Berlin, June 14, 1934 Dear Mr. Messersmith: I appreciate very much ...

Berlin, June 14, 1934 Dear Mr. Messersmith: I appreciate very much ...

Berlin, June 14, 1934

Dear Mr. Messersmith:

I appreciate very much receiving your kind letter.

It wis good of you indeed to sit down and write me a long letter hy hand N

when you must have so many other things to do. The letter which I have

just received mentions the trip which you had on the Danube with the

Chancellor. You can imagine how much I miss having the opportunity of

hearing all about it and getting your reactions. You will bear with me if

I recall with a certain amount of pathos the memory of our past experinces

and association from which I derived so much satisfaction. However the

hope of seeing you in the not too distant future helps to fill up the

vacuum which I feel around me. you

I have been wondering again and again how I could write to/openly and

without fear of the letter being disturbed and in the last pouch I sent

a resume of the situation to you via Washington. It was in the form of

a letter addressed to Mr. Moffat, whom I know personally. A copy of it

is enclosed herewith. I am sending this letter to you with the courier

who is leaving Saturday for Brussels and Paris. The letter will be mailed

to you from Paris. Mr. White informed me today that a courier was soon

leaving; and in the future I will avail myself of every courier to send

you a personal letter. Besides I shall take the opportunity of getting as

much information together as I can. I shall always have a talk with

the Ambassador before concluding my letter and also with Mr. V/hite.

Besides you know that I have other contacts including the newspaper

men. Lochner and I are becoming pretty good friends, and he will give

me all he gets. I hope you will not think from the letter I sent to

Mr. Moffat that I was trying to imitate you; on the other hand you will

have some satisfaction in realizing that I have always tried to be an

apt scholar. I thought it good to try to keep up to a certain extent

the series of personal letters to somebody in the Department. After all

there may be something in them worth while.

Mr. Baerwald has been in to see me twice since you left and the letter

which I sent to Mr. Moffat contains part of the information which Mr.

Baerwald gave me, particularly about the metting of the generals of the

Eeichswehr at Bad Nauheim. Since writing that letter Mr. Baerwald has

been in a ggain. In the meantime he has spent a week in Paris. He seems

to have learned nothing new from his contacts here, except that Hitler

and Hindenburg have had a serious misunderstanding and that Hindenburg

has gone home to his estate in Neudeck in a huff. Baerwald also said

that the interview between Hitler and Mussolini which is now going on

was not altogether at the request of Hitler, but that Mussolini has become

somewhat alarmed at the rumored instability of the Hitler regime

on account of the economic and financial crisis and that Mussolini has

thought it about time to give Hitler a measure of real support fearing

the Italian Facistic ship might be on the defensive if the Hitler regime

should fall.

The financial and economic situation is getting steadily worse. As you

learned today the moratorium on the transfer of all debt interest including

the Young and Dawes loans has been declared effective July 1.

When I referred not long ago to the fact that what you had written to

Mr. Phillips had since been proved, I referred particularly to your advice

to the extent that nobody c&uld place any faith in this Government. You

said that we could not make any agreements with the present regime in

Germany. This was sensational^proved not long agao when Steere discovered

in a Swedish official publication the announcement of the fact that the

lard quota from there was 60% into Germany. It was supposed to be confidential

but some how o*r other it got into an official publication. This

after the solemn assurance f-om the Foreign Office that all quotas had

been fixed at 40 % like ours. The official prpof was shown to the Foreign

Office by our Embassy and the Foreign Office got red in the face and

admitted the hoax. The matter was telegraphed to Washington and a note

came in today about it; but I have not had time to get all the information

from Mr. White. We are presently to have a conference at the Embassy

about this.

- 2 -

The Ambassador has been having a few rather intimite contacts with the

Minister of Commerce Herr Schmidt. LIr. White tells me that Schmidt let it

"be known to the Ambassador that the parting of the ways must come very

soon and that Hitler will have to decide whetherv or not he is going to

keep radicals like Goebels, Prick, Streicher and others, or whther he is

'going to separate himself from the men who are clamoring for a moderate

policy. I also understand that Schacht has insisted upon resigning but

it has been intimated to him that resignation would be regarded as

treason and that he could expect to be sent to a concentration camp if he

resigned. There is a great deal of unrest and the people are talking all

sorts of things. The increased exchange restrictions and the new embargoes

placed on shipments of lumber have thrown the ports of Hamburg and Bremen

into a panic; and a good deal of fear exists there as to the future of

those centers. The only thing that is thriving in Germany of course is

the industry which caters to certain classes of home trade. While the

foreign trade situation becomes worse the Nazis are succeeding in forcing

more people into the working processes; all of which is very unhealthful

because it is all artificial and on no solid basis.

The air is loaded with something which is supposed to happen in July. .

