The Appointed Minister to Austria (Messersmith) to the Under Secretary of State (Phillips)
BERLIN April 21, 1934.
DEAR MR. PHILLIPS:
In my last letter I mentioned that Miller,  the Acting Commercial Attaché, was preparing a resume of the economic and financial situation for the Embassy as part of the background information to be presented to Mr. Child on his expected arrival here. As I anticipated, it is a very excellent review of certain aspects of the situation here and I am sending a copy to you now as I feel sure it will be of interest to you and to others in the Department.
He has avoided, as was of course proper, in his review a discussion of the political factors in the local situation, but these have been pretty well brought out in my recent letters to you. The review is interesting because it brings out some of the major details on which my own conclusions expressed to you have been based. The review may be particularly interesting to you in the Department when I say that Miller's conclusions have been entirely independently arrived at and in no way influenced by my own, and yet it will be apparent that we are very much in accord in our appraisal of the situation.
Cordially and faithfully yours,
GEORGE S. MESSERSMITH
APRIL 17, 1934
MEMORANDUM TO THE EMBASSY
MAIN PURPOSE OF NAZIS
The fundamental purpose is to secure a greater share of the world's future for the Germans, the expansion of German territory and
 Douglas Miller.
growth of the German race until it constitutes the largest and most powerful nation in the world, and ultimately, according to some Nazi leaders, until it dominates the entire globe.
The German people suffering from a traditional inferiority complex, smarting from their defeat in the war and the indignities of the post-war period, disillusioned in their hopes of a speedy return to prosperity along traditional lines, inflamed by irresponsible demagogic slogans and flattered by the statement that their German racial inheritance gives them inherent superior rights over other peoples, have to a large measure adopted the National Socialist point of view for the time being.
There are two other purposes subsidiary to the main purpose. Germany is to be made the economic center of a self-sustaining territorial block whose dependent nations in Central and Eastern Europe will look to Berlin for leadership. This block is to be so constituted that it can defy wartime blockade and be large enough to give the peoples in it the benefits of free trade now enjoyed by the 48 American States. In accordance with this purpose, an agricultural self-sufficiency program has been adopted, foreign foodstuffs are being rigorously excluded or the imported supply secured in increasing quantities from Central and Southeastern Europe. A hereditary peasantry has been set up, firmly attached to the soil through the prohibition of the sale or mortgaging of the peasants' land or crops. An increasing number of commodities have been placed under Government monopolies with fixed prices to consumers and producers, the principle of the numerus clausus or fixed number of persons engaged in any occupation has been increasingly adopted. The National Socialist conception of the correct or Government-fixed price instead of the price fixed by supply and demand has been introduced.
The second subsidiary purpose is the welding of all individuals in the present and future Greater Germany into a homogeneous racial family, gladly obedient to the will of its leader, with class and cultural differences inside the country eliminated, but a sharp line drawn between Germans and the foreign world outside. In carrying out this purpose, the Jews are to be entirely eliminated, the Slavic or eastern elements in the population to be minimized and eventually bred out of the race. A national religion is in process of organization; trade unions, political parties and all social, political, cultural, trade or
other organizations not affiliated with the National Socialist party, have been abolished, the individual's rights have been largely taken away. In the future the nation is to count for everything, the individual for nothing. Germany is to engage in a gigantic struggle with the rest of the world to grow at the expense of its neighbors. The German population owes the nation the patriotic duty of supporting it and bringing forward all necessary sacrifices to reach the common goal.
RETENTION OF POWER
To these long-distance objectives must be added the fourth and most important purpose of all, namely to retain control at all costs. The National Socialist party may compromise on distant objectives, if necessary, but cannot compromise on a question of retaining its absolute hold on the German people. This control had been gained by making most irresponsible and extravagant promises; by the studied use of the press, the radio, public meetings, parades, flags, uniforms, and all methods of working on popular psychology and finally by the use of force. This control once lost, could never be regained. It is absolutely necessary for the party to continue to make a show of success and to keep popular enthusiasm and fanaticism alive. There must be no open criticism or grumbling, even discussion of the future form of the State, the form in which industry is to be organized, or the laws regarding the hereditary peasantry is prohibited. Since the German public is politically inept and unusually docile, the Nazi movement has been able to dominate the situation for the past year, but the hard facts of the economic situation are beginning to be felt by the more intelligent Germans, particularly bankers, business men, professional men and persons who have touch with the outside world.
DANGER OF WAR
The Nazis are not satisfied with the existing map of Europe. They are at heart belligerent and aggressive. True, they desire nothing more than a period of peace for several years in which they can gradually re-arm and discipline their people. This period may be years, 10 years, or longer, but the more completely their experiments succeed the more certain is a large-scale war in Europe some day.
NAZIS WANT TO WIPE OUT 1918
In estimating the aims and purposes of the National Socialist movement, we must not make the mistake of putting too much reliance on public statements designed for consumption abroad which breathe the spirit of good peace and will and assert the intention of
the Government to promote the welfare of the German people and good relations with their neighbors. Nor should we imagine that the present Government leaders will feel and act as we would in their circumstances, namely think only of Germany's welfare. The real emotional drive behind the Nazi program is not so much love of their own country as dislike of other countries. The Nazis will never be content in merely promoting the welfare of the German people. They desire to be feared and envied by foreigners and to wipe out the memory of 1918 by inflicting humiliations in particular upon the French, the Poles, the Czechs and anybody else they can get their hands on.
A careful examination of Hitler's book and his public speeches reveals the fact that he cannot be considered as absolutely sane and normal on this subject. The same is true of many other Nazi leaders. They have capitalized the wounded inferiority complex of the German people, and magnified their own bitter feelings into a cult of dislike against the foreign world which is past the bounds of ordinary good sense and reason. Let us repeat this fact and let it sink in, the National Socialist movement is building a tremendous military machine, physically very poorly armed, but morally aggressive and belligerent. The control of this machine lies in the hands of narrow, ignorant and unscrupulous adventurers who have been slightly touched with madness from brooding over Germany's real or imagined wrongs, as well as the slights and indignities thrown in their own individual way as they attempted to organize the movement. Power of this kind concentrated in hands like these is dangerous. The Nazis are determined to secure more power and more territory in Europe. If this is voluntarily given to them by peaceful means, well and good, but if not, they will certainly use force. That is the only meaning behind the manifold activities of the movement in Germany today.