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THE PRESIDENT: Before we go on with the case of the Defendant Schacht, the Tribunal wishes to announce its decision on the applications by Dr. Sauter on behalf of the Defendant Von Schirach: The first application to which any objection was taken related to the group of documents Numbers 30, 31, 45, 68, 73, 101, 124, and 133. That application with respect to that group of documents is denied.
The next matter was an application in respect of Number 118(a). That application is granted and the document is to be translated.
The next was Number 121 and in that case the application is denied. As regard to witnesses, Dr. Sauter withdrew his application for the witness Marsalek.
In connection with the other applications, the Tribunal grants the application that Uiberreither should be called as a witness.
That is all.
DR. DIX: Yesterday, much to my regret, I neglected after an answer given by Dr. Schacht to my question as to whether he was disappointed by Hitler or whether he considered himself deceived by him, to read a passage from a document which deals with the same point. I am referring to a document which has been submitted to the High Tribunal and which has been quoted several times- Exhibit Schacht-34, Page 114 of the English text of the document book. This passage may be found on Page 124 of the English document book and reads as follows:
"Dr. Schacht, even in the years 1935-36, as may have been seen from numerous statements, had fallen into the role of a man, who in good faith had put his strength and ability at Hitler's disposal but who now felt himself betrayed.
"Of the many statements made by Schacht, I quote only one which Schacht made at the occasion of a supper with my wife and myself in the summer of 1938. When Dr. Schacht made his appearance, it was evident that he was in a state of inner excitement and during the supper, he suddenly gave vent to his feelings, when, in deep agitation he almost shouted at my wife, 'My dear lady, we have fallen into the hands of criminals-how could I ever have suspected that?'"
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This is the affidavit made out by Schniewind.
Yesterday I mentioned three documents: namely, a speech made by Schacht on "Geography and Statistics" at Frankfurt-am-Main on 9 December 1936, then an article Schacht had written on the colonial problem and a speech given at Koenigsberg by Schacht.
I wish to submit these documents: The speech on "Geography and Statistics" at Frankfurt is the Document Schacht-19, Page 48, English Page 54. The theme on the colonial question is Exhibit Schacht-21, German version Page 53 and English version Page 59. The speech at Koenigsberg is Exhibit Schacht-25 of my document book, German version on Page 44 and English version Page 73.
Dr. Schacht, we stopped in the middle of 1934, shortly before you entered the Ministry of Economics, and when you became Minister of Economics, you were familiar with the happenings of 30 June 1934 and their legalization by the Cabinet. Did you not have any misgivings to enter the Cabinet or what reasons prompted you to put aside these misgivings?
SCHACHT: As far as my personal composure and comfort would have been concerned, it would have been very simple not to assume office and to resign. Of course, I asked myself what help that would be for the future development of German politics if I did refuse office. We were already at a stage in which any public and open opposition and criticism against the Hitler regime had been made impossible. Meetings could not be held, societies could not be established, every press statement was subject to censorship, and all political opposition, without which no government can thrive, had been prevented by Hitler through his policy of terror. There was only one possible way to exercise criticism and even form an opposition which could prevent bad and faulty measures being taken by the Government. And this opposition could solely be formed in the Government itself. Thus convinced, I entered the Government and I hoped in the course of the years to find a certain amount of support and backing among the German people. There was still a large mass of spiritual leaders, professors, scientists, and teachers, whom I did not expect simply to acquiesce to a regime of coercion. There were also many industrialists, leaders of economy, who I did not assume would bow to a policy of coercion incompatible with free economy. I expected a certain support from all these circles, support which would make it possible for me to have a moderating, controlling influence in the Government. Therefore, I entered Hitler's Cabinet, not with enthusiastic assent, but because it was necessary to keep on working for the German people and exercise a moderating influence within the Government.
DR. DIX: In the course of time was no opposition ever developed within the Party?
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SCHACHT: In answering that question, I would like to say that within the Party, of course, the decent elements were by far in majority; the greater part of the population had joined the Party because of a healthy instinct and with good intentions driven by the need in which the German nation found itself.
I would like to say about the SS, for instance, that in the beginning numbers of decent people joined the SS because Himmler gave the SS the appearance of fighting for a life of ideals. I would like to call your attention to a book written by an SS man which appeared at that time under the significant title, Schafft anstaendige Kerle (Let's Make Decent Men).
But, in the course of time, Hitler knew how to gather around him all bad elements, within the Party and its organization, and to chain tightly all those elements to himself, because he understood how to exploit shrewdly any mistake, slip-up, or misdemeanor on their part. Yesterday I talked about drunkenness as a constituent part of Nazi ideology; I did not do that with the purpose of degrading anyone personally. I did it for another quite definite reason.
In the course of further developments, I observed that even many Party members who had fallen into this net of Hitler and who occupied more or less leading positions, gradually became afraid because of the consequences of the injustices and the evil deeds to which they were instigated by the regime. I had the definite feeling that these people resorted to alcohol and various narcotics in order to flee from their own conscience, and that it was only this flight from their own conscience that permitted them to act the way they did. Otherwise, there would be no explanation for the large number of suicides that took place at the end of the Nazi regime.
DR. DIX: You know that you are accused of being a participant in a conspiracy which had as its object an illegal violation of the peace. Did you at any time have secret discussions, or secret orders, or secret directives, which worked toward this objective?
SCHACHT: I may say that I myself never received any order or fulfilled any wish which might have been contrary to the conception of right. Never did Hitler request anything from me which he knew I would surely not carry out because it did not agree with my moral point of view. But neither did I ever notice or observe that one of my fellow ministers or one of the other leading men who did not belong to Hitler's inner circle-of course, I could not control that circle-or anyone else whom I met in official contacts, showed in any way that there was an intent to commit a war crime; on the contrary, we were always very glad when Hitler came off with one of his big speeches in which he assured, not only the entire world, but above all the German people that he was thinking of nothing except peace and peaceful work. The fact that Hitler deceived the
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world and the German people, and many of his co-workers is one of the things that I mentioned yesterday.
DR. DIX: Did you at any time-of course, I mean outside of your normal oath of office-take any oath or bind yourself in any other way to the Party or another National Socialist organization?
SCHACHT: Not a single oath and not a single obligation beyond my oath of office to the head of the State.
DR. DIX: Did you have close private relations with leading National Socialists, for example, with Hitler or Goering?
SCHACHT: I assume you mean a close friendly or social contact?
DR. DIX: Yes.
SCHACHT: I never had relations of that sort with Hitler. He repeatedly urged me in the first years to come to the luncheons at the Reich Chancellery where he was lunching with closer friends. I tried to do that twice. I attended twice at various intervals, and I must say that not only the level of the discussion at the luncheon and the abject humility shown to Hitler repulsed me but I also did not like the whole crowd, and I never went back again.
I never called on Hitler personally in a private matter. Of course, naturally, I attended the large public functions which all the ministers, the Diplomatic Corps and high officials, et cetera, attended, but I never had any intimate, social, or other close contact with him. That applies to the other gentlemen as well.
As a matter of course, in the first months of our acquaintance we visited each other on occasion, but all so-called social gatherings which still took place in the first period had a more or less official character. Close private relations simply did not exist.
DR. DIX: And does this answer apply to all the other leading National Socialists as well?
SCHACHT: All of them.
DR. DIX: When, for instance, did you speak for the last time with the following persons? Let us start first with Bormann.
SCHACHT: I gather from the use of the word "first" that you are going to mention others also.
DR. DIX: Yes, Himmler, Hess, Ley, and Ribbentrop.
SCHACHT: In that case I would like to make a few preliminary remarks: At the close of the French campaign, when Hitler returned triumphant and victorious from Paris, all of us-the ministers and the Reichsleiter and the other dignitaries of the Partner as I assume, and state secretaries, and so forth-received an invitation from the Reich Chancellery to be present at the Anhalter Railway Station to greet Hitler on his arrival. Since I was in Berlin at the time, it was
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impossible for me to refuse this invitation. It was 1940, the conflict between Hitler and myself had been going on for some time, and it would have been a veritable affront if I had stayed at home. Consequently, I went to the station and saw a very large number of Party dignitaries, ministers and so forth, but, of course, I do not remember any more just who all these people were.
DR. DIX: I beg your pardon for interrupting you. I have a rather poor memory for films and especially for newsreels, but I believe that that reception was shown in a newsreel and I believe that you were just about the only civilian who was present among those people.
SCHACHT: I personally did not see that film, but my friends told me about it. They mentioned especially that among all the gold braid, I was the only civilian in street clothes there. Of course, it could be ascertained from the film who was present at the time.
I mentioned this reception, for it might be possible that I said "Good morning" to many people and inquired about their health and so forth, and I also recall that I arrived at the station with the Codefendant Rosenberg in the same car, because there were always two people to a car. I did not attend the reception which followed at the Reich Chancellery. Rosenberg did go but I said, "No, I would rather not go. I am going home."
DR. DIX: Then, I may assume that you probably saw the leading men, Hess, Ley, Ribbentrop, Rosenberg, Frick, Frank, Schirach, Speer, Sauckel, Seyss-Inquart, Kaltenbrunner, et cetera, then for the last time?
SCHACHT: It is possible that all these gentlemen were there, but I did not speak at length with any of them except Hitler himself.
DR. DIX: Did you speak with Hitler at that time?
SCHACHT: Hitler addressed me, and that was one of the strangest scenes of my life. We were all standing in line and Hitler passed everyone by rather quickly. When he saw me, he came up to me with a triumphant smile and extended his hand in a cordial manner, something which I had not seen from him for a long time, and he said to me, "Now, Herr Schacht, what do you have to say now?" Then, of course, he expected me to congratulate him or express my admiration or a similar sentiment, and to admit that my prognostication about the war and about the disaster of the war was wrong, for he knew my attitude about the war quite exactly. It was extremely hard for me to avoid such an answer and I searched my mind for something else to say, finally replying: "I can only say to you, 'God protect you.' " That was the only significant conversation which I had that day. I believed the best way to have kept my
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distance was through just such a completely neutral and inconsequential remark.
DR. DIX: Well...
SCHACHT: But perhaps you would like me to refer to the individual gentlemen, and I can tell you with this exception just when I spoke to these gentlemen for the last time.
DR. DIX: Himmler?
SCHACHT: Himmler, I would judge that perhaps I talked to him last in 1936.
DR. DIX: Hess?
SCHACHT: Hess-of course I am not referring to the conversations here in the prison. I had not spoken with Hess for years before the beginning of the war.
DR. DIX: Ley?
SCHACHT: Ley, I had not seen him since the beginning of the war.
DR. DIX: Ribbentrop?
SCHACHT: I saw Ribbentrop last after my being thrown out of the Reichsbank, because I had to talk with him about the imminent journey to India, and that must have been, I would judge, February 1939. I have not talked with him since.
DR. DIX: Rosenberg?
SCHACHT: Rosenberg, always aside from this reception of Hitler's, perhaps not since 1936.
DR. DIX: Frick?
SCHACHT: I perhaps saw Frick last in the year 1938.
DR. DIX: Schirach?
SCHACHT: I did not even know Schirach.
DR. DIX: Speer?
SCHACHT: I talked with Speer for the last time-and I can tell you this exactly-when I went to the World Exposition in Paris in the year 1937.
DR. DIX: Of course, you are always referring to the time before you were taken prisoner?
SCHACHT: Yes, of course, naturally here I have...
DR. DIX: Sauckel?
SCHACHT: Not since the beginning of the war.
DR. DIX: Seyss-Inquart?
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SCHACHT: Seyss-Inquart, I would judge that I spoke to him for the last time in 1936, when I visited a colleague in the National Bank in Austria.
DR. DIX: Kaltenbrunner?
SCHACHT: I saw Kaltenbrunner for the first time here at the prison.
DR. DIX: We will refer to Hitler later. Frank is still missing.
SCHACHT: I saw Frank last perhaps 1937 or 1938.
DR. DIX: Most likely at the occasion of the speech you mentioned yesterday?
SCHACHT: Yes, possibly also afterwards at an official reception, but I do not believe that I saw him after 1938.
DR. DIX: Now, how about the leading men of the Wehrmacht, Keitel, for instance?
SCHACHT: I never had any contact with Keitel. I perhaps saw him at some social gathering, but never after 1938.
DR. DIX: Jodl?
SCHACHT: I made Herr Jodl's acquaintance here in the prison.
DR. DIX: Doenitz?
SCHACHT: I met Doenitz for the first time here in the prison.
DR. DIX: Raeder?
SCHACHT: Herr Raeder, I believe I have known him for quite some time. In the beginning we exchanged occasional visits within the family, visits of a semiofficial character but always on a friendly basis; however, I believe that I have also not seen him or talked to him since 1938.
DR. DIX: Brauchitsch?
SCHACHT: I have not talked with Brauchitsch since 1939, or since 1938, since the Fritsch affair.
DR. DIX: How about Halder?
SCHACHT: As you know, I saw Halder in connection with the Putsch in the fall of 1938 but not after that.
DR. DIX: How often did you see Hitler after your dismissal as President of the Reichsbank?
SCHACHT: After my dismissal as President of the Reichsbank?
DR. DIX: Since January 1939.
SCHACHT: I saw him once more in January 1939 because I had to discuss my future activity, et cetera, with him. And on that occasion he asked me-he knew that I had long wished to take an extensive journey-that I might avail myself of this opportunity to
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take this journey now, so there would not be so much talk about my leaving the Reichsbank. Then we agreed on the trip to India. On that occasion I also saw Goering for the last time. And then-after my return in August, I did not see him again-then the war came, during the course of which I saw him twice.
Shall I tell you about those two occasions?
DR. DIX: Yes.
SCHACHT: I saw him once in February 1940. At that time various American magazines and periodicals had requested me to write articles on Germany's interpretation of the situation, her desires, and her position in general. I had the inclination to do this, but because we were at war, I naturally could not do so without first informing the Foreign Minister. The Foreign Minister advised me that he had nothing against my writing an article for an American periodical, but that before sending off this article, he wanted to have the article submitted for censorship. Of course that did not appeal to me-I had not even thought of that-and, consequently, I did not write this article.
However, there were further inquiries from America and I said to myself, "It is not sufficient for me to talk with the Foreign Minister, I must go to Hitler in this matter." So, with that aim, I called on Hitler, who received me very soon after my request, and I told him at that time, among other things, just what my experience with Herr Von Ribbentrop had been, and I further told him that I thought it might be quite expedient to write these articles; and that it seemed vital to me to have constantly someone in America, who by means of the press, et cetera, could enlighten public opinion as to Germany and her interests.
Hitler was favorably impressed with this suggestion of mine and said to me, "I shall discuss this matter with the Foreign Minister." Consequently, this entire matter came to naught.
Then, later, through the good offices of my Codefendant, Funk, who probably had a discussion at that time with Ribbentrop about this matter, I tried to get at least an answer from Ribbentrop. This answer, given to Funk, was to the effect that it was still too early for a step of that sort. And that was my visit in 1940. Then I saw Hitler again in February of 1941...
DR. DIX: Pardon my interruption. So that we can avoid all misunderstandings, if Hitler had given you permission that you could have gone to America, just what would your activities have been? Tell us very briefly. I want no misunderstanding.
SCHACHT: First of all, I had not proposed going myself; I rather made a general suggestion. But, naturally, I would have been very glad to go to America for I saw a possibility. . .
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THE PRESIDENT: The Tribunal does not think it is material to know what he would have done if something had happened which did not happen.
DR. DIX: I just wanted to preclude any misunderstanding. I said that misunderstandings-Well let us drop the subject.
[Turning to the defendant.] Then, let us go on to your second visit.
SCHACHT: In 1941, in February, I called on Hitler once more because of a private affair. The year before my wife had died and now I intended to remarry. As Minister without Portfolio, which I still was, I naturally had to inform the Reich Chancellor and head of the State of my intention and I called on him for that reason. There was no political discussion on this occasion. As I was going to the door, he asked me, "At one time you had the intention, or you advised me, that someone should go to America. It is probably too late for that, now." I replied immediately, "Of course, it is too late for that now." And that was the only remark of a political nature made. The conversation dealt mainly with my marriage, and since then I did not see Hitler any more.
DR. DIX: And now your relations with Goering?
