Smoke and Fire

When Prime Minister Neville Chamberlain publicly abandoned his policy of appeasing the dictators last March many political opponents doubted that the spattered British lion could so quickly change his spots. Last week they thought they had a few facts to confirm these doubts.

Circulating in world capitals for days were vague reports that the British Government was again negotiating with Adolf Hitler over the impending crisis in the Free City of Danzig. One account told of a "positive peace plan" in which the Germans would be offered an international loan of $5,000,000,000 to enable them to change the Third Reich's economy from a war to a peace basis. Another story, originating in Washington and printed in the Philadelphia Inquirer, predicted a five-nation conference between Great Britain. France, Germany, Italy and Poland which would give Danzig to Germany, change the status of the Polish Corridor, give Italy rights in Djibouti and representation on the Suez Canal Board and then freeze all European frontiers, either for 25 years or permanently.

Although the British Foreign Office categorically denied all talk of "peace" negotiations, there was still enough appeasement smoke around to make British non-appeasers increasingly suspicious that there was a fire somewhere. Early this week the "fire" was located, and it was found to be so near No. 10 Downing Street that its discovery was a Parliamentary sensation.

Talk. In London, presumably to attend an international whaling conference, was Dr. Helmuth Wohlthat, Adolf Hitler's star traveling salesman. He had been to Spain in early summer, and last spring he had signed in Rumania a sensationally successful trade agreement which all but made Rumania an economic dependency of the Third Reich. Forty-four-year-old Dr. Wohlthat was a wanderlusty young man who sought his fortune in the U. S. and Mexico, married a German girl living in Philadelphia, was recalled to Germany in 1933 by Dr. Hjalmar Schacht, the German financial wizard who was then beginning to steer the Third Reich into the economics of barter dealing and autarchy. Helmuth Wohlthat quickly rose in power and position until he became Field Marshal Hermann Goering's chief foreign exchange expert. Since last year he has controlled the entire German export industry.

Obviously a mere whaling conference was small-time stuff for such a big-time Nazi. While in London he sought out Robert Spear Hudson, British Government economic expert and Secretary for Overseas Trade. Not a member of the Cabinet, Mr. Hudson nevertheless is one of His Majesty's Ministers. He led a "revolt"' of junior ministers last winter against the Cabinet's dilatory rearmament policy and, although he supported Mr. Chamberlain's appeasement policy last year, it was Mr. Hudson who later dramatically warned Germany that unless the Reich gave up its trading methods, Britain would "fight and beat" Germany at her own game. Like Dr. Wohlthat, he too got his wife from Philadelphia.

Dr. Wohlthat was said to be impressed with Britain's changed "firm attitude" toward further aggression and to have expressed his fear of war. Secretary Hudson agreed, and then, as one economist to another, expounded the theory that only drastic financial measures could better the situation. Before they had talked for many hours, they had drafted an agreement, the gist of which was that in return for Adolf Hitler's good behavior Great Britain would see that Germany had access to world markets and to raw materials. To help the Third Reich turn its swords into plowshares an international loan would be granted, although Mr. Hudson later denied that any mention of $5,000,000,000 was made.

Storm. The Wohlthat-Hudson discussions were supposed to be secret and confidential. Dr. Wohlthat returned to Germany to report to Field Marshal Goering, but scarcely had he left before the plan--and garbled versions of it--had leaked out all over the world, much to the Secretary's annoyance and embarrassment. Early this week a sizable Parliamentary storm was coming up, and the British public, in no mood for further appeasement, was definitely angry.

While Mr. Hudson claimed that he had talked to Dr. Wohlthat only in his "private, personal capacity," the suspicion grew among Laborites, Liberals and non-appeasing Conservatives that the Chamberlain Government had far from re formed. "Is the Government still yearning after appeasement?" angrily asked Labor Leader Arthur Greenwood. "Is it prepared to try to buy off Hitler by sacrificing Danzig and perhaps Poland itself? Is it toying with the idea that it can, by sweet reasonableness and financial aid, persuade Germany to beat her swords into plowshares?''

Early this week Secretary Hudson, badgered by the press and politicians, was once reported on the point of resigning. The Prime Minister, tranquil as ever, appeared before Parliament to explain. The Hudson-Wohlthat discussions were "private" and "unofficial" and the Cabinet knew nothing about them in advance, the Prime Minister reiterated. The Secretary and the foreign trade expert were simply discussing how international confidence could be restored, and naturally they mentioned international trade, barter agreements, exchange restrictions, import quotas. But there was "nothing unusual" in the talks and certainly no loan was proposed.

Leak. Although Mr. Chamberlain did not know how the story of the conversations could have leaked out, the angry, outspoken Mr. Hudson had an idea that it was none other than Dr. Wohlthat who had broken his confidence. If that were so, Dr. Wohlthat could scarcely have done a better day's work for his Fuehrer. For it is just such appeasement rumors that weaken Polish, French and general European confidence in Britain's promises to stop further German aggression.

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