Nuremberg Trial Proceedings Vol. 13

Friday, 3 May 1946

Morning Session

[The Defendant Schacht resumed the stand.]

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

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

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

THE PRESIDENT: It is very difficult.

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

HJALMAR SCHACHT (Defendant): That may be.

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

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

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

SCHACHT: Bormann?

MR. JUSTICE JACKSON: Bormann, yes.

SCHACHT: That I do not know.


3 May 46

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

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

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

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

MR.JUSTICE JACKSON: Or in interrogation?

SCHACHT: Interrogations are also sometimes heated.

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

SCHACHT: He tried it repeatedly, I believe.

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

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

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

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

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


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

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

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

SCHACHT: That was the meeting of 17 December 1936.

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


3 May 46

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

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

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


SCHACHT: I assume it is.

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

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

That was also true, was it not?

SCHACHT: Yes, certainly.

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


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

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

And that was also true, was it not?


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

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


SCHACHT: Entirely aside from other differences which we had.


3 May 46

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

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

MR. JUSTICE JACKSON: Oh, were you?

SCHACHT: Oh, yes.

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



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

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

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

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

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

You made that statement?

SCHACHT: I believe that is correct.

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

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



3 May 46

You described it as follows:

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

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

"Answer: 'Certainly.' "

Is that correct?

SCHACHT: Yes, certainly.

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

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

"Answer: 'Correct.' "

Did you give that testimony?

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

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

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


3 May 46

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

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

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

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

SCHACHT: November 1937.

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

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

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

SCHACHT: This difference...

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

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


SCHACHT: But now please let me finish.

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

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


3 May 46

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

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

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

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

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

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

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

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

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

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

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


3 May 46

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


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

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

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

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

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

SCHACHT: I have never had a friendship with Goering.


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


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

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

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

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


3 May 46

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

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

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

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

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

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

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

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

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

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

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


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

SCHACHT: Our colonies.

MR. JUSTICE JACKSON: And where were they located?

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

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

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

MR. JUSTICE JACKSON: What colonies?

SCHACHT: I was thinking especially of the African colonies.

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


3 May 46

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

SCHACHT: You can go by air.

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


3 May 46

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

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

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

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

SCHACHT: Not in the least.

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

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

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

SCHACHT: We never spoke about that.

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

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

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

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

Hitler in 1931 and 1932 concerning colonial policy, you did

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

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

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

alternatively to the possibility of obtaining colonies?'

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

Did you give those answers?

SCHACHT: Certainly.

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

SCHACHT: Yes, I had my doubts.

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


3 May 46

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

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


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


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

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

"Answer: 'Not at all.'

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

"Answer: 'Not at all, Sir.'

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

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

Did you give those answers?


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

SCHACHT: Certainly.

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


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

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

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

SCHACHT: I assume I read that.

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


3 May 46

SCHACHT: When and where? What attacks?

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

SCHACHT: That was my duty.

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

SCHACHT: Of course.

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

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

MR. JUSTICE JACKSON: I beg your pardon?

SCHACHT: Amalgamated.

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

SCHACHT: Everything.

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

SCHACHT: Certainly.

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


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


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

SCHACHT: Certainly.

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

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

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

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


3 May 46

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

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

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

Did you use that language?


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

SCHACHT: If that is the way you see it.

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

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

Continuing with the speech:

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

Is that what happened?

SCHACHT: Yes, they all agreed, surprisingly.

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


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


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

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


3 May 46

Did that happen?


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


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

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

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

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

Is that a correct representation of what took place?

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

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

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

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

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


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


3 May 46 -

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

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

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

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

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

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


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

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

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

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

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

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

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


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

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


3 May 46

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

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

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

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

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

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

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

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

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

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

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


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


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

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

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


3 May 46

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

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

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

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

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

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

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

SCHACHT: Surely. Yes.

MR.JUSTICE JACKSON: They could have?

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

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


3 May 46


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

SCHACHT: Shortly.

MR. JUSTICE JACKSON: They were shortly to mature?

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

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

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

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

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

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

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

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


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

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

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

Did you give that answer?

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


3 May 46

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

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

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


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

SCHACHT: Not at all.

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

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

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

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

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

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

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

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

"Answer: 'Yes.'


3 May 46

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

"Answer: 'No.'

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

"Answer: 'No, certainly not.'

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

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


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

"Answer: 'Yes.'

"Question: 'You did?'

"Answer: 'Yes, Sir,'

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

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

SCHACHT: Certainly not.

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

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

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

SCHACHT: Of course.

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

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


3 May 46

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

SCHACHT: Yes, I have never denied that.

