Schacht, in London, Seen Seeking Trade Gains for Aiding Refugees on Capital Exodus

Dr. Hjalmar Schacht, president of the Reichs bank, who arrived here today, was expected by authoritative circles to offer concessions regarding transfer of German Jews’ capital in exchange for trade concessions to the Reich by Britain. Though the nature of the proposals has not been revealed, it is expected that the Reich would permit export of a Limited amount of Jewish capital in exchange for concessions and certain markets which would permit increased German exports.

The amount of Jewish capital which would be released, however, would be limited in proportion to the increase in German exports. If an agreement on these lines is reached, the Bank for International Settlements, a meeting of whose board of governors Dr. Schacht has just attended in Basel, Switzerland, would be expected to act as a clearing house.

The possibility of Britain’s proposing a loan to Germany to furnish sterling for emigrating German Jews is not discounted, although it is pointed out that the Reich would hardly agree to any proposals resulting in a reduction of her already severely limited supplies of foreign exchange. Should the discussions proceed as far as the emigration and transfer question, it is believed that George Ruelee, director of the Refugee Bureau would be called in to participate.

Meanwhile, light was thrown on the significance of the cryptic references in Monday’s communique by the German News Agency to the removal of transfer difficulties by foreign Jews. It was learned that the Nazis, in proposing to allow emigrants to take out part of their wealth in “goods coupons,” require the payment to the Government of a substantial proportion to cover the costs of the imported raw materials used in these products.

Sources close to the Intergovernmental Refugee Committee said the Reich preferred to discuss the problem directly with individual foreign governments rather than with a collective international organization. The Wilhelmstrasse, these sources said, has indicated its disposition to enter into bi-lateral talks with various states on transfer of Jewish property from Germany, rather than collectively through the Intergovernmental Committee. This attitude, which would scrap the cooperative principles formulated at the Evian conference and substitute the methods of ordinary diplomacy, is motivated by economic considerations, it was pointed out.

The Nazis’ prime interest is to avoid all exodus of Jewish money from Germany, and bilateral conversations might facilitate agreement with various governments to accept German exports equal in value to the funds needed to establish refugees abroad, observers stated. The Nazi change of position, it was said, considerably affects the work of Mr. Rublee, who has been trying with scant success to secure an arrangement with Reich authorities. It is expected that Mr. Rublee, who is keeping in close touch with Washington and awaiting instructions on what position to adopt in the light of this development, will confer with Dr. Schacht on details of Reich plans for transfer of Jewish property.

Explanations which Dr. Schacht may furnish will be presented to a plenary meeting of the Intergovernmental Committee in the middle of January. It will be up to that conference to decide whether to abandon the principle of international cooperation in order not to compromise immediate results which may be obtained through regular diplomatic negotiations.