SCHACHT: I did not see Goering either since 1939.
DR. DIX: Now, I am turning to a point which has been repeatedly stressed by the Prosecution, that is, the propaganda value of your participation at Party rallies, and I would like to remind you of what Mr. Justice Jackson has already mentioned in his opening statement. I am translating from the English because I have no German text:
"Does anyone believe that Hjalmar Schacht, seated in the first row at the Nazi Party Rally of 1935 and wearing the Party emblem, was only included in the film for the purpose of making an artistic effect? This great thinker, in lending his name to this threadbare undertaking, gave it respectability in the eyes of every hesitating German."
Will you please state your opinion on this?
SCHACHT: First of all, I would like to make a few minor corrections. In 1935 I did not have a Party emblem. Secondly, Germans who were hesitating were no longer of any importance in 1935, for Hitler's domination had been firmly established by 1935. There were only those people who were turning away from Hitler but none who were still coming to him. And then, I must really consider it as a compliment that I am called a figure of importance, a great thinker, and so forth; but I believe that the reasons for my being and working in the Hitler Cabinet have
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been set forth by me in sufficient detail, so that I need not go into that any more.
The fact that in the first years especially I could not very well absent myself from the Party rallies is understandable, I believe, for they were Hitler's principal display of show and ostentation for the outside world, and not only did his ministers participate in the Party rallies but also a great many other representative guests.
May I add just a few more words?
I stayed away from the later Party rallies. For example, the Party Rally of 1935 mentioned by the Chief Prosecutor. That was the Party rally-and this is why I happen to remember it-at which the Nuremberg Laws against the Jews were proclaimed, and at the time I was not even in Nuremberg.
I attended the Party Rally in 1933 and in 1934. I am not certain whether I attended it in 1936 or 1937. I rather believe that I attended in 1936. I was decidedly missing at the later rallies and the last visit that I made at the Party Rally, which I have just mentioned, I attended only on "Wehrmacht Day."
DR. DIX: At these Party Rallies were the prominent foreigners- you already mentioned that. Was the Diplomatic Corps represented by the chiefs of the diplomatic missions?
SCHACHT: I believe that with the exception of the Soviet Ambassador, in the course of years all other leading diplomats attended the Party Rally, and I must say, in large numbers, with great ostentation and seated in the first rows.
DR. DIX: How did you explain that? The Diplomatic Corps only really takes part in functions of State and this was a purely Party matter? How was this participation explained?
MR. JUSTICE JACKSON: I think this is objectionable. If it please the Tribunal, I am in a position to object, because I am not embarrassed by it, if there is any embarrassment, but for this witness to explain the conduct of the ambassadors of other countries seems utterly beyond probative value. His opinion of what the ambassadors were doing, why they attended a Party rally which he was lending his name to, doesn't seem to me has any probative value. The fact that they attended I don't object to, but it seems to me that for him to probe, unless he has some fact-and I want to make clear I don't object to any facts that this witness knows, and I haven't objected to most of his opinions which we have been getting at great length. But I think for him to characterize the action of foreign representatives is going beyond the pale of relevant and material evidence.
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SCHACHT: May I make just one remark in reply?
THE PRESIDENT: I think we had better pass on, Dr. Dix.
DR. DIX: Yes, of course. However, I would ask to be given the permission to answer Mr. Justice Jackson briefly, not because I want to be stubborn, but I believe that if I answer now I can avoid later discussions and can save time thereby. I did not ask the defendant for his opinion. Of course Mr. Justice Jackson is right in saying that he is not here to give opinions about the customs of the Diplomatic Corps; but I asked him about a fact: How this participation on the part of the Diplomatic Corps, which is significant, was explained at that time. I consider this relevant, as will be seen more than once in the course of my questioning, and that is why I am saying it now, that throughout his and his political friends' oppositional activities, it is of prime importance to know who gave them moral, spiritual, or any other support, and who did not support them. And thereby, of course, the outward demeanor of the official representatives of foreign countries during the whole period is of tremendous importance, with regard to the capacity of this opposition group to act. One can support such a group; one can be neutral to it, or one can also combat it from abroad. That is the only reason why I put my question, and I deem myself obligated to consider this angle of the problem also in the future.
THE PRESIDENT: Dr. Dix, I don't think Mr. Justice Jackson's objection was to the fact that the diplomatic representatives were there but to comment upon the reasons why they were there. If all you want to prove is the fact that they were there, then I don't think Mr. Justice Jackson was objecting to that. What the defendant was going on to give, was his opinion of why the diplomatic representatives were there.
DR. DIX: I believe I do not need to make a further reply. He has already said that he does not wish to give an explanation, but if Your Lordship will permit me, I shall continue.
[Turning to the defendant.] Around that time, you certainly came into contact with prominent foreigners both officially and privately. What position did they take towards the trend of events at the time the National Socialists consolidated their power? And how did their attitude influence your own attitude and activity?
MR. JUSTICE JACKSON: May it please the Tribunal! I dislike to interrupt with objections, but I can't see how it exonerates or aids this defendant, that prominent foreigners may have been deceived by a regime for which he was furnishing the window dressings with his own name and prestige. Undoubtedly there
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were foreigners, I am willing to stipulate there were foreigners, like Dahlerus, who were deceived by this set-up of which he was a prominent and slightly respectable part. But it does seem to me that if we are going to go into the attitude of foreigners who are not indicted here or accused that we approach endless questions.
I see no relevance in this sort of testimony.
The question is here, as I have tried to point out to Dr. Dix, the sole thing that is charged against this defendant is that he participated in the Conspiracy to put this nation into war and to carry out the War Crimes and Crimes against Humanity incidental to it.
Now, I can't see how the attitude of foreigners either exonerates or helps the Court to decide that question. If it does, of course I don't object to it, but I can't see the importance of it at this stage.
DR. DIX: I do believe that Mr. Justice Jackson...
THE PRESIDENT: Wait a minute, Dr. Dix, what exactly was the question that you were asking at that moment? What had it reference to?
DR. DIX: I asked the witness what the attitude was that was taken by prominent foreigners with whom he came into contact at that time, officially and privately during the period that the regime consolidated its power. Did they reject the regime, or were they sympathetic to it? In other words, just how far did these foreigners influence him and his thinking? And may I...
THE PRESIDENT: I think you know, Dr. Dix, that to ask one witness what the attitude of other people is is a very much too general form of question. Attitude-what does the word mean? It is far too general, and I do not understand exactly what you are trying to prove.
DR. DIX: I will make the question more precise.
How, Dr. Schacht, through your exchange of thoughts with foreigners, was your personal attitude influenced? How was your attitude and your activity influenced through the attitude of these foreigners?
[Turning to the Tribunal.]That is something which Dr. Schacht can testify to alone, because it is of an intimate nature and personal to Schacht. Your Lordship, I want quite openly to state the point to be proved which seems very relevant to the Defense and on which this question is based. I do not wish to conceal anything.
I, the Defense, maintain that this oppositional group-about which Gisevius has already spoken, and of which Schacht was a prominent member-that this group not only received no support from abroad, but that foreigners rendered the opposition more
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difficult. That is not a criticism that is leveled towards foreign governments.
There is no doubt that the representatives of these countries took that attitude in good faith and with a sense of duty in the service of their countries. But it was of decisive value for the attitude of these men of this oppositional group what position the foreign countries took to this regime; whether they respected or whether they supported it by precedence given its representatives, socially, as far as possible, or, through caution and reserve, showed their disinclination to it, thereby strengthening this oppositional group.
This evidence is of the utmost importance to me in the carrying on of the defense. I have stated it quite openly, and, as much as I can, I will fight for this piece of evidence.
THE PRESIDENT: Dr. Dix, the Tribunal has considered the argument which you have presented to it and they think that the investigation of these facts is a waste of time and is irrelevant. They will, therefore, ask you to go on with the further examination of the defendant.
DR. DIX: Dr. Schacht, you supported the rearmament through financing by the Reichsbank. Why did you do that?
SCHACHT: I considered that Germany absolutely had to have political equality with other nations, and I am of the same opinion today; and in order to reach this state, it was necessary that either the general disarmament which had been promised by the Allied powers would come into effect, or that if equal rights were to be obtained Germany would have to rearm on a corresponding scale.
DR. DIX: Was this financial help by the Reichsbank your work alone or was that decreed through the Directorate of the Reichsbank?
SCHACHT: In the Reichsbank, the Leadership Principle was never applied; I rejected the Leadership Principle for the Reichsbank. The Reichsbank was governed by a group of men all of whom had an equal power to vote and if there was a "tie,'' the vote of the chairman was the decisive vote, and beyond that the chairman had no rights in this board.
DR. DIX: You are familiar with the affidavit of the former Reichsbank Director Puhl. Did-I put the question taking into consideration the contents of this affidavit with which the Tribunal is acquainted-Puhl also participate in giving financial help from the Reichsbank for rearmament?
SCHACHT: Herr Puhl participated in all decisions which were made by the Reichsbank Directorate on this question and not once did he oppose the decision reached.
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DR. DIX: It is known to you that the Reichsbank's method of financing consisted in the discounting of the so-called mefo bills. The Prosecution have discussed this fact in detail and the aforementioned affidavit signed by Puhl says that this method made it possible to keep the extent of rearmament secret. Is that correct?
SCHACHT: We cannot even talk about keeping the armament a secret. I call your attention to some excerpts from documents presented and submitted by the Prosecution themselves as exhibits. I quote first of all from the affidavit by George Messersmith, dated 30 August 1945, Document Number 2385-PS, where it says on Page 3, Line 19: "Immediately after the Nazis came into power they started a vast rearmament program." And on Page 8 it says: "The huge German armament program which was never a secret...."
Thus, Mr. George Messersmith, who was in Berlin at the time, knew about these matters and I am sure, informed his colleagues also.
I continue quoting from Document Number EC-461. It is the diary of Ambassador Dodd, where it says, under 19 September 1934, and I quote in English for I just have the English text before me:
"When Schacht declared that the Germans are not arming so intensively, I said: Last January and February Germany bought from American aircraft people one million dollars worth of high-class war flying machinery and paid in gold."
This is from a conversation between Dodd and myself which took place in September 1934 and he points out that already in January and February 1934 war aircraft...
[The proceedings were interrupted by technical difficulties in the lighting system.]
THE PRESIDENT: The Tribunal will adjourn.
[A recess was taken.]
THE PRESIDENT: The Tribunal would like to know how long you expect to be with your examination-in-chief of the defendant. You have already been nearly a whole day, and the Tribunal think, in view of the directions in the Charter, that the examination of the defendant ought to finish certainly in a day.
DR. DIX: Your Lordship, there are two things I do not like to do, to make prophecies which do not come true and to make a promise I cannot keep.
May I answer the question by saying that I consider it quite impossible for me to finish today. I am fully aware of the rules
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of the Charter, but on the other hand I am asking you to consider that the Prosecution have tried to prove the accusations against Schacht by numerous pieces of evidence, directly and indirectly relevant facts, and that it is my duty to deal with these individual pieces of evidence offered by the Prosecution.
Please apply strict measures to my questions and if the Tribunal should be of the opinion that there is something irrelevant, then I shall certainly adhere to their ruling. However, I do think that I have not only the right, but also the duty to put any questions which are necessary to refute the evidence submitted by the Prosecution.
I shall, therefore, certainly not be able to finish today. I think- I should be extremely grateful if you would not make me prophesy, it may go faster and tomorrow I may finish in the course of the day but it may even take the whole day-I cannot say for certain. In any case, I shall make every effort to put only relevant questions. If the Tribunal should be of the opinion that something is not relevant, I ask to be told so after I have explained my standpoint.
THE PRESIDENT: I think you had better get on at once then, Dr. Dix, and we'll tell you when we think your questions are too long or too irrelevant.
DR. DIX: Now, Dr. Schacht, we were considering the mefo bills, did you consider them as a suitable means of keeping the rearmament secret? Have you anything else to say to that question?
SCHACHT: The mefo bills as such, as far as rearmament was concerned, had of course no connection with the question of secrecy, for the mefo bills were used to pay every supplier. And there were, of course, hundreds and thousands of small and big suppliers all over the country.
Apart from that, before they could be taken to the Reichsbank, the mefo bills circulated among the public for at least 3 months and the suppliers who required cash used the mefo bills to discount them in their banks or to have advances made on the strength of them, so that all banks participated in this system.
But I should like to add also that all the mefo bills, which were taken up by the Reichsbank, were listed on the bill account of the Reichsbank. Furthermore, I should like to say that the keeping secret of State expenditure-and armament expenditures were State expenditure-was not a matter for the President of the Reichsbank but an affair concerning the Reich Minister of Finance. If the Reich Minister of Finance did not publish the guarantees which he had accepted for the mefo bills, then that was his affair and not mine. I am not responsible for that. The responsibility for that lies with the Reich Minister of Finance.
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DR. DIX: The next question, Your Lordship, might arouse doubts as to its relevancy. I personally consider it irrelevant for the verdict in this Trial. However, it has been mentioned by the Prosecution, and for that reason alone I think it is my duty to give Dr. Schacht an opportunity to reply and to justify himself.
The Prosecution have represented the view that the financing by means of mefo bills, from the point of view of a solid financial procedure, was also very hazardous. One might adopt the view that that may have been the case or not to make this verdict...
THE PRESIDENT: Ask the question, Dr. Dix, ask the question.
DR. DIX: You have heard what I have in mind.
SCHACHT: It goes without saying that in normal times and under normal economic conditions such means as mefo bills would not have been resorted to. But if there is an emergency, then it has always been customary, and it has always been a policy recommended by all experts, that the issuing bank should furnish cheap money and credits so that the economic system can, in turn, continue to function.
Mefo bills, of course, were a thoroughly risky operation, but they were absolutely not risky if they were connected with a reasonable financial procedure and to prove this I would say that if Herr Hitler, after 1937, had used the accruing funds to pay back the mefo bills, as had been intended-the money was available-then this system would have come to its end just as smoothly as I had put it in operation. But Herr Hitler preferred simply to refuse to pay the bills back, and instead to invest the money in further armament. I could not foresee that someone would break his word in such a matter too, a purely business matter.
DR. DIX: But, if the Reich had met the bills and had paid, then means would no doubt have partly been lacking for further rearmaments and the taking up of the bills would therefore have curtailed armament. Is that a correct conclusion?
SCHACHT: That, of course, was the very purpose of my wanting to terminate the procedure. I said if the mefo bills were not met, it would obviously show ill-will; then there would be further rearming, and that cannot be.
DR. DIX: Earlier you briefly dealt with the question of keeping armament secret in another connection. Have you anything to add to that?
SCHACHT: I think in a general manner it must be realized that State expenditures do not come under the jurisdiction of the President of the Reichsbank, and that the expenses and receipts of the State are under the control of the Reich Minister of Finance,
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and consequently the responsibility lies in his hands and it is his duty to publish the figures. Every bill which the Reichsbank had in its possession was made known every week.
DR. DIX: Is that what you have to add to your answer to the basic question of allegedly keeping the armament program secret?
DR. DIX: You have also already explained on the side why you fundamentally were in favor of rearmament. Have you anything to add to that?
SCHACHT: Yes. A few very important remarks are, of course, to be made on that and since this question concerns the chief accusation against me, I may perhaps deal with it in greater detail.
I considered an unarmed Germany in the center of Europe, surrounded by armed nations, as a menace to peace. I want to say that these states were not only armed but that they were, to a very large part, continuing to arm and arming anew. Especially two states which had not existed before, Czechoslovakia and Poland, were beginning to arm, and England, for example, was continuing to rearm, specifically with reference to her naval rearmament in 1935, et cetera.
I should like to say quite briefly that I myself was of the opinion that a country which was not armed could not defend itself, and that consequently it would have no voice in the concert of nations. The British Prime Minister Baldwin once said, in 1935:
"A country which is not willing to take necessary precautionary measures for its own defense will never have power in this world, neither moral power nor material power."
I considered the inequality of status between the countries surrounding Germany and Germany as a permanent moral and material danger to Germany.
