1938: Germany

The year 1938 meant for Germany not only a large increase of her territory and her population but also the attainment of hegemony on the European continent. Twenty years after the crushing defeat of Germany in the World War, she had not only regained her former position, but had strengthened and extended it, had changed the frontiers of Europe and had inflicted a heavy defeat on her former enemies, all without the sacrifices and expenses of a war. The year 1938 meant the resumption of a bold forward policy on the part of Germany, with the aim of controlling the whole of Central and Southeastern Europe politically and economically. In her efforts Germany cooperated in a close alliance with the two other leading Fascist powers, Italy and Japan. Her victory in the foreign field strengthened the hold of the National Socialist party and its doctrines upon the internal life of Germany. The racial, intellectual and economic policies of the National Socialist Party were carried out with unprecedented ruthlessness. The Jewish element in Germany was threatened with complete extermination. All opposition was forcefully silenced. The degradation of the Churches went on at a quickened pace. The economic policy of self-sufficiency was made more rigorous and was helped by an extended control over the raw materials of southeastern Europe.

February Fourth.

The new orientation of Germany's policy, by which the Nazi extremists came into full power and removed the moderate elements from the influence which they had exercised until then in the army and in the Foreign Office, started on Feb. 4. The day marked a thoroughgoing 'purge' of leading men in the army and in diplomacy who had acted as a brake upon the more adventurous, aggressive spirits of younger Nazi elements. The German Foreign Minister, Baron von Neurath, resigned and Joachim von Ribbentrop was appointed in his place. He is a firm Nazi who, in 1934, had become Hitler's most important aid for devising a new Nazi foreign policy, and, in the summer of 1935, had signed with Great Britain the Naval Agreement which officially recognized Germany's rearmament and came as a heavy blow to France's efforts to bar its rapid progress. In August 1936 he was appointed German Ambassador to London. His whole effort was concentrated upon winning England's benevolent neutrality in the case of German expansion eastward. To prepare this expansion he signed, at the end of 1936, the German-Japanese Pact, and, in November 1937, he strengthened, by his visit to Rome, the Rome-Berlin Axis and won Italy over to the anti-Communist crusade of the German-Japanese Pact.

As important as the coordination of the Foreign Office was the subjection of the army to Party control. The leading German generals, under the headship of Baron von Fritsch, had protested against Field Marshal Blomberg's marriage to a commoner and against his connivance with Nazi propaganda in the army. They demanded the resignation of Blomberg, the strict separation of army and Party, the stopping of all anti-religious propaganda in the army, and finally a much more cautious foreign policy. In this conflict between the General Staff and the Party the latter remained victorious. A number of leading generals, among them Von Fritsch, were dismissed, and Hitler concentrated in his own hands the supreme command of the army. The office of War Minister, which Blomberg had occupied, was abolished. General Keitel took over its agenda under Hitler's personal guidance, and General von Brauchitsch became the successor of General von Fritsch.

Conquest of Austria.

The new policy inaugurated on the 4th of February found its immediate application in an aggressive policy against Austria. Chancellor Hitler invited the Austrian Chancellor Schuschnigg to visit him on February 12th at Berchtesgaden, where he tried to impress upon him the necessity of coordinating Austrian policy, internal and external, with the German policy, and of admitting the Austrian Nazis into his Government. Chancellor Schuschnigg tried in vain to reassert the principle of Austrian independence. The vacillating policy which he had followed for years, his alienation of the sympathy of the Socialist population of Vienna, and especially his lack of any support on the part of France and, even more, of Great Britain, undermined his position.

The determination of the German Government to pursue its policy relentlessly was expressed by Air Minister Hermann Goering at the celebration, on March 1st, of the third anniversary of the official creation of a German air force. In his speech Goering reviewed the growth of the air force, and then said: 'The German air force is the guarantor of German peace. But I openly confess that terrible will be the result when the command for an attack comes. Then, we swear to the German people, we shall become the terror of our enemy. Nothing shall hold us from unreserved recklessness. All obstacles will be overcome wherever we find them. I want in this army iron men with a will to deeds. Everyone must be aware of the fact that the German air force is not an instrument for peace parades, but the sharpest war instrument we have been able to forge. And when the Fuehrer, in his Reichstag speech, employed the proud words that we would no longer tolerate that 10,000,000 German comrades should be oppressed beyond our borders, then you know that, if it must be, you must back these words to the last.'

