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                          EXTRACT                           
 
 
 
I had a separate conversation with Schacht. He made 
reference to his article in Foreign Affairs on the 
question of colonies for Germany. I asked whether 
he had msde any progress in this regard with the 
French and the British. The French attitude, he 
said,after his visit to Paris late
last summer, was satisfactory; the Germans had 
found it entirely possible to have direct 
conversations with the French. The British, he 
said, had not yet given a definite or formal answer 
to Germany's plea for raw material resources although
he had been most discouraged by Eden's attitude and the
British rebuff to the French approach on this subject after
Schacht's visit to Paris. Schacht reminded me of the
Hitler Government's sincere offers for disarmament and peace.
One after another of these offers, he said, including that
of limiting the army to 300,000 men had either been totally
ignored or had been refused. He told me he thought they
might be making their last offer in the outstanding offer
for peace in return for colonies. Great Britain and the
world, he said, should understand that the Hitler Government 
is firmly established, and if there is any attempt to
humble Germany the German people will be solidly behind it.
 
 
Schacht said again that it is not possible to have
world peace without German peace. He emphasized the efforts
 
 
and
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