I further want to point out-and this is not meant to be criticism, but merely a statement of fact-that Germany, after the Treaty of Versailles, was in a state of extreme disorganization and confusion. Conditions in Europe were such that, for example, a latent conflict and controversy existed between Russia and Finland and between Russia and Poland which had considerable parts of Russian territory. There was Russia's latent conflict with Romania which had Bessarabia, and then Romania had a conflict with Bulgaria about the Dobruja and one with Hungary about Siebenbuergen. There were conflicts between Serbia and Hungary, and between Hungary and nearly all her neighbors and between Bulgaria and Greece. In short all of Eastern Europe was in a continuous state of mutual suspicion and conflict of interests.
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In addition, there was the fact that in a number of countries there were most serious internal conflicts. I remind you of the conflict between the Czechs and the Slovaks. I remind you of the civil war conditions in Spain. All that will make it possible to understand that I considered it absolutely essential that in the event of the outbreak of any conflagration in this devil's punch bowl, it was an absolute necessity for Germany to protect at least her neutral attitude. That could not possibly be done with that small army of 100,000 men. For that an adequate army had to be created.
Here in prison I accidentally came across an edition of the Daily Mail, dated April 1937, where the conditions in Europe were described, and I beg you to allow me to quote one single sentence. I shall have to quote it in English. It does not represent the views of the Daily Mail; it only describes conditions in Europe.
"All observers are agreed that there is continual peril of an explosion and that the crazy frontiers of the peace treaties cannot be indefinitely maintained. Here, too, rigorous noninterference should be the King of the British chariot. What vital interests have we in Austria or in Czechoslovakia, or in Romania, or in Lithuania or Poland?"
This merely describes the seething state of Europe at that time, and in this overheated boiling pot which was always on the point of exploding, there was Germany, unarmed. I considered that a most serious danger to my country.
Now, I shall probably be asked whether I considered Germany threatened in any way. No, Gentlemen of the Tribunal, I did not consider Germany threatened directly with an attack, nor was I of the opinion that Russia was likely to attack Germany. However, for example, we had experienced the invasion of the Ruhr in 1923 and these past events and the actual situation made it imperative for me to demand equality for Germany and to support a policy that would attempt to achieve this.
I assume that we shall deal with the reasons for the carrying out of the rearmament and with the reaction of foreign countries, et cetera.
DR. DIX: What did you know at the time about Germany's efforts to cause the other nations to disarm? Did that have anything to do with your decisions?
SCHACHT: Let me tell you the following:
Fundamentally, I was not in favor of rearmament. I only wanted equality for Germany. That German equality could be brought about either by means of disarmament on the part of the other
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nations or by our own rearmament. I would have preferred, in fact I desired disarmament on the part of the others, which anyway had been promised to us. Consequently I most zealously tried all along for years to prevent a rearmament, if general disarmament could be brought about.
The disarmament on the part of the others did not take place, although the Disarmament Committee of the League of Nations had repeatedly declared that Germany had met her obligations regarding disarmament.
To all of us who were members of the so-called National Government at the time, and to all Germans who participated in political life, it was a considerable relief that during the first years Hitler, again and again, strove for and suggested general disarmament. Afterwards, of course, it is easy to say that that was a false pretense and a lie on Hitler's part, but that false pretense and that lie would have blown up quite quickly if the countries abroad had shown the slightest inclination to take up these suggestions.
I remember quite well what was told Foreign Minister Eden of Great Britain when he visited Germany at the beginning of 1934, because I was present at the social festivities. Quite concrete proposals concerning Germany's obligations in all disarmament questions, in case disarmament on the part of the others was begun and carried out, were made to him. It was promised to Eden that all so-called half-military units, like the SS, the SA, and the Hitler Youth, would be deprived of their military character if only the general disarmament could be accelerated by those means.
I could produce a number of quotations regarding these offers to disarm, but since it is the wish of the President not to delay the proceedings, I can forego that. They are all well-known statements made by statesmen and ministers, ambassadors, and such, all of which have the same tenor, namely, that it was absolutely essential that the promise made by the Allies should be kept; in other words, that disarmament should be carried out.
DR. DIX: Excuse me if I interrupt you, but we can do it more quickly and more simply by asking the Tribunal to take judicial notice of Exhibit Number Schacht-12, which I have been granted, without my reading it, Page 31 of the English translation of my document book. These are pertinent remarks and speeches made by Lord Cecil and others, by the Belgian Foreign Minister, et cetera. There is no need to read them; they can be presented. I just hear that they have been presented, and I can refer to them.
Pardon me, please. Continue.
SCHACHT: Well, in that case I am finished with my statement. Hitler made still further offers but the other countries did not take
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up a single one of these offers, and thus, unfortunately, only one alternative remained, and that was rearmament. That rearmament carried out by Hitler was financed with my assistance, and I assume responsibility for everything I have done in that connection.
DR. DIX: Do I understand you correctly? Can one draw the conclusion from your statement that there were other reasons for your assistance in the rearmament program, that you had the tactical consideration that, by putting German rearmament up for discussion, the debate on disarmament amongst the other governments might be started again? This debate, so to say, had died down?
SCHACHT: If I may, I will illustrate it briefly by means of an example:
Two parties have a contract with each other. One party does not live up to that contract, and the other party has no way of making him fulfill his obligations. Thus the other party can do nothing except, in turn, not adhere to the contract. That is what Germany did. That is what I supported. Now, of course, I must say that I had expected a type of reaction which in such a case must always be expected from the partner to a contract, namely, that he would say, "Well, if you do not keep up the contract either, then we shall have to discuss this contract again."
I must say-and I can quite safely use the word-it was a disappointment to me that Germany's rearmament was not in any way replied to by any actions from the Allies. This so-called breach of contract on Germany's part against the Versailles Treaty was taken quite calmly. A note of protest was all; nothing in the least was done, apart from that, to bring up again the question of disarmament in which I was interested.
Not only was Germany allowed to go on rearming but the Naval Agreement with Great Britain did, in fact, give Germany the legal right to rearm contrary to the Versailles Treaty. Military missions were sent to Germany to look at this rearmament, and German military displays were visited and everything else was done, but nothing at all was done to stop Germany's rearmament.
MR. JUSTICE JACKSON: If the Tribunal please, I cannot see the point of all this detail. We have conceded that rearmament here, except as it was involved with aggressive purposes, is immaterial. As I said in the opening, the United States does not care to try here the issues of European politics, nor are they submitted to this Tribunal for decision.
The sole question here is the Indictment, charging arming with the purpose of aggression.
I do not want to interfere with the defendant giving any facts that bear on his aggressive intentions, but the details of negotiations,
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of European politics and charges and countercharges between governments, it seems to me, lies way back of any inquiry that we could possibly make, and the details of this matter seem to me not helpful to the solution of the issues here, and I think was ruled out by the Tribunal in the case of Goering, if I am not mistaken.
THE PRESIDENT: Well, Dr. Dix, it all seems to be a matter of argument, and argument isn't really the subject of evidence.
DR. DIX: I do not believe so, Your Lordship. What Mr. Justice Jackson said is quite correct. Schacht is accused of having assisted in bringing about an aggressive war, but this assistance of his is supposed to have consisted in the financing which he carried out.
THE PRESIDENT: Go on, Dr. Dix, and do try to make it as short as possible.
DR. DIX: I think you had come to the end of that question anyway.
May I refer in this connection to one of the motives for Dr. Schacht's assistance in rearmament. It was his hope to renew the debate on disarmament. May I draw your attention to Exhibit Number Schacht-36, Page 141 of the German text, and Page 149 of the English text? It is an affidavit from Dr. Schacht's son-in-law, Dr. Von Scherpenberg. On Page 2 of that affidavit you will find the following brief paragraph which I propose to read; in fact, I can confine myself to one sentence:
"He"-that is to say, Schacht-"considered rearmament within certain limits to be the only means for the re-establishing of the disturbed equilibrium and the only means of inducing the other European powers to participate in a limitation of armaments which, in opposition to the Versailles Treaty, they had sought to avoid."
That is a statement of Scherpenberg regarding conversations which Schacht had had at that time. It is, therefore, not an ex post facto opinion; it is the report of a conversation which he, Scherpenberg, had with his father-in-law Schacht at that time. That is just an additional remark I wanted to make.
[Turning to the defendant.] You have spoken about the rearmament on the part of the other states, particularly Czechoslovakia and Poland, but can you tell us whether at the time you knew of or heard any exact details regarding the state of armament of those two states?
SCHACHT: I know only that it was known about Russia that in 1935 she announced that her peacetime army should be increased to 960,000 men.
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Then I knew that in Czechoslovakia, for instance, the installation of airdromes was one of the leading tasks of rearmament. We knew that Great Britain's Navy was to be stepped up.
DR. DIX: Did you later on completely abandon your idea of general disarmament?
SCHACHT: To the contrary, I used every opportunity, in particular during conversations with men from abroad, to say that the aim should always be disarmament, that, of course, rearmament would always mean an economic burden for us, which we considered a most unpleasant state of affairs.
I remember a conversation which I had with the American Ambassador Davies. His report of this conversation is incorporated in an exhibit that has been submitted to the Tribunal. It is an entry in a diary which is repeated in his book, Mission to Moscow, and it is dated as early as 20 June 1937, Berlin. He is writing about the fact that among other things he and I had talked about disarmament problems, and I need only quote one sentence. I do not have the number of the document, Your Lordship, but it has been submitted to the Tribunal.
DR. DIX: It is Exhibit Schacht-18, German Page 43, English Page 49.
SCHACHT: Since I have only the English text, I shall read from it.
"When I outlined the President's (Roosevelt) suggestion of limitation of armament to defensive weapons only, such as a man could carry on his shoulder, he (means Schacht) almost jumped out of his seat with enthusiasm."
It becomes clear, therefore, from Ambassador Davies' remark that I was most enthusiastic about this renewed attempt and the possibility of an imminent step towards disarmament as proposed by President Roosevelt.
In this same book, Davies reports a few days later on 26 June 1937 about the conversation he had with me, in a letter addressed to the President of the United States. I quote only one very brief paragraph-in English again:
"I then stated to him (that is, Schacht) that the President in conversation with me had analyzed the European situation and had considered that a solution might be found in an agreement among the European nations to a reduction of armaments to a purely defensive military basis and this through the elimination of aircraft, tanks, and heavy equipment, and the limitation of armaments to such weapons only
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as a man could carry on his back, with an agreement among the nations for adequate policing of the plan by a neutral state. Schacht literally jumped at the idea. He said: 'That's absolutely the solution.' He said that in its simplicity it had the earmarks of great genius. His enthusiasm was extraordinary."
DR. DIX: To what extent did you want rearmament?
SCHACHT: Not beyond equality with every single one of our neighbor states.
DR. DIX: And did Hitler talk to you of far-reaching intentions, or did you hear of any?
SCHACHT: At no time did he tell them to me, nor did I hear from anyone else, whether he had made remarks about further intentions.
DR. DIX: Were you informed about the extent, the type and speed of rearmament?
SCHACHT: No, I was never told about that.
DR. DIX: Had you set yourself a limit regarding this financing or were you prepared to advance any amount of money?
SCHACHT: I was certainly, by no means, ready to advance any unlimited amount of money, particularly as these were not contributions; they were credits which had to be repaid. The limits for these credits were twofold. One was that the Reichsbank was independent of the State finance administration, and the supreme authority of the State as far as the granting of the credits was concerned. The Board of Directors of the Reichsbank could pass a resolution that credits were to be given, or were not to be given, or that credits were to be stopped, if they considered it right, and as I was perfectly certain of the policy of the Board of Directors of the Reichsbank-all of these gentlemen agreed with me perfectly on financial and banking policy-this was the first possibility of applying a brake, if I considered it necessary.
The second safeguard-limit was contained in the agreement which the Minister of Finance, the Government, and of course Hitler had made-the mefo bills, of which these credits consisted, were to be paid back when they expired. They were repayable after 5 years, and I have already said that if the repayments had been made, funds for rearmament would naturally have had to decrease. Therein lay the second possibility of limiting the rearmament.
DR. DIX: Will you please give now to the Tribunal the figures which you were dealing with at the time?
SCHACHT: We went up to...
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MR. JUSTICE JACKSON: We have no desire to enter into controversy about the figures of financing rearmament. It seems that the detail of dollars and cents or Reichsmarks is unimportant to this, and terribly involved. We aren't trying whether it cost too much or too little; the purpose of this rearmament is the only question we have in mind. I don't see that the statistics of cost have anything to do with it.
THE PRESIDENT: Dr. Dix, we would like to know what figures the accused and you are talking about.
DR. DIX: The amounts that Schacht as President of the Reich bank was ready to grant for the rearmament program; that, no doubt, is relevant, because if those amounts remained within such limits as might possibly be considered adequate for defensive rearmaments in case of emergency, then, of course, the extent of that financial assistance is a very important piece of evidence regarding the intentions which Schacht was pursuing at the time. That is the very thing that, in the case of Schacht, Mr. Justice Jackson considers relevant, namely, whether he helped prepare for an aggressive war. If he were considering only the possibility of a defensive war in his financing and placed only sums at the disposal of the rearmament program which would never have allowed an aggressive war, then that would refute the accusation raised by the Prosecution against the defendant, and I think that the relevance of that question cannot be doubted.
THE PRESIDENT: Are you saying that if the Defendant Schacht placed at the disposal of the Reich, say, 100 millions, or whatever the figure is, it would be defensive, and if he placed 150 millions, it would be not defensive, or what? Is it simply the amount?
DR. DIX: No, I want to say that if, as will be proved, he only wanted to give 9 and later on gave hesitatingly and unwillingly 12 millions for the purpose, then that contribution can never have been aimed at an aggressive war.
THE PRESIDENT: It is simply the amount?
DR. DIX: Yes, only the size of the amount.
THE PRESIDENT: Well, that can be stated very shortly, but as for details of finance...
DR. DIX: I am also of the opinion that we have talked about it too long. I was only going to ask, "What amount did you give?" and then the objection was raised, and thus the discussion was drawn out. May I put the question?
THE PRESIDENT: Yes.
DR. DIX: [Turning to the defendant.] Well, then, what amount did you intend to grant?
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SCHACHT: Naturally as little as possible; however, what I contributed is what is decisive. I placed at their disposal-to give one figure and to be very brief-until 31 March 1938, credits amounting to a total of 12,000,000,000 Reichsmark. I have discussed that with one of the interrogators of the British Prosecution, who asked me about the subject, and I replied that that was about one third of the amount which was spent on rearmament. After that, without the Reichsbank, beginning with 1 April 1938, the figure stated in that budget year for rearmament was 11,000,000,000, and in the subsequent year, 20,500,000,000, and of that not a pfennig came from the Reichsbank.
DR. DIX: That was after your resignation, was it not?
SCHACHT: That was after I had stopped credits.
For the record I should like to say that I think I made a mistake before. I said millions instead of milliards, but I think it is obvious what I meant. I wanted only to correct it.
DR. DIX: Now, then, Dr. Schacht, the Prosecution have stated that on 19 February 1935 the Ministry of Finance received authority to borrow unlimited amounts of money if Hitler ordered them to do so.
SCHACHT: Here, again, the prosecutor did not see things in the proper light. The President of the Reichsbank is not responsible for the actions of the Reich Minister of Finance. I think the President of the Federal Reserve Bank in New York can hardly be held responsible for the things done by the Secretary of the Treasury in Washington.
DR. DIX: You have also been accused that the debt of the Reich increased three times during the time while you were President of the Reichsbank.
SCHACHT: I might just as well be accused of being responsible for the fact that the birth rate in Germany rose sharply during the time I was President of the Reichsbank. I want to emphasize the fact that I had nothing to do with either.
DR. DIX: You were not responsible for the same reason.
SCHACHT: No, of course I am not responsible for that.
DR. DIX: And presumably the same applies to the point made by the Prosecution that you allegedly drafted a new finance program in 1938?
SCHACHT: On the contrary, I refused to do anything else for the financing of rearmament; the finance program was drafted by a state secretary in the Reich Finance Ministry, and it looked like it.
DR. DIX: One of your economic policies, during the time you were Minister of Economy, and which you have been accused of as
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being a preparation for war, was the so-called "New Plan" (Neue Plan). What was that?
SCHACHT: May I first of all say that the New Plan had nothing at all to do with rearmament. Germany, after the Treaty of Versailles, had fallen into a state of distress, economically speaking and especially export ..