Chancellor Schuschnigg's invitation to the Austrian National Socialists to participate in the Austrian Government hastened the end of the Austrian state. They undermined from the inside the authority of the Government, threatening to foment uprisings and disorder. Early in March a threat of military occupation by the German army forced Schuschnigg to resign; his successor, the Nazi leader Seyss-Inquart, welcomed the German army which on March 11 started to occupy Austria. On March 12, Chancellor Hitler crossed the Austrian frontier. The complete administration of the country was taken over by the German army, the German Elite Guard, and the German police; and in an astonishingly short time the whole life of Austria was coordinated according to Nazi principles; all the existing Nazi legislation as it had evolved in Germany over a time of more than five years was suddenly introduced in its totality, and the former Austria became an integral part of the new Great Germany. Germany thus gained without any military effort an area of 32,369 sq. mi. with a population of over six and a half million. All memories of the historical personality of Austria were extinguished and the newly-conquered territory was divided into new divisions and assimilated to the older parts of Germany. The Great-German mentality, and the faith in National Socialist miracles produced by the National Socialist propaganda, had made many Austrians, especially in the provinces, welcome the idea of a closer union with the Nazi Reich, but most of them had hoped for the preservation of some autonomy of Austria in her historical character, and found themselves disillusioned by the rapid and ruthless Nazification of all ways of life in the former Habsburg lands.

The conquest of Austria, which shocked the world for a short while, opened to the Nazi Government the resources which the better-ordered and more prosperous economic administration of Austria had made possible. The gold reserve of the Austrian National Bank helped the German armament program. Of greater importance, however, was the strategic consequence of the conquest of Austria. Vienna had been for many centuries the spearhead of German political, economic and cultural expansion into southeastern Europe. It had dominated the trade of the Danube and of all the fertile lands along the middle and lower course of the river. The Habsburg Empire had formed a bulwark against Prussian expansion into the Balkans and the Near East. With the conquest of Vienna the last remnant of this bulwark was gone and the road was laid open to further economic and political penetration in the direction of the Black and Aegean Seas and beyond. (See also INTERNATIONAL LAW.)

Attack upon Czechoslovakia.

The occupation of Austria made the situation of Czechoslovakia most difficult. The young Republic found herself surrounded on all sides, with the exception of her short common frontier with Rumania, by three states, Germany, Hungary and Poland, who laid claim to some of her territory and who, with the support of Italy, prepared a concerted action in this direction. The new strength gained by Nazi Germany, and the inflammatory speeches of some Nazi leaders, influenced large parts of the German minority in Czechoslovakia to expect, within a short time, the annexation to Nazi Germany of the territory inhabited by their minority. The Sudeten-German Party, which, under the leadership of Konrad Henlein, represented the majority of Czechoslovak-Germans, now became more and more intransigent in its demands for complete autonomy within Czechoslovakia and for the Nazification of the Czechoslovak democracy. (See CZECHOSLOVAKIA.) To outside observers it seemed as if Germany had prepared for May 21 a surprise occupation of Czechoslovak territories similar to what she had done in the case of Austria. A most successful partial mobilization of the Czech army carried through at the shortest notice prevented any breach of the peace.

On March 13, Field Marshal Goering as acting Foreign Minister, had officially assured the Czechoslovak Government that Germany had no hostile designs upon her. But the tension within Czechoslovakia grew, since the Czechoslovak Germans firmly believed in the support of the German Government for their demands of complete autonomy and free development of their Nazi ideology and institutions, demands which a democratic state could not grant without undermining completely its integrity and its democratic Constitution. In spite of the presence of Lord Runciman as head of an unofficial British mission in Czechoslovakia, Germany started in August to mobilize her army to the strength of one million men, to hold army maneuvers not far distant from the Czechoslovak border, and to rush the building of most modern and impregnable fortifications along her Western frontier. For this last, a decree for the mobilization of all labor in Germany was promulgated; over 400,000 men were actually mobilized, and the whole German industry was put on a war basis, working day and night for the strengthening of the air fleet and the army.

Meanwhile the Czechoslovak Government showed itself ready to grant the most far-reaching concessions to the German minority. Although, during the whole crisis, it gave proof of outstanding moderation and restraint, the German military preparations and the violent press campaign in German papers against Czechoslovakia not only went on unabated, but increased steadily in fury. Repeated warnings by the British Government to the effect that it could not remain indifferent to a war in Central Europe, and its pleas for a lessening of the tension, remained unheeded, as the German Government was convinced that Britain would not hinder Germany's expansion in Central or Eastern Europe.

