Chapter 5 Will this meeting never end?

Berlin, May 14, 1935 Cabinet meeting

Hjalmar Schacht (HS): ...so, by order of the Führer, the following information is delivered to the cabinet, it remains top secret and must not be discussed outside this room. This secret must be kept for now, even if even the dumbest economic attaché is expected to discover it before the end of the year.

Now I'm sure you are all aware of the $2 billion initial public offering of Atlantic Mineral Group or AMG, what is secret is that the Reich was the sole owner of AMG. What's more is that we have used the 2 billion and the remaining shares now valued at 1 billion as collateral for a series of new loans. Loans collectively worth US$10 billion, or approximately RM25 billion in hard currency. These billions will naturally be used for Germany.

Werner von Blomberg (WB): Wait, I don't understand, why did we sell the gold mines in the first place and if we had to sell why didn't we sell everything? Also, why the new loans?

AH: Hjalmar, let me answer this one.

HS: Of course, Adolf(1).

AH: Thank you, in response to your questions Werner, we sold 2/3 of the company and not the entirety to maintain investor confidence. If you sell the entire company, people start to worry that something is wrong.

We then proceeded with the IPO to set and obtain a firm market price for the shares, before the IPO there was only an internal estimate or guess of the value of the company, which the banks refused to take as collateral. Whereas now there is a fixed figure that banks can and are happy to use as collateral for their loans. And the reason why we didn't take the 2 billion in cash, but used it to borrow 10 billion, it's pretty obvious that 10 is more than 2, you understand?

WB: Yes, sir.

AH: It should also be noted that we did not so much sell gold or gold mines to the Americans, but rather a treasure map to hoard that they already owned. Treasure that they will now proceed to unearth at an enormous cost of labor and capital. To get some shiny items that are almost useless for your industry or army.

All: Ha ha.

AH: Now Hjalmar, please continue.

HS: So, as I said before, we now have approximately RM25 billion in cash available to spend in the US. According to Adolf's instructions, we have started purchasing the following items. The items we are purchasing at a deep discount, due to the current depression.

We have signed orders with Mack Trucks for 250 dump trucks, we will start receiving them at the Hamburg dock starting next month. The entire order will take about 50 months to complete.

An agreement has been reached for a thousand excavators from a company called Holt Caterpillar, of two types, a 45 hp one called RD-6 and a 132 hp RD-8. And as part of this deal, a license was obtained to produce an additional 500 of each and spare parts as needed. We have also been able to collect 700 second-hand excavators from judicial depots of the older type 60.

They will be used for both infrastructure and agricultural projects, and I think Werner will be able to find some uses for them as well.

WB: You're right.

HS: We were also successful in purchasing the bankrupt Baldwin Locomotive Works, transportation and relocation of the production plant will begin in June and the plant should be operational in Konigsberg from November. From then on, it will produce about a thousand DRG class 44 locomotives per year. Also coming with the plant will be about 800 experienced workers who will provide a cadre.

Konstantin von Neurath (KN): Debo señalar que esto está generando cierto descontento entre los estadounidenses, ya que no están felices de perder las oportunidades de empleo y las patentes. Por lo tanto, se esperan algunas dificultades con la aduana y durante el desmontaje, sin embargo, la embajada en Washington está trabajando arduamente para acelerar los asuntos.

HS: Haré una nota para prever retrasos en la entrega.

Este mes se firmó otra orden para una entrega adicional de unos cien mil durmientes de ferrocarril debidamente curados para más de 20 cargas por eje. Y el trato por las piezas para mil interruptores de riel se cerrará esta semana.

Paul von Eltz-Rübenach(PE): Eso nos ayudará a poner en marcha los proyectos de mejora del ferrocarril este año en lugar de esperar hasta la primavera del próximo año.

HS: Bastante, por eso Adolf tiene una prioridad tan alta en estos artículos.

Ahora, desde otras sindicaturas estamos negociando cuatro molinos harineros, dos fábricas de herramientas, una planta química y una refinería de petróleo. Se proporcionarán actualizaciones a medida que avancen las negociaciones.

Mi gente y la embajada también pudieron cerrar varias docenas de contratos de licencias y patentes, principalmente en la industria de fabricación de herramientas. Eso debería ayudar a nuestra propia industria a ganar bastante ventaja competitiva.

Y finalmente, para la sección estadounidense en el programa de materias primas a largo plazo, hemos llegado a un acuerdo con Alcoa, un gran fabricante de aluminio. Que nos suministren todo el Aluminio que requerimos durante los próximos 4 años, con precios fijados al punto de equilibrio, no al precio de mercado. Como la mayoría de sus plantas estaban inactivas y poco a poco iban a la quiebra.

Aluminio que se pagará no en efectivo sino vendiéndoles las minas de bauxita descubiertas recientemente en Surinam y dos generadores de electricidad de gran capacidad de Siemens. Ahora permítanme señalar que las minas, si bien son masivas y se espera que produzcan durante varias generaciones, requieren grandes inversiones y desarrollo durante varios años. Y que nuestra industria y la nueva Luftwaffe demandan Aluminio ahora y no dentro de 10 años.

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