-4-                             
 
 
 (15) Schacht and the "Kolonial Bund" are pressing for
colonies. The opposition to tropical colonies expressed in
"Mein Kampf" seems to turn the pointer eastward as a natural
corollary to anti-Soviet policy.
 *** Actual advancement toward peace in Europe has been nil         recently due largely to Germany (diplomacy plus saber rattling),         and on the loss side the following points appear.
            (1) There are indications that England feels that
                Germany "must be written off as a bad job" and England
                is re-arming for any emergency.
            (2) Germany has alienated Poland to a certain
                extent through the Nazi's activities in Danzig.
            (3) Belgian rearmament could also be turned to                                  the advantage of France.
            (4) The Franco-Soviet pact depending on its real
                military value can be regarded as a loss for Germany.
            (5) Germany's internal activities have alienated
                Catholicism and to some extent christianity generally,
                and because of the attitude adopted toward racial
                matters, justice and real democracy, bad economic
                relations have arisen with the United States.                         (6) Germany will seek to realize her aims without
                war if possible. If not? .....
 
 
 
WE:JF:DW
                                                                                       (15) Schacht