The crisis reached its culmination during the month of September. Under flimsy pretexts, the Sudeten German leaders broke off most promising negotiations with the Czechoslovak Government. Chancellor Hitler and Konrad Henlein met on Sept. 1 at Berchtesgaden, and Chancellor Hitler demanded, on Sept. 12, in his speech at the Party Congress at Nuremberg, 'self-determination' for the Sudeten Germans, implying their right to secede from Czechoslovakia. At this moment the British Prime Minister, Neville Chamberlain, personally intervened. He asked Chancellor Hitler for an interview which was granted him at Berchtesgaden on Sept. 15. The British leading Conservative weekly, the Spectator, published in its issue of Sept. 16 an editorial article under the heading, 'A Momentous Mission' in which it wrote: 'Mr. Chamberlain has certainly not gone to Berchtesgaden with the idea of settling the future of Czechoslovakia over the heads of the Czechs. . . . Anxiety is to be felt regarding only one commitment into which the Prime Minister might conceivably enter, concurrence with the demand put forward by Herr Hitler in a veiled form in his Nuremberg speech for a plebiscite in the Sudeten German area. Mr. Chamberlain is more likely on many grounds to resist that demand than to endorse it.' What the Spectator had regarded as impossible or improbable, happened. In three momentous conferences, at Berchtesgaden on Sept. 15, in Godesberg on Sept. 22, and in Munich on Sept. 29, Mr. Chamberlain agreed to settlement of the question of German expansion in Czechoslovakia, without any participation on the part of the Czechoslovak Government in the deliberations, and in the growing sense of a complete cession of all the Sudeten German territory to Germany.

The agreement, signed on Sept. 29 in Munich, between Germany, Italy, Great Britain and France, sanctioned the cession to Germany of all Czechoslovak territory inhabited, according to the census of 1910, by a German majority; and the occupation of this territory within ten days, in successive stages, beginning October 1st. A commission, under German chairmanship, of delegates from Germany, Italy, Great Britain, France and Czechoslovakia, was to regulate all further questions involved in the transfer of territories and in the delimitation of new frontiers. It soon became clear that this commission acted entirely according to the wishes of Germany, and that, in the final settlement, Germany got more territorial and economic advantages than she had expected at the conclusion of the Munich agreement.

As the result of this historical crisis, Germany acquired a territory of approximately 11,583 sq. mi. (about the size of Belgium) with approximately 3,500,000 inhabitants of whom about 750,000 were Czechs. But more important for Germany than this additional territorial aggrandizement, which brought the increase in her population within one year to about ten million, was the fact that the remainder of Czechoslovakia lay entirely defenseless before Germany, having lost her natural and strategic frontiers and fortifications. This new Czechoslovakia became for all practical purposes an integral part of the economic, political and strategic system of Germany, an important spearhead for German penetration into Rumania, Hungary and beyond. The position thus acquired within one year, without a war, put Germany into a much stronger position than even Bismarck's Germany had occupied after three victorious wars. At the same time, the influence of France and Great Britain in Central and Eastern Europe came practically to an end, and the smaller states of Central and Southeastern Europe were forced to veer toward the political and economic orbit of Germany.

Relations with Great Britain and France.

With German hegemony in Central and Eastern Europe acknowledged, Germany declared herself ready to enter into friendly relations with Great Britain and France. Mr. Chamberlain proposed, in Munich, to Chancellor Hitler that they sign a bilateral declaration 'symbolic of the desire of our two peoples never to go to war with one another again.' Chancellor Hitler accepted and the document was signed, declaring the intention of the two statesmen to employ consultation on all questions and to contribute to the assurance of peace in Europe. A more explicit declaration of similar nature was signed in Paris on December 6th by the German Foreign Minister von Ribbentrop and the French Government of M. Daladier and M. Bonnet.

None of these declarations touched the question of the return of all German pre-War colonies, upon which Chancellor Hitler has repeatedly insisted. Several efforts were made to work out a plan for some form of compensation to Germany for her lost colonies. In this connection the South African Minister, Pirow, visited the capitals of Europe, including Berlin. But all these efforts were in vain. Germany demanded the unconditional and integral return of all her colonies. Public opinion in Great Britain and France seemed to be stiffening at the end of the year against these demands. It was especially stressed that Germany, with her new racial policy, could not be trusted in the administration of territories inhabited by backward races, and that the interests of the native populations in the colonies must be given first consideration.