DR. DIX: Your Lordship, if the Tribunal is of the opinion that the New Plan has nothing to do with the rearmament and preparations for war-I think the Prosecution are of the opposite opinion- then, of course, the question is irrelevant, and I will drop it. I am only putting it because the New Plan has been used in the argumentation of the Prosecution.
THE PRESIDENT: If you say, and the defendant has just said that the New Plan had nothing to do with rearmament, I think you might leave it for cross-examination and you can raise it again in re-examination if it is cross-examined.
DR. DIX [Turning to the defendant]: In that case I shall not ask you about the barter agreements, either. I shall leave it to the Prosecution to bring it out during the cross-examination. I cannot see what it has to do with the preparation for war.
Now, you have already stated that you strove to remove the Versailles Treaty by means of peaceful negotiations, or at least, to modify it. In the opinion which you held at that time did any such means for a peaceful modification of the Versailles Treaty still exist?
SCHACHT: In my opinion, there were no means other than peaceful ones. The desire to modify the Versailles Treaty by means of a new war was a crime.
DR. DIX: Well. But now you are being accused that the alleged preparations for war, which really were a countermeasure to the general rearmament although not a preparation for an aggressive war, were nevertheless a rearmament, and as such, were an infringement of the Treaty of Versailles. I assume that you, at the time, decided to help finance that rearmament only after giving the problem due legal and moral considerations. What, exactly, were these considerations?
SCHACHT: I think I have already answered that question in detail. I need add nothing else.
DR. DIX: Very well. Insofar as you know, was this attitude of yours, the attitude of a pacifist and of someone who was definitely opposed to the extension of living space in Europe, known abroad?
SCHACHT: As long as I have been President of the Reichsbank, that is to say from March 1933-and I am, of course, only talking
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about the Hitler regime-my friends and acquaintances abroad were fully informed about my attitude and views. I had a great many friends and acquaintances abroad, not only because of my profession but also outside of that and particularly in Basel, Switzerland, where we had our monthly meeting at the International Bank, with all the presidents of the issuing banks of all the great and certain neutral countries, and I always took occasion at all these meetings to describe quite clearly the situation in Germany to these gentlemen.
Perhaps I may at this point refer to the so-called conducting of foreign conferences or conversations. If one is not allowed to talk to foreigners any more, then one cannot, of course, reach an understanding with them. Those silly admonitions, that one had to avoid contact with foreigners, seem entirely uncalled for to me, and if the witness Gisevius deemed it necessary the other day to protect his dead comrades, who were my comrades too, from being accused of committing high treason, then I should like to say that I consider it quite unnecessary. Never at any time did any member of our group betray any German interests. To the contrary, he fought for the interests of Germany, and to prove that, I should like to give you a good example:
After we had occupied Paris, the files of the Quai d'Orsay were confiscated and were carefully screened by officials from the German Foreign Office. I need not assure you that they were primarily looking for proof whether there were not any so-called defeatists circles in Germany which had unmasked themselves somewhere abroad. All the files of the Quai d'Orsay referring to my person and, of course, there were records of many discussions which I had had with Frenchmen, were examined by the Foreign Office officials at that time, without my knowing it.
One day-I think it probably happened in the course of 1941-I received a letter from a German professor who had participated in this search carried out by the Foreign Office. I shall mention the name so that, if necessary, he can testify. He is a Professor of Finance and National Economy, Professor Stueckenbeck of Erlangen, and he wrote me that at this investigation...
THE PRESIDENT: The Tribunal cannot see any point in this, so far as this Trial is concerned. In any event, if the defendant says that he did not, in any way, give away the interests of Germany, surely that is sufficient. We do not need all the details about it. What it has got to do with this Trial, I do not know.
DR. DIX: I think, Your Lordship, that that was not the point of the statement. What he wants to say is that reliable men abroad knew him and were acquainted with the fact that he was certainly a man of peace and not a man who prepared aggressive wars, and that applies even to the period of rearmament.
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THE PRESIDENT: But he said that 5 minutes ago.
DR. DIX: I do not think the question of Professor Stueckenbeck is so important, but it certainly seems pertinent to me what Ambassador Davies said about his conversation with the then Foreign Commissar of the Soviet Republic, Litvinov. This is contained in Exhibit Schacht-18 of my document book. It is Page 43 of the German text, and Page 49 of the English text. May I read one paragraph, and then ask Dr. Schacht briefly whether that statement of Ambassador Davies corresponds to his recollection? It is Davies' report, an extract from his book Mission to Moscow. A report is there to the Secretary of State in the United States. The passage is on Pages 108 and 109.
"Pursuant to an appointment made, I called upon Commissar for Foreign Affairs Litvinov to present my respects before departure for the United States.
"I then stated that the European situation in its elementals looked simple and that it was difficult to understand why the statesmanship of Europe could not provide that England, France, Germany, Italy, and Russia should agree to preserve the territorial integrity of Europe and through trade agreements provide Germany with raw materials, thereby giving the assurance that she could live, which would relieve the peoples of Europe and the world of these terrific burdens of armament and of the fear of catastrophic war. The prompt rejoinder was: 'Do you think Hitler would ever agree to anything like that?' I said that I did not know, but that it was my opinion that there was a very substantial body of influential and responsible men in Germany that such an idea would appeal to. Litvinov replied that he thought that might be so; that Schacht was of that type; he did not think they could prevail against Hitler and the political and military forces dominant in Germany."
And now I ask you, do you remember that conversation with Davies?
SCHACHT: I think there must be a mistake. I did not speak to Davies about this, I spoke to Litvinov. This is a report of Davies to the Secretary of State, about which I did not know.
DR. DIX: Yes, you are perfectly right.
It has been repeatedly emphasized by the Prosecution that your knowledge of Hitler's intentions of war resulted also from your being Plenipotentiary for War Economy and a member of the Reich Defense Counsel. Goering has made a detailed statement on it. Have you anything new to add to Goering's statement?
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SCHACHT: I think the witness Lammers has also talked about it. I should like merely to confirm that the first Reich Defense Counsel of 1935 was nothing other than the legalization of a committee which existed before 1933, made up of ministerial officials who were supposed to deal with economic measures as well as administrative measures, which might have to be taken in the event of a threat of war against Germany.
DR. DIX: How often did you have a meeting especially with the Minister of War and the Plenipotentiary for Administration?
SCHACHT: This famous triumvirate, this Three Man College described by one of the prosecutors as the cornerstone of war policy, never met at all, and it is no wonder that we lost the war, if that was the cornerstone.
DR. DIX: The Prosecution have also referred to the report of the Ministry of War regarding the task of the Reich Defense Counsel of 1934. It is Document Number EC-128, Exhibit Number USA-623. Have you anything in particular to add to that?
SCHACHT: Yes, I should like to have permission to quote one very brief paragraph. I see there are only two sentences. This report contains the following statement:
Referring to the experiences of World War I, that is 1914 to 1918, and I quote-I shall have to do it in English since I have only the English, I quote:
"At that time we were able to extend our bases for raw materials and production toward the West: Longwy, Briey, Tourcoing, Roubaix, Antwerp (textiles), and toward the East, Lodz, and Southeast (ore mines in Serbia and Turkey, mineral oils in Romania). Today we have to reckon with the possibility of being thrown back in our own country and even of being deprived thereby of most valuable industrial and raw material in the West and in the East."
I think that if anyone wanting to prepare an aggressive war had calculated in September 1934 that one would have to protect oneself against the possibility of such a situation arising, that this is the best proof that there can be no question of an aggressive war at all.
DR. DIX: In that connection, under the heading of "peaceful efforts," can you perhaps also tell the Tribunal what your peaceful efforts were, to have the reparations clauses of the Versailles Treaty modified or even abolished?
SCHACHT: From the very first moment, after the reparations were determined in 1921 or so, I fought against this nonsense with the argument that the carrying out of those reparations would throw the entire world into economic chaos. One cannot, during one
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generation, pay 120,000,000,000 Reichsmark or about 2,000,000,000 Reichsmark yearly, as at that time...
DR. DIX: We would like to make it brief. Will you please talk only about your peaceful efforts and not about national economy?
SCHACHT: All right, I will not talk about national economy.
I fought against it and, as time went by, I did succeed in convincing the people of almost all the countries that this was sheer nonsense. Therefore in July of 1932, if I am not mistaken, the then Reich Chancellor Papen was in a position to affix his signature to an agreement at Lausanne, which reduced reparations, de jure, to a pending sum of 3,000,000,000, and which, de facto, canceled reparations altogether.
DR. DIX: Did you then continue your definitely peaceful efforts in other fields? You have already touched upon the negotiations in Paris regarding the colonial question. I wonder if you have anything to add to that in this connection?
SCHACHT: I do not remember at the moment how far I had gone at the time, but I think I reported on the negotiations in detail, so I need not repeat.
DR. DIX: George Messersmith, the often-mentioned former Consul General of the United States in Berlin, states in his affidavit Document Number EC-451, Exhibit Number USA-626, to which the Prosecution have referred, that he is of the opinion that the National Socialist regime could not have been in a position to stay in power and build up its war machine if it had not been for your activity. At the end of the case for the Prosecution, the Prosecution present that thesis of Messersmith. Therefore I should like you to make a statement on this subject.
SCHACHT: I do not know whether that completely unsubstantiated private opinion of Mr. Messersmith has any value as evidence. Nevertheless, I should like to contradict it by means of a few figures. I had stated earlier that until 31 March 1938, the Reichsbank had given 12,000,000,000; that is to say, during the first fiscal year, about 2,250,000,000, and during the subsequent 3 years, 3,250,000,000 per annum. During those years-the Codefendant Keitel was asked about that when he was examined here-the armament expenditures, as Keitel said, amounted to the following:
In the fiscal year 1935-1936-5,000,000,000.
In the fiscal year 1936-1937-7,000,000,000.
In the following fiscal year-9,000,000,000.
And at that stage the assistance from the Reichsbank ceased. In spite of that, during the following year and without any assistance
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from the Reichsbank, the expenditure for armament increased to 11,000,000,000, and in the following year it climbed to 20,500,000,000.
It appears, therefore, that even without the financial genius of Herr Schacht, they managed to raise the funds. Just how they did so is another question.
DR. DIX: I duly put these figures to the Defendant Keitel. I do not think that the Tribunal had the document at the time. It is now available and has the Exhibit Number Schacht-7. It is Page 15 of the German text and Page 21 of the English text. Herr Keitel could, of course, only refer to the first column, that is to say, total expenditure; but there is a second and a third column, in this account, and these two are calculations made by Schacht, calculations regarding what was raised with the help and without the help of the Reichsbank.
I do not intend to go through it in detail now. I should merely like to have your permission to ask Dr. Schacht whether the figures calculated by him, in Columns 2 and 3 of the document, were calculated correctly.
SCHACHT: I have these figures in the document before me. The figures are absolutely correct and again I want to declare that they show that, during the first year after the Reichsbank had discontinued its assistance, no less than 5,125,000,000 more were spent without the assistance of the Reichsbank, that is to say, a total of 11,000,000,000.
DR. DIX: Up to now you have stated to the Tribunal that you were active against a dangerous and extensive rearmament and you showed that by tying up the money bag. Did you oppose excessive rearmament in any other way, for instance, by giving lectures and such?
SCHACHT: Many times I spoke not only before economists and professors who were my main auditors, but I often spoke upon invitation of the Minister of War and the head of the Army Academy before high ranking officers. In all these lectures I continually referred to the financial and economic limitations to which German rearmament was subject and I warned against excessive rearmament.
DR. DIX: When did you first gather the impression that the extent of German rearmament was excessive and exaggerated?
SCHACHT: It is very difficult to give you a date. Beginning in 1935, I made continuous attempts to slow down the speed of rearmament. On one occasion Hitler had said-- just a moment, I have it here-that until the spring of 1936 the same speed would have to be maintained. I adhered to that as much as possible,
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although, beginning with the second half of 1935, I continuously applied the brake. But after 1935 I told myself that, since the Fuehrer himself had said it, after the spring of 1936 the same speed would no longer be necessary. This can be seen from Document 1301-PS in which these statements of mine are quoted, statements which I communicated to the so-called "small Ministerial Council" (kleiner Ministerrat). Goering contradicted me during that meeting, but I of course maintain the things which I said at the time.
After that I constantly tried to make the Minister of War do something to slow down the speed of rearmament, if only in the interest of general economy, since I wanted to see the economic system working for the export trade. Proof for the fact of just how much I urged the Minister of War is contained in my letter dated 24 December 1935, which I wrote him when I saw the period desired by Hitler coming to an end, and when I was already applying the brake. It has also been presented by the Prosecution as Document Number EC-293. In the English version of the document it is on Page 25.
I beg to be allowed to quote very briefly-all my quotations are very brief-from that document. I wrote a letter to the Reich Minister of War, and I quote:
"I gather from your letter dated 29 November"-and then come the reference numbers-"that increased demands by the Armed Forces for copper and lead are to be expected, which will amount to practically double the present consumption. These are only current demands, whereas the equally urgent provisions for the future are not contained in the figures. You are expecting me to obtain the necessary foreign currency for these demands, and to that I respectfully reply that under the existing circumstances I see no possibility of doing so."
In other words, Blomberg is asking that I should buy raw materials with foreign currency, and I am stating quite clearly that I do not see any possibility of doing so.
The document goes on to say-and this is the sentence regarding the limit up to 1 April. I quote:
"In all the conferences held with the Fuehrer and Reich Chancellor up to now, as well as with the leading military departments, I have expressed my conviction that it would be possible to supply the necessary foreign currencies and raw materials for the existing degree of rearmament until 1 April 1936. Despite the fact that, due to our cultural and agrarian policies which are being repudiated all over the world, this has been made extremely difficult for me and
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continues to be difficult, I still hope that my original plan may be carried out."
That is to say, that I thought this proposed program could be carried out up to 1 April, but not over and beyond that.
DR. DIX: It is a fact that Minister of Transportation, Dorpmueller, was trying to raise credits for railway purposes. What was your attitude as President of the Reichsbank towards this?
SCHACHT: During a conference between the Fuehrer, Dorpmueller, and myself, at which the Fuehrer strongly supported Dorpmueller's demands, I turned that credit down straightway, and he did not get it.
DR. DIX: The meeting of 27 May 1936 of the so-called "small Ministerial Council," presided over by Goering, has been discussed here. The Prosecution contend that intentions of aggressive war became apparent from that meeting. Did you have any knowledge of that meeting?
SCHACHT: What was the date, please?
DR. DIX: 27 May 1936.
SCHACHT: No. I was present during that conference and I see nothing in the entire document pointing to an aggressive war. I have studied the document very carefully.
DR. DIX: It has furthermore been stated against you what is contained in the report of Ambassador Bullitt, Document Number L-151, Exhibit USA-70, dated 23 November 1937. You have heard, of course, that the Prosecution are also drawing the conclusion from that report that there were aggressive intentions on Hitler's part. Will you please make a statement about that?
SCHACHT: I see nothing in the entire report to the effect that Hitler was about to start an aggressive war. I was simply talking about Hitler's intentions to bring about an Anschluss of Austria, if possible, and to give the Sudeten Germans autonomy if possible. Neither of those two actions would be aggressive war, and apart from that, Mr. Bullitt says the following with reference to me in his report about this conversation. I quote: "Schacht then went on to speak of the absolute necessity for doing something to produce peace in Europe...."
DR. DIX: The memorandum of this conversation is also contained in my document book as Exhibit Number Schacht-22. It is on Page 64 of the English text and Page 57 of the German text.
We shall now have to deal in greater detail with your alleged knowledge of Hitler's intentions to start war. First of all, speaking generally, did Hitler ever, as far as you know...
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SIR DAVID MAXWELL-FYFE: My Lord, I asked Dr. Dix if he would object if the Tribunal would allow me, since he is passing to a new point, to mention the question of the Raeder documents. I had a discussion with Dr. Siemers. There are still some outstanding points, and we should be grateful if the Tribunal would hear us this afternoon, if possible, because the translating division is waiting for the Raeder documents to get on with their translations.
THE PRESIDENT: How long do you think it will take, Sir David?
SIR DAVID MAXWELL-FYFE: Not more than a half hour, My Lord.
