Translation of document 3576-PS

                                 Berlin W8, 19 February 1938
                                          Behrensstrasse 39A
                                                 Tel. 165861

Central Office for the Economic-political Organizations of
the NSDAP

Director: W. Keppler
[Letterhead]
                           [Stamped] `received' 19 Feb. 1938
To Minister President Field Marshal Goering.

Honored Field Marshal:

I am taking the liberty of enclosing herewith a brief report
by my colleague, Dr. Veesenmayer, who returned this morning
from Vienna. Also enclosed is a copy of a handbill (see p.
2, point 3).

                                                Heil Hitler!
                                      Yours very faithfully,
                                            (Signed) Keppler

                           -------

1. According to latest reports, Schuschnigg is being hard
pressed by the Catholics as well as the Jews. The Jewish
attack is carried on Chiefly through the stock exchange,
with the intention of exerting pressure on the currency.
After the 17th of February 1938 there suddenly set in an
extraordinarily pronounced flight of capital that led to an
appreciable sinking of Austrian loan values in Switzerland
and in London, as well as elsewhere abroad. Great quantities
of schilling notes are smuggled over the border, so that
since yesterday it has been impossible to make any
quotations. This development is not unfavorable for the
Reich just now, but great care must be taken to prevent the
undermining of Austrian currency and, with it, the Austrian
economy, from going too far. In this matter it appears
probably only a matter of days now.

From the Catholic side, the Nuncio sharply attacked
Schuschnigg yesterday afternoon, making use of Provincial
Governor [Landeshauptmann] Gleissner, who is spoken of in
opposition circles as the successor. Under this double
pressure Schuschnigg himself again expressed intentions of
resigning, yesterday evening, and informed the President of
the Administrative Court, Mr. Dinghofer, that he eventually
intended to take over his post. At the same time Schuschnigg
urged the return of Minister Seyss-Inquart, probably in
order, with his assistance, to remain in the

                                                  [Page 272]

saddle. In my opinion it is clear that Schuschnigg's
intention of resigning has been discussed, yet he apparently
is still making efforts to retain his chancellorship if
possible.

2. On the basis of four days of careful and extensive
observation it must be confirmed that the breakthrough has
succeeded completely and that it goes much deeper than is
realized in much of the Reich. After Schuschnigg was left in
the lurch by the foreign countries he experienced the blows
of having his supporters wrangle violently over the
succession to the post of Chancellor. In monarchist circle -
- where every hope has been abandoned chaos reigns. Jewish
circles are convinced that it is only a matter of time until
Austria will be politically and economically united with the
Reich. The prompt removal of Kienboeck as President of the
National Bank seems particularly necessary, since, as an
outspoken friend of the Jews, he not only tolerates the
present catastrophic policy of the Jews, but actually
promotes it. This opinion is confirmed even by the Austrian
Ministry of Finance. The appointment of Director Fischboeck
as Counsellor of the Federal Ministry [Bundesministerium]
was made in a wholly unsatisfactory manner. He himself
showed me, on the afternoon of 18 Feb 1938, his certificate
of appointment, which shows that he is to be consulted only
in individual cases. Since he has no specific authority or
other means of exerting influence, his appointment is
worthless for the present.

3. The situation of the prohibited party has reached a
crisis. Through the use of sensible intermediaries I succeed
in inducing Mr. Leopold to leave for Germany on 18 Feb.
1938. He arrived in Berlin early on 19 Feb. 1938 and went to
Hotel Fuerstenhof. On 17 Feb. 1938 a very unsatisfactory
circular was again issued by the party, a copy of which has
already been forwarded. Furthermore, reports telephoned from
Vienna today state that large-scale demonstrations are being
planned by followers of the prohibited party. According to
information just received, Dr. Tavs, who was released
yesterday, issued orders for the breaking of all windows of
the German Legation in the course of this evening. One of
the most important people around Captain Leopold, the
engineer, Mr. Ruediger, went so far as to declare before a
group of industrialists who he had called together that even
the Fueh-