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

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

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

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

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

"Answer: 'Yes.' "

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

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

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

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

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

SCHACHT: Thanks to your invitation, I was here.

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

SCHACHT: Disapproved; disapproved under all circumstances.

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

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

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


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


3 May 96

SCHACHT: Absolutely.

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

SCHACHT: Absolutely.

MR. JUSTICE JACKSON: And of Holland?

SCHACHT: Absolutely.

MR. JUSTICE JACKSON: And of Denmark?

SCHACHT: Absolutely.


SCHACHT: Absolutely.

MR.JUSTICE JACKSON: And of Yugoslavia?

SCHACHT: Absolutely.


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

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

SCHACHT: Absolutely to be condemned.

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

SCHACHT: Unfortunately.

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

THE PRESIDENT: We will adjourn now.

[A recess was taken.]

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

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

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

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


3 May 46

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

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

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

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


[Moving pictures were then shown.]

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

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

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

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


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

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

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

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

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


3 May 46

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

Is that correct?

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

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

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

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

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

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

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

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

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

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

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

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

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


3 May 46

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

Did you say that?

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

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

SCHACHT: Nothing.

MR.JUSTICE JACKSON: What employees did you have?

SCHACHT: One female secretary.

MR. JUSTICE JACKSON: What space did you occupy?

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

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

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

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

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

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

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

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

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

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

SCHACHT: Absolutely correct.

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


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


3 May 46

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

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

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

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

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

"Answer: 'Yes.'

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

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

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

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

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

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

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

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

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

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


3 May 46

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

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

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

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

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

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

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

SCHACHT: No, he did not say that.

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

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

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

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


3 May 46

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

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

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

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

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

SCHACHT: Absolutely.

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

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

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

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

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

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


3 May 46

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

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

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

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

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

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

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

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

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

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

SCHACHT: Leon Fraser.

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



3 May 46

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

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

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

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

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

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

SCHACHT: Mr. Justice . . .

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

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


3 May 46

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


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

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

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

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

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

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

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

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

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

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


3 May 46

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

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

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

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

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

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

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

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

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

SCHACHT: I knew about it.

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

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

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

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


3 May 46

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

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

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

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

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

"Question: 'You would have said that?'

"Answer: 'Yes.'

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

"Answer: 'Quite.'

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

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

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

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

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

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

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

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


3 May 46

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

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


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

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

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


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

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


3 May 46

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

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

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

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

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

SCHACHT: Please ask Herr Goering that.

GEN.ALEXANDROV: Did you not ask him yourself?

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

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

SCHACHT: That you must ask Herr Goering.

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

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

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

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

GEN.ALEXANDROV: Tell me, please...


3 May 46

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

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

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

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


GEN. ALEXANDROV: How do you explain it?

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

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

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

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

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

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

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

SCHACHT: Yes, we both heard it here.


3 May 46

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

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

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

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

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

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

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

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

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

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

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

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

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


3 May 46

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

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


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

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

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

This is the question which I am asking you.

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

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

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

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

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

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

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

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


3 May 46

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

SCHACHT: I consider them wrong.

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

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

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

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

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

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

Does this testimony of the Defendant Funk represent the truth?

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


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

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

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

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


3 May 46

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

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

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

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

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

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

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

SCHACHT: No, I categorically deny that.

GEN. ALEXANDROV: You were Plenipotentiary for War Economy?

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

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

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


3 May 46

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

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

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

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

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

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

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

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

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

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

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

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

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

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


3 May 46

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

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

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

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

SCHACHT: It was simply an ordinary law.

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

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

THE PRESIDENT: The Court will adjourn now.

[A recess was taken.]


3 May 46

Afternoon Session

THE PRESIDENT: Yes, General Alexandrov.

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

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

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

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

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

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

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

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

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


3 May 46

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

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

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

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

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

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

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

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

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


3 May 46

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

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

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

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

That was the New Plan.

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

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

SCHACHT: Absolutely nothing.

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

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

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


3 May 46

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


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

SCHACXT: No, in no way.

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

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

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

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

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


3 May 46

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

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

DR. DIX: Under Rita Von Epp?

SCHACHT: Yes, under Ritter Von Epp.

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

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

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

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

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


3 May 46

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

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

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

And that concludes my questions.

THE PRESIDENT: The defendant can then retire.

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

[The witness Vocke took the stand.]

THE PRESIDENT: Will you state your full name?

WILHELM VOCKE (Witness): Wilhelm Vocke.

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

[The witness repeated the oath in German.]

THE PRESIDENT: You may sit down.

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

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

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


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

V0CKE: No.


3 May 46

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


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


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


DR. DIX: When did you meet Schacht?

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

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

VOCKE: A disapproving attitude.