THE PRESIDENT: If the translation department are waiting, perhaps we had better do it at 2 o'clock.
SIR DAVID MAXWELL-FYFE: If Your Lordship pleases.
THE PRESIDENT: If it is only going to take a half hour. It isn't likely, I suppose, to take more than that?
SIR DAVID MAXWELL-FYFE: I don't think it will take more than that.
THE PRESIDENT: We will do that at 2 o'clock, and now we will adjourn.
[The Tribunal recessed until 1400 hours.]
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SIR DAVID MAXWELL-FYFE: May it please Your Lordship, the Tribunal should have in front of them a statement of our objections to certain of the documents, arranged in six groups. Attached to that sheet they will find an English summary of the documents, presenting shortly the contents of each one of them. My Lord, with regard to the first group, might I make two erasures from our objection to Number 19, which has been allowed in the case of Schacht, and if I understand Dr. Siemers correctly he doesn't press for Number 76.
Now, My Lord, the others in that group:
Number 9 is a series of quotations from Lersner's book on Versailles.
Number 10, the quotation from a book by the German leftwing publicist, Thomas Mann.
Number 17 is the Failure of a Mission, by Nevile Henderson.
Number 45 is a quotation from a book of Mr. Churchill's.
Number 47 is the report on a complaint to Lord Halifax about an article in News Chronicle criticizing Hitler.
My Lord, Number 66 is rather different. If the Tribunal would be good enough to look at it, it is a report by a German lawyer, Dr. Mosler I think his name should be, who is an authority on international law, dealing with the Norway action. Dr. Siemers has been, of course, absolutely frank with me and he said that it would be convenient to him to have this, which is really a legal argument, embodied in his document book. Of course, that is not really the purpose of these document books; but, of course, it is a matter for the Tribunal, and we felt we had to draw attention to it.
Then, My Lord, Number 76 comes out.
Numbers 93 to 96 are quotations from Soviet newspapers.
Number 101 is a quotation from Havas, the French News Agency.
Numbers 102 to 107 are minor orders relating to the Low Countries which, the Prosecution submit, have no evidential value.
Then in the second group, there are a number of documents which, the Prosecution submit, are not relevant to any of the issues in the case.
THE PRESIDENT: Sir David, you didn't deal with Number 109, did you?
SIR DAVID MAXWELL-FYFE: I am sorry, My Lord, it is on the second line. That is another legal argument, the effect of the war on the legal position of Iceland, which is a quotation from the British Journal of Information in Public Law and International Law.
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THE PRESIDENT: All right.
SIR DAVID MAXWELL-FYFE: My Lord, the second group, the Prosecution submit, is irrelevant.
Number 22 is a Belgian decree of 1937 dealing with the possible evacuation of the civil population in time of war.
Number 39 is a French document of the Middle East.
Numbers 63 and 64 are two speeches, one by Mr. Emery and another by Mr. Churchill, dealing with the position in Greece at the end of 1940, some two months after the beginning of the Italian campaign against Greece.
Number 71 is an undated directive with regard to the study of routes in Belgium, which doesn't seem to us to have any evidential importance.
Number 76 comes out as the Altmark.
THE PRESIDENT: Did you say 76 came out?
SIR DAVID MAXWELL-FYFE: Yes, My Lord, that is the Altmark. It is the same one that is in Number 71. I am sorry, My Lord, it should have been marked out.
Number 99 is the minutes of the ninth meeting of the combined Cabinet Council on the 27th of April 1940, and it deals with a suggestion of M. Reynaud with regard to the Swedish ore mines. As it was long after the Norway campaign and it was never, of course, acted upon in Norway, it seems to us to have no relevance for this Trial.
Numbers 102 to 107 I have dealt with under one. They have certain very small unimportant memoranda relating to the Low Countries.
Number 112 is a French document in which Paul Reynaud quotes a statement from Mr. Churchill that he will fight on to the end, which again doesn't seem of much importance in 1946.
Now, My Lord, the next group are documents which were rejected by the Tribunal when applied for by the Defendant Ribbentrop. The first two deal with British rearmament and the others with the Balkans and Greece. The Tribunal will probably remember the group which they did reject in the Ribbentrop application; and the fourth group are other documents of the same series as those rejected by the Tribunal in the case of the Defendant Von Ribbentrop. The fifth group are really objectionable on the tu quoque basis. I think they are entirely French documents which deal with proposals in a very tentative stage and which were arranged, but never followed out, with regard to the destruction of oil fields or the blocking of the Danube in the Middle East. My Lord, they are documents dated in the spring of 1940 and, as I say, they deal with
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the most tentative stages and were never put into operation. The plans were never in operation.
The sixth group are documents dealing with Norway, which were captured after the occupation of France. As I understand Dr. Siemers' argument, it is not suggested that these documents were within the knowledge of the defendants at the time that they carried out the aggression against Norway; but it is stated that they had other information. Of course, as to their own information, we have not made any objection at all; and that these documents might be argued to be corroborative of their agents' reports. Actually, as is shown by Document Number 83, to which we make no objection, they also deal with tentative proposals which were not put into effect and were not proceeded with; but in the submission of the Prosecution, the important matter must be what was within the knowledge of the defendants before the 9th of April 1940; and it is irrelevant to go into a large number of other documents which are only arguably consistent with the information which the defendants stated they had.
My Lord, I tried to deal with them very shortly because I made a promise to the Tribunal on the time, but I hope that I have indicated very clearly what our objections were.
DR. WALTER SIEMERS (Counsel for Defendant Raeder): Your Honors, it is extremely difficult to define my position with reference to so many documents, especially since I know that these documents have not yet been translated and that the contents, in the main, are therefore not known to those concerned. Therefore, I might point out that there is a certain danger in treating documents in this way. In part they are basic elements of my defense.
Therefore, I should like to state now that in dealing with these documents I shall be compelled, in order to give the reasons for the relevancy of this evidence, to point out those passages which I shall not need to read separately into the record, for as soon as the document book is ready they will be known to the Tribunal and can be read there.
I shall follow the order as outlined by Sir David. First of all, the first group, Document Numbers 9 and 10. The note submitted by Sir David to the Tribunal points out that the submission of these documents conflicts with the ruling given by the Tribunal on 29 March. In reply I should like to point out that this opinion of the Prosecution is an error. The ruling of the Tribunal said that no documents might be submitted concerning the injustice of the Versailles Treaty and the pressure arising from it. These documents do not concern the injustice and the pressure; rather they serve to give a few examples of the subjective attitude of a man like Noske,
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who was a Social Democrat and certainly did not want to conduct any wars of aggression. A few other statements in Numbers 9 and 10 show the thought of the Government and the ruling class at that time in regard to defensive measures and the fear that in case of an attack on the part of Poland, for instance, the German Armed Forces might be too weak. These are facts pure and simple; and I give you my, express assurance that I shall not quote any sentences which might introduce a polemic. Moreover, I need this mainly as a basis for my final pleading.
Number 17 is a very brief excerpt from the book by Henderson, Failure of a Mission, written in 1940. I believe there are no objections to my quoting about 15 lines, if I wish to use them in my final pleading in order to show that Henderson, who knew Germany well, still believed in 1940 that he had to recognize certain positive good points in the regime at that time; and I believe that the conclusion is justified that one cannot expect that a German military commander should be more sceptical than the British Ambassador at that time.
Then we turn to Document Number 45. It is true this document is taken from a book by Churchill; but it deals with a fact which I should like to prove, the fact that already many years before World War I there existed a British Committee for Defense. In the table of contents which Sir David has submitted, the word "Reichsverteidigungsausschuss" is used, and I therefore conclude that this is a mistake on the part of the Prosecution who took it to mean a German Reich Defense Committee; that is not correct. This document shows how it came about that the Prosecution wrongly overestimated the importance of the German Reich Defense Committee, as the Prosecution naturally compared it with the British Committee for Defense, which went very much further in its activities.
Number 47 is evidence to show that when the German Embassy pointed out that an extremely scathing article on Hitler had appeared in the paper News Chronicle, Lord Halifax pointed out in reply that it was not possible for him to exert any influence on the newspaper. I should merely like to compare this with the fact that the Prosecution made it appear as though Raeder had had something to do with the regrettable article in the Voelkischer Beobachter: "Churchill sank the Athenia." Raeder was no more connected with that article than Lord Halifax with the article in the News Chronicle and was unfortunately even more powerless, as far as this article was concerned, than the British Government.
Number 66 deals with the opinion given by Dr. Mosler, a specialist on international law, an opinion on the Norway action in very compressed form, as the Tribunal will surely admit. The Tribunal will also concede that in my defense of the Norway action
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I must speak at length about the underlying principles of international law. The underlying principles of international law are not an altogether simple matter. I have nothing against presenting this myself in all necessary detail. I was merely guided by the thought that the Tribunal have asked again and again that we save time. I believe that we can save considerable time if this statement of opinion is granted me, so that I shall not have to cite numerous excerpts and authors in detail in order to show the exact legal justification. I could then perhaps deal with the legal questions in half an hour, whereas without this statement of opinion it is utterly impossible for me to treat such a problem in half an hour. If the Prosecution do not object to more time being taken up, then l do not object if the document is denied me. I will merely have to take the consequences.
Number 76 has meanwhile been crossed out, that is, it is granted me by the Prosecution.
Numbers 93 to 96 are excerpts on statements of the official Moscow papers, Isvestia and Pravda. These statements prove that, at least at that time, Soviet opinion regarding the legality of the German action in Norway coincided with the German opinion of that time. If the Tribunal think that these very brief quotations should not be admitted as documents, I would not be too insistent, since at this point in the proceedings I shall in any case be compelled to discuss it The Tribunal will remember that at that time Germany and Russia were friends, and Soviet opinion on a purely legal problem should, at any rate, be considered as having a certain significance.
Then, Number 101; I beg your pardon, Sir David, but if I am not mistaken Dr. Braun said an hour and a half ago that Number 101 is to be rejected. Very well, then, Numbers 101 to 107. The action against Norway, as I have already said, involved a problem of international law. It involves the problem of whether one country may violate the neutrality of another country when it can be proved that another belligerent nation likewise intends to violate the neutrality of the afore-mentioned neutral state. When presenting my evidence I shall show that Grossadmiral Raeder, in the autumn of 1939, received all sorts of reports to the effect that the Allies were planning to take under their own protection the territorial waters of Norway, that is, to land in Norway, in order to have Norwegian bases. When I deal with the Norway documents, I shall return to this point. I should like to say at this point that it is necessary to explain and to prove that the legal attitude taken by the Allies to the question of the possible violation of the neutrality of a country was in the years 1939 and 1940 entirely the same as
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the attitude of the Defendant Raeder in the case of Norway at the same time.
Therefore it is necessary not only to deal with Norway; but also to show that this was a basic conception, which can readily be proved by reference to parallel cases on the strength of these documents. These parallel cases deal in the first place with the plans of the Allies with respect to the Balkans, and secondly with the plans of the Allies with respect to the Caucasian oil fields.
Your Honors, it is by no means my intention, as Sir David has suggested, to use these documents from the tu quoque point of view, from the point of view that the defendant has done something, which the Allies have also done or wanted to do. I am concerned only with a judgment of the Defendant Raeder's actions from the legal point of view. One can understand such actions only when the entire matter is brought to light.
It is my opinion-and in addition to this I should like to refer to the statement of Dr. Mosler's opinion, Exhibit Raeder-66-that this cannot be made the subject of an accusation.
We are concerned, Your Honors, with the right of self-preservation as recognized in principle by international law. In this connection I should like...
THE PRESIDENT: Dr. Siemers, we don't want to go into these matters in great detail, you know, at this stage. If you state what your reasons are in support and state them shortly, we shall be able to consider the matter.
DR. SIEMERS: I am very sorry that I have to go into these details, but if through the objection of the Prosecution the principles . . .
THE PRESIDENT: The Tribunal do not wish to hear you in detail. I have said that the Tribunal do not wish to hear you in detail.
DR. SIEMERS: I merely ask that the Tribunal take into consideration the fact that this concerns the principle of international law laid down by Kellogg himself in 1928, namely, the right of self-preservation, or "the right of self-defense." For that reason l should like to adduce these documents showing that just as the Allies acted quite correctly according to this principle, so also did the Defendant Raeder.
Document Number 22 is next. I have given various statements of principle which apply to a large number of the remaining documents, so that I can refer to the statements I have already made. These statements also apply to Documents Numbers 22 and 39.
As far as Documents Numbers 63 and 64 are concerned, I should like to point out that these documents deal with Greece; and not
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only these two, but also a later group of perhaps 10 or 12 documents, with which I should like to deal very briefly.
As far as Greece is concerned, the situation is as follows:
I must admit that I was more than surprised that the Prosecution objected to these documents, about 14 in all. In Document Number C-12, Exhibit Number GB-226, the Prosecution accuse Raeder of having decreed on 30 December 1939; and I quote, "Greek merchantmen in the prohibited area declared by the United States and England are to be treated as enemy ships." The accusation would be justified, if Greece had not behaved in such a manner that Raeder had to resort to this order.
If the documents concerning Greece which show that Greece did not strictly keep to her neutrality are struck out, then I cannot bring any counterevidence. I do not believe that it is the intention of the Prosecution to restrict my presentation of evidence in this way.
These are all documents which date back to this time and which show that Greece put her merchantmen at the disposal of England who was at war with Germany. Therefore they could be treated as enemy ships.
SIR DAVID MAXWELL-FYFE: I would like to say that I should have told the Tribunal I would make no objection to Documents Numbers 53 and 54, because they do deal with the chartering of Greek steamers by the British Government.
THE PRESIDENT: But you made no objection to them; you didn't object to Numbers 53 or 54.
SIR DAVID MAXWELL-FYFE: I wanted to make clear that I don't object to them.
THE PRESIDENT: There is no objection on the paper. What you are dealing with, Dr. Siemers, is 63 and 64, not 53 and 54?
Oh, I beg your pardon, I see it further on. Yes, I see; will you please strike that out.
DR. SIEMERS: There is no objection to Numbers 53 and 54?
SIR DAVID MAXWELL-FYFE: No, no objection. My Lord, my friend was dealing with the Greek fleet.
THE PRESIDENT: Yes; I beg your pardon, I misheard.
DR. SIEMERS: The same things, as I have already stated regarding Documents Numbers 101 to 107, apply also to Document Number 71.
Number 99 belongs really to Group 6, to the Norwegian documents; and I should like to refer to these collectively and then refer
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again later to Number 99. All these documents concern Norway, that is, the planning by the Allies with respect to Norway. These documents deal positively with the planning of the landing in Narvik, the landing in Stavanger, the landing in Bergen, and the absolute necessity of having Norwegian bases. The documents mention that Germany should not be allowed to continue getting ore supplies from Sweden. They also deal in some measure with Finland. There are likewise documents which support the same plan after the Finnish-Russian war had already been concluded.
I should like to quote from these documents to prove their relevancy. Since the Tribunal has told me that I cannot do that, I ask that these brief references be considered sufficient. The facts contained in these documents agree, point for point, with those reports which Grossadmiral Raeder received from September 1939 until March 1940 from the Intelligence Service of the German Wehrmacht headed by Admiral Canaris. These plans agree with the information which Raeder received during the same 6 months through the Naval Attache in Oslo, Korvettenkapitan Schreiber, and with the information which he received in a letter from Admiral Carls at the end of September 1939.
The information from these three sources caused the Defendant Raeder to point out the great danger involved were Norway to fall into the hands of the Allies, which would mean that Germany had lost the war. It is, therefore, a purely strategic consideration. The occupation of Norway did not, as contended by the British Prosecution, have anything to do with the prestige or desire for conquest but was concerned solely with these positive pieces of information.
I must therefore prove, first of all, that the Defendant Raeder did receive this information and, secondly, that these reports were objective.
THE PRESIDENT: Dr. Siemers, you are dealing with Document Number 99, are you not?
DR. SIEMERS: Yes, 99, and all of Group 6.
THE PRESIDENT: I don't know what you mean by Group 6; 99 is in Group B.
DR. SIEMERS: The group under the letter "F." which Sir David called Group 6, the last on the page.
