The Avalon Project : Nuremberg Trial Proceedings Vol. 13

Nuremberg Trial Proceedings Vol. 13

ONE HUNDRED AND TWENTIETH DAY
Friday, 3 May 1946

Morning Session

[The Defendant Schacht resumed the stand.]

THE PRESIDENT (Lord Justice Sir Geoffrey Lawrence): The Tribunal will sit in open session tomorrow at 10 o'clock and will adjourn into closed session at 12 noon.

Mr. Justice Jackson and Defendant Schacht: It is desired on behalf of the interpreters that you should pause if possible after the question has been put to you and if you find it necessary, owing to the condition of the documents with which you are dealing, to read in English or speak in English, to give an adequate pause so that those interpreters who are interpreting from English into other languages can take over the interpretation. Is that clear?

MR. JUSTICE ROBERT H. JACKSON (Chief of Counsel for the United States): I owe an apology constantly to the interpreters. It is hard to overcome the habit of a lifetime.

THE PRESIDENT: It is very difficult.

MR. JUSTICE JACKSON: [Turning to the defendant.] Dr. Schacht, by the way, the photograph Number 10 which was shown you yesterday, that was one of the occasions on which you wore the Party Badge which you referred to, was it not?

HJALMAR SCHACHT (Defendant): That may be.

MR. JUSTICE JACKSON: You are quite sure of that, are you not?

SCHACHT: I cannot distinguish it clearly; but it may be, and that would prove that the picture must have been taken after 1937.

MR. JUSTICE JACKSON: That is what I wanted to prove. And as a matter of fact, it was taken after 1941, was it not? As a matter of fact, Bormann did not come to any important official position until after 1941, did he?

SCHACHT: Bormann?

MR. JUSTICE JACKSON: Bormann, yes.

SCHACHT: That I do not know.

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MR. JUSTICE JACKSON: Now, if we return to the Four Year Plan which began in 1936, as I understand it you opposed the appointment of Goering to have charge of the Four Year Plan on two grounds: First, you thought that that new plan might interfere with your functions; and secondly, if there were to be a Four Year Plan, you did not think Goering was fit to administer it?

SCHACHT: I do not know what you mean by "opposed." I was not satisfied with it and considered the choice of Goering not the right one for any leading position in economics.

MR.JUSTICE JACKSON: As a matter of fact you have described Goering as a fool in economics, have you not?

SCHACHT: Yes, as one does say such things in a heated conversation.

MR.JUSTICE JACKSON: Or in interrogation?

SCHACHT: Interrogations are also sometimes heated.

MR. JUSTICE JACKSON: Now, very soon Goering began to interfere with your functions, did he not?

SCHACHT: He tried it repeatedly, I believe.

MR. JUSTICE JACKSON: Well, he got away with it too, did he not?

SCHACHT: I do not understand what you mean by "he got away with it."

MR. JUSTICE JACKSON: Well, this American slang is difficult, I admit. I mean he succeeded.

SCHACHT: In July 1937 he had me completely against the wall.

MR. JUSTICE JACKSON: That started over a proposal that he made or a measure that he took with reference to mining?

SCHACHT: Yes.

MR. JUSTICE JACKSON: He also made a speech to some industrialists, did he not? '

SCHACHT: I assume that he made several speeches to industrialists. I do not know to which one you are referring. I presume you mean the speech in December 1936 or so.

MR. JUSTICE JACKSON: I am referring to the speech in which you said to us in interrogation that Goering had assembled industrialists and said a lot of foolish things about the economy which you had to refute.

SCHACHT: That was the meeting of 17 December 1936.

MR. JUSTICE JACKSON: And then you wrote to Goering complaining about the mining measures?

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SCHACHT: I assume that you mean the letter of 5 August?

MR.JUSTICE JACKSON: Right. That document is Document EC-497, Exhibit USA-775. And in that letter of August 1937 you said this, if I quote you correctly:

"Meanwhile I repeatedly stressed the need of increased exports and actively worked towards that end. The very necessity of bringing our armament up to a certain level as rapidly as possible must place in the foreground the idea of as large returns as possible in foreign exchange and therewith the greatest possible assurance of raw material supplies."

Correct?

SCHACHT: I assume it is.

MR. JUSTICE JACKSON: And you also said this, I believe: "I have held this view of the economic situation which

I have explained above from the first moment of my collaboration."

That was also true, was it not?

SCHACHT: Yes, certainly.

MR. JUSTICE JACKSON: Now, both of those things were true, were they not?

SCHACHT: Yes.

MR. JUSTICE JACKSON: And then you concluded, addressing Goering:

"I ask you to believe me, my dear Prime Minister, that it is far from me to interfere with your policies in any way whatsoever. I offer no opinion, either, as to whether my views, which are not in agreement with your economic policy, are correct or not. I have full sympathy for your activities. I do believe, however, that in a totalitarian state it is wholly impossible to conduct two divergent economic policies."

And that was also true, was it not?

SCHACHT: Yes.

MR.JUSTICE JACKSON: And that was the basis on which you and Goering disagreed so far as policy was concerned?

SCHACHT: So far as what was concerned?-Policy? I do not understand what you mean by policy. I mean the way business was conducted.

MR. JUSTICE JACKSON: Yes.

SCHACHT: Entirely aside from other differences which we had.

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MR. JUSTICE JACKSON: These other differences were personal differences. You and Goering did not get along well together?

SCHACHT: On the contrary. Until then we were on very friendly terms with each other.

MR. JUSTICE JACKSON: Oh, were you?

SCHACHT: Oh, yes.

MR. JUSTICE JACKSON: So the beginning of your differences with Goering was the struggle as to which of you would dominate the preparations for war?

SCHACHT: No.

MR. JUSTICE JACKSON: WE

SCHACHT: I have to deny that absolutely. The differences...

MR.JUSTICE JACKSON: Do you want to say anything more about it?

SCHACHT: The differences which led to my resignation resulted from the fact that Goering wanted to assume command over economic policies while I was to have the responsibility for them. And I was of the opinion that he who assumes responsibility should also have command; and if one has command then he also has to assume the responsibility. That is the formal reason why I asked for my release.

MR. JUSTICE JACKSON: Well now, I turn to your interrogation of 16 October 1945, Document 3728-PS, Exhibit USA-636, and ask if you did not give the following testimony:

"After Goering had taken over the Four Year Plan-and I must say after he had taken over the control of Devisen, already since April 1936-but still more after the Four Year Plan in September 1936, he had always tried to get control of the whole economic policy. One of the objects, of course, was the post of Plenipotentiary for War Economy in the case of war, being only too anxious to get everything into his hands, he tried to get that away from me. Certainly as long as I had the position of Minister of Economics, I objected to that . . ."

You made that statement?

SCHACHT: I believe that is correct.

MR. JUSTICE JACKSON: Yes, and then you describe your last visit with him after Luther for two months had endeavored to unite Goering and yourself.

SCHACHT: That is a mistake; it is Hitler, and not Luther.

MR. JUSTICE JACKSON: Very well.

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You described it as follows:

"Then I had a last talk with Goering; and at the end of this talk Goering said, 'But I must have the right to give orders to you.' Then I said, 'Not to me, but to my successor.' I have never taken orders from Goering; and I would never have done it, because he was a fool in economics and I knew something about it, at least.

"Question: 'Well, I gather that was a culminating, progressive, personal business' between you and Goering. That seems perfectly obvious.'

"Answer: 'Certainly.' "

Is that correct?

SCHACHT: Yes, certainly.

MR. JUSTICE JACKSON: And then the interrogator went on:

"Let us go into the duties of that job for a moment and see what he was trying to take away from you. There are only two possibilities, as it has been explained to me; if I am wrong, correct me. One would be the preparation for a mobilization, and the other would be the actual taking charge of this in the event of war. Otherwise, the post had no meaning. So the things you resisted his taking away from you, as I see it, were the right to be in charge of the preparation for mobilization and, secondly, the right to control in the event of war.

"Answer: 'Correct.' "

Did you give that testimony?

SCHACHT: Please, Mr. Justice, you are confusing the events in relation to time. The differences with Goering about this so-called Plenipotentiary for War Economy occurred in the winter 1936-37; and the so-called last conversation with Goering which you have just mentioned took place in November 1937. I stated, I believe in January 1937, that I was prepared to turn over the office and the activity as Plenipotentiary for War Economy immediately to Goering. That can be found in the memorandum from the Jodl Diary which has been frequently mentioned here.

At that time the War Ministry, and Blomberg in particular, asked to have me kept in the position of Plenipotentiary for War Economy, since I was the Minister of Economy, as long as I was the Minister of Economy. You can find the correspondence about that, which I think has already been submitted by you to the Tribunal.

MR. JUSTICE JACKSON: Well, all right; I think the dates appear in your testimony. I am not concerned at the moment with the sequence of events; I am concerned with the functions that you were

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quarreling over, and which you described in your interrogations. And the questions and answers which I read to you are correct; these are the answers you made at the time, are they not?

SCHACHT: Yes, but I must say the following: If you ask me about these individual phases, it will give an entirely different picture if you do not single out the different periods. Mr. Justice, surely you cannot mention events of January and November in the same breath and then ask me if that is correct. That is not correct.

MR. JUSTICE JACKSON: Well, let us get what is wrong about this, if anything.

When was your last conversation with Goering in which you told him he would give orders to your successor but not to you?

SCHACHT: November 1937.

MR. JUSTICE JACKSON: Now, the question as to the duties of the job has nothing to do with relation to time, has it? That is, the Plenipotentiary for War Economy, the disagreement between you and Goering, and in order to make it perfectly clear I will read this question and answer to you again, and I am not concerned with time; I am concerned with your description of the job.

"Question: 'Let us go into the duties of that job for a moment and see what he was trying to take away from you. Now, there are only two possibilities, as it has been explained to me; if I am wrong, correct me. One would be the preparation for a mobilization, and the other would be the actual taking charge of this in the event of war. Otherwise the post had no meaning. So the things you resisted his taking away from you, as I see it, were the right to be in charge of the preparation for mobilization and, secondly, the right to control in the event of war."'

And you answered, "correct," did you not?

SCHACHT: This difference...

MR. JUSTICE JACKSON: Can you answer me first as to whether you did give that answer to -that question, that it was correct?

SCHACHT: Yes, the minutes are correct. And now I should like . . .

MR. JUSTICE JACKSON: All right.

SCHACHT: But now please let me finish.

MR. JUSTICE JACKSON: All right, go ahead with your explanation.

SCHACHT: Yes. Now I wish to say that that disagreement between Goering and myself had absolutely nothing to do with the conversation of November, and that it was not even a disagreement

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between Goering and myself. That disagreement which you have just read about occurred in January 1937, but it was not at all a difference of opinion between Goering and myself because I said right away, "Relieve me of the post of Plenipotentiary for War Economy and turn it over to Goering." And the War Ministry, that is, Herr Von Blomberg, protested against this, not I. I was delighted to turn over that office to Goering.

MR. JUSTICE JACKSON: Is there anything in writing about that, Dr. Schacht?

SCHACHT: The documents which you have submitted here. ] would like to ask my counsel to look for these documents and to present them during the re-examination. They have been submitted by the Prosecution.

MR. JUSTICE JACKSON: Now, is it not a fact that your controversy with Goering was a controversy of a personal character, between you and him, for control and not a controversy as to the question of armament? You both wanted to rearm as rapidly as possible.

SCHACHT: I do not want to continue that play with words as to whether it was personal or anything else, Mr. Justice. I had differences with Goering on the subject; and if you ask whether it was on armament, speed, or extent, I reply that I was at greatest odds with Goering in regard to these points.

I have never denied that I wanted to rearm in order to gain equality of position for Germany. I never wanted to rearm any further. Goering wanted to go further; and this is one difference which cannot be overlooked.

MR. JUSTICE JACKSON: Now I do not want to play upon words; and if you say my reference to it as personal is a play upon words, you force me to go into what you told us about Goering.

Is it not a fact that you told Major Tilley this?

"Whereas I have called Hitler an amoral type of person, I can

regard Goering only as immoral and criminal. Endowed by nature with a certain geniality which he managed to exploit for his own popularity, he was the most egocentric being imaginable. The assumption of political power was for him only a means to personal enrichment and personal good living. The success of others filled him with envy. His greed knew no bounds. His predilection for jewels, gold and finery, et cetera, was unimaginable. He knew no comradeship. Only as long as someone was useful to him did he profess friendship.

"Goering's knowledge in all fields in which a government member should be competent was nil, especially in the economic field. Of all the economic matters which Hitler entrusted to

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him in the autumn of 1936 he had not the faintest notion, though he created an immense official apparatus and misused his powers as lord of all economy most outrageously. In his personal appearance he was so theatrical that one could only compare him with Nero. A lady who had tea with his second wife reported that he appeared at this tea in a sort of Roman toga and sandals studded with jewels, his fingers bedecked with innumerable jewelled rings and generally covered with ornaments, his face painted and his lips rouged." Did you give that statement to Major Tilley?

SCHACHT: Yes.

