German debts Before his departure for Berlin, State Department officials set as his priority the need to ensure that the German government did not default on its debts to American lenders. Dodd met with a group of bankers in New York City who recognized that economic conditions in Germany made full payment unlikely. They hoped he could argue against a German default and suggested they would agree to lower the interest on their loans from 7% to 4% to prevent it. National City Bank and Chase National Bank held over 100 million dollars in German bonds, which Germany later proposed to pay back at the rate of thirty cents on the dollar. Dodd was not sympathetic to the bankers or the high interest rates they charged. Still, he repeatedly registered protests with the German government when payments were suspended or debts to United States lenders were treated differently from debts owed to those in other countries. Yet he remained fundamentally in sympathy with Germany's request that interest rates be lowered. As Secretary of State Hull insisted that Dodd renew his requests for payment, Dodd expressed frustration in his diary: "What more can I say than I have said a score of times? Germany is in a terrible plight and for once she recognizes war is no remedy."
Antisemitism Before leaving to take up his post, Dodd consulted on the situation in Germany, and especially Nazi persecution of the Jews, with his own contacts and during interviews the State Department arranged for him. The opinions he heard covered a broad range.
Charles Richard Crane, a plumbing industry tycoon and philanthropist, expressed great admiration for Hitler. As for the Jews, Crane said: "Let Hitler have his way." Some of the State Department's most senior officials harbored an outright dislike of Jews, including
William Phillips, Undersecretary of State, the second-highest-ranking man in the department. Dodd met with members of the Jewish-American community, including
Stephen S. Wise and
Felix Warburg, who asked him to seek a reversal of the Nazis' repressive anti-Jewish policies. Dodd promised he would "exert all possible personal influence against unjust treatment" of German Jews, but not in his official capacity. President Roosevelt advised him on June 16, 1933:
Edward M. House, a veteran in Democratic Party circles since the Wilson administration, told Dodd that he should do what he could "to ameliorate Jewish sufferings", but cautioned that "the Jews should not be allowed to dominate economic or intellectual life in Berlin as they have done for a long time." Dodd shared House's views, and wrote in his diary that "The Jews had held a great many more of the key positions in Germany than their numbers or talents entitled them to." Based on this view of the proper role of Jews in society, he advised Hitler in March 1934 that Jewish influence should be restrained in Germany as it was in the United States. "I explained to him [Hitler]", wrote Dodd, "that where a question of over-activity of Jews in university or official life made trouble, we had managed to redistribute the offices in such a way as to not give great offense." Hitler ignored Dodd's advice and responded that "if they [the Jews] continue their activity we shall make a complete end of them in this country." Dodd tried without success to save the life of
Helmut Hirsch, a
German-American Jew who planned to bomb parts of the
Nazi party rally grounds at
Nuremberg.
Anti-Americanism The German government's treatment of United States citizens created a series of crises during Dodd's tenure as ambassador.
Edgar Ansel Mowrer, a reporter for the
Chicago Daily News and president of the Foreign Press Association in Berlin, published a book-length attack on the Nazis,
Germany Puts the Clock Back, and continued his critical coverage until the government demanded his resignation as head of the Association. The U.S. State Department ignored the government's demand that it arrange for his return to the U.S. When Mowrer's employers arranged for him to leave and he sought to stay to cover the September 1933 Nuremberg rally, Dodd refused to support him, believing his reporting was so provocative that it made it difficult for other American journalists to work.
Assessment of Nazi intentions On October 5, 1933, Dodd gave a speech in Berlin at the American Club describing the
New Deal's effect on the U.S. Constitutional system: "It was not revolution as men are prone to say. It was a popular expansion of governmental powers beyond all constitutional grants, and nearly all men everywhere hope the President may succeed." On October 12, 1933, Dodd gave a speech to the American Chamber of Commerce in Berlin, with
Joseph Goebbels and
Alfred Rosenberg in attendance, and used an elaborate analogy based on Roman history to criticize the Nazis as "half-educated statesmen" who adopted the "arbitrary modes" of an ancient tyrant. His views grew more critical and pessimistic with the
Night of the Long Knives in June–July 1934, when the Nazis killed prominent political opponents including many dissenters within the Nazi movement. Dodd was one of the very few in the U.S. and European diplomatic community who reported that the Nazis were too strongly entrenched for any opposition to emerge. In May 1935 he reported to his State Department superiors that Hitler intended "to annex part of the Corridor, part of Czechoslovakia, and all of Austria". A few months later he predicted a German-Italian alliance. Feeling ineffectual, Dodd offered to resign, but Roosevelt allowed him only a recuperative visit to the U.S. The President wrote to U.S. Ambassador to Italy
Breckinridge Long in September 1935 that he and Dodd had been "far more accurate in your pessimism for the past two years than any of my other friends in Europe". In a note to Assistant Secretary of State
R. Walton Moore that same month, he wrote of Dodd: "we most certainly do not want him to consider resigning. I need him in Berlin." Dodd reported to Secretary of State Hull in September 1936 that Hitler's domestic economic policies, rearmament, and Rhineland initiatives had consolidated his support to the point that he could count on the support of the German people for a declaration of war "in any measure he might undertake". Following a U.S. vacation of several months in 1936, Dodd devoted the fall to testing German reaction to a personal meeting between Roosevelt and Hitler, an initiative the President proposed, or a world peace conference. After a series of rebuffs, Dodd produced a report for the State Department dated November 28, 1936, which Assistant Secretary Moore commended and forwarded to Roosevelt. He decried the tendency of Europeans to refuse to believe that Hitler meant to carry out the expansionist plans he had outlined in
Mein Kampf. He described Hitler's success in outmaneuvering France and Great Britain diplomatically and forging ties with Italy and Spain. Assessing the current situation, he wrote: "there does not appear to be any vital force or combination of forces which will materially impede Germany in pursuit of her ambitions."
Conflict with State Department Many in the State Department had reservations about Dodd's suitability for the job. He was neither a political figure of the sort normally honored with such a prestigious appointment, nor a member of the social elite that formed the higher ranks of the Foreign Service. In Berlin some of his subordinates were embarrassed by his insistence on living modestly, walking unaccompanied in the street, and leaving formal receptions so early as to appear rude. Dodd considered his insistence on living on his $17,500 annual salary a point of pride and criticized the posh lifestyle of other embassy officials. Early in his tenure as ambassador, Dodd decided to avoid attending the annual Nazi Party rally in Nuremberg rather than appear to endorse Hitler's regime. In 1933, the State Department left the decision to him, and other ambassadors—including those of France and Great Britain—adopted a similar policy to Dodd's. As the Nazi Party became indistinguishable from the government, however, the State Department preferred that Dodd attend and avoid giving offense to the German government. State Department pressure increased each year until Dodd determined to avoid attending in 1937 by arranging a visit to the United States at the time of the rally. His advice against sending a representative of the U.S. embassy to attend the September 1937 Nazi Party congress in Nuremberg was overridden by his State Department superiors, and the State Department allowed its overruling of Dodd's position to become public. Hitler expressed his pleasure with the attendance of the U.S., Great Britain, and France for the first time, recognizing it as an "innovation" in policy. ==Later life==