THE PRESIDENT: The objection of the Prosecution to that document was that it was a document of the 27th of April 1940, at a time after Germany had invaded Norway. You haven't said anything about that.
DR. SIEMERS: I wanted to avoid dealing with each document singly, because I believe that these can be treated generally. However, in this specific case...
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THE PRESIDENT: I don't want you to deal with each document separately. I thought you were dealing with Document Number 99. If you can deal with them in groups, by all means do so. However, you are taking up a great deal of the Tribunal's time.
DR. SIEMERS: This Document Number 99 is the Minutes of the Ninth Meeting of the Supreme Council, that is, the military operational staff of England and France. on 27 April. The heading shows beyond doubt that it was after the occupation of Norway. However, that is only a formal objection. The contents of the document show that at this session the participants discussed the happenings during the period before the occupation, and the most important leaders of the Allies took part in this meeting. Chamberlain, Halifax, Churchill, Sir Samuel Hoare, Sir Alexander Cadogan, et cetera and, on the French side Reynaud, Daladier, Gamelin, and Darlan were present; and these gentlemen discussed the previous plans which, I admit, had misfired because of the German occupation of Norway. But they did discuss about how necessary it was that the iron ore deposits in Sweden should fall into the hands of the Allies and what was to be done now to prevent Germany's getting this ore and how the destruction of these iron-ore deposits could be brought about. I believe, therefore, that though this happened at a later date, the train of thought I have presented is of significance.
Then we turn to Document Number 100. This deals with the session of the French War Committee of 9 April 1940, which concerns the same problem: what the Allies had planned and what could've planned now that the report had just come in about the action on the part of Germany.
Documents Numbers 102 to 107 have already been dealt with. For Document Number 110 the same statements apply as for Documents 101 to 107.
Document Number 112 is a document which shows that Churchill, as early as May 1940, expected active intervention on the part of America. I wanted to present this in connection with the accusation raised against the Defendant Raeder, that in the spring of 1941 he was instrumental in bringing about a war against the United States by way of Japan. For me this document is not nearly so important as those basic documents which I have referred to at greater length. Therefore, I leave this completely to the discretion of the Prosecution or the Tribunal.
The next group consists of documents which were turned down in the case of Ribbentrop. I should like to point out that I did not have the opportunity in the Ribbentrop case to define my position as to the justification and relevancy of these documents. Therefore
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I consider it insufficient simply to state that these documents were refused in the case of Ribbentrop, that the charges against Ribbentrop . . .
THE PRESIDENT: We have already carefully considered the arguments and have decided those documents were inadmissible.
DR. SIEMERS: I believed that the decision applied only to the Ribbentrop case, since no other point of view was discussed during those proceedings, namely, that of the charges raised against Raeder in which connection it is expressly said in Document C-152 that Raeder brought about the occupation of the whole of Greece. That is an accusation that was not made against Ribbentrop but only against Raeder. How can I refute this accusation if these documents are denied me?
THE PRESIDENT: Dr. Siemers, the Tribunal know the documents and know the charges against Raeder, and they don't desire to hear any further argument on it. They will consider the matter.
DR. SIEMERS: I beg the pardon of the Tribunal. Under these circumstances I am compelled to see whether all these documents were covered in Ribbentrop's case. My notes, as I told the Prosecution this morning, do not agree with the statements of the Prosecution. Perhaps after the session, if I am unable to do so at the moment, I might point out whether or not the documents are identical.
It is really a fact that in Ribbentrop's case these documents were not presented in their entirety and that the Tribunal therefore does not know, them in their entirety. Whether Dr. Horn had marked exactly the same passages as I wish to use, I am not able to say as far as each individual document is concerned. I know only that in the large majority of cases Dr. Horn did not present the entire document because he was presenting it only from the point of view of the Ribbentrop case.
THE PRESIDENT: Presumably you have submitted your extracts to the Prosecution. The Prosecution tell us that those extracts are the same ones that were rejected in Ribbentrop's case.
SIR DAVID MAXWELL-FYFE: My Lord, we have only a list of those documents so far. We haven't seen the extracts.
[There was a pause in the proceedings while the Prosecution conferred.]
My Lord, I am sorry. I spoke too quickly. We have seen the extracts in German and we haven't had them translated. We have done the best we could in German.
THE PRESIDENT: 24 and 25, at any rate, are both speeches in English.
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SIR DAVID MAXWELL-FYFE: Yes, My Lord, some of them are. I am sorry, My Lord; these are. Your Lordship is quite right.
THE PRESIDENT: Sir David, as I understand it, Dr. Siemers says that these are not the same passages of evidence, or suggested evidence, as were rejected in Ribbentrop's case.
SIR DAVID MAXWELL-FYFE: My Lord, I did not do the actual checking myself, but Major Barrington, who checked the Ribbentrop documents, went through these and compared the two, and he gave me that which forms the basis of our note. That is the position. I can't tell Your Lordship that I have actually checked these myself.
THE PRESIDENT: Well, Dr. Siemers is telling us that that is untrue?
SIR DAVID MAXWELL-FYFE: As I understood Dr. Siemers, he was saying that he didn't know whether they were the same extracts . . .
DR. SIEMERS: May I just make one remark in connection with that, please? I am not quite certain that I can say in each specific case which extracts were contained in the Ribbentrop case, but they are not the same. I know for certain that they are not the same because in order to relieve the work of the Translation Division I compared the numbers and in the few cases in which they were the same I told the Translation Division that these documents were identical so that they would not be translated a second time. But I am sorry to say that a large number of the documents were not the same, as they were asked for by Dr. Horn and Ribbentrop from a completely different point of view.
I might also point out that the numbers under Group D which are enumerated here as Ribbentrop Documents Numbers 29, 51, 56, 57, 60, 61, 62, although I made every effort to find them, could not be found in the Ribbentrop Document Book. And the list does not show which numbers they should be in the Ribbentrop Document Book.
SIR DAVID MAXWELL-FYFE: My Lord, that is not suggested. What is said is that they are in the same series which deals with the same subject-that is, the question of Greece and the Balkans- as those documents which the Tribunal ruled out in the case of Ribbentrop.
THE PRESIDENT: Well, Dr. Siemers, I think the best course would be for you to go through these documents this afternoon under the heading "C" and find out whether they are the same ones rejected in Ribbentrop's case; and if they are not, indicate
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exactly in what they differ from the documents rejected in Ribbentrop's case, so as to show they have some relevance to your case; and we shall expect to have that by 5 o'clock.
Now will you go on with the others?
DR. SIEMERS: May I perhaps make one remark about what Sir David said regarding group "D"? They were not objected to because they have already been mentioned in Ribbentrop's case; but only because they deal with the same subject matter, that is true. The same subject matter, namely, Greece, is dealt with; and I can only reply that the Prosecution have charged the Defendant Raeder in Document C-152 with having aimed at, and brought about, the occupation of the whole of Greece. The facts concerning this statement of three lines I can present only if I am allowed some documents referring to Greece and only if these are not refused on the grounds that the documents concerning Greece were turned down quite generally in Ribbentrop's case.
Now, I come to group "E" which begins with Document 26. The same statements apply which I have already set forth in regard to Documents Numbers 101 to 107. The attacks planned by the Allies on the oil regions in neutral Romania and in the neutral Caucasus-as I should like to remark in parenthesis-have already keen dealt with in these proceedings. The Tribunal will remember that I asked Goering during his examination about entries in Jodl's diary pertaining to this question and he has given information about the reports received by Germany, on Pages 6031 and 6033 of the transcript of 18 March (Volume IX, Pages 402-404). This testimony too concerns only the subjective side, that is, what was known by Germany. I must prove that the objective side, the fact that this had actually been planned, agrees exactly with the subjective side, that is, with these reports. These documents, Numbers 26, 30 to 32, 36, 37, 39, 40 to 44, are to prove that. Then comes Number 99 which has already been dealt with, which seems to be here in duplicate; Number 101, and Number 110 which also seem to be duplicates.
I turn now to Group 6, which is supposed to be irrelevant, dealing with the attack on Norway. I have already, on principle, set forth my reasons and I beg the Tribunal not to deny me these documents under any circumstances. If I am not granted these documents, I shall simply not be in a position to present evidence in a reasonable manner without telling everything myself. I can present proof in regard to a question of such importance only if documents are granted me just as they are granted the Prosecution. But if all the documents, practically all the documents concerning this question are refused, then I do not know how I am to treat
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such a question. And I believe that the Tribunal will wish to assist me in this matter.
I am requesting this especially for the following reasons: When I gave my reasons for wanting to present this particular evidence, I asked that those files of the British Admiralty be brought in, which dealt with the preparations and planning regarding Scandinavia, that is, Norway. Sir David did not object at that time but said he would have to consult the British Admiralty. The Tribunal decided accordingly and granted my application. In the meantime the British Admiralty has answered, and I assume that Sir David will agree to my reading the answer which has been put at my disposal. This answer is as follows-it concerns, if I may say that in advance . . .
THE PRESIDENT: We have had the answer, I think, have we not? We have had the answer and transmitted it to you.
DR. SIEMERS: Thank you very much. From this reply it can be seen that the files will not be submitted, that I cannot get the necessary approval. It can also be seen that certain facts which will be important for my presentation of evidence will be admitted by the British Admiralty; but in reality I am not in a position to prove anything by means of documents. Since I am unable to make use of this evidence, I ask at least to be allowed the other means of presenting evidence, that is, the documents contained in the German White Books. These are documents recognized as being correct. In all cases they are facsimiles. They can be carefully examined and I believe...
THE PRESIDENT: Dr. Siemers, we are dealing with your application for particular documents. We are not dealing with any general argument or general criticism that you have to make. We are only hearing you in answer to certain objections on behalf of the British Prosecution.
DR. SIEMERS: Your Honor, unless I am very much mistaken-in which case you will please correct me-Sir David, with a few exceptions, defined his position regarding these documents under "F"- this is a large number, from 59 to 91 with some omissions-as a whole and not his position regarding each individual document. But I have to say the same thing to practically each document and asked only that I be granted those documents as a whole, for I cannot make headway without these documents...
THE PRESIDENT: You were not referring to these documents. You were referring to the fact that the British Admiralty was not prepared to disclose its files to you. It has nothing to do with these documents at all.
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DR. SIEMERS: I believe I have been misunderstood, Your Honors. I have already stated very clearly why I need these documents for my presentation of evidence regarding the Norway action. Beyond that I said merely that if these documents are not granted me, then I cannot present any evidence. I am deprived of it. I asked the Tribunal merely to take into consideration the fact that the documents from London, which I had originally counted on, are not at my disposal. And I do not know why this request, which I am submitting to the Tribunal and which is only in explanation of my previous statements, is being taken amiss by the Tribunal.
THE PRESIDENT: Is that all you have to say?
DR. SIEMERS: I have now finished, Your Honors. It is not at all my intention to read all these documents or to spend too much time on them. I believe that if I am granted these documents, the presentation of evidence will be much easier, for these are groups of documents which show the chronological development of certain plans; and if I have the 5th, 6th or 7th document, then I need not read each one. But if I am granted just one document, I will be put in an extremely difficult position and will have to speak in greater detail than I would if I could simply refer to these documents.
THE PRESIDENT: The Tribunal will consider it.
Now, Dr. Dix.
DR. DIX: [Turning to the defendant.] Now, we come to the whole question of your alleged knowledge of the direct war objectives of Hitler. You have already mentioned in a general way that Hitler never spoke about war to you. Have you anything to add to this?
DR DIX: You also touched upon the question of the sincerity of his peaceful assurances and his disarmament proposals. Have you anything to add to that?
SCHACHT: No, at the beginning I believed that.
DR. DIX: And did the various members of the Cabinet ever speak to you about warlike intentions?
SCHACHT: Never did I hear anything from any of my fellow colleagues in the Reich Cabinet which could lead me to believe that anyone had the intention of going to war or would welcome it if Germany were to start a war.
DR. DIX: Now, we turn to your own attitude towards the war. You already indicated your general attitude when you spoke about
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your philosophy as a pacifist. I believe, therefore, that it is more expedient if I read from my document book the opinion of a third person, one who knows you very well, the former member of the Reichsbank Directorate, Huelse. It is the Schacht Document 37-C, Page 160 of the German text, and 168 of the English text. It is an affidavit. And there, beginning with Paragraph 2, Huelse says:
"I recall several chance talks with Dr. Schacht during the years 1935 to 1939 about war and rearmament. In these talks he always expressed his aversion to any war and any warlike conduct. He held the firm opinion that even to the conqueror war brings only disadvantages and that a new European war would, on the whole, be a crime against culture and humanity. He hoped for a long period of peace for Germany, as she needed it more than other countries in order to improve and stabilize her unstable economic situation.
"To my knowledge, until the beginning of 1938, Dr. Schacht at meetings of the Reichsbank Board of Directors and in private conversations on the subject of armament always spoke only of defense measures. I believe I can recall that he told me in the middle of 1938 that Hitler's provocative action against Austria and the Sudeten country was worse than thoughtless from the military point of view.
"He said that Germany had undertaken only a defensive armament, which would prove absolutely inadequate as a defense in case of attack by one of the big powers, a possibility with which Hitler had to reckon. He said that he had never heard that the Wehrmacht was in any way designed or armed for an aggressive war.
"When the war did break out and spread more and more, he said repeatedly that he had greatly erred in his judgment of Hitler's personality; he had hoped for a long time that Hitler would develop into a real statesman who, after the experience of the World War I, would avoid any war."
You have already touched upon the question of an annexation of Austria and given your general opinion. I ask you now to make a concrete statement about the Anschluss after it had actually taken place and especially about the manner in which this Anschluss was carried out.
SCHACHT: That this Anschluss would come at some time we Germans all knew. As for the various political negotiations which took place between Hitler, Schuschnigg and others, I naturally was as little informed as were the other Cabinet Ministers, with the probable exception of Goering and Ribbentrop and perhaps one or two more. The actual Anschluss in March was a complete surprise
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to us, not the fact but the date. A great surprise and we, at any rate my acquaintances and I myself, were completely surprised.
DR. DIX: How did you judge the manner, the nature and development of this Anschluss?
SCHACHT: I believe that much can be said about the manner. What we heard subsequently and what I have learned in these proceedings is certainly not very gratifying, but I believe that it would have had very little practical influence on the Anschluss itself and the course of events. The whole thing was more of a demonstration to the outside world, similar perhaps to the marching into the Rhineland; but it had no great effect in my opinion on the course of the negotiations. I am speaking now of the marching in of the troops. This march was more or less a festive reception.
DR. DIX: The Prosecution have pointed out that in March 1938 you regulated the relation of the schilling to the mark for the event of a possible Anschluss, and by this the Prosecution obviously want to prove that you had previous knowledge of this action. Will you tell us your position as to this?
SCHACHT: The fact to which the Prosecution refer is a communication from a Lieutenant Colonel Wiedemann. March 11, at about 3 o'clock in the afternoon-I believe I remember that but I cannot say whether it was by telephone or in person-someone, it may have been Lieutenant Colonel Wiedemann, inquired of me how the purchasing power for the troops in Austria was to be regulated if German troops should march into Austria, purely as a matter of currency policy, and whether it was necessary to have any regulation prescribed. I told him that of course everything had to be paid for, everything that the troops might buy there, and that the rate of exchange, if they paid in schillings and not in marks, would be 1 mark to 2 schillings. That was the rate which obtained at the time, which remained fairly steady and was the recognized ratio of the schilling to the mark. The fact that in the afternoon of the 11th I was approached about this matter is the best proof that I had no previous knowledge of these matters.
DR. DIX: The Prosecution further consider it an accusation against you that in your speech to the Austrian National Bank after the marching in of the troops, you used decidedly National Socialist phraseology and thus welcomed the Anschluss.
Perhaps we can use this opportunity to save time and reply to the accusation made repeatedly by the Prosecution that in speeches, petitions, et cetera, you sometimes thought fit to adopt a tone, of which it could perhaps be said that it exuded National Socialist ideas. That has been used as circumstantial evidence against you.
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Will you please define your position to those arguments and give your reasons for this attitude of yours?