MR. JUSTICE JACKSON: Yes. And you say you had no personal differences with Goering?

SCHACHT: Mr. Justice, I ask here again that the different periods of time should not be confused. I found out about all these things only later and not at the time of which you speak, that is, the year 1936.

MR. JUSTICE JACKSON: Do you dispute the testimony of Gisevius that in 1935 he told you about Goering's complicity in the whole Gestapo set-up?

SCHACHT: I have testified here that I knew about the Gestapo camps which Goering had set up and said that I was opposed to them. I do not at all deny that.

MR. JUSTICE JACKSON: But your friendship continued despite that knowledge.

SCHACHT: I have never had a friendship with Goering.

MR. JUSTICE JACKSON WE

SCHACHT: I surely cannot refuse to work with him, especially as long as I do not know what kind of a man he is.

MR. JUS

TICE JACKSON: All right. Let us take up foreign relations, about which you have made a good deal of complaint here. I think you have testified that in 1937 when you were doing all this rearming, you did not envisage any kind of a war, is that right?

SCHACHT: No, what you are saying, Mr. Justice, is not correct. In 1937 I did not do everything to rearm; but from 1935, from the fall of 1935 on, I tried everything possible to slow down the rearming.

MR. JUSTICE JACKSON: All right. I refer you to your interrogation of 16 October 1945, and ask whether you gave these answers to these questions:

"Question: 'Let me ask you then, in 1937 what kind of war did you envisage?'

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"Answer: 'I never envisaged a war. We might have been attacked, invaded by somebody; but even that I never expected.'

"Question: 'You did not expect that. Did you expect a possibility of a mobilization and concentration of economic forces in the event of war?'

"Answer: 'In the event of an attack against Germany, certainly.'

"Question: 'Now, putting your mind back to 1937, are you able to say what sort of an attack you were concerned with?'

"Answer: 'I do not know, Sir.'

"Question: 'Did you have thoughts on that at the time?' "Answer: 'No, never.'

"Question: 'Did you then consider that the contingency of war in 1937 was so remote as to be negligible?'

"Answer: 'Yes.' "Question: 'You did?'

"Answer: 'Yes.' " (Document Number 3728-PS) Did you give those answers?

SCHACHT: I have made exactly the same statements as found in this interrogation, here before the Tribunal.

MR.JUSTICE JACKSON: Now, you testified that you tried to divert Hitler's plan which was to move and expand to the East-you tried to divert his attention to colonies instead.

SCHACHT: Yes.

MR. JUSTICE JACKSON: What colonies? You have never specified.

SCHACHT: Our colonies.

MR. JUSTICE JACKSON: And where were they located?

SCHACHT: I assume that you know that exactly as well as I do.

MR.JUSTICE JACKSON: You are the witness, Dr. Schacht. I want to know what you were telling Hitler, not what I know.

SCHACHT: Oh, what I told Hitler? I told Hitler we should try to get back a part of the colonies which belonged to us and the administration of which was taken away from us, so that we could work there.

MR. JUSTICE JACKSON: What colonies?

SCHACHT: I was thinking especially of the African colonies.

MR. JUSTICE JACKSON: And those African colonies you would regard as essential to your plan for the future of Germany?

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SCHACHT: Not those, but generally any colonial activity; and of course, at first, I could only limit my colonial desires to our own property.

MR. JUSTICE JACKSON: And your property, as you call it, was the African colonies?

SCHACHT: Not I personally called them that. That is what the Treaty of Versailles calls them-"our property."

MR. JUSTICE JACKSON: Any way you wish it, you wanted the colonies you are talking about.

SCHACHT: Yes.

MR. JUSTICE JACKSON: You considered that the possession and exploitation of colonies was necessary to the sort of Germany that you had in mind creating?

SCHACHT: If you would replace the word "exploitation" by "development," I believe there will be no misunderstanding, and to that extent I agree with you completely.

MR. JUSTICE JACKSON: Well1 by "development" you mean trading, and I suppose you expected to make a profit out of trade?

SCHACHT: No, not only "trade" but "developing the natural resources" or the economic possibilities of the colonies.

MR. JUSTICE JACKSON: And it was your proposal that Germany should become reliant upon those colonies instead of relying on expansion to the East?

SCHACHT: I considered every kind of expansion within the European continent as sheer folly.

MR. JUSTICE JACKSON: But you agreed with Hitler that expansion, either colonial or to the East, was a necessary condition of the kind of Germany you wanted to create.

SCHACHT: No, that I never said. I told him it was nonsense to undertake anything toward the East. Only colonial development could be considered.

MR. JUSTICE JACKSON: And you proposed as a matter of policy that Germany's development should depend on colonies with which there was no overland trade route to Germany and which, as you knew, would require a naval power to protect them.

SCHACHT: I do not think that at all-how do you get that idea?

MR. JUSTICE JACKSON: Well, you do not get to Africa overland, do you? You have to go by water at some point, do you not?

SCHACHT: You can go by air.

MR. JUSTICE JACKSON: What was your trade route? You were thinking only of air developments?

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SCHACHT: No, no. I thought of ships also.

MR. JUSTICE JACKSON: Yes. And Germany was not then a naval power?

SCHACHT: I believe we had a merchant marine which was quite considerable.

MR. JUSTICE JACKSON: Did your colonial plan involve rearmament by way of making Germany a naval power to protect the trade routes to the colonies that you were proposing?

SCHACHT: Not in the least.

MR.JUSTICE JACKSON: Then your plan was to leave the trade route unprotected?

SCHACHT: Oh, no. I believed that international law would be sufficient protection.

MR. JUSTICE JACKSON: Well, that is what you disagreed with Hitler about.

SCHACHT: We never spoke about that.

MR. JUSTICE JACKSON: Well, in any event he rejected your plan for colonial developments?

SCHACHT: Oh, no. I have explained here that upon my urgent request he gave me the order in summer 1936 to take up these colonial matters.

MR. JUSTICE JACKSON: Did you not give these answers in your interrogation, Dr. Schacht?

"Question: 'In other words, at the time of your talks with

Hitler in 1931 and 1932 concerning colonial policy, you did

not find him, shall we say, enthusiastic about the possibility?'

"Answer: 'Neither enthusiastic nor very much interested.'

"Question: 'But he expressed to you what his views were

alternatively to the possibility of obtaining colonies?'

"Answer: 'No, we did not go into other alternatives.' "

Did you give those answers?

SCHACHT: Certainly.

MR. JUSTICE JACKSON: Now, after the Fritsch affair, at least, you knew that Hitler was not intent upon preserving the peace of Europe by all possible means.

SCHACHT: Yes, I had my doubts.

MR. JUSTICE JACKSON: And after the Austrian Anschluss you knew that the Wehrmacht was an important factor in his Eastern policy?

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SCHACHT: Well, you may express it that way. I do not know exactly what you mean by it.

MR. JUSTICE JACKSON: Well, do not answer anything if you do not know what I mean, because we will make it clear as we go along. Except for the suggestion of colonies you proposed no other alternative to his plan of expansion to the East?

SCHACHT: No.

MR. JUSTICE JACKSON: Never at any Cabinet meeting or elsewhere did you propose any other alternative?

SCHACHT: No.

MR. JUSTICE JACKSON: Now, as to the move into Austria, I think you gave these answers:

"Question: 'Actually Hitler did not use the precise method that you say you favored?'

"Answer: 'Not at all.'

"Question: 'Did you favor the method that he did employ?'

"Answer: 'Not at all, Sir.'

"Question: 'What was there in his method that you did not like?'

"Answer: 'Oh, it was simply overrunning, just taking the Austrians over the head-or what do you call it? It was force, and I have never been in favor of such force.' "

Did you give those answers?

SCHACHT: Yes.

MR. JUSTICE JACKSON: Now, you have made considerable complaint here that foreigners did not come to your support at various times in your efforts to block Hitler, have you not?

SCHACHT: Certainly.

MR. JUSTICE JACKSON: You knew at the time of the Austrian Anschluss the attitude of the United States towards the Nazi regime, as expressed by President Roosevelt, did you not?

SCHACHT: Yes.

MR. JUSTICE JACKSON: And you knew of his speech suggesting that the Nazi menace ought to be quarantined to prevent its spread?

SCHACHT: I do not remember; but I certainly must have read it at that time, if it was published in Germany, as I assume it was.

MR. JUSTICE JACKSON: Goebbels let loose a campaign of attack on the President as a result of it, did he not?

SCHACHT: I assume I read that.

MR. JUSTICE JACKSON: As a matter of fact, you joined in the attack on foreigners who were criticizing the methods, did you not?

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SCHACHT: When and where? What attacks?

MR. JUSTICE JACKSON: All right. After the Austrian Anschluss, when force was used, with your disapproval, you immediately went in and took over the Austrian National Bank, did you not?

SCHACHT: That was my duty.

MR. JUSTICE JACKSON: Yes. Well, you did it.

SCHACHT: Of course.

MR. JUSTICE JACKSON: And you liquidated it for the account of the Reich.

SCHACHT: Not liquidated; I merged it, amalgamated it.

MR. JUSTICE JACKSON: I beg your pardon?

SCHACHT: Amalgamated.

MR. JUSTICE JACKSON: Amalgamated it. And you took over the personnel?

SCHACHT: Everything.

MR.JITSTICE JACKSON: Yes. And the decree doing so was signed by you.

SCHACHT: Certainly.

MR. JUSTICE JACKSON: Yes. And you called the employees together on 21 March 1938.

SCHACHT: Yes.

MR. JUSTICE JACKSON: And made a speech to them.

SCHACHT: Yes.

MR. JUSTICE JACKSON: And did you say the following among other things...

SCHACHT: Certainly.

MR. JUSTICE JACKSON: Well, you have not heard it yet.

SCHACHT: Yes, I heard it during the case of the Prosecution.

MR. JUSTICE JACKSON: Well, I would like to quote some of it to you and remind you of it.

"I think it is quite useful if we recall these things to our mind in order to expose all the sanctimonious hypocrisy exuding from the foreign press. Thank God, these things could after all not hinder the great German people on their way, for Adolf Hitler has created a communion of German will and German thought. He has bolstered it up with the newly strengthened Wehrmacht, and he has thereby given the external aspect to the inner union between Germany and Austria.

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"I am known for sometimes expressing thoughts which give offense; nor would I care to depart from this custom today."

"Hilarity" is noted at this point in your speech.

"I know that there are even here in this country a few people -I believe they are not too numerous-who find fault with - the events of the last few days. But nobody, I believe, doubts the goal; and it should be said to all hecklers that you cannot satisfy everybody. There are those who say they would have done it in some other way, perhaps, but strange to say they did not do it"-and in parentheses the word "hilarity" appears again. Continuing with your speech-"it was done by our Adolf Hitler (Long, continued applause); and if there is still something left to be improved, then those hecklers should try to bring about these improvements from within the German Reich and the German community and not disturb it from without." (Document EC-297)

Did you use that language?

SCHACHT: Yes.

MR. JUSTICE JACKSON: In other words, you publicly ridiculed those who were complaining of the methods, did you not?

SCHACHT: If that is the way you see it.

MR. JUSTICE JACKSON: Then you also, in addressing the personnel of the Austrian National Bank, which you were taking over, said this:

"I consider it completely impossible that even a single person will find a future with us who is not wholeheartedly for Adolf Hitler. (Loud, continued applause; shouts of 'Sieg Heil')."

Continuing with the speech:

"Whoever does not do so had better withdraw from our circle of his own accord. (Loud applause)."

Is that what happened?

SCHACHT: Yes, they all agreed, surprisingly.

MR. JUSTICE JACKSON: Now, had the Reichsbank before 1933 and 1934 been a political institution?

SCHACHT: No.

MR. JUSTICE JACKSON: Had politics been in the Reichsbank?

SCHACHT: Never.

MR. JUSTICE JACKSON: Well, on this day, speaking to its employees, you said this, did you not?

"The Reichsbank will always be nothing but National Socialist, or I shall cease to be its manager. (Heavy, protracted applause)."

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Did that happen?

SCHACHT: Yes.

MR. JUSTICE JACKSON: Now, Sir, you have said that you never took the oath to Hitler.

SCHACHT: Yes.

MR. JUSTICE JACKSON: I ask you if this is what you, as head of the Reichsbank, required of the employees whom you were taking over in Austria; and I quote:

"Now I shall ask you to rise. (The audience rises.) Today we pledge allegiance to the great Reichsbank family, to the great German community; we pledge allegiance to our newly arisen, powerful Greater German Reich, and we sum up all these sentiments in the allegiance to the man who has brought about all this transformation. I ask you to raise your hands and to repeat after me:

"I swear that I will be faithful and obedient to the Fuehrer of the German Reich and the German people, Adolf Hitler, and will perform my duties conscientiously and selflessly. (The audience takes the pledge with uplifted hands.)

"You have taken this pledge. A bad fellow he who breaks it. To our Fuehrer a triple 'Sieg Hell'."

Is that a correct representation of what took place?

