The paper begins by establishing the position of psychiatry after the First World War, concentrating upon the interplay between economy measures and limited reform during the Weimar Republic. Each therapeutic advance involved the definition of irremediable subgroups within the already socially marginalized psychiatric constituency. Nazi policy towards psychiatric patients during the 1930s involved further economy measures, and the introduction of negative eugenic strategies, were similar in kind if not degree, to those pursued in some other countries at that time. The decision to kill the mentally ill and physically disabled was taken by Hitler in order to clear the decks for war, and was justified with the aid of crude utilitarian arguments, as well as what limited evidence there was regarding popular attitudes on these issues. Many health professionals and psychiatrists accommodated themselves to policies which a few years later became one of the components of the 'Final Solution of the Jewish Question', i.e. Hitler's vengeance against the Jewish people in circumstances of war he had envisaged much earlier.