DR. DIX: And for what reason?

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

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

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

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

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


3 May 46

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

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

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

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

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


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

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

DR. DIX: When was that?

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

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


3 May 46

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

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

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

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

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

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

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


3 May 46

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

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

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

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

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

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

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

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

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


3 May 46

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

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

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

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

THE PRESIDENT: At what time?

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

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

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


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

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


3 May 46

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

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

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

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

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

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

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

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

VOCKE: No, never.


3 May 46

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

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

DR. DIX: Schacht made these statements?

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

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

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

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

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


3 May 46

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

VOCKE: Not in the sense of your question. Schacht did speak to me about the incidents when the Rhineland was reoccupied, that is to say, he explained to me how at that time Hitler, as soon as France adopted a somewhat menacing attitude, was resolved to withdraw his occupation forces-Hitler had climbed down-and how he was only prevented in this by Herr Von Neurath, who said to him: "I was against that step, but new that you have done it, it will have to stand." What Schacht told me at that time about Hitler's attitude was that Hitler would do anything rather than have a war. Schacht also felt this, as he told me, when he mentioned He friendship with Poland, the renunciation of his claim to Alsace Lorraine, and, in particular, Hitler's policy during the first years, all of which was a peaceful policy. Only later did he begin to have misgivings as regards foreign policy.

DR. DIX: What were Schacht's principles and ideas in foreign policy and how did these line up with his attitude to Hitler's foreign policy?

VOCKE: He definitely disapproved, especially, of course, since Ribbentrop had gained influence in foreign politics; Schacht saw in him the most incapable and irresponsible of Hitler's advisers. But already before that there were serious differences of opinion between Schacht and Hitler on foreign policy.

For instance, as regards Russia: Already from 1928-29 onwards Schacht had built up a large trade with Russia by long term credits which helped the economy of both countries. He has often been attacked on account of that, but he said: "I know what I am doing. I also know that the Russians will pay punctually and without bargaining. They have always done it." Schacht was very angry and unhappy when Hitler's tirades of abuse spoiled the relations with Russia and brought this extensive trade to an end.

Also, with regard to China, Schacht was convinced of the importance of trade with China and was just about to develop it on a large scale, when Hitler, by showing preference to Japan and recalling the German advisers to Chiang Kai-Shek, again destroyed all Schacht's plans. Schacht saw that this was a fatal mistake and said that Japan would never be able nor willing to compensate us for the loss of trade with China.


3 May 46

Also Schacht always advocated close co-operation with the United States, with England, and with France. Schacht admired Roosevelt and was proud of the fact that Roosevelt, through the diplomat Cockerill, kept in constant touch with him. Schacht was convinced of the necessity of remaining on the best terms with England and France and for that very reason he disapproved of Ribbentrop being sent to London and actively opposed this plan.

Schacht was against Hitler's policy towards Italy. He knew that Mussolini did not want to have anything to do with us, and he considered him the most unreliable and the weakest partner.

With regard to Austria, I know only that Schacht thought highly of Dollfuss and was horrified and shocked when he heard of his murder. Also after the occupation of Austria, he disapproved of much that happened there.

May I, in this connection, say a word about Schacht's colonial policy, which was a sort of hobby of Schacht's, and about which he once gave a lecture? I can best illustrate Schacht's views by telling you about the orders which he gave me. Schacht's idea was to make an arrangement with England, France, et cetera, whereby these powers should purchase part of the Portuguese colony of Angola and transfer it to Germany, who would not exercise any sovereign rights, but would exploit it economically; and he had experts' opinions...

THE PRESIDENT: Dr. Dix, the Tribunal thinks that this is being given in far too great length.

DR. DIX: Well, we can leave out the individual examples. The late Field Marshal Von Blomberg made a statement to the effect that the Reichsbank received every year from the Reichswehr Ministry a written communication about the state of the armaments. Do you, who were a member of the Directorate, know anything about this communication?

VOCKE: No, I have never heard anything about it.

DR. DIX: From the whole of your experience in the Reichsbank and your experience with Schacht's attitude to his colleagues, do you consider it possible that Schacht personally received that information, but did not pass it on to any of his colleagues in the

Reichsbank Directorate?

VOCKE: It may be, but I consider it highly improbable.

DR. DIX: Now, when did Schacht start to try to stop the financing of armaments and thereby cheek rearmament; and, if he did try, and if you can affirm it, what were his reasons?

VOCKE: Schacht made the first attempts to limit armaments, I believe, about 1936, when economy was running at top speed and


3 May 46

further armament seemed an endless spiral. The Reichsbank was blocked and, I believe, in 1936, Schacht himself started making serious attempts to put an end to armaments.

