862.00/3320: Telegram

The Ambassador in Germany ( Dodd ) to the Secretary of State

148. From most reliable sources we have [hear?] German situation is more uncertain and dangerous than at any time since my arrival here a year ago. The economic status is worst feature due to loss of credit everywhere and the popular feeling about consequences of the drought which goes on. No answer to anything can be had from Government officials except that debts cannot be paid and industrial plants must soon be taken in hand by Ministry of Economics.

Bankers here from New York terribly uneasy because short-term credits now in serious doubt and no way is seen to continue most necessary business relations. Bankers here and in England think private big business corporations like Siemens will demand right to make their own deals again.

Many more people killed than officially acknowledged and thousands are still in prison although no newspaper prints anything. The people show great concern and consular reports indicate increasing hostility to regime. The Chancellor always under heavy guard flies constantly from place to place. The President seems entirely isolated and never says a word. Goering is out of his office most of the time and Goebbels is in difficult position of denouncing all outside publicity and yet compelled to keep foreign press here. Collapse of financial structure or death of the President might produce another revolution. The complete encirclement of Germany and utter demoralization of S.A. organization have stopped all talk of war and armament. Reichswehr officials never say a word about their attitude.

Dodd