The relations between Germany and Great Britain were further strained by the repeated intervention of Chancellor Hitler and of the German official press into British internal affairs in the form of violent attacks against British statesmen like Anthony Eden, Duff Cooper, and Winston Churchill who favored a policy of collective security and of resistance to Fascist aggression. The November Jewish pograms in Germany also alienated, at least for the time being, a part of the more progressive British public opinion from sympathy with Nazi Germany. During the weeks of growing tension between Great Britain and Germany the latter courted the favor of France. By a strange coincidence however, at the time of Von Ribbentrop's visit to Paris, Germany's closest ally, Fascist Italy, started to demand, in a strong campaign by the press and by the public, the annexation of French colonies in Africa. Thus all efforts at appeasement fell flat before the dynamic character inherent in Nazi and Fascist politics. (See also GREAT BRITAIN: Foreign Policy; FRANCE: Foreign Relations.)

Relations with the United States.

As the foremost democracy of the world, the United States found herself repeatedly the target of violent attacks in the Nazi press. The American press was practically unanimous in the condemnation of the Pact of Munich, in which it saw not only a betrayal of Czechoslovakia but the surrender of the principle of the League of Nations and of standards of law and right before threats of brutal aggression. The ferocious persecution of the Jews in November affected American opinion deeply. President Roosevelt spoke of the necessity of salvaging the victims of Nazi persecution, non-Jews as well as Jews, and voiced the sympathy of the American nation for all oppressed racial and religious minorities. As a veiled sign of American displeasure, the American Ambassador, Hugh R. Wilson, was summoned to Washington to report on the situation in Germany. After his report he was ordered to stay for an indefinite time in the United States. To this recall of the American Ambassador to Berlin, the German Government replied by recalling in a similar way the German Ambassador at Washington. Hans H. Dieckhoff. Distrust of the Nazi régime and its methods was kept alive in America also by the trial there of several persons convicted by the jury of espionage for Nazi Germany, and by the exposal of a great spy plot in which the persons convicted in America were only minor figures, for the main accomplices managed to evade American jurisdiction. German subjects were also accused of espionage for Germany in the Panama Canal Zone.

Relations with Central Europe.

Germany's relations with Hungary and Yugoslavia became, during 1938, even friendlier than they had been before. This friendship was confirmed by the exchange of visits of leading statesmen in the capitals of the countries concerned. With the growing economic hold which Germany has obtained in all these countries, the political influence of Germany has grown rapidly. After the annexation of the Sudeten German territory of Czechoslovakia, the German Government supported Hungarian claims to Czechoslovak territory, but resisted the Hungarian-Polish demands for the inclusion of the whole Carpatho-Russian land (Ruthenia) into Hungary. This German refusal to allow the formation of a common Hungarian-Polish frontier revealed a growing tension between Germany and Poland. The common Polish-Hungarian frontier was intended by Poland as a bulwark against German expansion into the Ukraine. For the very same reason Germany insisted upon Carpatho-Russia remaining a buffer between Poland and Hungary, allowing Germany direct access to Rumania and the Ukraine.

The relations between Germany and Poland had already grown tense during the summer because of the question of the treatment of the large Polish minority in Germany and the German minority in Poland. Both minorities complained bitterly about a forceful policy of denationalization, about administrative pressure, and the curtailment of political and economic equality. The German minority in Poland undoubtedly had none of the many cultural privileges enjoyed by the German minority in Czechoslovakia, nor its complete democratic political and economic equality. In 1923 Poland had 1550 elementary schools for German children, attended by 93,214 children. This number had diminished in 1937 to 428 schools with 40,700 children. The German population of Polish Upper Silesia had dwindled from 318,786 in 1921 to a few thousand in 1938. The struggle of the German minority in Poland against Polonization is paralleled by the struggle of the Polish minority in Germany against their Germanization. At the beginning of June the official organization of the Poles in Germany transmitted to the German Government a detailed memorandum, with a request for protection of the political, economic and cultural status of the Poles in Germany. This tension between Poland and Germany, explains why, at the beginning of December, Poland renewed her contracts with the Soviet Union, reestablished friendlier relations with Lithuania and generally tried to strengthen herself against any possible German intervention.

The German annexation of Austria and of Sudeten German Czechoslovakia, and the rapidly progressing complete Nazification of the Free City of Danzig, increased the nervousness of all Germany's neighbors. This nervousness made itself felt also in Lithuania where the German element in Memel demanded complete autonomy; in Denmark where the small German minority in Danish Schleswig became increasingly restless; in the Belgian frontier districts of Eupen and Malmédy; in French Alsace-Lorraine where there was increasing Nazi propaganda from across the border, and even in the Netherlands and in Switzerland to which some of the more extreme Nazi publications laid claim as fundamentally Germanic countries. Thus the dynamism of the German foreign policy, unleashed in February 1938, has left Europe in a state of complete insecurity and feverish preparation against expected attacks.