DR. DIX: And do you know from your own experience what these attempts were?

VOCKE: These attempts continued throughout the following years: First, Schacht tried to influence Hitler and that proved to be in vain. His influence decreased as soon as he made any such attempt. He tried to find allies in the civic ministries, and also among the generals. He also tried to win over Goering, and he thought he had won him over, but it did not work. Schacht then put up a fight and at last he succeeded in stopping the Reichsbank credits for armaments. That was achieved at the beginning of March 1938. But that did not mean that he discontinued his efforts to stop rearmament itself, and he continued to use every means, even sabotage.

In 1938 he issued a loan at a time when he knew that the previous loan had not yet been absorbed-when the banks were still full of it; and he made the amount of the new loan so big that it was doomed to failure. We waited eagerly to see whether our calculations were correct. We were happy when the failure became obvious, and Schacht informed Hitler.

Another way in which he tried to sabotage armaments was when the industries which applied for loans to expand their factories were prohibited from doing so by Schacht, and thus were prevented from expanding. The termination of the Reichsbank credit did not only mean that the Reichsbank could no longer finance armaments, but it dealt a serious blow to armament itself. This was shown in 1938, when financing became extremely difficult in all fields and, upon Schacht's resignation, immediately reverted to the direct credits of the issuing bank, which was the only means of maintaining elastic credit, perpetual credit, so to speak, which Hitler needed and could never have received from Schacht.

I know that from my personal recollection, because I protested against that law which was put to me and which Hitler issued after Schacht's dismissal. I said to the Vice President: I am not going to have anything to do with it.

Thereupon, I was immediately dismissed ten days after the dismissal of Schacht.

DR. DIX: Well, Herr Vocke, for an outsider the motive for stopping the financing of armaments might have been purely economic. Hav

e you any grounds, have you any experience which shows that Schacht was now also afraid of war, and wanted to prevent a war by this stoppage of credit?


3 May 46

VOCKE: Yes. At any rate, in 1938 the feeling that this tremendous armaments program which had no limits would lead to war became stronger and stronger, especially after the Munich Agreement. In the meantime Schacht had realized, and I think the Fritsch affair had made it very clear to him, that Hitler was the enemy, and that there was only one thing to do; that was to fight against Hitler's armament program and warmongering by every possible means. These means, of course, were only financial, such as the sabotage, et cetera, as I have already described. The final resort was the memorandum by which Schacht forced his resignation.

DR. DIX: We will speak later about that. May I ask you another question? The Tribunal know about the method of financing this credit, namely, by mefo bills, so you need not say anything about that. What I want to ask you is now, in your opinion as a lawyer, could the financing of armaments by these mefo bills be reconciled with banking law?

VOCKE: The mefo bills and the construction of that transaction had, of course, been legally examined beforehand; and the point of their legality had been raised with us, and the question as to whether these bills could be brought under banking law had been answered in the affirmative. The more serious question, however, was whether these bills fulfilled the normal requirements which an issuing bank should demand of its reserves. To that question, of course, the answer is definitely "no." /

If one asks, why did not the bank buy good commercial bills instead of mefo bills, the answer is that at that time there had been no good commercial bills on the market for years-that is, since the collapse due to the economic crisis. Already under Bruening schemes for assisting and restoring economy and credit had been drawn up, all of which followed similar/, lines, that is, they were sanctioned according to their nature as normal credits along the lines of a semipublic loan; for the Bank was faced with the alternative of standing by helplessly and seeing what would happen to the economy or of helping the Government as best it could to restore and support the economy. All issuing banks in other countries were faced with the same alternative and reacted in the same manner. Thus the armaments bills, which, economically speaking, were nothing more than the former unemployment bills, had to serve the same purpose. From the point of view of currency policy the Reichsbank's reserves of old bills, which had been frozen by the depression, were again made good.

All the regulations under banking law, the traditional regulations concerning banking and bills policy, had only one aim, namely, to avoid losses.


3 May 46

DR. DIX: I believe, Herr Vocke, it will be sufficient for the Tribunal if you could confirm that in the end the legal experts of the Reichsbank pronounced the mefo bills to be legal. The reasons for this, if Your Lordship agrees, we can omit.

Now we come to the memorandum which you have already mentioned. I want you to describe to the Tribunal the reasons which caused the Reichsbank Directorate, with Schacht at the head, to submit that memorandum to Hitler, and what the tactical purposes were which the Directorate, and therefore Schacht, hoped to achieve by that memorandum.

