Free Chasing Gold: The Incredible Story of How the Nazis Stole Europe's Bullion by George M. Taber

that its military opponents would again attempt to starve the country into submission. The Nazis wanted to make sure that didn’t happen again, and Schacht was ready to help them.
    Only two months after returning to the Reichsbank, Schacht traveled to the U.S. to meet the leaders of the new Franklin D. Roosevelt administration. The new president greeted him on the White House terrace and had four separate sessions with him. The president and his top aides, though, did not look favorably on the new Nazi government. Nonetheless, Roosevelt, who once called Schacht a “bastard,” and had been suspicious of the Nazis almost from day one, still hosted him at a White House lunch, and Hull honored him with a dinner. The German basked in the glow of all the attention. 34
    Back in Germany, the central banker soon took on more titles that reflected his growing power within the Hitler regime. On July 26, 1934, the Führer was in southern Germany at the Bayreuth Wagner festival when he asked him to come down from Berlin to meet with him. He offered his banker the additional post of Minister of Economic Affairs. Two loyal Nazis who occupied the position previously had been complete flops. 35
    When he learned of the proposal, Schacht asked, “Before I take office, I should like to know how you wish me to deal with the Jewish question.” Hitler replied, “In economic matters the Jews can carry on exactly as they have done up to now.” Schacht then accepted the new position. Less than a year later on May 21, 1935, a secret law also named Schacht the General Plenipotentiary of War Economy. That gave him authority over the entire German economy in time of conflict. He would be the co-equal to the commander of the country’s armed forces. He was charged with placing “all the economic resources in the service of warfare.” 36
    The first step in the autarky program was to reorient as much as possible of Germany’s trade away from the country’s traditional economic partners. Berlin would simultaneously reduce its commerce with Britain, France, and the U.S., while increasing it with peripheral and less developed nations with whom Germany had historically done little trade. Those countries would be much less likely to demand payment in gold or major currencies and be willing to accept barter trades. Berlin could sell its surplus production of non-vital products in exchange for important ones that it needed to buy abroad. That would keep the country’s sparse financial resources for only the most important imports. The two areas with the greatest potential were the Balkans and Latin America. Both were rich in natural resources.
    As far as can be determined from historic records, Schacht never wrote out his autarky policy or presented it in any public speech, although he explained it clearly to top Nazi officials. He repeatedly insisted on the need to husband precious foreign currency so that the country could buy vitally needed imports, especially war materiel. The use of foreign currencies and gold turned into a major subject of conflict between the General Plenipotentiary of War Economy and other top Nazis. It was a classic case of the historic choice between guns and butter. Nazi leaders such as Hitler and Göring believed they could have both, and the central banker never succeeded in changing their view.
    Schacht’s immediate challenge in the early months of the Third Reich was to find a way to finance Hitler’s huge military buildup. The Führer’s goal was to make Germany the mightiest military power in Europe, if not the world, in just five years. Moreover, this had to be accomplished without setting off a new 1920s-style inflation, which still terrified Germans. Initially, at least, it also had to be done without attracting attention from other countries. Schacht not only had to pull a financial rabbit out of his hat, he had to do it without anyone noticing.
    The centerpiece of Schacht’s plan was a new corporation called