BERLINER TAGEBLATT 21 April 1937, Page 98.
The Economic Development An Inaugural Speech by Dr. Schacht
On the occasion of the Fuehrer's birthday and of the simultaneous inauguration of the new Hall of Honour in the Economic and Labour building of the Reich- and Prussian Ministry of Economics and of the Reich- and Prussian Ministry of Labour, Dr. Schacht, Reich Minister of Economics and President of the Reichsbank, delivered a speech in which he gave a survey of the National-Socialist developments in the spheres of national economy and currency. The ceremony was attended by all fellow-workers at both Ministries, Reich Labour Minister Seldte, the creator of the new Hall of Honour, as well as by all the workers who had been engaged in the construction of the new hall. Reich Minister Dr. Schacht stated among other things:
We are met together here to remember, with respect and love, the man to whom the German people entrusted the control of its destiny more than four years ago. Today, our Fuehrer, Adolf Hitler, upheld by the veneration of a 'whole nation, completes the 48th year of his life. The last 18 years of this life were dedicated to one single aim: the revival of the German people, the restoration of its freedom, its honour and its wellbeing. These 18 years were full of strife and trouble, of suffering and care, but also full of success and proud happiness. With the limitless passion of a burning heart and the infallible instinct of the born statesman, Adolf Hitler has won for himself the soul of the German people in a battle fought for 14 years with unswerving consequences. Hitler has stood at the very head of the German Reich for more than four years, called upon by the people and upheld by the inner, constant trust of the whole nation.
This unshakeable belief of all Germans in their Fuehrer gives an increased power to Hitler's decisions, brought about by the indomitable will of a strong and resolute people of seventy millions; it gives the Fuehrer again the power to bear the responsibility of the destiny of the German Reich. Only the closest collaborators of the Fuehrer know how difficult is the burden of this responsibility, how sorrowful often the hours during which decisions have to be made which bear upon the well-being and the fate of Germany. What brilliant successes the Fuehrer's well thought-out policy has achieved, is, of course, no secret to anyone.
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Labour and Industrial Peace
I do not wish to speak, on this occasion, of the successes of this policy in the sphere of domestic and foreign policy. As Minister of Economics and President of the Reichsbank, I am more competent to throw some light on the successes of the NationalSocialist policy in the sphere of national economy and currency. Here also, great things have been achieved. The national economy that the Fuehrer found extant at the time of the assumption of power was practically bankrupt and was hardly able to keep even two-thirds of those capable of work in employment. With a few notable exceptions, there was a complete lack of understanding between employer and employed.
We have put an end to the nation-destroying plague of unemployment, and have enabled nearly all those willing and able to work to earn wages and bread. We have restored the profitableness of economic undertakings. We have introduced industrial peace into national economy and have imbued it with a new economic conviction, which regards owner and workers as equally useful members of the industrial community and as having equality of rights; which considers economic work as primarily a service to the whole people and adapts all economic measures to the great aims of state leadership. All this has been achieved by the principle of the recognition of free enterprise, without which no national economy and no cultured nation of the 20th century can exist.
German banking, at the time of the change, was also in an unenviable condition. The after-effects of the crisis of '31 had in no way been overcome, the loan banks were not yet able to dispense with support from the Reich and the Reichsbank. The restoration of national economy, which started during the following years, and the beginnings of the recovery of economic activity gave the loan banks the opportunity of covering their crisis liabilities to the Reichsbank, of writing off the crisis losses and of creating a new profit basis. The restoring to private circulation of the shares of the big banks which had been taken over by the public authorities, has already made considerable progress. Finally, it is of quite exceptional significance that, by the Reich law concerning the credit system, the competent Reich organizations—the Reichsbank, in particular—are afforded sufficient opportunities, by means of the Credit Supervisory Office, of supervising the management of the banks and in particular of ensuring that, in the management of the banks the general economic interests and particularly the political requirements as regards currency are taken sufficiently into account.