SCHACHT: The oath is the prescribed civil service oath and it is quite in accordance with what I said here yesterday, that the oath is made to the head of the state just as I have stated before too: "We stand united before the German people"-I do not know exactly what the German expression is. I hear your English version here. That oath is exactly the same.

MR. JUSTICE JACKSON: I have referred to Document EC-297, Exhibit USA-632, in the course of this. That is the exhibit I have been using.

So you say that was to an impersonal head of state and not to Adolf Hitler?

SCHACHT: Yes. One obviously cannot take an oath to an idea. Therefore, one has to use a person. But I said yesterday that I did not take an oath to Herr Ebert or to Herr Hindenburg or to the Kaiser, but to the head of State as representative of the people.

MR.JUSTICE JACKSON: You told your employees that all of the sentiments of this oath were summed up in the allegiance to the man, did you not?

SCHACHT: No.

MR. JUSTICE JACKSON: Is that not what you said?

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SCHACHT: No, that is not correct. If you read it again, it does not say to the man but to the leader as the head of State.

MR. JUSTICE JACKSON: Well, no matter what you took the oath to...

SCHACHT: [Interposing.] Excuse me. There is a very great difference.

MR. JUSTICE JACKSON: Well, we will get to that. Whatever you took the oath to, you were breaking it at the very time, were you not? .

SCHACHT: No. I never broke the oath to this man as representative of the German people, but I broke my oath when I found out that that man was a criminal.

MR. JUSTICE JACKSON: When you plotted to cause his death?

SCHACHT: Yes.

MR. JUSTICE JACKSON: Do you want to explain to the Tribunal how you could cause the death of Adolf Hitler without also causing the death of the head of the German State?

SCHACHT: There is no difference because unfortunately that man was the head of the German nation.

MR. JUSTICE JACKSON: You say you never broke the oath?

SCHACHT: I do not know what you want to express by that. Certainly I did not keep the oath which I took to Hitler because Hitler unfortunately was a criminal, a perjurer, and there was no true head of State. I do not know what you mean by "breaking the oath," but I did not keep my oath to him and I am proud of it.

MR. JUSTICE JACKSON: So you were administering to your employees an oath which you at that moment were breaking and intended to break?

SCHACHT: Again you confuse different periods of time, Mr. Justice. That was in March 1938 when as you have heard me say before, I still was in doubt, and therefore it was not clear to me yet what kind of a man Hitler was. Only when in the course of 1938 I observed that Hitler was possibly walking into a war, did I break the oath.

MR. JUSTICE JACKSON: When did you find him walking into a wa

SCHACHT: In the course of 1938 when, judging from the events, I gradually became convinced that Hitler might steer into a war, that is to say, intentionally. Then only did I break my oath.

MR. JUSTICE JACKSON: Well, you stated yesterday that you started to sabotage the government in 1936 and 1937.

3 May 46

SCHACHT: Yes, because I did not want excessive armament.

MR. JUSTICE JACKSON: And we find you administering an oath to the employees to be faithful and obedient.

Now, I ask you if you did not make this statement in interrogation:

"Question: 'But you make this statement at the end of the oath, after everybody has raised his hand and made his oath. Did you say the following, "You have taken this pledge. A bad fellow he who breaks it"?'

"Answer: 'Yes, I agree to that and I must say that I myself broke it.'

"Question: 'Do you also say that at the time that you urged this upon the audience, that you already were breaking it?'

"Answer: 'I am sorry to say that within my soul I felt very shaken in my loyalty already at that' time, but I hoped that things would turn out well at the end.' "

SCHACHT: I am glad that you quote this because it confirms exactly what I have just said; that I was in a state of doubt and that I still had hope that everything would come out all right; that is to say, that Hitler would develop in the right direction. So it confirms exactly what I have just said.

MR. JUSTICE JACKSON: Well, I am sure we want to be helpful to each other, Dr. Schacht.

SCHACHT: I am convinced that both of us are trying to find the truth, Mr. Justice.

MR.JUSTICE JACKSON: Now, you remained in the Reichsbank after this Anschluss, of course?

SCHACHT: Yes.

MR. JUSTICE JACKSON: And you remained there until later- until January 1939, if that is the date?

SCHACHT: Yes.

MR. JUSTICE JACKSON: Now, after this Anschluss, the mefo bills which had been issued began to become due, did they not, in 1938 and 1939?

SCHACHT: No, the maturity date of the first mefo bills must have been at the earliest in the spring of 1939. They had all been issued for 5 years and I assume that the first mefo bills were issued in the spring of 1934, so that the first mefo bills became due in the spring of 1939.

MR.JUSTICE JACKSON: Now, this is the question and the answer. Correct me if I am wrong.

3 May 46

"Question: 'Well, did you in the Reichsbank utilize funds which were available? Let me put it this way: As these mefo bills became due, what did you do about them?'

"Answer: 'I asked the Minister of Finance whether he could repay them, because after 5 years he had to repay them, some in 1938 or 1939, I think. The first mefo bills would have become due for repayment and of course he said, "I cannot." ' "

You had that conversation with the Finance Minister while you were still President of the Reichsbank?

SCHACHT: Mr. Justice, I said that throughout our financial dealings we became somewhat worried as to whether we would get our bills paid back or not. I have already explained to the Tribunal that in the second half of 1938 the Finance Minister got into difficulties and he came to me in order again to borrow money. Thereupon I said to him, "Listen, in what kind of a situation are you anyway for you will soon have to repay the first mefo bills to us. Are you not prepared for that?" And now it turned out, that was in the fall of 1938, that the Reich Finance Minister had done nothing whatever to fulfill his obligation to meet payment of the mefo bills; and that, of course, in the fall of 1938, made for exceedingly strained relations with the Reich Finance Minister, that is, between the Reichsbank and the Reich Finance Minister.

MR. JUSTICE JACKSON: Now, taxes did not yield any sufficient revenue to discharge those bills, did they?

SCHACHT: Yes; I explained already yesterday that the risk which was taken in the mefo bills, which I have admitted from the very beginning, was not really a risk if a reasonable financial policy were followed; that is, if from 1938 on, further armament had not continued and additional foolish expenditures not been made, but if instead, the money accruing from taxes and bonds had been used for meeting the payment of the mefo bills.

MR.JUSTICE JACKSON: All I am asking you at the present moment, Dr. Schacht, is whether these bills could not have been paid out of the revenue from taxes.

SCHACHT: Surely. Yes.

MR.JUSTICE JACKSON: They could have?

SCHACHT: Of course, but that was the surprising thing, they were not repaid; the Honey was used to continue rearming. May I add something in order to give you further information?

MR. JUSTICE JACKSON: No, I am really not concerned with the financing; I am merely concerned with what kind of a mess you were in at the time you resigned.

3 May 46

SCHACHT: Yes.

MR.JUSTICE JACKSON: The mefo bills were due and could not be paid?

SCHACHT: Shortly.

MR. JUSTICE JACKSON: They were shortly to mature?

SCHACHT: Yes, but they could be paid. That is a mistake if you say that they could not be paid.

MR.JUSTICE JACKSON: Well, they could not be paid out of the current year's taxes, could they?

SCHACHT: Yes, indeed. You are not interested and do not want me to tell you, but I am quite ready to explain it.

MR. JUSTICE JACKSON: Well, you have explained it pretty well to us.

SCHACHT: You have just told me you were not interested.

MR. JUSTICE JACKSON: Your subscriptions to the Fourth Reich Loan of 1938 had produced unsatisfactory results, had they not?

SCHACHT: They were hardly pleasing. The capital market was not good.

MR.JUSTICE JACKSON: And you have reported on the loan that there had been a shortage in the public subscription? And the result had been unsatisfactory?

SCHACHT: Yes.

MR.JUSTICE JACKSON: Now, did you not make this answer to the interrogator's question:

"Question: 'But I am asking you whether during that period from 1 April 1938 to January 1939 you did not continue to finance armaments?'

"Answer: 'Sir, otherwise these mefo bills had to be refunded by the Reich, which they could not be, because the Reich had no money to do it; and I could not procure any money for refunding because that would have had to come from taxes or loans. So I had to continue to carry these mefo bills and that, of course, I did.' "

Did you give that answer?

SCHACHT: Yes, that was quite in order-kindly let me speak, would you not-because the Finance Minister did not make his funds available for the repayment of the mefo bills, but instead gave them for armaments. If he had used these funds to pay the mefo bills, everything would have been all right.

3 May 46

MR. JUSTICE JACKSON: And you carried the mefo bills which let him use current revenues to continue the plans of rearmament after 1938, did you not?

SCHACHT: Mr. Justice, this was the situation. A large part of the mefo bills was already on the financial and capital market. Now, when that market was too heavily burdened by the government, then the people brought in the mefo bills to the Reichsbank, for the Reichsbank had promised to accept them. That, precisely, was the great obstruction to my policy. The Reich Finance Minister financed the armament instead of honoring the mefo bills as he had promised.

MR. JUSTICE JACKSON: Now, it was under those circumstances that you took a position which would result in your retirement from the Reichsbank?

SCHACHT: Yes.

MR. JUSTICE JACKSON: Now we come to Czechoslovakia. Did you favor the policy of acquiring the Sudetenland by threat of resort to arms?

SCHACHT: Not at all.

MR. JUSTICE JACKSON: I think you characterized the manner in which the Sudetenland was acquired as wrong and reprehensible.

SCHACHT: I do not know when I could have done that. I said that the Allies, by their policy, gave the Sudetenland to Hitler, whereas I always had expected only that the Sudeten Germans would be given autonomy.

MR. JUSTICE JACKSON: Then you approved of Hitler's policy in handling the Sudetenland situation? Is that what you want to be understood as saying?

SCHACHT: I never knew that Hitler, beyond autonomy, demanded anything else.

MR. JUSTICE JACKSON: Your only criticism of the Czechoslovakian situation relates to the Allies, as I understand you?

SCHACHT: Well, it also applies to the Czechs, maybe to the Germans too; for goodness sake, I do not want to play the judge here.

MR. JUSTICE JACKSON: Well, now on 16 October 1945, in Exhibit USA-636, Document 3728-PS, I ask if you did not make these replies to questions:

"Question: 'Now, I am coming back to the march against Czechoslovakia which resulted in the appeasement policy, Munich, and the cession of the Sudetenland to the Reich.'

"Answer: 'Yes.'

3 May 46

"Question: 'Did you at that time favor the policy of acquiring the Sudetenland?'

"Answer: 'No.'

"Question: 'Did you favor at that time the policy of threatening or menacing the Czechs by force of arms so as to acquire the Sudetenland?'

"Answer: 'No, certainly not.'

"Question: 'Then I ask you, did it strike you at that time, did it come to your consciousness, that the means which Hitler was using for threatening the Czechs was the Wehrmacht and the armament industry?'

"Answer: 'He could not have done it without the Wehrmacht."' Did you give those answers?

SCHACHT: Yes.

MR. JUSTICE JACKSON: Continuing: "Question: 'Did you consider the manner in which he handled the Sudeten question wrong or reprehensible?'

"Answer: 'Yes.'

"Question: 'You did?'

"Answer: 'Yes, Sir,'

"Question: 'And did you have a feeling at that time, looking back on the events that had proceeded and in your own participation in them, that this army which he was using as a threat against Czechoslovakia was at least in part an army of your own creation? Did that ever strike you?'

"Answer: 'I cannot deny that, Sir.' "

SCHACHT: Certainly not.

MR.JUSTICE JACKSON: But here again, you turned in to help Hitler, once he had been successful with it, did you not?

SCHACHT: How can you say such a thing? I certainly did not now that Hitler would use the army in order to threaten other nations.

MR. JUSTICE JACKSON: After he had done it, you turned in and took over the Czech bank, did you not?

SCHACHT: Of course.

MR. JUSTICE JACKSON: Yes. You followed to clean up economically just so far as Hitler got the territory, did you not?

SCHACHT: But I beg your pardon. He did not take it with violence at all. The Allies presented him with the country. The whole thing was settled peacefully.

3 May 46

MR. JUSTICE JACKSON: Well, we have your testimony on the part the Wehrmacht played in it and what part you played in the Wehrmacht.

SCHACHT: Yes, I have never denied that.

MR. JUSTICE JACKSON: No. What I mean is this, referring to your interrogation of 17 October (Exhibit US-616):

"Question: 'Now, after the Sudetenland was taken over by

the Munich agreement, did you, as the President of the Reichsbank, do anything about the Sudeten territory?'

"Answer: 'I think we took over the affiliations of the Czech Bank of Issue.'

"Question: 'And you also arranged for the currency conversion, did you not?'

"Answer: 'Yes.' "

That is what you did after this wrong and reprehensible act had been committed by Hitler, did you not?

SCHACHT: It is no "wrong and reprehensible" act "committed" by Hitler, but Hitler received the Sudeten German territory by way of treaty and, of course, the currency and the institute which directed financing had to be amalgamated with this field in Germany. There can be no talk of injustice. I cannot believe that the Allies have put their signature to a piece of injustice.

MR.JUSTICE JACKSON: So you think that everything up to Munich was all right?