Germany and Italy.

Nazi foreign policy is supported by the foreign policy of Fascist Italy and of imperial Japan. The cooperation between Germany and Italy grew especially close after Mussolini's visit to Berlin during the fall of 1937 and the return visit of Hitler to Rome in May 1938. Both Governments cooperated politically in the Spanish and the Czechoslovak crises. After the German occupation of Austria, which had been for the past four years practically a protectorate of Italy, Chancellor Hitler had assured Italy that he regarded the Italian frontier at the Brenner Pass as inviolable and that he would therefore not raise the issue of the German population in the Italian southern Tyrol. (See also ITALY.)

The cooperation between the three Powers, Germany, Italy and Japan, who had signed the Anti-Communist Pact, extended also to economic and cultural fields. All three Powers cooperated in South and Central America in the closest way, and tried by increased economic and cultural propaganda not only to gain trade at the expense of the democracies, and especially of the United States, but also to undermine the prestige of the democracies and to win the Latin American nations to closer cooperation with the Fascist states. Germany concluded a pact of cultural relations with Japan. In a similar effort at coordination of their policies Italy adopted, during 1938, the goose step of the German army as the model for a newly introduced passu romano for the Italian army, and accepted in an astonishingly short time the whole German racial theory with all its anti-Semitic implications. The anti-Jewish campaign in Italy, Germany, and even in Japan surpassed in violence the former anti-Soviet campaign of these three Governments. But the relations with the Soviet Union remained strained, and it was generally believed that Germany and Japan, with the open support of Italy, were preparing for a show-down with the Soviet Union in the Ukraine and in the Far East.

Position of the Churches.

The attack of present-day Germany against the Catholic Church found especially forceful expression in the weeks after the Pact of Munich and after the successful conclusion of the crisis over Czechoslovakia. In August, Bishop Ludwig Sproll, Bishop of Rottenburg in Würtemberg had been banished from Würtemberg. He had incurred official disfavor by not participating in the plebiscite on the annexation of Austria. As early as 1934, however, his house had been attacked by a violent mob because he had declared: 'the Church that ceases to be a free institution and becomes a mere handmaiden of the secular state loses all value. What inspires the German Faith movement is no religion at all. If it succeeded it would signify the end of Christianity.' Following the failure of the Bishop to vote in the plebiscite of 1938 part of his house had been set on fire by Storm Troopers. In October the Nazi opposition to the Catholic Church found especially violent expression in attacks upon Cardinal Theodor Innitzer in Vienna and Cardinal Faulhaber in Munich. Cardinal Innitzer had welcomed the Nazi occupation of Vienna in March 1938, but in October he published a pastoral letter to Catholic parents against the Nazi non-religious education law. The attacks against his palace and his person forced him to withdraw from participation in public life for a while, and it was rumored that he would relinquish his See and withdraw into a monastery. A few weeks later, Cardinal Faulhaber made a vigorous defense of the rights of the Christian individual against the all-embracing Nazi regime before a large audience which jammed the huge cathedral in Munich. He said 'The Church must now champion the rights of the individual. These rights are decreed by God and must be maintained by the community.' He denounced as blasphemous Julius Streicher's slogan 'to serve the people is to serve God.'

The situation of the Protestant Churches was in no way easier than that of the Catholic Churches. Both Churches are being constantly undermined in their existence and vigor, not so much by open measures of the state as by the constant pressure which all the means of the totalitarian regime — school, youth movement, labor battalion, the press — permanently exercise. This is true especially of the Confessional Synod, whose power of resistance was broken by the arrest of Reverend Martin Niemöller on July 1, 1937. The latter had not yet been released from specially strict supervision in a concentration camp at the end of 1938. Moral pressure against the Confessional Synod and the ministers faithful to it was supplemented by financial pressure. All ministers had to take an oath of loyalty to the Nazi State and to the leadership of Chancellor Hitler. The movement of the German Christians also lost much of its importance with the generally decreasing importance of the religious question; they had put forward the program of unification of the Catholic and Protestant Churches in Germany.

Protestant ministers within Germany added their warning voice to that of the Catholic clergy. On March 20 the pastor in charge of the Rev. Martin Niemöller's pulpit, in his church in Berlin-Dahlem, warned that 'civil rights are today invaded for the advantage of state interests. Today the state can do with us whatever it wishes. We cannot and have not the desire to revolt. Who knows, however, whether God's bitter laughter is not already reverberating through the heavens? Who knows whether, despite all apparent successes, the nation's breakdown from within has not already begun? . . . They should remember that these constant breaches of their own laws can eventually break the nation itself. The Church must say, `I am in your hands; do with me as you will.' When its warnings are not heeded, however, that does not mean that the catastrophe will not come. Do not deceive yourself. You cannot mock God.'

