the resulting financial strain might involve inflation The influence of Schacht suffered further when, on 16 October 1936, Göring was appointed Plenipotentiary for the Four Year Plan with the task of putting "the entire economy in a state of readiness for war" within four years. Schacht had opposed the announcement of this plan and the appointment of Göring to head it, and it is clear that Hitler's action represented a decision that Schacht's economic policies were too conservative for the drastic rearmament policy which Hitler wanted to put into effect.

After Göring's appointment, Schacht and Göring promptly became embroiled in a series of disputes. Although there was an element of personal controversy running through these disputes, Schacht disagreed with Göring on certain basic policy issues. Schacht, on financial grounds, advocated a retrenchment in the rearmament program, opposed as uneconomical much of the proposed expansion of production facilities, particularly for synthetics, urged a drastic tightening on Government credit and a cautious policy in dealing with Germany's foreign exchange reserves. As a result of this dispute and of a bitter argument in which Hitler accused Schacht of upsetting his plans by his financial methods, Schacht went on leave of absence from the Ministry of Economics on 5 September 1937, and resigned as Minister of Economics and as Plenipotentiary General for War Economy on 16 November 1937.

As President of the Reichsbank Schacht was still involved in disputes. Throughout 1938 the Reichsbank continued to function as the financial agent for the German Government in floating long-term loans to finance armaments. But on 32 March 1938 Schacht discontinued the practice of floating short-term notes guaranteed by the Reichsbank for armament expenditures. At the end of 1938, in an attempt to regain control of fiscal policy through the Reichsbank, Schacht refused an urgent request of the Reichsminister of Finance for a special credit to pay the salaries of civil servants which were not covered by existing funds. On 2 January 1939 Schacht held a conference with Hitler at which he urged him to reduce expenditures for armaments. On 7 January 1939 Schacht submitted to Hitler a report signed by the Directors of the Reichsbank which urged a drastic curtailment of armament expenditures and a balanced budget as the only method of preventing inflation. On 19 January Hitler dismissed Schacht as President of the Reichsbank. On 22 January 1943 Hitler dismissed Schacht as Reichsminister without Portfolio, because of his "whole attitude during the present fateful fight of the German Nation." On 23 July 1944 Schacht was arrested by the Gestapo and confined in a concentration camp until the end of the war.

It is clear that Schacht was a central figure in Germany's rearmament program, and the steps which he took, particularly in the