thereby in securing the food and armament requirements for the future. I have already stated in my letter of 2 April, that conditions in the world markets allow for a considerable extension of German export. Whether an increase of the export proceeds of 1 Billion Reichsmark, i.e. an increase in exports of approximately 30% compared with the year 1936, will be possible, can naturally not be predicted with certainty.
This does not depend solely on our ability to deliver and our willingness to deliver, but also on the further development of the state of business in the world as well as on the willingness and readiness of foreign countries to accept, whereby psychological and foreign-political factors play an important part.
In order to utilize the present export opportunities, it is above all necessary, that the principle of the urgency of export trade, which unfortunately has been undermined in the last months, be given renewed attention. I welcome the fact, that you are prepared to use your authority in this direction and that you intend most emphatically to make it the special duty of all participants to pursue those guiding principles which are to be set up for the increase of exports. For the discussion of this subject, as proposed, by which should indeed take place as soon as possible, I
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am sending enclosed a list of persons, whom it would be of practical importance to invite.
Furthermore the following measures should be taken :
a. The control offices are again directed under all circumstances to distribute the raw materials needed for export contracts. They are furthermore directed to favor, when possible, those firms dealing mainly with export trade also in regard to the raw materials distribution for the inland sector.
The same applies to those firms, which manufacture basic products for the export trade. Firms especially engaged in export could perhaps be permitted to receive part of their export free for the purpose of making their own purchase of raw materials outside the jurisdiction of the control office, so that they can increase their export activity independent of raw-material difficulties. Thereby it can naturally happen, that at first a certain friction may arise in firms, which at present are primarily or exclusively occupied with the inland-market. However, these difficulties can be taken into the bargain, since they will later smooth themselves out of their own accord as a result of the steady increase in the volume of export. The examining offices for the export trade likewise are again directed to pay strict attention that, where at all possible, those export goods bringing a high price and not those requiring much raw material be exported.
b. Those economic groups, whose production capacity is so much utilized by inland contracts, that there is no room or insufficient room for the carrying out of export contracts; are directed to maintain, that is, to provide the capacity necessary for the carrying out of export contracts. This can be accomplished by those economic groups, on whom I should levy appropriate taxes. At the present time this concerns the iron-refining and the wrought iron industry (iron and steel construction, construction of machines), the electric-industrial group and the motor industry, as well as the precision tool and optics group and the paper-manufacturing industry. '
In all the remaining fields the question of capacity does not play a decisive role for the export trade. Here the question of export is generally a question of the apportionment of raw-materials and a question of the demand.
In order to reach a compromise between the competing interests of export on the one side and the Four-Year Plan and armament on the other in respect to the adjustment of capacity, representatives of the aforementioned fields of action should
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meet about once weekly, in order to decide those cases in dispute. The representatives would have to be equipped with such plenipotentiary powers that an immediate final decision is guaranteed. I, for my part, would make my Chief Consultant, Director of the Reichsbank Brinkmann, available for this purpose. A representative of the War Economic Staff to be named by the Reich Ministry of War, and a representative of the Four-Year Plan should also be included.
d. Price-politically the same procedure will be followed as before, so that the best possible price will be secured for the German export goods. In the case of these export goods, which are touched by the state of business in the world, the extraallowance will be cut further or completely suspended. In the case of those export goods, which now as before are affected by foreign price-pressure, such cuts are not feasible for the time being. However, in order to reach here too the necessary increase of export proceeds through an increased export amount, it will be necessary to increase the extra allowance in many cases and indeed especially in regard to countries, from which we receive either foreign exchange bills in cash or raw-materials in which we are interested.
After the discussion planned by you has taken place it will be of practical importance to carry over your views regarding the urgency of the export increase into the whole German economy also. As it is not advisable to do this by way of radio or press because of probable counter-measures abroad, I shall be pleased, if I could bring to the knowledge of all economic circles concerned by way of a circular decree, via the Reich Economic Chamber, an exchange of letters between us, as yet to be agreed upon.
Heil Hitler!
_ &
Yours very truly
^ /s/ Hjalmar Schacht
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