Eighty Years Ago This Week

Nazi Germany’s march towards autarky and the abandonment of any semblance of market economy became plain to the world as the rift between Hjalmar Schacht, former central banker now Minister of Economics, and a regime uninterested in conservative economic management leaked into public consciousness. The trigger for the dispute were the synthetic oil and fabrics production programmes driven on by Herman Goering as Commissioner of the Four Year Plan. These were not paying propositions but designed to replace imports that would be prevented in wartime. The rumours of Schacht’s resignation were only a couple of weeks premature. The  visit to Germany by the  Duke and Duchess of Windsor culminated in tea with the Führer himself at Berchtesgaden. Hitler was favourably impressed with the Duchess and rather thought she would have made a good Queen unlike almost the entire British establishment. Predictably enough this meeting unleashed extensive criticism which was still well under wa

Helped in part by President Roosevelt’s “New Deal” the US economy and its stock market had rebounded strongly from the 1929 crash and the ensuing Great Depression and by early 1937 on many measures had returned to pre-Crash levels.  From the summer, though, a sharp correction had set in with demand was softening and unemployment headed back towards 19% from a low of 14%. With hindsight this all looks like a mere cyclical effect (none of the structural weaknesses which destroyed the financial system in the early 1930s had returned), but the attendant slump in share prices brought back evil memories. Even today economists squabble about the precise causes. After reaching a peak at around 190 in February the Dow Jones Index had been falling steadily and on Tuesday 19 th October share prices suffered sharp falls in very heavy volume triggered by a report of falling steel production. The market ticker was running 22 minutes behind events at one point; in reality simply a register of th

Amphibious landings by Japanese troops on the Yangtse turned one flank of the defending Chinese armies defending the line of the Beijing-Hankow railway and a pincer movement turned the other. The Chinese broke completely and some 200,000 soldier fled. Many were drowned trying to escape by river-junk. The latest German diplomatic move showed a degree of finesse not normally associated with the Nazi regime and it was all the more devastating for this. The Belgian government was given a formal declaration of Germany’s respect for the inviolability of its frontiers and a promise of support if Belgium were invaded. It set the seal on the Belgium’s drift away from France with whom it had formally abrogated its 1920 alliance the year before.  It fed Belgian fantasies of remaining neutral in a war and removed any hope that Belgium would somehow help extend the Maginot Line to the north either in terms of physical fortification or mobile forces. Of course, when the day came in May 194

Italian dictator Benito Mussolini concluded his state visit to Germany on a high note. He was treated to an immense review of the Wehrmacht manifestly designed to impress him with Germany’s military might. The whole event was conducted with great cordiality and accompanied by expressions of friendship. No firm agreements were signed during the visit but few doubted that it market the de facto alliance between the two countries. The murder of a British official and his police guard on the steps of the Anglican church in Nazareth prompted a sharp swing to repressive tactics against the Arabs by the British authorities in Palestine. The Higher Arab Committee and other national Arab bodies were declared illegal and a number of their members were arrested and deported. The Mufti of Jerusalem who was probably the single most influential Arab leader was not arrested but he was removed from his position as chairman of the Moslem Supreme Council. The British Prime Minister Nevill