Zags After Zigs?

Down upon the thick skull of one Gottfried Feder in his student days crashed the flat of a heavy dueling sabre. Never quite the same afterward, unsuccessful Civil Engineer Feder began to preach an absurd distinction on which was founded the Nazi Party. He thought there were two kinds of capital, good and bad, raffendes and schaffendes, "grasping capital" and "creative capital." Often but not always one could tell bad capital by the fact that it was possessed by Jews. Only good capital had any proper place in the Fatherland. Orating along these lines in a beer hall, Messiah Feder converted to his doctrine one Adolf Hitler who received Nazi membership card No. 7. Time & again grateful Disciple Hitler has given public thanks for raffendes and schaffendes. This masterly distinction enabled Nazi spellbinders to preach expropriation of capital (bad) to factory hands, then walk straight into the directors' room and promise protection of capital (good). Last week the moment was indeed historic when Disciple Hitler abruptly kicked Messiah Feder into limbo.

The kick was most considerate. The Realmleader, while dismissing Herr Feder as Commissar for Homesteading and Undersecretary of Economics, granted him a handsome pension for life.

Like Stalin, who also is no profound economist, Hitler pursues an economic course of zigs to the Right and zags to the Left. Last week the Great Zig-Zagger was zigging.

Zig! He dropped demagogic, anti-capitalist Count Ruediger von der Goltz from the post of Commissar of Economy to which he was appointed last July with impossible hopes that Count Ruediger would make the Fatherland self-sufficient, "a pure autarchy!"

Zig! On the day after, the Realmleader dismissed one of his oldest, stanchest Party chiefs, fiery Helmuth Bruckner, who in 1925 founded Nazidom in Silesia and eventually became its capitalist-scourging, priest-&-parson-baiting Governor. Not only was honored "Old Nazi" Brueckner stripped of all the offices which have made him the uncrowned "Tsar of Silesia" but he was also kicked out of the Party with no explanation, except that his conduct had "damaged party interests." Finally he was locked up in "protective custody."

Simultaneously with the bashing of such radical Nazi chiefs last week, Realmleader Hitler extended fresh confidence and further powers to comparatively conservative Dr. Hjalmar Horace Greeley Schacht, the tall, turtlenecked, autocratic President of the Reichsbank who recently became Minister of Economics (TIME, Aug. 13).

With characteristic awkwardness the Cabinet decreed last week a verbose and complex measure cumbrously entitled "The First Ordinance for the execution of the Law for the Preparation of the Organic Reorganization of the German Economy." All next day Berlin business leaders plodded fearfully through this heroic jumble. They then announced, with beaming smiles, that it seemed to mean the scrapping of most Nazi innovations in the realm of business and finance. Under the guise of "organizing German business regionally into economic chambers and vertically into six national groups --banking, industry, manual trades, commerce, utilities and insurance," the actual effect of the ordinance seemed to be to turn German business back to the powerful pre-Nazi chambers of commerce and employer organizations, now freshly grouped and in some cases renamed, under Dr. Schacht as Economic Dictator.

In a burst of activity, the Cabinet also reduced the number of German stock exchanges last week from 21 to nine and decreed that no German firm may pay cash dividends of more than 6%. Any excess must be paid, virtually as a forced loan, into a "trustee fund" administered by the Gold Discount Bank until further notice. Next day the mighty firm of Krupp announced that for the first time in years it was out of the red and making "modest profits." Discreetly Krupp will declare no dividend, but Gustav Krupp von Bohlen, preparing to plow back his profits into reserves, felt so flush last week that he handed out bonuses to all employes and executives.

Observers assumed that Dr. Schacht has prevailed upon Herr Hitler to "give German business one more chance" to recover under its traditional leaders, with Nazi interference withdrawn. That this zig to the Right, if it fails, will be followed by a zag to the Left, most German businessmen believed. They pointed meaningly to a Government announcement that Messiah Feder was to be considered not as permanently kicked out but as "temporarily retired" on his life pension. Should the Fatherland's economic crisis become too acute for Dr. Schacht to handle, Realmleader Hitler was expected either to be trounced by a Putsch of the Reichswehr or to recall Messiah Feder and give him free rein to try his program--the original Nazi Party program--of nationalizing the banks, abolishing interest payments, running the country on a "self-contained" currency off the gold standard ("Feder Marks").

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