I believe this proceeds from the fact that new recruits are being taken

into the Eeichswehr (not from the S. A. ); that Rohm has taken a sick

leave ( which is variously interpreted); and thatvthe whole S. A. is to

have a vacation during July. This all gives rise to uneasiness; but I do

not believe there is anything of very special importance attached to these

three circumstances.

The big campaign which was launched against critics and grumblers has

not been carried very far. It is like all the other Nazi programs: it

amounts to nothing. The seriousness of the situation is indicated however

by the fact that it was considered necessary to launch such a program.

I learn from Press reports that some of these speeches were not in

the usual Nazi defiant tone, nor threatening eaither; but apologetic and

begging people to have patience. The young fellows who have been foreed

onto the farms as Landgehilfe ar4 sowing a good deal of discontent in the

rural districts where I understand the farmers are getting awakened to the

real situation. The drouth has very much injured the crops, on account

of which there will be a tremendous shortage of fodder for the animals.

This resulted in a rush to unload the meat on to the markets; but at

once came out decrees controlling this panic. No appreciable rain has

fallen here for a long time and I an told by Christy that already 25 95 of

the crops have been lost. The drouth still continues. Heard reports #'£*ru,

- 3v -

for a long time by these most unfortunate people. One thing, however, is

sure : the Regime is not gaining ground in popular support. The uncomforatable

and uncongenial atmosphere that the terror and the forced

acquiescence are creating has "begun to seep down into the Yery commonest

walks of life. The rhapsodies of the leaders and the endless preaching

of Nazi doctrine have been served up to everybody"ad nauseam" and everybody

is sick of it. I went the other day to see the President of the

who fought four years in the war . He raged and swore

against the situation and said that he saw no salvation for Germany

unless she returned to a sane policy. Some of the officials I saw in the

Reichsbank act as if they would like to weep on my shoulder. Decent men

are ashamed and dazed by what has happened to this country. I feel very

often that men of standing who feel that they must do something to establish

their moral correctness vis-a-vis a visitor like myself are actually

constrained by some inv/ard impulsion of decency to say something which

reveals their position and attitude.

The work in the office is unusually heavy. Things pile on me from

every side and it seems that I shall never get through. I am so hard

pressed at time that at five o'clock I am fairly worn out. You know exactly

what I mean. At five o'clock I start to get my dossiers ready to begin

dictation early in the morning. I have often to thank you for making the

way open for me to dictate and not write. It has given rae a great deal

of freedom. The position of American trade is getting steadily more

precarious in Germany. Import restrictions are now so low as ten per

cent, through the divisen curtailments. An embargo has been just placed on

the imports of logs and lumber, and many valuable American cargoes have

been caught afloat. No warnings, no facilities. I am very busy working

on a number of protection cases. I believe that we have nearly reached

the bottom so far as American trade in this country is concerned. After

zero has been reached we shall probably have a period of readjustment and

perhaps begin to build up again; but this will only be possible if there is

a complete change in Government. I have little confidence in the so-called

moderation possibilities.

I made a special point of going to the Ambassador this afternoon in order

to get what information I could for this letter. He asked me how I was

intending to get the letter to you. I explained that I intended to utilize

the courier who was leaving tomorrow for Brussels and Paris. He said that

he had received a letter from you and was much obliged that I had called

Jiiar attention to the fact that a courier was leaving and that he would

make a point of writing to you. He did, however, discuss the situation

with me; but pointed out that there was nothing very special to report.

I mentioned that fact that I had heard that Mussolini had invited Hitler

because Mussolini was worried lest the Hitler regime would totter. The

Ambassador said that undoubtedly that was true because he had had confidential

word from Long in Rome that the situation in Rome a few days ago

was very tense; and that obviously both dictators understood the necessity

for mutual support. The Ambassador felt sure that the Austrian situation

was a major theme at the conversations. The Ambassador receives visits from

Riebentrop, who it appears talks very openly to the Ambassador. In view of

the fact that the Ambassador espressed his intention of writing to you

also by this courier I did not direct the conversation into order to be

further informed By ^the:-Ambassador. He asked whether or not I had heard of

anybody being appointed to your place in Berlin, and I told him of a message

which Mrs. Ray Fox sent to her husband in Berlin, which came in the

Department's Grey Code. " For Pox sunshine Jenkins slated all well Betty".

We had to decode the message completely as it was addressed "American Consul"

and signed "Hull" . Having two Foxes in the office we had to finish the

message before knowing to whom- it belonged. The Ambassador seems to want

no changes in the staff in Berlin; and told me that he wrote to the Department

two weeks ago asking that no changes be made. He said that the situation

in Germany is critical and that the Tatatus §uo" of the personell should

be maintained. I don't know what objection he should have to a new Consul

General; I am sure I have none. I shall certainly give any man who comes

here loyal support, and go on doing my job the best I can. I have not the

slightest illusionments about all these things; and while I appreciate the

Ambassador's high confidence in me I hope that his attitude will not lead

Washington to think that I am influencingnhim or scheming? as nothing would

be farther from the realities.



-C &4>&^c

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