VOCKE: If we had been able to speak frankly, of course, we would have said: You must stop armaments. But the Reichsbank itself could not do this. Instead, we had to limit ourselves to the question of our responsibility for the currency. Therefore, the Reichsbank memorandum dealt with the question of currency. It said: If the financing of armaments is continued, German currency will be ruined and there will be inflation in Germany.

The memorandum also spoke of limitless credits, of unrestrained expansion of credits, and unrestrained expenditure. By expenditure we meant armaments. That was quite clear.

THE PRESIDENT: We have all seen the memorandum, have we not?

DR. DIX: Me is not speaking about the contents of the memorandum, but of the reasons, the tactical reasons.

{Turning to the witness.]- You understand, Herr Vocke, the Tribunal knows the text of the memorandum, so please confine yourself to what I have asked you.

VOCKE: The memorandum had to deal with the question of currency, but at the same time, we made quite clear what we wanted: Limitation of foreign policy. That shows clearly what we wanted: Limitation of expenditure, limitation of foreign policy, of foreign policy aims. We pointed out that expenditure had reached a point beyond which we could not go, and that a stop must be put to it. In other words, the expenditure policy, that is the armaments program must be checked.

DR.DIX: Now tell us, did you anticipate the effect that that memorandum would have on Hitler? What did you expect, tactically?

VOCKE: Either the memorandum would result in a halt of this intolerable expenditure which had brought us to ruin-for at the end of 1938 there was no more money available, instead there was a cash deficit of nearly 1,000 million. That had to be faced, and the Minister of Finance was on our side. If this was not


3 May 46

recognized, then the smash would come and we would have to be released. There was no other alternative. We took the unusual step of getting the whole Directorate to sign this document.

DR. DIX: That, in my experience, is quite unusual, because generally an official document of the Reichsbank is signed by the President or his deputy, is it not?

VOCKE: That is true. We wanted to stress that the entire Directorate unanimously approved this important document which was to put an end to armaments.

DR. DIX: That, Witness, is clear. Have you any reason for believing that Hitler recognized that fact?

VOCKE: Yes, Hitler said something to the effect that that would be "mutiny." I think that is the word they use in the Army. I have never been a soldier, but I think that when a complaint is signed by several soldiers, it is looked upon as mutiny. Hitler had the same ideas.

DR. DIX: Yes, something like that does exist. But you were not present there. Who told you about that expression "mutiny"?

VOCKE: I cannot remember that any more. I believe it was Herr Berger of the Finance Ministry. But I cannot say exactly.

DR. DIX: So there was talk about this expression in ministerial circles?


DR. DIX: Now, that memorandum also contained a compliment to Hitler, a reference to his success in foreign policy.

VOCKE Yes, Schacht had adopted the habit of using flattery in his dealings with Hitler. The greater an opponent of the Hitler regime Schacht became, the more he made use of this flattery. Therefore, in that memorandum, at any rate at the beginning where he spoke of Hitler's successes, he also used those tactics.

DR. DIX: And what Divas the consequence of that memorandum? Please tell us briefly.

VOCKE: The result was that first Schacht was dismissed, then Kreide and Huelse, then I, Erhard, and Lessing. The result, however, visas that they knew abroad what things had come to in Germany. My colleague Huelse had made unequivocal statements in Basel, and said that if we should be dismissed, then our friends would know to what pass things had come.

DR. DIX: Did Herr Huelse tell you that?

VOCKE: Yes, Huelse told me that.


3 May 46

DR. DIX: Your Lordship, shall we make a short pause here? I have not much more, but I still have the documentary evidence.

THE PRESIDENT: How much longer do you think you will take before you finish?

DR. DIX: It is very short and then the documentary evidence is also very short. Shall I continue?

THE PRESIDENT: The Tribunal will adjourn.

[A recess was taken.]

DR. DIX: Now, Witness, you have described to the Tribunal how that dismissal of Schacht and yourself came about. Why did Schacht not take that step before? Did he talk to you about it?

VOCKE: No. Throughout the years 1936 and 1937 we could not make up our minds. At first there was still hope that Hitler would steer a reasonable course as a statesman. Finally, in 1938, we reached a crisis, particularly in connection with the Munich Agreement and then after the Munich Agreement. Then, indeed, there was real anxiety that things would lead to war, and we then saw that we had to force the decision.

However, one has to consider the following: As a bank we could not bring up political or military arguments or demands which were not within our competence. The danger of inflation, which we had stressed in that memorandum, did not show until 1938, when the note circulation during the last ten months had increased enormously-more than throughout the five preceding years.

DR. DIX: So that it was not until that year that, let us say, a pretext, a means, was found to take that leap?