                                                  [Page 273]

rer had no reason to interfere personally in Austrian
questions. It is further intended, through provocations, to
force Minister of Security Seyss-Inquart to make new
arrests, so that he can then be denounced as a traitor to
the national cause. Under these circumstances Leopold's
remaining would have been dangerous and action had to be
taken. On the other hand, it would have been unbearable for
the movement had it been necessary later to remove him
forcibly to the Reich, therefore, his departure yesterday
was probably the only possible solution, as far as the time
and manner of his going are concerned. Our reliable people
in the Party and the SS have received exact instructions to
prevent as far as possible any sort of demonstration, and it
is to be hoped that this can be done.

4. It is to be gathered from numerous reports that Foreign
Minister Guido Schmidt has played a scarcely gratifying role
during the past few days. It is he, in particular, who has
hindered the infiltration of nationalist personalities into
the Government or has so weakened their position, at any
rate, that no great value can be attached to the posts
obtained to date. The motivation of his attitude is to be
found in his very strong Catholic attachment as well as in a
certain jealousy toward Minister Seyss-Inquart.

5. In the last few days, Minister Glaise-Horstenau has
repeatedly expressed the intention of resigning, but the
combined efforts of Minister Seyss-Inquart and myself have
succeeded, so far, in preventing him from doing this, and
there is a probability that he will remain in office for the
time being.

6. A very bad role is played by State Secretary Skubl in the
Ministry of Security and it can be expected that Minister
Seyss-Inquart will have to get rid of him soon in order to
bring the influence of his own position fully to bear.

7. The reports coming from the working class are most
encouraging. A strong trend towards National Socialist cell
organization in industrial enterprises has set in which is
essentially genuine and only a slight fraction of which is
due to the temporary situation.

8. Hardly any difficulty with the Reds need be feared.

                                    (Signed) Dr. Veesenmayer

                           -------

                     COPY [of handbill]

The minority cabinet of Austria has again reconstituted
itself. This reorganization did not deserve the fanfare with
which it was

                                                  [Page 274]

heralded in the press. Schuschnigg has again called into his
cabinet only those men upon whom he relies. This clear fact
can not be obscured by using the press, free of charge, to
call one or the other of the Ministers “the representatives
of the national opposition.” The national opposition and its
leaders have sent no man possessing their confidence into
the Cabinet.

It is with a certain regret that we see Minister Glaise-
Horstenau leave the post of Minister of Interior. He has at
all times shown and earnest desire to come to an
understanding and has never subscribed to deceitful
tendencies. We trust that the fact that he, in particular,
has been recalled from his immediate sphere of activity may
not be an evil foreshadowing of the last Cabinet
reorganization.

The new Minister taking his place, Dr. Seyss-Inquart, comes
from the Catholic side. He got in touch with national
circles only relatively late. He has made no positive
contribution in national matters since his appointment as
Councillor of State [Staatsrat]. So it remains to be seen
whether, following the advancement accorded him by Dr.
Schuschnigg, he will see his opportunity to develop a more
effective activity in the national sense.

Despite the experience of the last 1½ years, an excess of
patience allows us to call  upon the National Socialist
majority of Austria also to regard this new minority
Cabinet, which has been plumped down under its nose to the
accompaniment of manifestations of State force, with cool
calm and presence of mind and to await the next
developments.

One thing is certain today, however; Now as before,
Chancellor Schuschnigg still owes us the fulfillment of our
natural demands that consideration be given to the
inalienable rights of our people and of the National
Socialist popular majority. Now as before, there reigns over
our country a minority cabinet that is not an expression of
the people’s will, but an expression of despotism.

National Socialists! We shall continue, therefore, united
and with closed ranks, undisturbed by tactical regroupings
of the Cabinet to pursue our goal — a goal which is also
that of the great majority of our people. We feel strong in
the justness and worthiness of our cause and in our
solidarity, willingness to sacrifice, and loyalty, tested in
a long and difficult struggle. Comrades! This fight
continues!

                   For honor and justice!
                   For freedom and bread!
                       For our people!