SCHACHT: If I did so in the first years, I did so only in order to remind Party circles and the people of the original program of the National Socialist Party, to which the actual attitude of the Party members and functionaries stood in direct contrast. I always tried to show that the principles which I upheld in many political matters agreed completely with the principles of the National Socialist program as they were stated in the Party program, namely, equal rights for all, the dignity of the individual, esteem for the church, and so forth.
In the later years I also repeatedly used National Socialist phraseology, because from the time of my speech at Konigsberg, the contrast between my views and Hitler's views regarding the Party was entirely clear. And gradually within the Party I got the reputation of being an enemy of the Party, a man whose views were contrary to those of the Party. From that moment on not only the possibility of my co-operation, but also my very existence was endangered; and in such moments, when I saw my activity, my freedom, and my life seriously threatened by the Party I utilized these moments to show by means of an emphatically National Socialist phraseology that I was working entirely within the framework of the traditional policies and that my activity was in agreement with these policies-in order to protect myself against these attacks.
DR. DIX: In other words, recalling the testimony of the witness Gisevius about a remark of Goerdeler's, you used Talleyrand methods in this case?
SCHACHT: I am not entirely familiar with Talleyrand's methods, but at any rate I did camouflage myself.
DR. DIX: In this connection I should like to read a passage from the affidavit of Schniewind which has been quoted repeatedly. It is Schacht Number 34. I have often indicated this page. It is Page 118 of the German, Page 126 of the English text. Schniewind says:
"If Schacht on the other hand occasionally made statements, oral or written, which could be construed as signifying that he went a long way in identifying himself with the Hitler regime, these statements were naturally known to us; but what Schacht thought in reality was known to almost every official in the Reichsbank and in the Reich Ministry of Economics, above all, of course, to his closest colleagues.
"On many occasions we asked Dr. Schacht if he had not gone too far in these statements. He always replied that he was
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under such heavy fire from the Party and the SS that he could camouflage himself only with strong slogans and sly statements."
I might explain that Schniewind was a high official in the Reich Ministry of Economics, and worked directly under Schacht and with him.
The Prosecution have also referred to an affidavit by Tilly to the effect that you admitted that you thought Hitler capable of aggressive intentions. Will you make a statement about that?
SCHACHT: That affidavit of the British Major Tilly is entirely correct. I told Major Tilly during the preliminary interrogation that in 1938, during the events of the Fritsch affair and afterwards, I had become convinced that Hitler at any rate would not avoid a war at all costs and that possibly he even sought to bring about a war. Looking back I pondered over a number of statements by Hitler and asked myself the reason why Hitler, in the course of the years, had reached the point where he might not avoid a war. And I told Major Tilly that the only reason which I could think of was that looking back I had the impression that Hitler had fallen into the role which necessarily falls to each and every dictator who does not want to relinquish his power in time, namely, that of having to supply his people with some sort of victor's glory-that that was probably the development of Hitler's thought.
DR. DIX: That is the same explanation as given by Prince Metternich about Napoleon?
You have already remarked parenthetically that you first became suspicious during the Fritsch affair. The witness Gisevius has described the Fritsch affair to the Tribunal in detail. We do not wish to repeat anything. Therefore, I am asking you only to state in regard to the Fritsch affair anything you might have to say to supplement or to amend Gisevius' testimony. If that is to take a long time-which I cannot judge-then I might suggest to the Tribunal that we have the recess now, if the Tribunal so desires.
SCHACHT: I have just a brief remark to make.
DR. DIX: A brief remark. Then answer the question briefly.
THE PRESIDENT: Yes, if he can do it briefly, we had better have it now.
SCHACHT: It is just a single remark that I should like to add. The account given by Gisevius of the development of the Fritsch affair is, according to my knowledge and my own experience, completely correct in every detail. I have nothing to add to that. I can only confirm it. On the other hand, I should like to refer to a speech of Hitler's on 20 February 1938 in the Reichstag which
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contains a remark which even at that time aroused my attention. He said-and I quote this speech from Die Dokumente der Deutschen Politik, of which all copies were available here:
"The changes in the Reich Cabinet and in the military administration on 4 February"-that is, changes which were made following the Fritsch and Blomberg affair-"were for the purpose of achieving within the shortest time that intensification of our military means of power, which the general conditions of the present time indicate as advisable."
This remark also confirmed my opinion that the change from a peaceful to a military policy on Hitler's part was becoming obvious; I did not wish to omit reference to this remark which completes the account given by Gisevius.
DR. DIX: This is Exhibit Number Schacht-28 of our document book, Page 81 of the English text, Page 74 of the German text. There this passage is quoted.
THE PRESIDENT: Very well, we will adjourn now for 10 minutes.
[A recess was taken.]
DR. DIX: [Turning to the defendant.] Several meetings have been discussed here during which Hitler is said to have spoken directly or indirectly about his war intentions. Did you participate in any such meetings?
SCHACHT: No, not in a single one.
DR. DAY: You disagreed, as you have stated, with Hitler and the Party on many issues. Did you express this disagreement or did you conform to Hitler's instructions at all times? Can you in particular make statements about your critical attitude, for instance, to the Jewish question, the Church question, the Gestapo question, the Free Mason question, et cetera?
SCHACHT: I might say in advance that Hitler never gave me any order or any instructions which would have been in opposition to my inner views and that I also never did anything which was in opposition to my inner convictions. From the very beginning I did not conceal my convictions concerning all these questions which you have mentioned, not only when speaking to my circle of friends and to larger Party circles, but also in addressing the public, and even when speaking to Hitler personally. I have already stated here that as early as the Party purge of 30 June 1934 I called Hitler's attention to the fact that his actions were illegal.
I refer, furthermore, to a document of which unfortunately only half has been presented by the Prosecution. It is a written report
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which I personally submitted to Hitler on 3 May 1935. I remember the date very well because it happened during a trial run of the Lloyd Steamer Scharnhorst, at which both Hitler and I were present.
On that day I handed him two inter-related memoranda which together formed a unit. In the one half I made it clear that I wanted to stop the unrestrained and constant collections of money by various Party organizations because it seemed to me that the money ought not to be used for Party purposes, particularly Party installations, Party buildings, and the like, but that we urgently needed this money for State expenses which had to be paid and which of course included the rearmament question as well.
The second half of this report dealt with cultural questions. The Defense and I have tried for months to get this, second half of the document from the Prosecution, since they had submitted the first half of the document here as evidence. It has not been possible to obtain that second half. I must therefore confine myself to communicating the contents.
I want to say in advance that, of course, I could only bring forward such charges in regard to the mistaken cultural and legal policy of the Party and of Hitler when reasons originating in my own department gave me the excuse to submit these things to Hitler. I stated that very serious harm was being done to my foreign trade policy by the arbitrary and inhuman cultural and legal policy which was being carried out by Hitler. I pointed in particular to the hostile attitude towards the churches and the illegal treatment of the Jews and, furthermore, to the absolute illegality and despotism of the whole Gestapo regime. I remember in that connection that I referred to the British Habeas Corpus Act, which for centuries protected the rights of the individual; and I stated word for word that I considered this Gestapo despotism to be something which would make us despised by the whole world.
Hitler read both parts of this memorandum while still on board the Scharnhorst. As soon as he had read it he called me and tried to calm me down by making statements similar to those which he had already made to me in July 1934, when he told me these were still the transitional symptoms of a revolutionary development and that as time went on this would be set right again and disappear.
The events of July 1934 had taught me a lesson, however, and consequently I was not satisfied with this explanation. A few weeks afterwards, on 18 August 1935, I used the occasion of my visit to the Eastern Fair Konigsberg to mention these very things in the speech which I had to make there; and here I gave clear expression to the same objections which I had made to Hitler aboard the Scharnhorst at the beginning of May.
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I did not talk only about the Church question, the Jewish question, and the question of despotism; I talked also about the Free Masons; and I shall quote just a few sentences from that speech (Exhibit Number Schacht-25), with the permission of the Tribunal. They are very short. I am speaking about people, and I now quote...
DR. DIX: Just one moment. I want to tell the Tribunal that this is the Konigsberg speech, which I submitted to the Tribunal this morning as a document.
SCHACHT: I am talking about people and I now quote:
". . . people who under cover of darkness heroically smear window panes who brand as a traitor every German who trades in a Jewish store, who declare every former Free Mason to be a scoundrel, and who in the fight against priests and ministers who talk politics from the pulpit, cannot themselves distinguish between religion and misuse of the pulpit." End of quotation, and then another sentence. I quote:
"In accordance with the present legislation and in accordance with the various declarations made by the Fuehrer's Deputy, the Reich Minister of the Interior, and the Reich Minister for Public Enlightenment and Propaganda (not to mention the Ministry of Economics), Jewish businesses are permitted to carry on their business activities as heretofore." End of quotation, and then, in the last sentences, I quote:
"No one in Germany is without rights. According to Point 4 of the National Socialist Party program the Jew can be neither a citizen nor a fellow German. But Point 5 of the Party program provides legislation for him too; that means, he must not be subjected to arbitrary action but to the law."
I assumed the same attitude on every other further occasion that offered itself.
DR. DIX: One moment, Dr. Schacht; did the regime tolerate this speech?
SCHACHT: It is a good thing that you remind me of that; because in the course of the Gisevius testimony the same question was discussed with reference to the Marburg speech of Herr Von Papen. Since up to then my speeches were not subject to censorship-of course I would not have allowed that-this speech was broadcast by mistake, so to speak, over the Deutschlandsender. In that way the speech was brought to the notice of Propaganda Minister Goebbels, and at once he issued an order prohibiting the publication of the speech in the newspapers. As a result, although the speech
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was broadcast by the Deutschlandsender it did not appear in any newspaper. But as, fortunately, the Reichsbank had its own printing press which was of course not subject to censorship, I had the speech printed in the Reichsbank printing press; and 250,000 copies of it were distributed to the 400 branches of the Reichsbank throughout the country, and in that manner it became known to the entire population.
DR. DIX: You were going to continue, were you not?
SCHACHT: I wanted to go on and say that on every future opportunity which I could find I always returned to these points. I should like to touch upon only two more things in this connection.
This morning I referred to these things in connection with the letter written by me on 24 December 1935 to the Reich Minister of War, which is Document Number EC-293. I should merely like to add and point out the words, which I shall now quote:
"The economic and legal policy for the treatment of the Jews, the anti-Church activities of certain Party organizations, and the legal despotism associated with the Gestapo are detrimental to our armament program. . ."
The same attitude can also be seen from the minutes of the so-called "small Ministerial Council" for 12 May 1936, which have been submitted in evidence by the Prosecution. It says in these minutes, and I quote: "Dr. Schacht emphasized openly again and again that a cultural and legal policy must be pursued which does not interfere with economy."
I want to remark in this connection that, of course, as Minister of Economics I always linked my arguments with the work of the departments under the Minister of Economics. And, as a last example, one of many others which I cannot mention today, there is the speech on the occasion of a celebration for the apprentices at the Berlin Chamber of Artisans on 11 May 1937 which is Exhibit Number Schacht-30. On that occasion I said the following, and I quote:
"No community and, above all, no state can flourish which is not based on legality, order, and discipline."
And a second sentence, I quote:
"For that reason you must not only respect the right and the law, but you must also act against injustice and unlawful actions everywhere, wherever you find them."
And because I made known my attitude not only to a close circle but also to a wider public by using every opportunity to voice my views frankly-because of this, a few weeks ago in this court, the Chief of the RSHA, Department III, Security Service, the
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witness Ohlendorf, in reply to a question, described me as an enemy of the Party, at least since the year 1937-1938. I believe that the Chief of the Security Service, the inland department, should know since he had the task of combating political opponents inside Germany.
DR. DIX: May I point out that the statements made during the meeting of the small Ministerial Council on 12 May 1936 are contained in my document book, Exhibit Schacht-20, Page 57 of the English text, Page 51 of the German text and Schacht's speech to the Chamber of Industry and Commerce on 12 May 1937...
SCHACHT: [Interrupting.] You mean Chamber of Artisans.
DR. DIX: I shall refer to that later when I have the proper document; and I now continue.
We have talked about your participation at the Party rallies, and I should merely like to ask you in addition: Did you participate in any other Party functions?
SCHACHT: I do not remember that I ever participated in any other functions of the Party.
DR. DIX: The Indictment charges you, in substance, with using your personal influence and your close connections with the Fuehrer for the aims as set forth. Did you, as far as you know and can judge from your experience, have any influence on the Fuehrer?
SCHACHT: Unfortunately, I never had any influence on the Fuehrer's actions and decisions. I had influence only insofar as he did not dare to interfere with me in my special financial and economic policies. But this lack of influence of all members of Hitler's entourage has already been mentioned by various witnesses and so much has been said about it that I think I need not take up the Tribunal's time with any further statements on that subject.
DR. DIX What you have just said applies in the main to the question of the influence of the Reich Cabinet, the last meetings of the Reich Cabinet, and so forth. Various witnesses have made statements on that subject. Have you anything new to add?
SCHACHT: I can merely add that on the whole the Reich Cabinet did not have the slightest influence on Hitler, and that from November 1937 on-this has been stated repeatedly-there were no more meetings or consultations of the Cabinet. The Reich Cabinet was an uncorrelated group of politically powerless departmental ministers without the proper professional qualifications.
DR. DIX: I should like to add that the number of the speech to the Chamber of Artisans is Exhibit Number 30, Page 89 of the English text and Page 82 of the German text.
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[Turning to the defendant.] What was the situation regarding rearmament? Whose will was decisive and authoritative as regards the extent of rearmament?
SCHACHT: I am without any basis for judgment as far as that is concerned. But I have no doubt that Hitler's will, here too, was the sole decisive and authoritative factor.
DR. DIX: That is to say, you had no influence other than that of the credit-giver?
SCHACHT: Within my Ministry, insofar as I administered this Ministry, I did nothing for which I would not assume responsibility myself.
DR. DIX: Did you speak to prominent foreigners about your lack of influence on Hitler?
SCHACHT: In this connection I recall a conversation with Ambassador Bullitt in November 1937. This conversation with Ambassador Bullitt has already been mentioned in some other connection, and Ambassador Bullitt's memorandum has been presented in evidence to the Tribunal by the Prosecution. I merely refer to the sentence which refers to me, and I quote:
"He"-that is to say Schacht-"prefaced his remarks- by saying that he himself today was 'completely without influence on that man"'-meaning Hitler. "He seemed to regard himself as politically dead and to have small respect for 'that man.'"
That was said in November 1937. But if I am permitted to add to this, I want to point out that my foreign friends were kept constantly informed about my position and my entire activity as regards the directing of public affairs in Germany, as I have already mentioned once before. This will be seen on later occasions when various instances are mentioned.
DR. DIX: This morning I submitted Exhibit Number Schacht-22, Page 64 of the English text.
[Turning to the defendant.] And now a few special questions regarding your position as Minister of Economics. You have already made statements regarding the obtaining of foreign raw materials, that is, you have quoted appropriate passages. Could these not be substituted by home products in your opinion?
SCHACHT: A portion of such raw materials could certainly be replaced by home products. We had learned in the meantime how to produce a large number of new materials which we did not know about before...
DR. DIX: Please be brief.
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SCHACHT: . . . to produce them synthetically. But a considerable part could not be replaced in that way and could be obtained only through foreign trade.
DR. DIX: And what was your attitude towards the question of self-sufficiency?
SCHACHT: As far as self-sufficiency was concerned I believe that, if at a reasonable cost, without undue expenditure, which would have meant a waste of German public funds and German manpower, certain synthetic materials could be produced in Germany, then one should do so, but that apart from this the maintenance of foreign trade was an absolute necessity for economic reasons, and that it was even more necessary for reasons of international cultural relations so that nations might live together. I always regarded the isolation of nations as a great misfortune, just as I have always regarded commerce as the best means of bringing about international understanding.
DR. DIX: Who was the exponent in the Reich Cabinet of the self-sufficiency principle?
SCHACHT: As far as I know, the whole idea of self-sufficiency, which was then formulated in the Four Year Plan, originated with Hitler alone; after Goering was commissioned with the direction of the Four Year Plan, then Goering too, of course, represented that line of thought:
DR. DIX: Did you express your contradictory views to Goering and Hitler?
SCHACHT: I think it is clear from the record that I did so at every opportunity.
DR. DIX: One incidental question: You will remember that Goering exclaimed, "I should like to know where the 'No men' are."