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The consequent 'policy of the capital market
Four years ago, the capital market was completely stagnant; the interest on capital was unbearably high. It has been possible for us, by means of organization, to lower the rates of interest to a reasonable level and to free the capital market from its lethargy. A meticulous control of the capital market made possible the utilization of newly acquired capital primarily for the urgent loan requirements of the Reich which resulted from the heavy special expenses in connection with the creation of work and later with the restoration of Germany's military power.
It has thus already been possible to consolidate a considerable sum, running into milliards. The method, followed up to the present, will, nevertheless, still have to be employed for years— with a careful probing of the existing capabilities of the capital market—until the total special expenditure of the Reich is finally settled.
In past years a not inconsiderable portion of this special expenditure must temporarily have been financed in advance over a short period. That has, in many instances, been misunderstood abroad and has led to the assertion that our currency policy is unsound. I have refuted this assertion too often to need to deal with it again in this company. The whole "secret magic trick" of our advance financing consists simply in the fact that we draw on any resources of the money market which are at the time lying idle for the advance financing of the exceptional Reich requirements, so that the Reichsbank, by its coverage, replaces the currency reserves which it sacrificed to Germany's foreign creditors, by special withdrawals, and, with the great fluctuation of the money market, can replace private discounts to a great extent by these special withdrawals. The decisive factor in currency policy is that, in spite of special discounts, it was possible for the Reichsbank, in cooperation with the Reich Government, to prevent the payments in actual cash and assets from rising above the level necessary to exceed the increased value of goods. Any further increase in the circulation of money would moreover mean inflation. Our whole currency policy is based, however, on keeping the wage- and price-levels, and therefore the purchasing power of our currency, stable.
Stable currency in spite of opposition from abroad
Our chronic lack of foreign exchange will not alter this in any way, although, in the next few years, it will hardly cause us less trouble than in the period following the 1931 crisis.
The achievements of the National-Socialist state in the field
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of currency policy are easily underestimated, since, according to the nature of the situation, it has been, up to now, not so much a question of creating something obviously new, but more of counteracting with all our might a deterioration of existing conditions. What we have achieved in this connection can never be rated too highly. We are the only one of the greater nations to have succeeded in maintaining the parity of our currency unchanged. Over and above this, we have paid back considerable amounts of our foreign debts in the last four years, although, God knows, foreign countries have not made it easy for us. On the contrary, foreign countries—however paradoxical it may sound— have attempted to hinder the payment of debts as far as possible, by prohibitive duties and quotas, by allowing a boycott policy to flourish. All this has forced us to make our foreign currency laws even more severe and to change our foreign trade policy radically. The success of the new foreign trade policy will be significant if one considers the trade balances of the last few years.
A disentanglement of the currency chaos of that time is unthinkable so long as no reasonable adjustment is made regarding international debt, international economic relations and the distribution of raw materials. We have time and again declared that we are ready to co-operate as far as possible in a reasonable adjustment such as this, 'but so far—apart from purely platonic expressions of agreement—this proposal has met with no support.
For the time being, therefore, we have only our own forces to fall back upon. We have drawn our conclusions from this knowledge and have set up the Four Year Plan which is to lessen the existing shortage of foreign raw materials. While it is in operation, the new Four Year Plan must exact some discomfort and also some sacrifice from the national community—the construction of new works, indeed, requires a temporary increase in the use of foreign currency—we can, however, already foresee that very soon it will contribute considerably to the easing of our trade balance. When, after the second of the four years has passed, the German people assemble for the ninth time since the assumption of power to celebrate the birthday of their Fuehrer, a great part of the difficulties that are now still facing us will happily be overcome.
This is the historical background behind the celebration for which we have gathered here today. The Reichs Haus of Labour and Economy is holding a small domestic celebration at the same time as the Fuehrer's birthday, the inauguration of the Hall of
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Honour in which we are assembled today for the first time. With the Hall of Honour, so-called in honour of the Fuehrer, our house receives a worthy abode, in which all of us who are connected by a common profession can foregather on the nation's festivals and days of remembrance in order to spend them together.