SCHACHT: No. I am certainly of a different opinion. There was much injustice.

MR. JUSTICE JACKSON: Were you in this Court when Goering testified to his threat to bomb Prague-"the beautiful city of Prague" ?

SCHACHT: Thanks to your invitation, I was here.

MR. JUSTICE JACKSON: Yes. I suppose you approved that use of the force which you had created in the Wehrmacht?

SCHACHT: Disapproved; disapproved under all circumstances.

MR. JUSTICE JACKSON: You did not think that was right dealing, then?

SCHACHT: No, no, that was an atrocious thing.

MR. JUSTICE JACKSON: Well, we have found something we agree on, Doctor. You knew of the invasion of Poland?

SCHACHT: Yes.

MR. JUSTICE JACKSON: You regarded it as an unqualified act of aggression on Hitler's part, did you not?

3 May 96

SCHACHT: Absolutely.

MR.JUSTICE JACKSON: The same was true of the invasion of Luxembourg, was it not?

SCHACHT: Absolutely.

MR. JUSTICE JACKSON: And of Holland?

SCHACHT: Absolutely.

MR. JUSTICE JACKSON: And of Denmark?

SCHACHT: Absolutely.

MR.JUSTICE JACKSON: And of Norway?

SCHACHT: Absolutely.

MR.JUSTICE JACKSON: And of Yugoslavia?

SCHACHT: Absolutely.

MR.JUSTICE JACKSON: And of Russia?

SCHACHT: Absolutely, sir, and you have left out Norway and Belgium.

MR. JUSTICE JACKSON: Yes, well, I got to the end of my paper. The entire course was a course of aggression?

SCHACHT: Absolutely to be condemned.

MR. JUSTICE JACKSON: And the success of that aggression at every step was due to the Wehrmacht which you had so much to do with creating?

SCHACHT: Unfortunately.

MR. JUSTICE JACKSON: Now, I intend to take up another subject and perhaps it would be . . . it is almost recess time.

THE PRESIDENT: We will adjourn now.

[A recess was taken.]

MARSHAL (Colonel Charles W. Mays): If it please the Tribunal, the report is made that Defendant Von Neurath is absent.

MR. JUSTICE JACKSON: Dr. Schacht, in your direct testimony you made reference to a film, which was taken and exhibited in Germany for propaganda purposes, of your demeanor on the occasion of Hitler's return after the fall of France.

SCHACHT: May I correct that? Not I, but my counsel, spoke of this film; and it was not mentioned that it was used for propaganda purposes. My counsel merely said that it had been run in a newsreel, so it probably was shown for about one week.

MR. JUSTICE JACKSON: I will ask to exhibit that film to the Tribunal. It is a very brief film, and the movement in it is very

3 May 46

rapid. There is very little of translation involved in it, but the speed of it is such that for myself I had to see it twice in order to really see what it is.

THE PRESIDENT: Do you want to put it on now?

MR. JUSTICE JACKSON: I would like to put it on now. It will take only a moment, and Dr. Schacht should be placed where he can see it for I want to ask him some questions and [Turning to the defendants] particularly I may ask you to identify the persons in it.

I will ask, if I may, to have it shown twice, so that after all has been seen you can once more see it.

THE PRESIDENT: Certainly.

[Moving pictures were then shown.]

MR. JUSTICE JACKSON: I think that I, in mentioning this exhibit which I wish to offer in evidence, spoke of it as a "propaganda film." That was not the language of Dr. Dix. Dr. Dix described it as a "weekly newsreel" and as a "weekly film."

[Turning to the defendant.] While our memory is fresh about that, will you tell the Court as many of the defendants as you recognized present in that picture?

SCHACHT: In glancing at it quickly I could not see exactly who was there. However, I should assume that almost all were present-I say that from memory, not from the film-either in Hitler's retinue or among those who received him.

MR. JUSTICE JACKSON: While you were still President of the Reichsbank and after the action in taking over the Czechoslovakian Bank you made a speech, did you not, on 29 November 1938?

SCHACHT: Yes.

MR. JUSTICE JACKSON: It is Document EC-611, Exhibit USA622. I am advised that the film became Exhibit USA-835, and before I pass from it I would like to offer the statement as to the personality of Hermann Goering, which is Document 3936-PS, as Exhibit USA-836.

[Turning to the defendant.] In this speech of 29 November 1938, Dr. Schacht, if I am correctly informed-and b

y the way, it was a public speech was it not?

SCHACHT: Inasmuch as it was made before the German Academy. It was entirely public, and if it passed the censorship it certainly was also mentioned in the papers. It was public; anyone could hear it.

MR. JUSTICE JACKSON: You used this language, did you not?:

3 May 46

"It is possible that no bank of issue in peace times has carried on such a daring credit policy as has the Reichsbank since the seizure of power by National Socialism. With the aid of this credit policy, however, Germany has created an armament second to none, and this armament in turn has made possible our political successes." (Document EC-611)

Is that correct?

SCHACET: That is absolutely correct, and-would you please mind letting me talk in the future? That is correct and I was very much surprised that it was necessary to do this in order to create justice in the world.

MR. JUSTICE JACKSON: The taking over of Czechoslovakia representing your idea of justice?

SCHACHT: I have already told you that Germany did not "take over Czechoslovakia," but that it was indeed presented to Germany by the Allies on a silver platter.

MR. JUSTICE JACKSON: Are you now saying that that was an act of justice, or are you condemning it? I cannot get your position, Doctor. Just tell us, were you for it? Are you today for it, or against it?

SCHACHT: Against what? Will you please tell me against what and for what?

MR. JUSTICE JACKSON: Against the taking over of the Sudetenland by the method by which it was done.

SCHACHT: I cannot answer your question for the reason that, as I said, it was no "taking over," but was a present. If someone gives me a present, such as this, I accept it gratefully.

MR. JUSTICE JACKSON: Even though it does not belong to them to give?

SCHACHT: Well, that I must naturally leave up to the donor.

MR. JUSTICE JACKSON: And although it was taken at the point of a gun, you still would accept the gift?

SCHACHT: No, it was not taken "at the point of a gun."

MR. JUSTICE JACKSON: Well, we will pass on to your speech. Did you say also:

"Instead of a weak and vacillating government a single, purposeful, energetic personality is ruling today. That is the great miracle which has happened in Germany and which has had its effect in all fields of life and not last in that of economy and finance. There is no German financial miracle. There is only the miracle of the reawakening of German

3 May 46

national consciousness and German discipline, and we owe this miracle to our Fuehrer, Adolf Hitler." (DocumentEC-611)

Did you say that?

SCHACHT: Certainly. That was what I was so greatly astonished at.

MR.JUSTICE JACKSON: As Minister without Portfolio, what did your Ministry consist of?

SCHACHT: Nothing.

MR.JUSTICE JACKSON: What employees did you have?

SCHACHT: One female secretary.

MR. JUSTICE JACKSON: What space did you occupy?

SCHACHT: Two or three rooms in my own apartment which I had furnished as office rooms.

MR. JUSTICE JACKSON: So the government did not even furnish you an office?

SCHACHT: Yes, they paid me a rental for those rooms.

MR. JUSTICE JACKSON: Oh, and whom did you meet with as Minister without Portfolio?

SCHACHT: I do not understand. Whom I met with?

MR. JUSTICE JACKSON: Well, did you have any meetings? Did you have any official meetings to attend?

SCHACHT: I have stated here repeatedly that, after my retirement from the Reichsbank, I never had a single meeting or conference, official or otherwise.

MR. JUSTICE JACKSON: Did anybody report to you, or did you report to anybody?

SCHACHT: No, no one reported to me, nor did I report to anyone else.

MR. JUSTICE JACKSON: Then I take it that you had no duties whatever in this position?

SCHACHT: Absolutely correct.

MR. JUSTICE JACKSON: And you were Minister without Portfolio, however, at the time that Hitler came back from France, and you attended the reception for him at the railway station? And vent to the Reichstag to hear his speech?

SCHACHT: Yes.

MR. JUSTICE JACKSON: Now, notwithstanding your removal as President of the Reichsbank, the government continued to pay you your full salary until the end of 1942, did it not?

3 May 46

SCHACHT: I stated yesterday that that is not correct. I received my salary from the Reichsbank, which was due to me by contract, but a minister's salary was not paid to me. I believe that as Minister I received certain allowances to cover expenses, I cannot say that at the moment; but I did not receive a salary as a Minister.

MR. JUSTICE JACKSON: Well, I will return to your interrogation of 9 October 1945 and ask you whether you gave these answers to these questions on that interrogation:

"Question: 'What salary did you receive as Minister without Portfolio?'

"Answer: 'I could not tell you exactly. I think it was some 24,000 marks, or 20,000 marks. I cannot tell you exactly, but it was accounted on the salary and afterward on the pension which I got from the Reichsbank, so I was not paid twice. I was not paid twice.'

"Question: 'In other words, the salary that you received as Minister-without Portfolio during the period you were also President of the Reichsbank was deducted from the Reichsbank?'

"Answer: 'Yes.'

"Question: 'However, after you severed your connection with the Reichsbank in January 1939, did you then receive the whole salary?'

"Answer: 'I got the whole salary because my contract ran until the end of June 1942, I think.'

"Question: 'So you received a full salary until the end of June 1942?'

"Answer: 'Full salary and no extra salary, but from the 1st of July 1942 I got my pension from the Reichsbank, and again the salary of the Ministry was deducted from that, or vice versa. What was higher, I do not know; I got a pension of about 30,000 marks from the Reichsbank.'"

And on 11 July 1945, at Ruskin, you were questioned and gave answers as follows:

"Question: 'What was the date of your contract?'

"Answer: 'From 8 March 1939, 1940, 1941, 1942. Four years. Four years' contract.'

"Question: 'You were really then given a four-year appointment?'

"Answer: 'That is what I told you. After 1942 I got a pension from the Reichsbank.'

"Question: 'What was the amount of your salary and all other income from the Reichsbank?'

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"Answer: 'All the income from the Reichsbank, including my fees for representation, amounted to 60,000 marks a year, and the pension is 24,000. You see, I had a short contract but a high pension. As Reich Minister without Portfolio, I had another, I think also 20,000 or 24,000 marks.' " Now, is that correct?

SCHACHT: The salaries are stated on paper and are correctly cited here and I have indeed claimed that I was paid by one source only. I was asked, "What salary did you receive as Reich Minister?" I stated the amount, but I did not receive it, as it was merely deducted from my Reichsbank salary. And the pension, as I see here, is quoted wrongly in one case. I believe I had only 24,000 marks' pension, while it says here somewhere that it was 30,000 marks. In my own money affairs I am somewhat less exact than in my official money affairs. However, I was paid only once, and that is mainly by the Reichsbank up to-and that also has not been stated here correctly. It was not the end of 1942, but the end of June 1942, that my contract expired. Then the pension began and it too was paid only once. How those two, that is, the Ministry and Reichsbank, arranged it with each other is unknown to me.

MR. JUSTICE JACKSON: Well, you were entitled to a salary and a pension both, and one was offset against the other; is that what you mean? And that arrangement continued as long as you were a part of the regime?

SCHACHT: It is still in effect today. It has nothing to do with the regime. I hope that I shall still receive my pension; how else should I pay my expenses?

MR. JUSTICE JACKSON: Well, they may not be very heavy, Doctor. When General Beck resigned, he asked you to resign, did he not?

THE PRESIDENT: Just a minute; it is quite unnecessary for anyone present in Court to show his amusement by laughter.

MR. JUSTICE JACKSON: Were you asked to resign when General Beck resigned?

SCHACHT: No, he did not say that.

MR. JUSTICE JACKSON: Have you in mind the testimony given by Gisevius here?

SCHACHT: Yes. It was a mistake on the part of Gisevius.

MR. JUSTICE JACKSON: Oh, well, in any event, when General Beck resigned, it was called sharply to your attention?

SCHACHT: He paid me a visit and told me about it a few days before his retirement. I assume that was about the end of August or the beginning of September of 1938.

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MR. JUSTICE JACKSON: And you say that no proposal was made to you at that time that you should resign along with Beck?

SCHACHT: No, nothing was said about that. Beck saw me in my room; he did not mention anything of this sort, and it was not discussed by us.

MR.JUSTICE JACKSON: Did it ever occur to you that resignation would be the appropriate way of expressing your protest against these things which you now say you disapprove?

SCHACHT: No, I do not at all believe that a resignation would have been the means to achieve that which had to be done, and I also regretted it very much that Beck retired. That which happened, Mr. Justice, was caused by an entirely false policy-a policy that partly was forced upon us, and partly, I am sorry to say, was not handled properly by us. In February, Neurath was dismissed. In the fall Beck stepped out; in January 1939 I was dismissed. One after the other was gotten rid of. If it had been possible for our group-if I too may now speak of a group-to carry out a common action, as we hoped for and expected, then that would have been an excellent thing. However, these individual retirements served no purpose whatsoever; at least, they had no success.

MR. JUSTICE JACKSON: You felt that Beck should have stayed at his post and been disloyal to the head of the State?