DR. DIX: Now I will end with a general question. The high intelligence of Dr. Schacht is not disputed-that he was disappointed in Hitler and deceived by him, he says himself. You yourself with your knowledge of Schacht's personality must probably have had your own ideas as to how this mistake on the part of Schacht could be explained, how he could have been so deceived. Therefore, if the Tribunal permits, I should be grateful if you could give us your personal impressions about it, but...

MR. JUSTICE JACKSON: Your Honor, may I make an objection? I do not understand how the operations of Dr. Schacht's mind can be explained by someone else. I have had no objection to any facts which this witness has known. We have even let him detail here


3 May 46

at great length private conversations. However, speculation on Schacht's mental operations, it seems to me, is beyond the pale of probative evidence.

THE PRESIDENT: Dr. Dix, as I think I have said before, you cannot give by one witness the thoughts of another man; you can only give his acts and his statements.

DR. DIX: Yes, Your Lordship. When I put the question, I said "if the Tribunal permits." I, too, was aware of the question of admissibility . . .

THE PRESIDENT: You have the answer now: The Tribunal does not allow it.

DR. DIX: Then we will leave that question. May I ask Your Lordship this? Of course, I can still put questions about the treatment of the Jews by Schacht. I personally think that this chapter has been dealt with so exhaustively that it is not necessary for this witness to give us more examples of the attitude of Schacht. I would only ask to be permitted to put the same question concerning the Freemasons, because nothing has been stated about that.

[Turning to the witness.] Do you know anything about the treatment of Freemasons or the attitude of Schacht to Freemasons?

VOCKE: Yes. The Party demanded that the Freemasons should be eliminated from the Civil Service. Schacht said: "I refuse to let anybody tell me what to do. Everybody knows that I myself am a Freemason; how can I take action against officials simply because they belong to the Order of Freemasons?" And as long as Schacht was in office he kept Freemasons in office and promoted them.

DR. DIX: Now, one last question. Do you know whether Schacht ever received any gifts or had any economic advantages during Hitler's time beyond his regular income as an official?

VOCKE: No; that was quite out of the question for Schacht. Besides, he was never offered gifts. In all his dealings, as far as money was concerned, he was absolutely clean and incorruptible. I can give examples. For instance, when he left in 1930 he reduced his pension to less than half the pension of the vice president or of any board member. He said: "These people have devoted their whole life to the bank, whereas I have given only a few years incidental service." I could give more examples of Schacht's absolute correctness in that respect.

DR. DIX: I believe, if the Tribunal does not wish so, it will not be necessary to give further examples. That brings me to the end of my interrogation of this witness.

THE PRESIDENT: Does any other counsel for the defense wish to ask any questions?


3 May 46

DR. GUSTAV STEINBAUER (Counsel for Defendant Seyss-Inquart): Witness, do you remember the financial-political measures on the occasion of the annexation of Austria in March 1938; that is to say, in general terms?

At that time two laws were issued, both of 17 March 1938, one concerning the conversion of schillings into marks, and the other for the taking over of the Austrian National Bank by the Reichsbank.

Dr. Schacht, as a witness stated yesterday that on 11 March he was asked what exchange rate he would consider correct in the event of an entry into Austria, and he answered that question by saying that according to the latest market rate two schillings for one Reichsmark would be correct.

After the Anschluss, my client, Dr. Seyss-Inquart, objected to the under-valuation of the schilling, and he succeeded in getting the schilling converted at 1.50 to the Reichsmark. Is that correct?

VOCKE: Before the entry into Austria I had not heard of any ratio being fixed by the Reichsbank Directorate. They were entrusted with that question only after the entry into Austria, and as experts and bankers they proposed a ratio which was in accordance with the conditions; and only a slight modification was made for the exchange. It was for the Government to make concessions, if it wanted to win over the Austrian population or make it favorably inclined.

DR. STEINBAUER: The second law deals with the Austrian National Bank. The witness Dr. Schacht has said today that the Austrian National Bank was not liquidated, but-as he expressed himself-amalgamated. I have looked up that law and it states expressly in Paragraph 2 that the Austrian National Bank was to be liquidated. That is Document Number 2313-PS. Now I ask you, Witness, do you know anything about it? Was the Austrian National Bank left in function as an issuing bank, or was it liquidated?

VOCKE: The right to issue notes in Austria, of course, went to the Reichsbank, which, as far as I know, took over the Austrian National Bank in Vienna and carried it on. I do not remember any details. My colleague Kesnick took care of that.

DR. STEINBAUER: But maybe you will remember if I quote from the official reports of the Austrian National Bank that the gold reserve of the Austrian National Bank in March 1933 amounted to 243 million schillings in gold and the foreign currency reserve to 174 million schillings, which means that roughly over 400 million schillings in gold were taken over by the Reichsbank from the Austrian National Bank.


