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Since the Treaty of Versailles was signed in 1919 there have been only a few turning points in the history of Europe. There was the March on Rome in 1922 which founded the first of many modern Fascist States (see p. 24). Another epochal moment was Stalin’s launching in 1928 of the first Five-Year Plan. Adolf Hitler then began striking from Germany, one by one, the shackles of Versailles, and last week came the mighty moment when his chain-bursting finally carried Nazi expansion well out beyond the borders of Germany, sent it crashing not only into a foreign land but into Austria—the land in which Hitler was born.

Good Story. The press of the world had last week a fine tale of the events which led up to Austria’s revamping along German lines. According to the tale, Benito Mussolini who twelve years ago accepted the role of protector of Austrian independence, called Vienna by telephone and told Chancellor Kurt von Schuschnigg that all was at an end between them, Austria must throw herself on Adolf Hitler’s mercy. So Schuschnigg crossed the border, to Bavaria, and at the Fuhrer’s mountain chalet was shown into a room where he was left alone to read a set of German General Staff plans for the invasion of Austria. Several strapping Austrian Nazis entered, shook their fists and bellowed threats at Dr. Schuschnigg. Four German generals next tried to crack him with menaces of war. The third degree was then administered by Hitler himself.

For several hours the Dictator bellowed and ranted at the Austrian Chancellor.

Shattered, Dr. Schuschnigg departed, carrying back to Vienna a 72-hour ultimatum, to which Austria’s President Wilhelm Miklas, capitulated.

All this was a good story, but the facts, as they belatedly emerged, left it nothing but a cock-and-bull story—except for the tremendous fact that the Chancellor of Austria and the Chancellor of Germany did secretly meet and negotiated a most vital accord which they further agreed to rush into action with the greatest haste, before Adolf Hitler was due to address the Reichstag. Dr. Schuschnigg is one of Europe’s hardest, smartest, most devoutly pious and most able statesmen. So far from the Nazis having been such fools as to try to crack him by third degree methods, the agreement, as it went into force, was chiefly remarkable for the way in which Dr. Schuschnigg had yielded much without yielding Austria’s territorial integrity or sovereignty last week.

Many, but not all the terms rearmed, re-mighty Germany was able to get Austria to accept, are deeply repugnant to Dr. Schuschnigg. On his return to .Vienna he earnestly discussed with President Miklas whether he could resign at once. The President asked Vienna Mayor Richard Schmitz if he were willing to become Chancellor. “No,” replied Schmitz. So Dr. Schuschnigg carried on.

Prisoners, Therefore at 11 p. m. that evening the Chancellor laid before the President for his signature the most repugnant decree. Effective at midnight, it opened the jails and prison camps of Austria, releasing everyone confined for a political offense. There have been few political crimes in history more revolting than that of certain Austrian Nazis who, in 1934, disguised in Austrian uniforms, invaded the Chancellery in Vienna and shot in cold blood Chancellor Engelbert Dollfuss, who lay groaning before he died (TIME, Aug. 6, 1934). To Schuschnigg and Miklas, the decree was immoral in every sense of the word, but the President signed it. Out of Austrian jails soon walked 54 Nazis convicted in the Dollfuss assassination case. In all, the decree released 1,228 Nazis from Austrian prisons, 198 from prison camps. It also returned to the Austrian Army 150 officers who had been dropped for Nazi leanings, put back into the Austrian Civil Service ousted Nazis numbering 1,932.

One aspect of the release appealed to the humor-loving Viennese: The Schuschnigg-Hitler agreement had required speedy action and since there was no time for making distinctions—730 imprisoned Communists, whose views are as distasteful to Hitler as to Schuschnigg and Miklas, were released along with Nazis.

New Cabinet. Half an hour after the amnesty went into effect Chancellor Schuschnigg announced himself at the head of a new Cabinet, which was sworn in at 2 a. m. One of the 18 ministers was an Austrian Nazi, Minister of Interior Dr.

Arthur Seyss-Inquart. Five others were Nazi sympathizers but not Nazi Party members: the Ministers of Finance, Justice, Labor, Industry, and one, Without Portfolio.

It was clear from this that Dictator Hitler aimed at the ultimate seizure of all power in Austria by obtaining first the Ministry of Interior which in Europe generally carries with it control of the police, who in turn can then make life easy for Nazi agitators and hard for their opponents. In 1930 this maneuver was used to give Nazis control of the state of Thuringia in Germany. After Hitler became German Chancellor in 1933 it was Minister of Interior Hermann Wilhelm Goring who, by control of the police, riveted Nazi control around the necks of 66,000,000 Germans, many of whom had voted Hitler in and thought they could control him by votes.