Persecution of the Jews.

The year 1938 marked the turning point in the situation of the Jews in Germany. The plight of the Jews had been almost unbearable even before 1938, but they were still allowed, under heavy restrictions, to make a living in certain closely regulated trades and business fields. Although entirely excluded from any participation in the cultural, political or social life of Germany, nevertheless they were allowed to develop, as far as that was possible, their own social and cultural life strictly segregated from the general German environment. All this has been changed since the occupation of Austria, which complicated the Jewish problem by adding a large number of Jews to the German Reich as similarly it complicated also the Catholic problem, and increased the determination of the Nazis to solve these problems with great speed and by the most ruthless means. Although violent anti-Jewish excesses had occurred in Germany in the spring, and all Jews were forbidden to exercise, as far as they had been hitherto permitted, the medical or legal professions during the summer months, the full-fledged persecution of the Jews really started in November after the Nazi Government had obtained by the Pact of Munich a position of power in which it felt able to defy the opinion of the civilized world, and to carry through completely its original program of extermination of the Jews.

In April a general conscription of all Jewish property was ordered. The Jews were forbidden to use their funds or their property without special governmental permission and they were allowed only a most moderate sum for their current expenses. Measures restricting all commercial activities were announced practically every week. Most Jewish shops and stores were 'alienized.' To name only a very few of the many restricting regulations promulgated during the summer, Jews were forbidden to act as tourist guides, to trade in real estate, to act as brokers for real estate contracts or loans or act as managers of estates, houses or lands. The licenses of all Jewish peddlers had to expire by Sept. 30. Jews were prohibited from acting as private detectives, or from running information bureaus on financial matters or personal affairs.

The long-prepared measures for a radical extermination of the Jews in Germany were put into effect in November after a young Polish Jew named Grynszpan whose parents had lived in Germany, but had been ruined and expelled to Poland, had assassinated in an act of despair a young German diplomat Von Rath, at the Parisian Embassy. This act was answered in Germany by a wave of destruction, looting and incendiarism of practically unparalleled extent as National Socialist mobs destroyed Jewish shops, offices and private property throughout most of Great Germany. These acts of vandalism were systematically undertaken according to prearranged plans in all localities. A new feature was the bombing and burning of all Jewish Synagogues and houses of prayer, among them many of great historical value. This vandalism was not confined to property. Jews were attacked and beaten, many thousands were put into concentration camps, many hundreds died there or committed suicide. It is, of course, impossible to give any exact figures.

These unprecedented excesses which aimed not only at reducing the position of the Jews but at extinguishing them completely, together with everything connected with their religion and their memory, aroused the indignation of the outside world. Even the London Times, which had for many months supported the Nazi Government and Mr. Chamberlain's policy, was obliged to write that 'no foreign propagandist, bent upon blackening Germany before the world, could outdo the tale of burnings and beatings, of blackguardly assaults upon defenseless innocent people, which disgraced that country. Either the German authorities were a party to this outbreak or their powers over public order and the hooligan minority are not what they are proudly claimed to be. Nations cannot truly be brought to book save by the consequences of their own excesses, and the lessons of experience may be slow in coming.'

The German Government officially took charge, with uncompromising ruthlessness and all the propagandistic weapons at its disposal, of the anti-Jewish campaign. The number of Jews and half-Jews or those of Jewish and Christian parentage, who were affected by this policy, was estimated at 700,000 in the fall of 1938. For these people the new policy meant, as the Schwarze Korps, the official organ of the all-powerful Elite Guards and secret police threatened: 'extermination with fire and sword,' or emigration as penniless refugees. Thus the situation in Germany created a vast emigration problem and increased international unrest in the world.

The German Government proceeded in its policy of financial ruin of the German Jews by demanding that they should pay all the immense damage caused to their stores, shops, merchandise and houses by the Nazi rioters, and that they should pay a collective fine of one billion marks as a 'punishment' for the assassination of the young attaché of the German Embassy in Paris. All Jewish enterprises and property were to be liquidated before Jan. 1, 1939, or transferred to 'Aryans' at the price fixed by the Nazi authorities.