SCHACHT: Absolutely.

MR. JUSTICE JACKSON: And, in all events, you continued in every public way throughout the period, until the fall of France, to hold yourself out as a part of the government and a part of the regime, did you not?

SCHACHT: Well, I never considered myself a part of the regime exactly, because I was against it. But, of course, ever since the fall of 1938 I worked towards my own retirement, as soon as I saw that Hitler did not stop the rearmament but continued it, and when I became aware that I was powerless to act against it.

MR. JUSTICE JACKSON: Well, when did you start working towards your own retirement?

SCHACHT: Pardon me; I did not understand-to work towards what?

MR. JUSTICE JACKSON: When did you start working towards your own retirement from office.

SCHACHT: After Munich and after we realized that we could no longer expect disarmament or a stopping of rearmament by Hitler and that we could not prevent a continuation of the rearmament; so, within the circles of the Reichsbank Directorate, we began

3 May 46

to discuss this question and to realize that we could not follow the further course of rearmament. That was the last quarter of 1938.

MR. JUSTICE JACKSON: And all of these events of which you disapproved never were of sufficient consequence to cause you to resign and withhold a further use of your name from this regime?

SCHACHT: Until then I had still hoped that I could bring about a change for the better; consequently I accepted all the disadvantages entailed with my remaining in office, even facing the danger that some day I might be judged, as I am today.

MR. JUSTICE JACKSON: You continued to allow your name to be used at home and abroad despite your disapproval, as you say, of the invasion of Poland?

SCHACHT: I never was asked for my permission, and I never gave that permission.

MR. JUSTICE JACKSON: You knew perfectly well, did you not, that your name meant a great deal to this group at any time and that you were one of the only men in this group who had any standing abroad?

SCHACHT: The first part of your statement I already accepted yesterday from you as a compliment. The second part, I believe, is not correct. I believe that several other members of the regime also had a "standing" in foreign countries, some of whom are sitting with me here in the prisoners' dock.

MR. JUSTICE JACKSON: Any foreign observer, who read affairs in Germany, would have obtained the understanding that you were supporting the regime continuously until you were deprived of the office of Minister without Portfolio, would they not?

SCHACHT: That is absolutely incorrect. As I have stated repeatedly yesterday and also during my direct examination, I was always referred to in foreign broadcasts as a man who was an opponent of this system, and all my numerous friends and acquaintances in foreign countries knew that I was against this system and worked against it. And if any journalist can be mentioned to me today who did not know this, then he does not know his business.

MR. JUSTICE JACKSON: Oh, do you refer to the letter which you wrote to the New York banker Leon...?

SCHACHT: Leon Fraser.

MR. JUSTICE JACKSON: Now, at the time you sent that letter to Switzerland, there was a diplomatic representative of the United States in Berlin, was there not?

SCHACHT: Yes.

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MR. JUSTICE JACKSON: And you knew he had a pouch communication at least once a week and usually once a day with Washington?

SCHACHT: Yes, I did not know it, but I assumed it.

MR. JUSTICE JACKSON: And, if you wanted to communicate with the Government of the United States or with an official of the United States, you might have communicated through the regular channels?

SCHACHT: I did not desire to communicate with the American Government or with an American official. I merely desired to re-establish my connection with a friend who had invited me in January to come to the United States, and I made reference to this previous correspondence between him and me in January.

MR. JUSTICE JACKSON: That disposes of the Fraser matter then.

Now, Dr. Schacht, while you were Minister without Portfolio, aggressive wars were instituted, according to your testimony, against Poland, against Denmark and Norway in April of 1940, against Holland and Belgium in May of 1940; in June there was the French armistice and surrender; in September of 1940 there was the German-Japanese-Italian-Tripartite Pact; in April of 1941 there was an attack on Yugoslavia and Greece, which you say was aggressive; in June of 1941 there was the invasion of Soviet Russia, which you say was aggressive; on 7 December 1941 Japan attacked Pearl Harbor, and after the attack declared war on the United States; on 8 December 1941 the United States declared war on Japan, but not on Germany; on 11 December 1941, Germany and Italy declared war on the United States; and all of these things happened in the foreign field and you kept your position as Minister without Portfolio under the Hitler Government, did you not?

SCHACHT: Mr. Justice . . .

MR. JUSTICE JACKSON: Did you not and is that not a fact?

SCHACHT: Yes, and I wish to add something to this. From dozens of witnesses who have testified here, and from myself, you have heard again and again that it was impossible unilaterally to retire from this office because, if I was put in as a minister by the head of a government, I could also be retired only with his signature. You have also been told that at various times I attempted to rid myself of this ministerial office. Besides the witnesses' testimony from countless others, including Americans, to the effect that it was well known that Hitler did not permit anyone to retire from office without his permission. And now you charge me with having remained. I did not remain for my pleasure, but I remained because

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I could not have retired from the Ministry without making a big row. And almost constantly, I should say, I tried to have this row until finally in January 1943 I succeeded; and I was able to disappear from office, not without danger to my life.

MR. JUSTICE

JACKSON: Well, I will deal with your explanation later. I am now getting the facts.

You did not have an open break with Hitler, so that you were not entirely out of office until after the German offensive broke down in Russia and the German armies were in retreat and until after the Allies had landed in Africa, did you?

SCHACHT: The letter by which I brought about the last successful row is dated 30 November 1942. The row and its success dates from 21 January 1943, because Hitler and Goering and whoever else participated in discussing it, needed 7 weeks to make up their minds about the consequence of my letter.

MR. JUSTICE JACKSON: Then by your letter it plainly shows that you thought the ship was sinking, was it not; that means that the war was lost?

SCHACHT: My oral and written declarations from former times have already shown this. I have spoken here also about this. I have testified on the letter to Ribbentrop and Funk; I have presented a number of facts here which prove that I never believed in the possibility of a German victory. And my disappearance from office has nothing whatsoever to do with all these questions.

MR. JUSTICE JACKSON: Now, meanwhile, while you were remaining as Minister without Portfolio because you thought it might be dangerous to resign, you were encouraging the generals in the army to commit treason against the head of the State, were you not?

SCHACHT: Yes, and I should like now to make an additional statement to this. It was not because of threatening danger to my life that I could not resign earlier. For I was not afraid of endangering my life because I was used to that ever since 1937, having constantly been exposed to the arbitrariness of the Party and its heads.

Your question as to whether I tried to turn a number of generals to high treason, I answer in the affirmative.

MR. JUSTICE JACKSON: And you also tried to get assassins to assassinate Hitler, did you not?

SCHACHT: In 1938 when I made my first attempt, I was not thinking as yet of an assassination of Hitler. However, I must admit that later I said if it could not be done any other way, we would have to kill the man, if possible.

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MR.JUSTICE JACKSON: Did you-say, "We will have to kill him," or did you say, "Somebody else will have to kill him," Dr. Schacht?

SCHACHT: If I had had the opportunity I would have killed him, I myself. I beg you therefore not to summon me before a German court for attempted murder because in that sense I am, of course, guilty.

MR. JUSTICE JACKSON: Well, now, whatever your activities, they were never sufficiently open so that the foreign files in France, which you say were searched by the Gestapo, had an inkling of it, were they?

SCHACHT: Yes, I could not announce this matter in advance in the newspapers.

MR. JUSTICE JACKSON: And the Gestapo, with all its searching of you, never was in a position to put you under arrest until after the 20 July attack on Hitler's life?

SCHACHT: They could have put me under arrest much earlier than that if they had been a little smarter; but that seems to be a strange attribute of any police force.

MR.JUSTICE JACKSON: And it was not until 1943 that the Hitler regime dismissed you? Until that time apparently they believed that you were doing them more good than harm?

SCHACHT: I do not know what they believed at that time, hence I ask you not to question me about that. You will have to ask somebody from the regime; you still have enough people here.

MR. JUSTICE JACKSON: You have now contended that you knew about the plot of 20 July on Hitler's life?

SCHACHT: I knew about it.

MR. JUSTICE JACKSON: You knew that Gisevius says you did not know about it?

SCHACHT: I already stated yesterday that I was informed not only of Goerdeler's efforts but that I was thoroughly informed by General Lindemann, and the evidence of Colonel Gronau has been read here. I also stated that I did not inform my friends about this, because there was a mutual agreement between us that we should not tell anyone anything which might bring him into an embarrassing situation in case he were tortured by the Gestapo.

MR. JUSTICE JACKSON: Do you recall that Gisevius said that there were only three civilians that knew about that plot which was carefully kept within military personnel?

SCHACHT: You see that even Gisevius was not informed on every detail Naturally, he cannot testify to more than what he knew.

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MR. JUSTICE JACKSON: And so, Dr. Schacht, we are to weigh your testimony in the light of the fact that you preferred, over a long period of time, a course of sabotage of your government's policy by treason against the head of the State, rather than open resignation from his cabinet?

SCHACHT: You constantly refer to my resignation. I have told you and proven that no resignation was possible. Consequently your conclusion is wrong.

MR. JUSTICE JACKSON: All right! Now let us see. In your interrogation on 16 October 1945, Exhibit USA-636, some questions were asked you about the generals of the Army, and I ask you if you were not asked these questions and if you did not give these answers:

"Question: 'I say, suppose you were Chief of the General Staff and Hitler decided to attack Austria, would you say you had the right to withdraw?'

"Answer: 'I would have said, "Withdraw me, Sir."'

"Question: 'You would have said that?'

"Answer: 'Yes.'

"Question: 'So you take the position that any official could at any time withdraw if he thought that the moral obligation was such that he felt he could not go on?'

"Answer: 'Quite.'

"Question: 'In other words, you feel that the members of the

General Staff of the Wehrmacht who were responsible for carrying into execution Hitler's plan are equally guilty with him?'

"Answer: 'That is a very hard question you put to me, Sir, and I answer, "yes".' "

You gave those answers, did you not? Did you give those answers?

SCHACHT: Yes, and I should like to give an explanation of

this, if the Tribunal permits it. If Hitler ever had given me an immoral order, I should have refused to execute it. That is what I said about the generals also, and I uphold this statement which you have just read.

MR. JUSTICE JACKSON: I am through with him, Your Honor, except that I would like to note the exhibit numbers. The petition to Hindenburg referred to yesterday is 3901-PS, and will become Exhibit USA-837. The Von Blomberg interrogation of October 1945 is Exhibit USA-838.

DR. HANS LATERNSER: (Counsel for General Staff and High Command of the German Armed Forces): Mr. President, I request

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that the statement of the Defendant Schacht insofar as it was cited and becomes part of the minutes be stricken from the record. The question, as I understood it, was whether he considered the General Staff to be just as guilty as Hitler. This question was answered in the affirmative by the Defendant Schacht in this examination. The question and the answer-the question to begin with is inadmissible and likewise the answer because a witness cannot pass judgment on this. That is the task of the Court. And for this reason I request that this testimony be stricken from the record.

MR. JUSTICE JACKSON: May it please the Tribunal, I do not, of course, offer this opinion of Schacht's as evidence against the General Staff or against any individual soldier on trial. The evidence, I think, was as to the credibility of Schacht and as to his position. I do not think that his opinion regarding the guilt of anybody else would be evidence against that other person; I think that his opinion on this matter is evidence against himself in the matter of credibility.

THE PRESIDENT: Yes, Dr. Dix.

DR. RUDOLF DIX (Counsel for Defendant Schacht): The question by Justice Jackson was not whether Schacht considered the generals guilty, but the question was whether it was correct that Schacht, in an interrogation previous to the Trial, had given certain answers to certain questions. In other words, it was a question about an actual occurrence which took place in the past and not a question about an opinion or a judgment which he was to give here. As Schacht's counsel, I am not interested in this passage being stricken from the record, except to the extent that these words remain: `'I, Schacht, would never have executed an immoral order and an immoral demand by Hitler." So far as the rest of This answer of Schacht is concerned I, as his defense counsel, declare that it is a matter of indifference to me.

DR. LATERNSER: Mr. President, after the declaration of Justice Jackson, I withdraw my objection.

MAJOR GENERAL G. A. ALEXANDROV (Assistant Prosecutor for the U.S.S.R.): Mr. President, may I begin my cross-examination?

THE PRESIDENT: Yes.

GEN. ALEXANDROV: Defendant Schacht, when answering the questions put to you by your counsel, you informed us of the circumstances under which you first became acquainted with Hitler and Goering. You even remembered a detail such as the pea soup with lard which was served for supper at Goering's house.

What I am interested in now are some other particulars, rather more relevant to the case, of your relations with Hitler and Goering.

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Tell me, on whose initiative did your first meeting with Hitler and Goering take place?

SCHACHT: I have already stated that my friend, Bank Director Von Stauss, invited me to an evening in his home so that I might meet Goering there. The meeting with Hitler then took place when Goering asked me to come to his home-that is, Goering's home- to meet Hitler.

GEN.ALEXANDROV: For what reasons did you, at that time, accept the invitation to meet Hitler and Goering?