3 May 46

VOCKE: I do not recall these facts any more; but if it was done, it was done by law, by the Government.

DR.STEINBAUER: Yes. I have that law of 17 March. I just wanted to correct a mistake which Herr Schacht must have made today unintentionally. The law he himself signed says "shall be liquidated." I have no other questions.

DR. LATERNSER: Witness, you said earlier that the fundamental difference between Dr. Schacht and the high military leaders was that he remained a free man in his attitude to the regime. I want to ask you now, since that statement seems to imply an opinion of the high military leaders: Which of the high military leaders do you know personally?

VOCKE: Not a single one.

DR. LATERNSER: Then would you maintain that opinion?

VOCKE: In our circle of the Reichsbank Herr Keitel and other gentlemen were considered too servile and too acquiescent toward Hitler.

DR. LATERNSER: But since you had no personal acquaintance with these people do you think that you can express a somewhat critical opinion on them, as you have done?

VOCKE: Yes, I think so.

DR.LATERNSER: I have no further questions.

THE PRESIDENT: Do any of the other counsel wish to cross-examine?

MR.JUSTICE JACKSON: Witness, when you met Dr. Schacht first, as I understood it, it was on the occasion of an official visit which you paid to Von Lump in Brussels?


MR. JUSTICE JACKSON: During the first years of the firs

t World War?


MR. JUSTICE JACKSON: Schacht then held some position on Von Lumm's staff?


MR. JUSTICE JACKSON: What was his position, Schacht's?

VOCKE: I cannot say that. He was just one of the staff. How I came to meet him was that on one occasion when I was sent to Brussels to discuss something with Von Lumm, the latter took the opportunity to introduce his collaborators and among them was Schacht. We were merely introduced.


3 May 46

MR. JUSTICE JACKSON: And what was Von Lumm's position? What was he doing in Brussels?

VOCKE: He was Commissioner for Banking with the General Command.

MR.JUSTICE JACKSON: General Command of the German Army?

VOCKE: Commissioner for the Banks with the Occupation Army.

MR. JUSTICE JACKSON: Named by Germany.

VOCKE: Without doubt.

MR. JUSTICE JACKSON: Well, he was a German, not a Belgian?

VOCKE: Yes, he was a German.

MR.JUSTICE JACKSON: Now, some time after that Schacht was dismissed by Von Lumm, was he not?


MR. JUSTICE JACKSON: And you had a discussion with Von Lumm about that and also you had one with Schacht about it, did you not? Tell me whether you had the visit...

VOCKE: I read the official reports in Berlin about the dismissal of Schacht. I was working in the Reich Office of the Interior. I only spoke about these things with Schacht when he became Reichsbank President and he spoke to me about it one day.

MR.JUSTICE JACKSON: Now, before Schacht went on the staff of Von Lumm, he was director of the Dresdner Bank.


MR.JUSTICE JACKSON: And the dismissal was because Schacht had delivered to that bank a considerable amount of Belgian francs.

VOCKE: Yes. I do not know how large that amount was.

MR. JUSTICE JACKSON: But it was considerable.

VOCKE: Maybe.

MR. JUSTICE JACKSON: And that, Von Lumm thought, gave to the Dresdner Bank an advantage which was incompatible with Schacht's duties as a public official?

VOCKE: That, at any rate, was Von Lumm's view. He took a very serious view, which Schacht, not being a civil servant, could not quite appreciate.

MR. JUSTICE JACKSON: And Von Lumm called a meeting and reproached Schacht?



3 May 46

MR. JUSTICE JACKSON: Schacht then gave an answer to Von Lumm which Von Lumm considered was not sincere, but was merely a lie?

VOCKE: Yes. That was Von Lumm's point of view.

MR.JUSTICE JACKSON: Now, that is what Von Lumm told you about?

VOCKE: That was in the written report which I have read.

MR. JUSTICE JACKSON: Now, when you came to talk to Schacht about it and about his answer to Von Lumm, Schacht told you that it was perhaps not quite an open answer, but not a lie?


MR. JUSTICE JACKSON: However, having heard both sides of it, you along with all of the other directors of the Reichsbank were opposed to Schacht's appointment as President, as you have testified


MR. JUSTICE JACKSON: And you took the view, along with all the other directors, that the behavior of Dr. Schacht in the Belgian bank affair was not quite fair and not quite correct?


MR. JUSTICE JACKSON: Now, when Dr. Schacht came back to the Reichsbank under the Nazi regime, as I understand it, there was a good deal of resentment and reserve against him on the part of the Reichsbank Directorate, because he "in our eyes then was a Nazi. He was in close touch with Hitler and kept some things secret from us, his colleagues." That is correct, is it not?