Jews were not only prohibited from entering any public library, museum, theater, movie house or concert hall, or any other place of entertainment, recreation or education in Germany but they were also ejected from their houses and apartments and forced to move into slum districts. The intention was to set up special ghetto districts for them. They were forbidden to enter at all certain streets and residential quarters. Every Jew had to carry with him a special card of identification, and officials even considered the introduction of the medieval yellow patch to be worn by every Jew on his garments.

Economic Outlook.

Germany's economic aims crystallized as an attempt at complete self-sufficiency and a mobilization of all the economic forces of the country and all its man power in the interests of the military power of the Nation. Marshal Goering, the economic dictator of Germany, who has supervision of the Four-Year Plan, declared in his speech of March 1, 1938: 'I call on German workers to be untiringly busy in their factories. I know I demand much of them — overtime and still more overtime. But they help create the sword of the nation, and that in itself is the deepest inner satisfaction.' In the choice between 'butter' and 'guns' the German people continued to prefer guns. But this relentless drive for economic self-sufficiency is not only of internal importance to Germany, it affects the whole world and dislocates world trade as much as it undermines all efforts to arrive at international trade treaties and mutual cooperation in the economic field. With the help of her regimented economics and with the full force of the state behind her economic drive, Germany pushed her trade energetically forward in Central and Southeastern Europe as well as in Latin America.

This went so far that even the Chamberlain Government, in spite of all its efforts for appeasement and for conciliating the Nazi Government, was obliged, at the end of November 1938, to enter into a trade war against Germany. On Nov. 30, Mr. Robert S. Hudson, the Secretary of the Department of Overseas Trade, told the House of Commons that Britain was forced to organize her industries to combat the dumping of German exports in Eastern Europe. 'Germany is not discriminating against British goods in Germany. Our complaint is that Germany, by her methods, is destroying trade throughout the world. The question is a much broader one of how to meet the new form of German competition throughout the world.' He charged that the basis of Germany's economic hold on Central and Southeastern Europe is her willingness to pay the producer much more than the world price. 'Germany obviously does that at the expense of her own people. It is a matter for the German Government how it treats its own people, but it does affect us.' In consequence, the British Government took steps to set up machinery for a trade war against Germany. A bill in the House of Commons introduced in December, aimed at giving the Board of Trade a fund of $50,000,000 to guarantee British export trade, not on commercial grounds but on the basis of national interest. The bill raised the liability that the Board of Trade may incur in guaranteeing the export trade from $250,000,000, as fixed last year, to $375,000,000. Hitherto, British Government guarantees to the export trade have been granted only on the basis of the soundness of the proposition, when approved by a committee of financial and commercial experts. Now, however, the guarantee may be obtained for proposals which in the long-term view may be expedient in the national interest. Thus British industry is to be helped to keep its market in the face of German competitive pressure.

Germany's economic life accelerated its general speeding up during 1938. German production which continued at a boom pace, with a consequent shortage of trained labor, the unprecedented armament increase, the Four-Year plan, the growing demand for the much-neglected consumption goods, and the export drive, all heightened the demands and the strain upon Germany's economic life. State control and state intervention are so intensified that not more than a certain semblance of private economics is preserved. As the economic life of Germany seems to lag behind the immense demands made upon it and as it starts to show symptoms of exhaustion — its labor and financial reserves being almost exhausted already — there is the danger that, should the production not increase speedily enough, the state would be obliged to take over even more of the economic system. Taxes are heavily increased upon industry and business as well as upon workers; red tape has grown to such dimensions as to hamper the progress of production which seems to drop per man and per shift. The foreign exchange control and the raw material rationing are important weapons in the hands of the state in the control of the whole industrial system. The German Labor Front urges the increase of production through an increased use of labor-saving machinery, suggests an even longer working day, and the provision of additional labor forces by training millions now employed in retail trade and offices for manual labor, and by reducing the time of the apprenticeship period.

This strained production situation and the new export drive seem also to endanger the status of the German mark. According to reliable information, the rise in the already exorbitant export subsidies granted by the German Government, may mean the establishment of a devalued mark. The export subsidies which have amounted to about one billion marks annually are to be increased in 1939 to about two and a quarter billion marks, and the subsidy on export items which has averaged around 25 per cent will be raised to a flat rate of approximately 45 per cent. The need for this foreign trade drive is explained by Germany's need for increased imports, and for wiping out the trade deficit, which Germany had accumulated during the first nine months of 1938, amounting to about 310,000,000 marks. During this period exports by Germany, including for more than half a year the former territory of Austria, were about 48,000,000 marks less than in the corresponding period of the preceding year for Germany alone. This general picture was also true for the trade relations between the United States and Germany. For the first nine months of 1938 the imports from the United States into Germany rose from about 201,000,000 marks in the corresponding period of 1937 to 305,000,000 marks in 1938, whereas German exports to the United States for the same period dropped from 151,000,000 marks to 104,000,000 marks. The acquisition of the Sudeten German territory, however, was bound to help the German economic situation somewhat, because the Sudeten territory contains many mineral resources and a high industrial productive capacity, but even more because it helped to strengthen Germany's hold on the economic resources of Central and Southeastern Europe, and thus to improve the chances of success for her foreign trade drive.

