DR. SCHACHT.  May 5th 1937.
 
At the Reichsbank. Present Lord Lothian & Mr. Conwell Evans.
 
 
Lord Lothian repeated the views he had placed before the 
Fuehrer and Goering regarding the need for establishing confidence
(see previous pages).
 
 
Dr. Schacht said he was glad that the visit to him showed
some appreciation of the business world, as too often importance
was attached to Nationalism and to Socialism, but not to those people
who paid for both.    England should encourage the business people 
in Germany to play their rightful part. Now through control, 
and also the vast scale public work scheme, they were rather an
the background.
 
 
Replying to Lord Lothian's remarks regarding the integrity
of Eastern nations, Schacht said that the old National Socialist 
policy of looking towards the East was losing itss appeal even
among the party leaders.    It had no reality.
 
 
Poland was an over-populated country, so was Czecho-
Slavokia, Austria and other states. Even Western Russia was 
over-populated.    What could Germany do with such countries, 
poor too in other respects lacking in raw materials needed by 
her and without any great agricultural supplies for export. 
Moreover territorial expression meant war, a very costly means for 
a very doubtful result. War was the most fatal of all methods. 
But the idea of self-determination should also be applied to 
Germans as to xxxx other peoples, the Germans In Austria for 
instance.    As for Czechs-Slovakia the name was an offence to
the Germans of Bohemia.    Czecho-Slovakia was an artificial
creation of the peace treaties. It was not an ancient nationality
at all.    No German would ever call himself a Csecho-Slovakian. 
The inhabitants were German, Czechs and Slovaks. At the same 
time Schacht stated that the Germans in Czecho-Slovakia given 
cultural autonomy should remain in that country.    He did not 
approve of secession.
 
 
Schacht proceeded to draw a picture of a Germany of 67