In Austria the situation was different last week, for the reason that the Austrian police and gendarmerie were left in charge of Chancellor Schuschnigg’s devoted follower, Secretary of State for Public Security Dr. Michael Skubl. Moreover, under Austrian law the only political party which is legal is the Fatherland Front of Kurt von Schuschnigg. The Austrian Nazi Party was not legalized, but Austrian Nazis were told they might join the Fatherland Front whose official leader is Schuschnigg, whose vice-leader, Guido Zernatto, one of the Chancellor’s most devoted followers, was given Cabinet rank as Minister Without Portfolio. It was clear that Jesuit-trained Kurt von Schuschnigg had not capitulated outright, had driven a bargain with Dictator Hitler.

Seyss-Inquart to Hitler. The first act of the new Minister of Interior was to rush from Vienna to Berlin. There Dr. Seyss-Inquart conferred with Economic Four-Year Plan Chief Goring, the No. 2 Nazi. That night, Dictator Hitler asked a number of prominent German industrialists to meet Dr. Seyss-Inquart at dinner.

While the world’s blatant headlines were yammering as though Germany had already swallowed Austria politically, economic alignment—of far greater.immediate importance to both countries—was discussed. To Austria German industry looks hungrily for iron and copper (see map, p. 21) and the Reich can use some Austrian timber. To Austria—which was lost from many of her sources of wealth by the post-War partition of her empire—Germany can offer wider economic horizons if Economic Plan Dictator Goring chooses, and not otherwise. That the two nations may form a customs union is now highly probable. Since the Austrian schilling is fairly sound money, whereas the German mark is artificial in the extreme, the two countries will have a tough currency transfer problem on their hands, probably to be solved by the barter methods of Dr. Hjalmar Schacht. In the end, an economic unit the size of small Austria and big Germany combined ought to be a much sounder proposition than a unit only the size of Austria.

“No Trojan Horse” It has been against Austrian law to shout “Heil Hitler!” for several years. This week Austrian Nazis made themselves purple in the face drifting around Vienna and other Austrian cities in crowds, bellowing hour after hour “HEIL HITLER!” This gave so many Viennese the jitters that all except Fatherland Front demonstrations were ordered stopped by Schuschnigg with Austrian Nazi concurrence, ”to avoid panic.”

To Viennese journalists who bustled about Minister of Interior Seyss-Inquart on his return from Berlin, he said: “Because there have been so many misunderstandings. I wish you to say to the whole world that I am no Trojan horse. I do not want the Fatherland Front to become a Nazi Party. I believe in the view that Austria must be an independent, Christian Austria—nothing else but that. Austria will continue on her destined course. No further changes are foreseen now in Austria.”

Unless this whole statement was a tissue of deliberate lies. Dr. Seyss-Inquart had thus brought back from his conference with Herr Hitler very good news for Austrian Jews, Austrian Catholics and all 100% Austrians. After all, Hitler was born an Austrian, is an Austrian blood & bone. Since the Austrians are easygoing, fun-loving people, and Hitler knows it, it seemed likely that a ruthless, violent Prussian-style Nazification might not be forced on Adolf Hitler’s native people.

Meanwhile the Austrian Pretender Archduke (“Kaiser”) Otto slipped out of his Belgian refuge for an unknown destination, and Austrian Monarchists prayerfully recalled: “Our Kaiser Otto has said ‘if my Empire seems about to fall to the Nazis, I will be in Vienna before Hitler!’

While the crisis was at its hottest last week, Dr. Israel Taglicht, Chief Rabbi of Austria, declared: “No doubt the windows have been opened to the Nazis. But I do not think the new Minister of Interior will follow the German example regarding Jews. Austrian Jews have full confidence in Schuschnigg.”

This week it was up to England and France to speed or check Nazi progress in Austria, and the British Cabinet itself was “cracking” with strain (see p. 22). Fearful of the future, a mood of gloom hung over once gay Vienna. In 1931, two years before Hitler came into power, the avowed desire of Austria and Germany to unite was blocked only by the opposition of France, Britain and the League of Nations. If it takes place now it will not be a calamity unless Herr Hitler makes it so.

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