I want to ask you now, do you claim this honorary title of "No man" for yourself? I remind you particularly of your letter of November 1942.
SCHACHT: On every occasion when I was no longer in a position to do what my inner conviction demanded, I said, "No." I was not content to be silent in the face of the many misdeeds committed by the Party. In every case I expressed my disapproval of these things, personally, officially, and publicly. I said "No" to all those things. I blocked credits. I opposed an excessive rearmament. I talked against the war and I took steps to prevent the war. I do not know to whom else this honorary title of "No man" might apply if not to me.
DR. DIX: Did you not swear an oath of allegiance to Hitler?
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SCHACHT: I did not swear an oath of allegiance to a certain Herr Hitler. I swore allegiance to Adolf Hitler as the head of the State of the German people, just as I did not swear allegiance to the Kaiser or to President Ebert or to President Hindenburg, except in their capacity as head of the State; in the same way I did not swear an oath to Adolf Hitler. The oath of allegiance which I did swear to the head of the German State does not apply to the person of the head of the State; it applies to what he represents, the German nation. Perhaps I might add something in this connection. I would never keep an oath of allegiance to a perjurer and Hitler has turned out to be a hundredfold perjurer.
DR. DIX: Goering has made extremely detailed explanations regarding the Four Year Plan, its origin, its preparation, technical opposition by you, and the consequences you took because of this opposition. Therefore we can be brief and deal only with new material, if you have something new to say. Have you anything to add to Goering's statements or do you disagree on points which you remember or about views held?
SCHACHT: I gather from Goering's statements that he has described conditions perfectly correctly and I myself have nothing at all to add unless you have something special in mind.
DR. DIX: According to your impressions and the experience you had, when did Hitler realize that you were an obstacle in the way of a speedy and extensive rearmament? Did he acknowledge your economic arguments? Was he satisfied with your policy or not?
SCHACHT: At that time, in 1936, when the Four Year Plan was introduced in September I could not tell what Hitler's inner attitude to me was in regard to these questions of economic policy. I might say that it was clear that after my speech at Konigsberg in August 1935 he mistrusted me. But his attitude to my activities in the field of economic policy was something which I was not yet sure of in 1936. The fact that I had not in any way participated in the preparation of the Four Year Plan but heard about it quite by surprise during the Party Rally and that, quite unexpectedly, Hermann Goering and not the Minister of Economics was appointed head of the Four Year Plan, as I heard for the first time at the Party Rally in September 1936-these facts naturally made it clear to me that Hitler, as far as economic policy with reference to the entire rearmament program was concerned, did not have that degree of confidence in me which he thought necessary. Subsequently, here in this prison, my fellow Defendant Speer showed me a memorandum which he received from Hitler on the occasion of his taking over the post of Minister and which, curiously enough, deals in great detail with the Four Year Plan and my activities, and is dated August 1936.
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In August 1936 Hitler himself dictated this memorandum which has been shown to me in prison by my fellow Defendant Speer, and I assume that if I read a number of brief quotations from it with the permission of...
DR. DIX: I just want to give an explanation to the Tribunal. We received the original of this memorandum about three weeks ago from the Camp Commander of the Camp Dustbin through the kind mediation of the Prosecution. We then handed it in for translation so that we might submit it now. But the translation has not yet been completed. I shall submit the entire memorandum under a new exhibit number when I receive it.
THE PRESIDENT: Has any application been made in respect to it?
DR. DIX: No application has been made as yet. I wanted . . .
THE PRESIDENT: Which memorandum? Who drew it up?
DR. DIX: It is a Hitler memorandum of the year 1936, of which there exist three copies; and one of them was in the Camp Dustbin. This copy arrived here a fortnight or three weeks ago after we had discussed our document books with the Prosecution. I intended to submit the translation of the Hitler memorandum today and at the same time to ask that this be admitted in evidence, but unfortunately I am not in a position to do so because the translation is not yet ready. My colleague, Professor Kraus, was in fact told that it has been mislaid.
THE PRESIDENT: Dr. Dix, let the defendant go on, and you can submit the document in evidence and a translation afterwards.
DR. DIX: Very well. The defendant has a copy and he will quote the most important, very brief passages.
SCHACHT: I shall quote very brief passages. Hitler says in this memorandum, among other things, and I quote:
"It is, above all, not the task of State economic institutions to rack their brains about methods of production. This does not concern the Ministry of Economics at all."
The Ministry of Economics was under me, and this is therefore a reproach for me.
A further quotation:
"It is furthermore essential that German iron production be increased to the utmost. The objection that we are not in a position to produce the same cheap raw iron from German ore, which has only 26 percent of iron content, as from the 45 percent Swedish ores, is unimportant . . . The objection that in this case all the German smelting works would have to be
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reconstructed is also irrelevant; and, in any case, this is none of the business of the Ministry of Economics."
As is apparent from the statement, I had explained that from 26 percent ore one could produce steel only at costs twice or three times those at which one could produce steel from 45 percent ore. And I explained further that, in order to use 26 percent ore, one would have to have completely different plants from those using 45 percent ore. Herr Hitler states that this is none of the business of the Ministry of Economics, and that, of course, means Herr Schacht.
There is one last, very brief quotation. I quote:
"I want to emphasize in this connection that in these tasks I see the only possible economic mobilization and not in the curbing of the armament industry..."
That statement, too, is directed, of course, against my policy.
DR. DIX: We have now reached the stage of tension of technical differences between you and Goering, the tension between you and Hitler regarding your functions as Minister of Economics. What were your thoughts at the time about resigning from your office as Minister of Economics? Was it possible for you to resign? Please do not repeat anything that Lammers and other witnesses have already told us about the impossibility of resigning. Please talk only about your own special case and what you yourself did.
SCHACHT: First of all, I tried to continue my own economic policy, in spite of the fact that Goering as head of the Four Year Plan tried, of course, as time went on to take over as many of the tasks concerned with economic policy as possible. But the very moment Goering encroached on my rights as Minister of Economics I used it as an opportunity to force my release from the Ministry of Economics. That was at the beginning of August 1937.
At the time I told Hitler very briefly the reason, namely, that if I was to assume responsibility for economic policy, then I would also have to be in command. But if I was not in command, then I did not wish to assume responsibility. The fight for my resignation, fought by me at times with very drastic measures, lasted approximately two and a half months until eventually Hitler had to decide to grant me the desired release in order to prevent the conflict from becoming known to the public more than it already was.
DR. DIX: When you say "drastic measures" do you mean your so-called sit-down strike?
In this connection I want to submit to the Tribunal Exhibit Number Schacht-40 of my document book, an affidavit from another
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former colleague of Dr. Schacht in the Reich Ministry of Economics, Kammerdirektor Dr. Asmus. On Page 180 of the English version of this long affidavit there is a brief passage. I quote:
"When this was found to be unsuccessful"-it means his fight-"and when developments continued along the course which he considered wrong, he"-Schacht-"in the autumn of 1937, long before the beginning of the war, acted as an upright man and applied for release from his office as Reich Minister of Economics and thereby from his co-responsibility.
"He was obviously not able to resign his office in the normal way, because for reasons of prestige the Party required the use of his name. Therefore, in the autumn of 1937, he simply remained away from the Ministry of Economics for several weeks. He started this sit-down strike, as it was humorously called in the Ministry, and went in his official capacity only to the Reichsbank..."
THE PRESIDENT: Dr. Dix, is it necessary to trouble the Tribunal with all this detail? There is no dispute that he did resign, and the only thing that he has got to explain is why he continued to be a Minister. The Prosecution have given evidence about his resignation and about the conflict between him and the Defendant Goering. What is the good of going into all the detail of it, as to this sit-down strike and that sort of thing? That doesn't interest the Tribunal:
DR. DIX: He did not remain a Minister at that time. He resigned as Minister.
THE PRESIDENT: I thought he had remained a Minister until 1943.
DR. DIX: Minister without Portfolio, yes.
THE PRESIDENT: I didn't say Minister with Portfolio, I said Minister.
DR. DIX: Yes, but there is a difference, but I shall come to that later. I understood you to mean an active Minister, but I shall not go into that now. It was a misunderstanding. Anyway, I have already finished that. I was merely trying to show how difficult it was to resign.
[Turning to the defendant.] We now come to the manner in which you were released. Have you anything to add to the statements made by Lammers in this connection or not?
SCHACHT: I think we should inform the Tribunal of one matter about which I also learned here in prison from my fellow Defendant Speer. He overheard the argument between Hitler and
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myself on the occasion of that decisive conference in which I managed to push through my resignation.
If the Tribunal allow, I shall read it very briefly. There are two or three sentences. Herr Speer informed me of the following: "I was on the terrace of Berghof on the Obersalzberg, and I was waiting to submit my building plans. In the summer of 1937 when Schacht came to the Berghof..."
MR. JUSTICE JACKSON: [Interposing.] Speer is present in the room. For one defendant to testify as to a conversation with another defendant is a very convenient way of getting testimony without access to cross-examination, but it seems to me that it is a highly objectionable method. I object to this on the ground that it has no probative value to testify to a conversation of this character when the Defendant Speer is in the courtroom and can be sworn and can give his testimony. He sits here and is available.
THE PRESIDENT: What is the subject of the conversation?
DR. DIX: The subject of this conversation is a matter which concerns the Defendant Schacht. It is a statement of Hitler regarding Schacht; it is not a matter which concerns the Defendant Speer. Therefore I consider it expedient for him, since it is a matter which concerns Schacht, to be able to make a statement about it. I would, of course, consider it more appropriate that he should not read something which Speer has written to him, but that he should give his own account of what happened between Hitler and Schacht and merely say, "I heard that from Speer." That appears to be better than...
THE PRESIDENT: Very well, Dr. Dix, you may give that.
DR. DIX: [Turning to the defendant.] Will you please not read, then, but tell of this incident and say you got it from Speer?
MR. JUSTICE JACKSON: That is even more objectionable to me than to have a written statement from Speer. If we are to have Speer's testimony, it at least should be Speer's and not a repetition of a conversation between the two defendants. If Speer has made a written statement, it can be submitted to us in the ordinary course.
This is the second document that we have not had the privilege of seeing before it has been used here; and it seems to me that if this is a document signed by Speer-which I don't understand it to be-if it is, that is one thing. We can then see it and perhaps it can be used. If it is a conversation, I should prefer Speer's version.
DR. DIX: May I add something? The question of procedure is not of basic importance for me here. In that case it can be discussed when Speer is examined. However, I do not know whether
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Speer is going to be called; probably he will be. Actually it would be better for us to hear it now, but I leave it to the Tribunal to decide. It is not a question of great importance to me.
THE PRESIDENT: The Tribunal will allow the evidence.
DR. DIX: [Turning to the defendant.] Well then, without reading, please describe the incident.
SCHACHT: The gentlemen on the terrace, among them Speer, heard this discussion, which was conducted in very loud tones. At the end of the discussion Hitler came out on the terrace and...
THE PRESIDENT: Just a moment. [There was a brief pause in the proceedings.] Very well, Dr. Dix, go on.
SCHACHT: Hitler came out on the terrace after this conference and said to those present, among them Speer, that he had had a very serious argument with Schacht, that he could not work with Schacht, and that Schacht was upsetting his financial plans.
DR. DIX: Well then, after you had left your position as Minister of Economics you were still left authority as Reichsbank President. Were you approached by Hitler or the Minister of Finance in your capacity as President of the Reichsbank and asked for credit?
SCHACHT: After the Reichsbank had discontinued giving credits, on 31 March 1938, the Reich Minister of Finance of course received more urgent demands for money and toward the end of that year he found himself in the awkward situation of not being able to pay even the salaries of the civil servants from the treasury. He came to me and asked me to grant him a special credit. According to its charter and laws the Reichsbank was entitled and to a certain extent obliged, but actually only entitled, to advance to the Reich up to 400 million marks per annum. The Reich Minister of Finance had received these 400 million marks and he was asking, over and above that, for further credits; the Reichsbank refused to give him these credits. The Reich Minister of Finance had to go to the private banks and all the large banks together gave him a credit of a few hundred million marks. However, the Reichsbank did not participate in this credit.
DR. DIX: If you as President of the Reichsbank turned down those credits, then it seems there was nothing for it but to print more notes. Did Hitler or anyone else suggest to you that the note printing presses should be set in motion?
SCHACHT: After the events of November 1938 I paid one more visit to London, in December, to attend a conference regarding the financing of the Jewish emigration from Germany in an orderly manner-a thing which I myself had suggested. On that occasion
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I also talked with Prime Minister Chamberlain. On 2 January 1939 I arrived at the Berghof in Berchtesgaden to report to Hitler about these matters. On that occasion we, of course, also got to talk about the financial needs of the Reich. I still refused to give credit to the Reich, and pointed out the very difficult financial situation which called for, or should have called for, a reduction of State expenditure and thus of armament expenditure.
In particular, I pointed out that at the beginning of December the first instalment of the so-called Jewish fine-which had been imposed on the Jews after the murder of Herr Vom Rath in Paris and which had been collected to the extent of 250 million marks at the beginning of December-that this first instalment of 250 million marks had not been received entirely in the form of cash, but that the Reich Minister of Finance had had to agree to accept a considerable part of it "in kind," as the English say, because it was not possible to make liquid the cash necessary for this payment. Hitler replied: "But we can circulate notes on the basis of these goods. I have looked into the question of our future financial policy very carefully and when I get back to Berlin in a few days I shall discuss my plans with you and the Minister of Finance."
I saw at once that it was Hitler's intention to resort to the printing of notes to meet this expenditure with or without the necessary cover, but at any rate against certain securities. The danger of inflation was now definitely imminent. And since I realized at once that this was the point where I and the Reichsbank had to say "stop," I replied to him, "Very well, in that case I will get the Reichsbank to submit a memorandum to you, setting out the attitude of the Reichsbank to this problem and which can be used at the joint meeting with the Finance Minister."
After that I went back to Berlin and informed my colleagues in the Reichsbank Directorate. We saw, to our personal satisfaction, that here was an opportunity for us to divorce ourselves definitely from that type of policy.
The memorandum dated 7 January which the Reichsbank Directorate then submitted to Hitler has, I think, also been submitted as evidence by the Prosecution.
In order to explain the statements which the Reichsbank Directorate made to Hitler in this decisive moment regarding further State expenditure and especially armament expenditure, I ask permission to read only two very brief sentences from this memorandum. It says, and I quote:
"Unrestrained public expenditure constitutes a definite threat to our currency. The unlimited growth of government expenditure defies any attempts to draw up a regulated budget.
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It brings State finances to the verge of ruin despite a tremendous increase in taxes, and it undermines the currency and the issuing bank."
Then there is another sentence, and I quote:
". . . if during the two great foreign political actions in Austria and the Sudetenland an increase in public expenditure was necessary, the fact that after the termination of these two foreign political actions a reduction of expenditure is not noticeable and that everything seems rather to indicate that a further increase of expenditure is planned, makes it now our absolute duty to point out what the consequences will be for our currency.
"The undersigned Directors of the Reichsbank are sufficiently conscious of the fact that in their co-operation they have gladly devoted all their energy to the great aims that have been set, but that a halt must now be called."
DR. DIX: This memorandum has already been submitted by the Prosecution under the Document Number EC-369, but it is being submitted again as Exhibit Schacht-24 in our document book, Page 70 of the English text, and Page 63 of the German text.
I shall have to put various questions to Dr. Schacht on that memorandum, but I think that perhaps there is not time now and that I should do so tomorrow.
THE PRESIDENT: If you must, Dr. Dix; but do you think that is very important? At any rate, you had better do it tomorrow, if you are going to do it at all.
DR. DIX: Yes.
THE PRESIDENT: Dr. Siemers?
DR. SIEMERS: Yes, Sir.
THE PRESIDENT: Dr. Siemers, can you inform us whether those extracts are the same as the extracts which were refused in the case of the Defendant Ribbentrop?
DR. SIEMERS: I have made a comparison, and I can hand it to the Tribunal in writing. Some documents are the same, some do not tally, and some are missing. I have done that in writing.
THE PRESIDENT: Thank you. The Tribunal will adjourn.
[The Tribunal adjourned until 2 May 1946 at 1000 hours.]
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