SCHACHT: The National Socialist Party at that time was one of the strongest parties in the Reichstag with 108 seats, and the National Socialist movement throughout the country was extremely lively. Consequently, I was more or less interested in making the acquaintance of the leading men of this movement whom up to then I did not know at all.

GEN. ALEXANDROV: But you declared that you were invited by Goering himself Why did Goering especially invite you?

SCHACHT: Please ask Herr Goering that.

GEN.ALEXANDROV: Did you not ask him yourself?

SCHACHT: Herr Goering wished me to meet Hitler, or Hitler to meet me.

GEN.ALEXANDROV: What for? With what aim in mind?

SCHACHT: That you must ask Herr Goering.

GEN. ALEXANDROV: Do you not think that Hitler and Goering intended-and not unsuccessfully at that-to inveigle you into participating in the fascist movement, knowing that in Germany you were an economist and financier of repute who shared their views?

SCHACHT: I was uninformed about the intentions of these two gentlemen at that time. However, I can imagine that it was just as much a matter of interest for these gentlemen to meet Herr Schacht as it was for me to meet Herr Hitler and Herr Goering.

GEN. ALEXANDROV: Then it was a matter of purely personal interest; or were other considerations involved, of a political nature? You yourself understood that your participation in the fascist movement would be of advantage to Hitler, inasmuch as you were a well-known man in your own country?

SCHACHT: As far as I was concerned, I was only interested in seeing what kind of people they were. What motives these two gentlemen had are unknown to me, as I have already stated. My collaboration in the fascist movement was entirely out of the question, and it was not given...

GEN.ALEXANDROV: Tell me, please...

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SCHACHT: Please let me finish. My collaboration was not given before the July elections of 1932. As I have stated here, the acquaintance was made in January 1931, which was 1.5, years before these elections. Throughout these 1.5 years no collaboration took place.

GEN. ALEXANDROV: Tell me, was your acquaintance with Hitler and Goering exclusively limited to these meetings, or had you already met them before Hitler came into power?

SCHACHT: Until July 1932 I saw Hitler and Goering, each of them, perhaps once, twice, or three times-I cannot recall that in these 1.5 years. But in any case there is no question of any frequent meetings.

GEN. ALEXANDROV: Then, how do you explain your letter to Hitler of 29 August 1932 in which you offered your services to Hitler? You remember this letter?

SCHACHT: Yes.

GEN. ALEXANDROV: How do you explain it?

SCHACHT: I have spoken about this repeatedly. Will you be so kind as to read it in the record?

GEN.ALEXANDROV: Please repeat it once more, briefly.

THE PRESIDENT: If he has been over it once, that is sufficient.

GEN. ALEXANDROV: When, and by whom were you first invited to participate in the future Hitlerite Government and promised the post of President of the Reichsbank?

SCHACHT: The President of the Reichsbank did not hold a position in the government, but was a high official outside the government. The first time that there was' any talk in my presence about this post was on 30 January 1933, when I accidentally ran into Goering in the lobby of the Kaiserhof Hotel, and he said to me, "Ah, there comes our future President of the Reichsbank-"

GEN.ALEXANDROV: When answering the questions of your counsel, you declared that the fascist theory of race supremacy was sheer nonsense, that the fascist ideology was no ideology at all, that you were opposed to the solution of the Lebensraum problem by the seizure of new territories, that you were opposed to the Leadership Principle within the Fascist Party and even made a speech on this subject in the Academy of German Law, and that you were opposed to the fascist policy of exterminating the Jews.

Is this right? Did you say this when answering the questions put by your counsel?

SCHACHT: Yes, we both heard it here.

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GEN. ALEXANDROV: Well, then tell me, what led you to fascism and to co-operation with Hitler?

SCHACHT: Nothing at all led me to fascism; I have never been a fascist.

GEN. ALEXANDROV: Then what induced you to co-operate with Hitler since you had adopted a negative attitude toward his theories and the theories of German fascism?

THE PRESIDENT: General Alexandrov, he has told us what he says led him to co-operate with Hitler, I think you must have heard him.

GEN. ALEXANDROV: But it did, in fact, take place?

[Turning to the defendant.] In reply to a question by your counsel as to why you did not emigrate, you stated that you did not wish to be a simple martyr. Tell me, did you not know the fate which befell Germany's outstanding personalities, who held democratic and progressive ideas when Hitler came to power? Do you know that they were all exiled or sent to concentration camps?

SCHACHT: You are confusing things here. I did not answer

that I did not want to be a martyr to the question of whether I wanted to emigrate; but I said, "Emigrants-that is, voluntary emigrants-never served their country," and I did not want to save my own life, but I wanted to continue to work for the welfare of my country.

The martyr point was in connection with a question following, as to whether I expected any good to have resulted for my country if I had died as a martyr. To that I replied, "Martyrs serve their country only if their sacrifice becomes known."

GEN.ALEXANDROV: You related it somewhat differently. I shall, nevertheless, repeat my question.

THE PRESIDENT: I would be very grateful if you would repeat this question.

GEN.ALEXANDROV: Do you know the fate which befell the foremost men of Germany, men who held progressive and democratic ideas when Hitler came to power? You know that all these people were either exiled or sent to concentration camps?

SCHACHT: I expressly stated here that when I spoke of emigrants I meant those who were in exile, who did not leave the country under compulsion but left voluntarily-those are the ones I was speaking about. The individual fates of the others are not known to me. If you ask me about individual persons, I will tell you regarding each one of these people, whether I know his fate or not.

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GEN. ALEXANDROV: The fate of these great men is universally known. You, one of the few outstanding statesme

n in democratic Germany, co-operated with Hitler. Do you admit this?

SCHACHT: No.

GEN. ALEXANDROV: You testified-and I am obliged to refer once again to the same question-that the entry in the Goebbels diary of 21 November 1932 was false. Once again I remind you of this entry which Goebbels wrote, and I quote:

"In a conversation with Dr. Schacht I found that he fully reflects our viewpoint. He is one of the few who fully agrees with the Fuehrer's position."

Do you continue to say that this entry does not conform to reality?

This is the question which I am asking you.

SCHACHT: I have never claimed that this entry was false. I only claimed that Goebbels got this impression and he was in error about it.

GEN. ALEXANDROV: But according to your statement this entry does not conform to reality, to your attitude toward Hitler's regime. Is that the case or not?

SCHACHT: In the general way in which Goebbels represents it there, it is wrong; it is not correct.

GEN. ALEXANDROV: Why did you not lodge a protest? After all, Goebbels' diary, including this entry, was published.

SCHACHT: If I would have protested against all the inaccuracies which were printed about me, I would never have come to my senses.

GEN. ALEXANDROV: But do you not see, this is not exactly an ordinary excerpt from Goebbels' diary-and he was rather an outstanding statesman in fascist Germany-for he describes your political views; and if you were not in agreement with him it would have been appropriate for you, in some way or other, to take a stand against it.

SCHACHT: Permit me to say something to this. Either you ask me-at any rate I should not like to have here a two-sided argument if it is only one-sided. I say that the diary of Goebbels is an unusually common piece of writing.

GEN. ALEXANDROV: The witness, Dr. Franz Renter, your biographer and close friend, in his written affidavits of 6 February 1946, presented to the Tribunal by your counsel as Document Schacht-35, testified to the following: "Schacht joined Hitler in the early thirties and helped him to power..."

3 May 46

Do you consider these affidavits of the witness Dr. Franz Reuter as untrue, or do you confirm them?

SCHACHT: I consider them wrong.

GEN.ALEXANDROV: How far did you personally participate to help bring Hitler to power? I continue this question: Under what circumstances and for what purpose did you, in February 1933, organize a meeting between Hitler and the industrialists? This subject has already been mentioned before.

SCHACHT: I did not help Hitler to come to power in any way. All this has been discussed here at great length. In February 1933 Hitler had already been in power quite some time. As to finances and the industrial meetings of February 1933, that has profusely been gone into.

GEN.ALEXANDROV: What particular role did you play in this conference?

SCHACHT: This, too, has been discussed in detail. Please read about it in the record.

GEN.ALEXANDROV: I have already familiarized myself with the reports but you have not explained events sufficiently clearly. In order to shed some more light on the question I shall refer to Defendant Funk's testimony of 4 June 1945. This is Document Number 2828-PS. I quote Defendant Funk's testimony:

"I was at the meeting. Money was not demanded by Goering but by Schacht. Hitler left the room, then Schacht made a speech asking for money for the election. I was only there as an impartial observer, since I enjoyed a close friendship with the industrialists."

Does this testimony of the Defendant Funk represent the truth?

SCHACHT: Herr Funk is in error. Document D-203 has been presented here to the Court by the Prosecution...

GEN. ALEXANDROV: But . . .

SCHACHT: Please do not interrupt me. The Prosecution has submitted this document, and this document shows that Goering directed the request for financial aid and not I.

GEN. ALEXANDROV: In this connection Defendant Funk declared that this speech was made by you and not by Goering. I ask you now, which statement represents the truth?

SCHACHT: I have just told you that Herr Funk is in error and that the evidence of the Prosecution is correct.

GEN.ALEXANDROV: Then what part did you play in connection with this conference?

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SCHACHT: This, too, I have already stated in detail. I am...

THE PRESIDENT: The Tribunal has already heard a long cross-examination and it does not desire to hear the same facts or matters gone over again. Will you tell the Tribunal whether you have any points which the Soviet Union are particularly interested in, which have not been dealt with in cross-examination?

GEN. ALEXANDROV: Mr. President, in his statements the Defendant Schacht did not reply in sufficient detail, nor were his answers sufficiently clear. I am therefore obliged, in certain instances, to refer to these questions again. It is, in particular, not clear to us what part the Defendant Schacht played in this meeting of the industrialists. It appears to me that Defendant Schacht did not give a sufficiently clear or well-defined reply to the question which I had asked him. As for the other questions, they are few in number and I imagine that after the recess I can try and finish with them in about 30 or 40 minutes. All these questions are of interest to us since they enable us to determine the guilt of the Defendant Schacht.

THE PRESIDENT: Very well. The Tribunal is not prepared to listen to questions which have already been put.

GEN.ALEXANDROV: Perhaps now you will find it desirable to declare a recess, in order to continue the cross-examination after the recess.

THE PRESIDENT: No, General Alexandrov, the cross-examination will continue up to the recess.

GEN. ALEXANDROV: Do you admit-that, while acting as President of the Reichsbank and as Minister of Economics and Plenipotentiary for War Economy, you played a decisive part in preparing the rearmament of Germany and consequently, in preparing for a war of aggression?

SCHACHT: No, I categorically deny that.

GEN. ALEXANDROV: You were Plenipotentiary for War Economy?

SCHACHT: Well, we have spoken about that here ten times already.

GEN. ALEXANDROV: I did not hear it from your own lips, not once.

THE PRESIDENT: He has admitted throughout and, of course, i. is obvious-that he was Plenipotentiary for War Economy; but `that you put to him was, whether he as Plenipotentiary for War Economy took part in rearmament for aggressive war, and he has said over and over again that that was not his object, that his

3 May 46

object was to gain equality for Germany. He said so, and we have got to consider whether that is true. But that he said it is perfectly clear.

GEN. ALEXANDROV: In my subsequent questions it will be quite clear why I touch precisely on this question.

How long did you occupy the post of Plenipotentiary for War Economy?

SCHACHT: I have just stated that I do not understand the question-for what duration? All this has certainly been stated here already.

THE PRESIDENT: We have got the date when he became Plenipotentiary for War Economy and the date when he ceased to be.

GEN. ALEXANDROV: I should like to remind you of the duties imposed on you as Plenipotentiary by the Reich Defense Act of 21 May 1935. I shall quote a brief excerpt from Section 2 of this law, entitled "Mobilization":

"Point 1: For the purpose of directing the entire war economy the Fuehrer and Reich Chancellor will appoint a Plenipotentiary for War Economy.

"Point 2: It will be the duty of the Plenipotentiary for War Economy to utilize all economic possibilities in the interest of the war and to safeguard the economic well-being of the German people.

"Point 3: Subordinate to him will be: the Reich Minister of Economics, the Reich Minister for Food and Agriculture, the Reich Labor Minister, the Chief Reich Forester, and all other Reich officials directly subordinate to the Fuehrer and Reich Chancellor.

"Further, he shall be responsible for the financing of the war within the sphere of the Reich Finance Ministry and the Reichsbank.

"Point 4: The Plenipotentiary for War Economy shall have the right to enact public laws within his official jurisdiction which may differ from existing laws."

You admit that this law gave you extraordinary powers in the sphere of war economy?

SCHACHT: This document is before the Court and I assume that you have read it correctly.

GEN. ALEXANDROV: I am not asking you whether I have read this document correctly; I am asking you whether you admit that by this law you were given extraordinary powers in the sphere of the war economy? Do you admit that?

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SCHACHT: I had exactly the full powers which are described in the law.

GEN. ALEXANDROV: Do you admit that these were not ordinary powers, but quite extraordinary powers?

SCHACHT: No, I will not admit this at all.

GEN. ALEXANDROV: In other words, you considered that the Reich Defense Law of 21 May 1935 was just an ordinary law?

