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the
resulting financial strain might involve
inflation The influence of Schacht suffered
further when, on 16 October 1936, Göring
was appointed Plenipotentiary for the Four Year
Plan with the task of putting "the entire
economy in a state of readiness for war"
within four years. Schacht had opposed the
announcement of this plan and the appointment of
Göring to head it, and it is clear that
Hitler's action represented a decision that
Schacht's economic policies were too
conservative for the drastic rearmament policy
which Hitler wanted to put into effect.
After
Göring's appointment, Schacht and Göring
promptly became embroiled in a series of
disputes. Although there was an element of
personal controversy running through these
disputes, Schacht disagreed with Göring on
certain basic policy issues. Schacht, on
financial grounds, advocated a retrenchment in
the rearmament program, opposed as uneconomical
much of the proposed expansion of production
facilities, particularly for synthetics, urged a
drastic tightening on Government credit and a
cautious policy in dealing with Germany's
foreign exchange reserves. As a result of this
dispute and of a bitter argument in which Hitler
accused Schacht of upsetting his plans by his
financial methods, Schacht went on leave of
absence from the Ministry of Economics on 5
September 1937, and resigned as Minister of
Economics and as Plenipotentiary General for War
Economy on 16 November 1937.
As
President of the Reichsbank Schacht was still
involved in disputes. Throughout 1938 the
Reichsbank continued to function as the
financial agent for the German Government in
floating long-term loans to finance armaments.
But on 32 March 1938 Schacht discontinued the
practice of floating short-term notes guaranteed
by the Reichsbank for armament expenditures. At
the end of 1938, in an attempt to regain control
of fiscal policy through the Reichsbank, Schacht
refused an urgent request of the Reichsminister
of Finance for a special credit to pay the
salaries of civil servants which were not
covered by existing funds. On 2 January 1939
Schacht held a conference with Hitler at which
he urged him to reduce expenditures for
armaments. On 7 January 1939 Schacht submitted
to Hitler a report signed by the Directors of
the Reichsbank which urged a drastic curtailment
of armament expenditures and a balanced budget
as the only method of preventing inflation. On
19 January Hitler dismissed Schacht as President
of the Reichsbank. On 22 January 1943 Hitler
dismissed Schacht as Reichsminister without
Portfolio, because of his "whole attitude
during the present fateful fight of the German
Nation." On 23 July 1944 Schacht was
arrested by the Gestapo and confined in a
concentration camp until the end of the war.
It is clear that Schacht was a central
figure in Germany's rearmament program, and the
steps which he took, particularly in the
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