Schacht Shocker

That holy terror of European high finance, turtlenecked, dictatorial Dr. Hjalmar Schacht, who as President of the Reichsbank has browbeaten many an international conference, was off last week to Danzig on a suave mission of quiet German conquest.

Up to Danzig before the sleepy old Free City's last election Adolf Hitler sent his whole crew of high-power Nazi orators, Goebbels, Goring and the rest (TIME, April 15). The Free City's Government was already in the hands of Danzig Nazis, needed only a two-thirds majority in the Danzig Parliament to take steps to merge Danzig into Germany. Stolid Danziggers chose to rebuff Adolf Hitler, returning their Nazi Danzig Government not with a two-thirds majority but with a simple majority. This result was gall and wormwood to Berlin after the 91% Nazi plebiscite victory in the Saar (TIME, Jan. 21). "Never mind," many a German Nazi leader remarked confidently after the Free City's election. "We'll find a way to get Danzig yet."

Quietly, under Dr. Schacht's orders, the big German banks have been withdrawing funds from Danzig, and rich Danzig Nazis hastened the flight of capital by rushing their money abroad. Last week every Danzig bank was closed for all except

"emergency transactions" sanctioned by the Danzig Senate and its President, Nazi Dr. Arthur Greiser, was proposing to meet Danzig's financial crisis by methods indeed amazing. Economy, Dr. Greiser said, was the thing, and he proposed to economize by booting out of their jobs 600 Danzig Government employes--presumably non-Nazis--and packing off the indigent to Germany by a process which Dr. Greiser called "voluntary migration." They could stay in Danzig and starve or accept whatever relief in Germany its Nazis might be disposed to give.

Never an easy speaker to understand, President Greiser told the pack-jammed

Danzig Senate last week with Nazi mysticism: "Need not only bends theory; it breaks iron! ... If these laws of the greatest need intervene in the fate of individual citizens, that is immaterial to me, for the fate of Danzig and its population is more important to me than the fate of individuals. ... I denounce nonsensical rumors that my Government is about to adopt the Polish zloty as our currency. . . . The police will use the strongest measures against rumormongers seeking to imperil Danzig's independence!" Since Danzig is hemmed on two sides by the Polish province of Pomorze ("The Corridor'') and Danziggers make their living chiefly by handling Polish imports and exports through their tight little harbor, many a Danzig businessman would like nothing better than to have the gulden tied to the zloty. In fact Danzig devalued her gulden last month to parity with the zloty. Such being the case, Polish Foreign Minister Josef Beck found it convenient last week to turn up unexpectedly in the Free City. In Warsaw everyone regards Colonel Beck as pro-German. He made the ten-year Corridor Peace Pact with Realmleader Hitler (TIME, Feb. 5, 1934). But on the Danzig question Colonel Beck is a thoroughgoing Pole. Reputedly he intimated to President Greiser that whatever else Danzig may do with its gulden, Poland will not tolerate that the gulden be replaced in Danzig by the German mark. And Danzig lies in the shadow of Polish guns.

Simultaneously the Polish Press was telling Germany that currency restrictions already enforced by the Danzig Nazis are "illegal and contradictory to the letter and spirit of the Polish-Danzig agreement of 1921." With tempers at the boiling point, Colonel Beck went back to Warsaw, and from Berlin arrived Dr. Hjalmar Schacht, looking, as usual, highly pleased with himself. If he had not created the whole financial muddle, provoking an "emergency"' favorable to Nazi designs on the Free City, at least everyone was giving him credit for that feat last week. Beaming above his high collar, the Reichsbank president was at his best when he addressed a luncheon tendered him by the president of the Bank of Danzig.

"You will show," Dr. Schacht cried, "just as the German Reich has proved, that the German will for survival will master all difficulties! I wish and hope that this will for survival may be shared by the entire population of Danzig, irrespective of personal or party interests of the day."

This was interpreted as a smooth German threat to the non-Nazis of Danzig to join the Nazis in a new Danzig election on pain of further German economic pressure to bring the Free City to its knees. By way of bait, Dr. Schacht in a later speech promised: "The Germany of Adolf Hitler will throw her whole moral authority into the balance when the time comes to strengthen the confidence of the Danzig population"--i. e., if the Danzig Opposition will consent to prompt dissolution of the Danzig Senate and a fresh election, German money will come flooding back into Danzig at the order of "Tsar" Schacht.

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