SCHACHT: It was simply an ordinary law.

GEN. ALEXANDROV: And you also considered the functions imposed on you by this law as Plenipotentiary for War Economy ordinary functions?

SCHACHT: As very common regulations which are customary with every general staff.

THE PRESIDENT: The Court will adjourn now.

[A recess was taken.]

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Afternoon Session

THE PRESIDENT: Yes, General Alexandrov.

GEN. ALEXANDROV: Mr. President, taking into consideration the Tribunal's desire, as well as the fact that Mr. Jackson has already questioned Schacht in detail, and having read the minutes of this morning's session, it has been possible for me to shorten considerably the number of questions in my examination. I have only two to put to Defendant Schacht.

Defendant Schacht, on 21 May 1935 the Reich Government made a decision with regard to the Reich Defense Council. The decision was as follows, citing Point 1.:

"It is the will of the Fuehrer and Reich Chancellor that the Plenipotentiary General for War Economy shall take over this responsible directorate (Leitung), and is, as with the Reich War Minister, holder of the executive power, independent and responsible for his own sphere of activity to the Fuehrer and Reich Chancellor."

Do you admit that you carried through actively this decision of the Reich Government; and that you took an active part in Germany's economic preparations for aggressive wars?

SCHACHT: No, Mr. Prosecutor, I definitely do not admit that. GEN. ALEXANDROV: On the 4th of March 1935, in your speech at the Spring Fair in Leipzig, you said the following, citing Exhibit Number USA-627 (Document Number EC-415):

"My so-called foreign friends are doing neither me nor the cause a service, nor a service to themselves, when they try to bring me into conflict with the impossible, so they say, National Socialist economic theories, and present me, so to speak, as the guardian of economic reason. I can assure you that everything I say and do is with the full consent of the Fuehrer, and I shall neither do nor say anything which he has not approved. Therefore, the guardian of economic reason is not I but the Fuehrer."

Do you confirm this speech you made at the Spring Fair in Leipzig?

SCHACHT: I admit it and would like to make a statement.

I have said repeatedly, first, that my foreign friends, as far as I had foreign friends, did not do me a service when they said publicly that I was an adversary of Hitler, because that made my position extremely dangerous. Secondly, I said in that speech I would not do anything which would not be according to my conviction, and that Hitler did everything I suggested to hire, that is, that it was

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Lois opinion also. If I had said anything to the contrary, that would have been expressed. I was in complete accord with him as long as his policies agreed with mine; afterwards I was not, and left.

GEN.ALEXANDROV: I have no more questions, Your Honor.

THE PRESIDENT: Do you wish to re-examine, Dr. Dix?

DR. DIX: I will put only a few questions which arose from the cross-examination.

During the cross-examination, the New Plan was again dealt with without Dr. Schacht's having had an opportunity of explaining it and of stating what role, if any, that plan had in the economy of rearmament and who was the originator, the responsible originator of the New Plan. Therefore, may I put this question to Dr. Schacht now?

SCHACHT: The New Plan was a logical consequence of the economic development which followed the Treaty of Versailles. I mention again only briefly that by the removal of German property abroad, the entire organization for German foreign trade was taken away and therefore great difficulties arose for German exports.

Without those exports, however, payment of reparations, or such, was out of the question. Nevertheless, all the great powers, particularly those who were competing with Germany on the world market, resorted to raising their tariffs in order to exclude German merchandise from their markets or to make it more difficult for Germany to sell her goods, so that it became more and more of a problem to develop German exports.

When Germany, in spite of this, tried by lower prices at the cost of lower wages to maintain or to increase her export trade, the other powers resorted to other means to meet German competition. I recall the various devaluations of foreign currencies which were made, again impeding the competition of German products. When even that did not suffice, the system of quotas was invented; that is, the amount of German goods which were imported into a Country could not go beyond a certain quota; that was prohibited. Such quotas for German imports were established by Holland, France, and other nations; so here also German export was made increasingly difficult.

All these measures to hinder German export led to the situation that German nationals also could no longer pay even private debts abroad. As you have heard here, for many years I had warned against incurring these debts. I was not listened to. It will be of interest to you to state here briefly that Germany, against my advice, had within five years contracted as large a foreign debt

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as the United States had throughout the 40 years before the first World War.

Germany was a highly-developed industrial nation and did not need foreign money, and the United States at that time was going in more for colonial development and could make good use of foreign capital.

We now hit the bottom. When we were no longer able to pay our interest abroad, some countries resorted to the method of no longer paying German exporters the proceeds from the German exports, but confiscated these funds, and out of this paid themselves The interest on our debts abroad; that is, effecting a settlement, so to speak. That was the so-called "clearing system." The private claims were confiscated in order to meet the demands of foreign creditors.

To meet this development, I looked for a way out to continue German exports. I set out a very simple principle: "I will buy only from those who buy from me." Therefore, I looked around for countries which were prepared to cover their needs in Germany, and I prepared to buy my merchandise there.

That was the New Plan.

THE PRESIDENT: I do not know what we have to do with this, Dr. Dix.

DR. DIX: Well, to make a long story short, the New Plan had nothing to do with the intention to rearm, let alone with any aggressive intentions.

SCHACHT: Absolutely nothing.

DR.DIX: In this connection, can you give an estimate as to what percentage of German economic production was armament production?

SCHACHT: That question has been put to me in previous interrogations and at that time I was not able to answer it, because I could not recall what amount Germany expended on her armament. Now, from the testimony of Field Marshal Keitel, we have heard here that armament expenditure during these years when the Reichsbank was still co-operating, 1934-35, 1935-36, 1936-37 and so on, amounted respectively to 5,000 million Reichsmark, 7.000 million Reichsmark and 9,000 million Reichsmark; that is the estimate

of experts. The production of the entire German economy during these years could be estimated approximately at 50-60,000 million Reichsmark. If I compare that with the armament expenditure, which has been stated here by a witness, then we find that armament expenditure amounted to about 10 to 15 percent of the entire German economy during the years when I had anything to do with it.

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DR. DIX: Then, in the course of the cross-examination, there came up the question of your willingness or unwillingness to give up the Office of Plenipotentiary for War Economy, and in order to prove your statement that General Von Blomberg did not wish you to give up that office, you referred to a document which has been submitted by the Prosecution. I am referring to Document EC-244, and it is a letter from the Reichswehr Minister, Von Blomberg, to Hitler, of 22 February 1937. It has already been read, so there is no need to do so Now. May I only point out that in the last paragraph Blomberg expressed. the desire that the Fuehrer would direct or get the Reichsbank president to remain in office, so that covers the statement made by Schacht. Furthermore, in the course of cross-examination by Mr. Justice Jackson, mention was made of your credibility concerning the statement on your colonial aspirations; and from the point of view of colonial policy without mastery of the sea-Germany had not the mastery of the sea-can Germany have any colonial problems? That was the question and answer; and in that connection I would like to ask you: Did Germany have colonies before 1914?

SCHACHT: Yes.

DR. DIX: Before 1914, or let us say between 1884 and 1914, that is, the time when Germany had colonial possessions, did Germany have mastery of the sea, especially as compared with Great Britain?

SCHACXT: No, in no way.

DR.DIX: That covers it. Then there is another problem from the point of view of the credibility of your statements: Mention has been made of the ethical conflicts concerning your oath to Hitler, as head of the State, as you say, and the intentions which you have revealed to overthrow Hitler, even to kill him. Do you not know of many cases in history where persons holding high office in a state attempted to overthrow the head of the state to whom they had sworn allegiance?

SCHACIIT: I believe you find these examples in the history of all nations.

THE] PRESIDENT: Dr. Dix, we are not concerned with past history, are we? You do not think the question of whether there are historical instances is a legitimate question to put to this witness?

DR.DIX: Then I will not pursue that point any further; it is argumentation and maybe I can use it later in my final pleadings.

Now, returning to the question of colonies, is it not correct that, apart from your personal colonial aspirations, Germany, the Reich Government, had prepared officially for the acquisition of her

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colonies and later their administration; and was not there a colonial policy department until 1942 or 1943 or thereabouts?

SCHACHT: Well, it is set out explicitly in the Party program that the colonial demands are part of the Party program. Of course, the Foreign Office also concerned itself with it and I believe also in the Partly there was a colonial policy department.

DR. DIX: Under Rita Von Epp?

SCHACHT: Yes, under Ritter Von Epp.

DR. DIX: Then concerning the question of the mefo bills, I only want to summarize: Did you mean to imply that the mefo bills were to serve as a brake on rearmament, because the signature of the Reich to these bills, that is of the Reich Government, was binding for their repayment?

SCHACHT: You see, I said very clearly that the limitation of the mefo bills to 5 years, and making them mature in 5 years, would automatically put a brake on armament.

DR. DIX: Furthermore, Mr. Justice Jackson dealt with the point that the name of Schacht, when he retained office as Minister without Portfolio, had a propaganda value in favor of the Nazi regime abroad and therefore served the aggressive intentions and their execution. In this connection and in order to shorten the presentation of my documents, may I read from my document book, Exhibit 37(a), Document Schacht-37(a); that is, the English text is on Page 157 and the German on Page 149. On Page 5 of that long affidavit Huelse states:

"The foreign press drew from the dismissal"-that is, the dismissal as Reichsbank President in 1939-"the correct conclusions and interpreted it as a warning signal. In this connection in repeated conversations, even at the end of 1938, and in agreement with Dr. Schacht, I spoke with representatives of foreign issuing banks, whom I had met at board meetings of the Bank for International Settlement, and I informed them that the resignation of Schacht and individual members of the Reichsbank Directorate meant that things in Germany were following a dangerous path."

Furthermore, the Prosecutor for the Soviet Union has accused Or. Schacht because in the biography of Reuter it is stated expressly that Schacht assisted the regime during the stage of the struggle for power. At any rate, that is the substance. That is correct as a quotation from Reuter's book, but there is something else. I believe we still have to submit Exhibit 35 (Document Schacht-35), Page 133 of the English text and 125 of the German, and there we

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find on the second page of that long affidavit the following sentences. which limit the authenticity of that biography and prove it to be a biased piece of writing. Reuter says in this affidavit, and I quote:

'I had a biography of Dr. Schacht published twice, first at the end of 1933 by the Publishing House R. Kittler in Berlin, and at the end of 1936 by the German Publishing Institute in Stuttgart. Besides its being a factual presentation of his life and his work, it also served the purpose of shielding him from his attackers. Therefore the principles of purely objective historical research are not applicable to this publication, because defensive views required by the situation at the time has to be taken into consideration."

This must be known and read before one can estimate the evidential value of that biography.

And that concludes my questions.

THE PRESIDENT: The defendant can then retire.

DR. DIX: I now call the witness Vocke with Your Lordship's permission.

[The witness Vocke took the stand.]

THE PRESIDENT: Will you state your full name?

WILHELM VOCKE (Witness): Wilhelm Vocke.

THE PRESIDENT: Will you repeat this oath after me: I swear by God-the Almighty and Omniscient-that I will speak the pure truth-and will withhold and add nothing.

[The witness repeated the oath in German.]

THE PRESIDENT: You may sit down.

DR. DIX: Herr Vocke, you were a member of the Directorate of the Reichsbank. When did you enter the Reichsbank Directorate' and when did you resign from it?

VOCKE: Reich President Ebert appointed me a member of the Reichsbank Directorate in 1919, and Hitler dismissed me from office on 1 February 1939. Therefore, I was for about 20 years a member of the Reichsbank Directorate, and for 10 of these years I was under Schacht.

DR. DIX: Excuse me, but I must ask you, were you a member of the Party?

VOCKE: No.

DR. DIX: Were you a member of the SA?

V0CKE: No.

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DR. DIX: Were you a member of the SS?

VOCKE: No.

DR. DIX: Were you a sponsoring member of the SA or SS?

VOCKE: No.

DR. DIX: You had no connection with the Party?

VOCKE: No.

DR. DIX: When did you meet Schacht?

VOCKE: In 1915. I merely made his acquaintance then, but it was not until he became Reichsbank Kommissar and Reichsbank President, that I came to know him better.

DR. DIX: I come now to the period of the first Reichsbank presidency of Schacht, that is, the year 1923. At that time what was the attitude of the Reichsbank Directorate to the candidature of Schacht as Reichsbank President?

VOCKE: A disapproving attitude.

DR. DIX: And for what reason?

VOCKE: We wanted Helferich as candidate for the presidency of the Reichsbank, because Helferich, in close co-operation with the Reichsbank, had created the Rentenmark and stabilization of currency.

But as reason for our disapproval of Schacht, we mentioned an incident contained in Schacht's dossier which referred to his activity under Herr Von Jung in 1915. According to this, Schacht, who had come from the Dresdner Bank, had rendered assistance to the Dresdner Bank which Von Jung did not consider quite correct, and that was the reason for Schacht's dismissal at that time.

The Reich Government, however, did not heed the criticism which we made against Schacht, and as Minister Severing told me recently, he followed the proverb, "It is not the worst fruit which is eaten by worms," and Schacht was appointed President.