Foreign trade figures for the old Reich (without Austria and Sudetenland) were estimated in December 1938 to show a drop in exports from 5,900,000,000 marks for 1937 to 5,200,000,000 marks for 1938, while imports were estimated to have fallen from 5,500,000,000 marks to 5,300,000,000 marks, thus changing a surplus export of 400,000,000 marks for 1937 into a deficit of about 100,000,000 marks for 1938, to which has to be added a further deficit of 200,000,000 marks for Austria, making for Great Germany a total deficit of 300,000,000 marks. This unfavorable German balance of trade explains the aggressive trade practices of Germany, and also an effort started by Germany in December to make the emigration of Jews from Germany dependent upon a simultancous expansion of German trade abroad. One suggestion was to allow exiled German Jews acting as salesmen of German goods abroad to receive the exchange value of German goods sold as credit towards a Jewish emigration fund. In December 1938 the President of the German Reichs-bank, Dr. Hjalmar Schacht, proceeded to London to discuss there the possibility of a similar agreement which would help very much to revitalize German economic life and to supply Germany with the necessary raw materials to carry on her enormous armament program. (See also WORLD ECONOMICS.)

Cultural Life.

During 1938 the regimentation of all cultural life in Germany was made even more stringent than it had been before. One of the many indications of this tendency was the arrest of Ernst Wiechert, a poet and one of the most famous German novelists, who had shown in previous years much sympathy for the National Socialist movement and who in 1934 had been honored by the National Socialist Government with the Wilhelm Raabe prize. Recently Wiechert was arrested because he had expressed sympathy for Pastor Niemöller by supporting the latter's family instead of giving to the National Socialist funds. In the German Universities many 'Aryan' professors who were suspected of not being entirely in agreement with all the developments and activities of the National Socialist Party have been dismissed.

In the field of art the personal taste of Chancellor Hitler rules as dictatorially as in all other fields, and no painting, sculpture, or architecture is accepted which does not entirely conform to the new official canons of taste. Chancellor Hitler is especially interested in architecture and many far-reaching projects have been started, both as regards Party and public buildings in Munich. Nuremberg and Berlin, and as regards town-planning schemes for Berlin and other Great German cities. The architectural style followed in the present Reich is neo-classicism, with an emphasis upon grandiose effects of gigantic dimensions so as to make architecture expressive of the new myth of power dominating the present-day mentality in Germany. (See ARCHITECTURE AND HOUSING.)

Particular attention was given during 1938 to the Hitler Youth Movement and to the education and training of future leaders who were to be educated exclusively by the Party and in the strictest Party spirit. At the end of the month of May a meeting of the Senior and Junior Leaders of the Hitler Youth Movement was organized in Weimar. There, 1,600 of them between eighteen and twenty-five years of age met, and in the opening speech the Senior leader stressed that among all these young leaders there should not be one who had a dissenting individual opinion on any important question. The Hitler Youth is strictly organized according to the military model. The smallest group is the Kameradschaft with 10 to 15 boys, several Kameradschafte form the Schar of about 50 boys, several Scharen form a Gefolgschaft, these again are merged into Unterbanne which correspond to brigades in the military formation, and the Unterbanne assemble into Banne which correspond to divisions in the army. In addition to these general formations corresponding to the general army, the Hitler Youth has its special formations of a youth navy, of a youth air force, and of a youth motor corps. All these groups meet in smaller or larger groups one afternoon every week for sports and military drill, and one evening for political education. Every month a whole Sunday is given to military exercises in the open. The training of the leaders of the Hitler Youth Movement is carried through in a large number of special schools for the Hitler Youth, erected everywhere in Germany and covering the land as densely as do the Youth Hostels of the Hitler Youth. Higher schools of this kind are based upon the principles which characterized the orders of the Teutonic Knights in the Middle Ages. They are known by a medieval name as Ordensburgen. Some of them are highly specialized, like the newly created schools to prepare leaders for the colonies which Germany hopes to regain in 1939. See also COMMUNISM; FASCISM.