DR. DIX: So that Schacht came to you as President, and he must have known that the Directorate did not want him, or at any rate wanted somebody else. Therefore, I assume the question is in order as to what the relations were among that group, that is, the Reichsbank Directorate and the new President.

VOCKE: Schacht took up his office in January 1924. He called us all to a meeting in which he spoke very frankly about the situation, and this was the substance of what he said: Well, you disapproved of me for President because I stole silver spoons; but now I am your President, and I hope that we will work together, and we will get to see eye to eye-that was the expression used by

3 May 46

Schacht however, if one or another of you feels that he cannot work with me, well, then he will have to take the consequences, and I will gladly assist him to find another position.

Our relations with Schacht soon became good and we worked together successfully. It was very good to work with Schacht. We quickly recognized that he was an unrivalled expert in his and our branch, and also in other respects his conduct was beyond reproach. He was clean in his dealings and there was no nepotism. Neither did he bring with him any men whom he wanted to push. Also he was a man who at all times tolerated controversy and differing opinions-he ever; welcomed them. He had no use for colleagues echo were "yes men."

THE PRESIDENT: There is neither any charge nor any issue about this.

DR. DIX: That is quite correct, Your Lordship, but I thought it would be helpful to touch upon these things. But we are now at the end, and will come to the Reichsbank presidency from 1933 on.

[Turning to the witness.] After his short period of retirement Schacht again became President of the Reichsbank in 1933. Did you have any conversations with him about his relations to Hitler and to the Party?

VOCKE: Yes.

DR.DIX: Would you like to describe to the Tribunal the kind of statements Schacht made to you?

VOCKE: First, I would like to mention two conversations which T remember almost word for word. During the period when Schacht was not in office, that is about three years, I hardly ever saw him, maybe three or four times at occasions at the Wilhelmstift. He never visited me, nor did I visit him, except once, when Schacht came into the bank-maybe he had some business there-and visited me in my office. We at once...

DR. DIX: When was that?

VOCKE: That must have been in 1932, a comparatively short time before the seizure of power. We immediately began to speak about political questions, about Hitler and Schacht's relations to Hitler. I used that opportunity to warn Schacht seriously against Hitler and the Nazis. Schacht said to me: "Herr Vocke, one must give this roan or these people a chance. If they do no good, they will disappear. They will be cleared out in the same way as their predecessors."

I told Schacht: "Yes, but it may be that the harm done to the German people in the meantime will be so great that it can never be repaired."

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Schacht did not take that very seriously, and with some light remark, such as: You are an old pessimist, or something like that, he left.

The second conversation about which I want to report took place shortly after Schacht's re-entry into the bank. It was probably in March 1933, or the beginning of April. Schacht at that time showed a kind of ostentatious enthusiasm, and I talked to him about his relation to the Party. I assumed that Schacht was a member of the Party. I told him that I had no intention of becoming a member of the Party, and Schacht said to me: "You do not have to. You are not supposed to. What do you think? I would not even dream of becoming a member of the Party. Can you imagine me bending under the Party yoke, accepting the Party discipline? And then, think of it, when I speak to Hitler I should click my heels and say, 'Mein Fuehrer,' or when I write to him address him as 'Mein Fuehrer.' That is quite out of the question for me. I am and remain a free man."

That conversation took place and those words were spoken by Schacht at a time when he was at the apex of a rapprochement with Hitler, and many a time I have thought about it, whether it was true, and remained true, that Schacht was a free man.

As things turned out, after a few years Schacht was forced to realize to his sorrow that he had lost a great deal of his freedom, that he could not change the course of the armaments financing scheme, upon which he had embarked, when he wished to do so; that it had become a chain in the hands of Hitler and that it would take years of filing and tugging for it to break.

But, in spite of that, his words were true inasmuch as they reflected the inner attitude of Schacht towards Hitler. Schacht never was a blind follower. It was incompatible with his character, to sign himself away to somebody, to sell himself and follow with blind devotion.

If one should seek to characterize Schacht's attitude to Hitler thus: My Fuehrer, you command, I follow; and if the Fuehrer ordered him to prepare an armament program: I will finance an armament program, and it is for the Fuehrer to decide to what use it shall be put, whether for war or peace-that would be incompatible with Schacht's attitude and character. He was not a man who thought along subaltern lines or who would throw away his liberty; in that Schacht differed fundamentally from a great many men in leading political and military positions in Germany.

Schacht's attitude, as I came to know it from his character and Prom his statements, could be explained somewhat as follows: Schacht admired this man's tremendous dynamic force directed

3 May 46

towards national aims, and he took account of this man, hoping to use him as a tool for his own plans, for Schacht's plans towards a peaceful political and economic reconstruction and strengthening of Germany. That is what Schacht thought and believed, and I take that from many statements made by Schacht...

DR. DIX: That, I think. answers the question fully. Now the Prosecution accuses Schacht and alleges that Hitler picked out Schacht to finance armament for an aggressive war. You, Herr Vocke, were a member of the Reichsbank Directorate and you worked with him during all those years. Therefore, I ask you to tell the Tribunal whether anything transpired in the course of conversations, or whether you noticed anything about Schacht's activities and work which would justify such a reproach.

VOCKE: No. Schacht often expressed the view that only a peaceful development could restore Germany and not once did I hear him say anything which might suggest that he knew anything about the warlike intentions of Hitler. I have searched my memory and I recall three or four incidents which answer that question quite clearly. I should like to mention them in this connection.

The first was the 490 million gold mark credit which was repaid in 1933. Luther, when the Reichsbank cover disintegrated in the crisis . . .

DR. DIX: May I interrupt for the information of the Tribunal: :Luther was Schacht's predecessor.

VOCKE: ..in 1931 when the cover for the issue of notes had to be cut down, Luther in his despair sent me to England in order to acquire a large credit in gold from the Bank of England which would restore confidence in the

Reichsbank. Governor Norman was quite prepared to help me, but he said that it would be necessary for that purpose to approach also the Federal Reserve Bank of New York, the Bank of France, and the International Bank in Basel. That was done and the credit amounted to 420 million gold marks, but the inclusion of the Bank of France created political difficulties which delayed the credit for about 10 or 12 days.

When I returned to Berlin I was shocked to hear that the greater part of the credit had already been used up. The gold divas torn from our hands, and I told Luther: The credit has lost its usefulness and we must repay it immediately. Our honor is our last asset. The banks which have helped us shall not lose a single pfennig.

Luther did not have sufficient understanding for that, and he said in so many words: What one has, one holds. We do not know for what purpose we may still have urgent need of the gold. And so the credit was extended and dragged out over years.

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When Schacht came to the bank in 1933, I told myself that Schacht would understand me, and he did understand me immediately. He agreed with me and repaid that credit without hesitation. It never entered his head for what other purpose one might use that enormous sum of gold, and I say here that if Schacht had known of any plans for a war, he would have been a fool to pay back 420 million gold marks.

As to the second incident, I cannot give the exact date, but I believe it was in 1936. The Reichsbank received a letter from the Army Command or the General Staff marked "Top Secret," with the request to remove the gold reserves of the Reichsbank, the securities and bank note reserves from the frontier regions of Germany to a zone in the interior. The reasons given were the following: In the event of a threat to attack Germany on two fronts, the Army Command had decided to evacuate the frontier areas and to confine itself to a central zone which could be defended under all circumstances. I still remember from the map which was attached to the letter that the line of defense in the East...

THE PRESIDENT: It seems to the Tribunal that this is very remote from any question we have to decide.

DR. DIX: Your Lordship, that map which the witness wants to describe shows clearly and beyond doubt that the attitude of the German High Command in 1936 was a defensive attitude and one which accepted the greatest strategic disadvantages, and this was communicated to the Reichsbank under the presidency of Schacht. We can see from that communication that nobody at that time even thought of aggressive intentions of the Army Command.

THE PRESIDENT: At what time?

DR. DIX: 1936, I understood him to say that. Perhaps it is better that he should give you the date.

VOCKE: I cannot say exactly what the date was, but it must have been about 1936, in my estimation.

DR.DIX: I believe that it is rather relevant. May the witness continue?

THE PRESIDENT: Yes.

VOCKE: The line of defense in the East went from Hof straight up to Stettin; I cannot remember so well where the western line was drawn. but Baden and the Rhineland were outside of it.

The Reichsbank was shocked to hear that and about the threat of a two-front attack on Germany and the tremendous sacrifice of German territory. It was also shocked at the idea that the Reichsbank, in the event of an occupation of these regions by the enemy, would have to leave these occupied territories without any financial

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support. Therefore we refused the last-mentioned request, but, as far as the gold was concerned, we placed it in Berlin, Munich, Nuremberg, and so on.

We could no longer have any doubt, however, after this top secret document, about the defensive character of our armaments and preparations.

I come to a third incident. That was in 1937. At that time, when the economy was already racing ahead and more and more money was being put up, Schacht asked for the support of the German professors of economy and called them together to persuade them to work along his lines, that is, to try to check this trend. At that meeting one of those present asked Schacht the question: "What will happen if war breaks out?" Schacht got up and said: "Gentlemen, then we are lost. Then everything is over with us. I ask you to drop this subject. We cannot worry about it now."

Now I come to the fourth incident, which also leaves no doubt about Schacht's attitude or the completeness of his information. That was a conversation immediately after the outbreak of the war. In the first few days Schacht, Huelse, Dreyse, Schniewind and I met for a confidential talk. The first thing Schacht said was: 'Gentlemen, this is a fraud such as the world has never seen. The Poles have never received the German offer. The newspapers are lying in order to lull the German people to sleep. The Poles have been attacked. Henderson did not even receive the offer, but only a short excerpt from the note was given to him verbally. If at any time at the outbreak of a war, the question of guilt was clear, then it is so in this case. That is a crime the like of which cannot be imagined."

Then Schacht continued: "What madness to start a war with a military power like Poland, which is led by the best French general staff of ricers. Our armament is no good. It has been made by quacks. The money has been wasted without point or plan."

To the retort: "But we have an air force which can make itself felt," Schacht said: "The air force does not decide the outcome of a war, the ground forces do. We have no heavy guns, no tanks; in three weeks the German armies in Poland will break down, and then think of the coalition which still faces us."

Those were Schacht's words and they made a deep impression on me; for me they are a definite and clear answer to the question which Dr. Dix put to me.

DR. DIX: Now, in the course of those years from 1933 to 1939 did Schacht ever speak to you about alleged or surmised war plans of Hitler?

VOCKE: No, never.

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DR. DIX: What was Schacht's basic attitude to the idea of a war; did he ever mention that to you?

VOCKE: Yes, of course, fairly often. Schacht always emphasized that war destroys and ruins both the victor and the vanquished, and, in his and our field, he pointed to the example of the victorious powers whose economy and currency had been devaluated and partly even crippled. England had to devaluate her currency; in France there was a complete breakdown of the financial system, not to speak of other powers such as Belgium, Poland, Romania, and Czechoslovakia.

DR. DIX: Schacht made these statements?

VOCKE: Yes, he did, and quite frequently. Schacht went into detail and was very definite about the situation in neutral countries. Schacht said again and again: There will be conflicts and war again, but for Germany there is only one policy, absolute neutrality. And he quoted the examples of Switzerland, Sweden, and so on, who by their neutral attitude had grown rich and more powerful and become creditor nations. Schacht again and again emphasized that very strongly.

DR. DIX: In that connection you will understand my question. How can you explain then, or rather, how did Schacht explain to you the fact that he was financing armament at all?

VOCKE: Schacht believed at that time that a certain quantity of armaments, such as every country in the world possessed, was also necessary for Germany for political...

DR. DIX: May I interrupt you. I want you to state only the things which Schacht told you; not your opinions about what Schacht may have thought, but only what Schacht actually said to you.

VOCKE: Yes. Schacht said a foreign policy without armament was impossible in the long run. Schacht also said that neutrality, which he demanded for Germany in case of conflict between the big powers, must be an armed neutrality. Schacht considered armaments necessary, because otherwise Germany would always be defenseless in the midst of armed nations. He was not thinking of definite attack from any side, but he said that in every country there was a militarist party which might come to power today or tomorrow, and a completely helpless Germany, surrounded by other nations, was unthinkable. It was even a danger to peace because it was an incentive to attack her one day. Finally, however, and principally Schacht saw in armaments the only means of revitalizing and starting up German economy as a whole. Barracks would have to be built; the building industry, which is the backbone of economy, must be revitalized. Only in that way, he hoped, could unemployment be tackled.

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DR. DIX: Now, events led to the militarization of the Rhineland, the reintroduction of compulsory military service. Did you have conversations with Schacht in which he said that if this policy of Hitler was pursued it might lead to a war, at least to an armed intervention by other nations which did not approve of such policies? Were there any such conversations between you and Schacht? </

The Avalon Project at Yale Law School

Nuremberg Trial Proceedings Vol. 13

ONE HUNDRED AND TWENTIETH DAY Friday, 3 May 1946 Morning Session

ONE HUNDRED AND TWENTIETH DAY
Friday, 3 May 1946

Morning Session