VOCKE: I could not say that. It is true there was a feeling against Schacht. As I explained before, because we had assumed, and I had assumed-though we were wrong about it-that he was a Nazi. It is possible that Schacht did keep things secret from us, but at any rate I do not know whether he did, or what those things were.

MR. JUSTICE JACKSON: Now, did you not say in a statement that he was in close touch with Hitler and kept some things secret from "us, his colleagues"?

VOCKE: I do not know whether he kept things secret from us. It is possible, but I could not prove it.

MR. JUSTICE JACKSON: Is it not true that years later, when already some fatal moments were reached in the currency system, circulation, price and wages system, "rumors came to our ears through semiofficial channels that Dr. Schacht had given Hitler the promise to finance armaments"? Did you not say that?


3 May 46

VOCKE: That Schacht had given the promise to Hitler? Well, in certain circles there were rumors of that nature. Whether it is true I could not say.

MR. JUSTICE JACKSON: Now, you felt after the Munich Agreement and after Hitler's speech at Saarbrucken that that destroyed all hopes of peace, did you not?


MR. JUSTICE JACKSON: And from that date, together with Pilseck, you did all in your power to persuade Schacht that a decision had to be forced?


MR. JUSTICE JACKSON: Dr. Schacht agreed with you, but hesitated to take the decisive step?

VOCKE: Yes. He said-Schacht was not against it in principle, but he wanted to decide himself when our memorandum should be submitted, and as this memorandum was to be signed by all of us, and each one of us wanted to make corrections, the handing in of this memorandum was delayed from October until 7 January.

MR. JUSTICE JACKSON: The agreement was prepared by you and Pilseck?


MR. JUSTICE JACKSON: And you approached Dr. Schacht again and again on it?


MR. JUSTICE JACKSON: And he kept the draft all this time and told you that he was in doubt about the best moment to bring it before Hitler?


MR. JUSTICE JACKSON: And it was not until Hitler refused to see him at Berchtesgaden that he finally sent him the memorandum?

VOCKE: That I do not know. I have heard here for the first time that Hitler refused to receive Schacht at Berchtesgaden. It may be. I only heard that Schacht was at Berchtesgaden, and after his return, according to my recollection, he talked about his meeting with Hitler and that now the moment had come to send him the memorandum.

MR. JUSTICE JACKSON: Well, your memorandum is the only source of my information, and according to my translation it says: "Finally, in December 1938, he resolved to sign it after a last attempt to speak with Hitler in Berchtesgaden."



3 May 46

MR. JUSTICE JACKSON: At that time, there was something of a financial crisis.


MR. JUSTICE JACKSON: Considerable difficulty, inflation was just around the corner, as you might say.

VOCKE: The Government was confronted with the 3,000 million mefo bills which were about to fall due and which had to be covered, and the Minister of Finance had a cash deficit of 1,000 million. The Minister of Finance came to see us and asked us to tide it over, because otherwise he could not pay the salaries oh 1 January. We refused. We did not give him a single pfennig. We told him that the best thing that could happen would be that bankruptcy should become manifest in order to show how impossible it was to continue this system and this policy. He then received money from private banks.

MR. JUSTICE JACKSON: And you and Huelse, particularly Huelse, had long warned against this course of the Reichsbank, is that not true?

VOCKE: No, that is not true.

MR. JUSTICE JACKSON: Had not you and Huelse, long before this, warned that this mefo business would end up in trouble?

VOCKE: Of course, the Reichsbank had for years fought against the mefo bills, which were to mature in March 1938, and from then on the Reichsbank did not give any more armament credits.

MR. JUSTICE JACKSON: Now, after his dismissal from the Reichsbank, you very frequently discussed matters with Schacht and you found that he had turned very bitter against the Government. Is that not true?

VOCKE: I did not have frequent meetings with Schacht. We met every few months in the beginning and then, when Schacht went to Guehlen, our meetings stopped; I saw him there only once or twice. But it was not only after his dismissal that Schacht became a bitter enemy of Hitler, but he had been that during the whole of 1938.

MR. JUSTICE JACKSON: And you said, "I think in his heart he hoped he would be called after Hitler's defeat to help build a new and better order of things in Germany"?

VOCKE: Certainly. Schacht spoke to me in Guehlen about the men who would have to come after Hitler had been finally overthrown, and in conversation we mentioned the ministers who then could save Germany from despair, and Schacht was certain that he also would be called in to assist.

MR. JUSTICE JACKSON: No further questions, Your Honor.


3 May 46

THE PRESIDENT: Do any of the other Prosecution Counsel want to cross-examine?

DR. DIX: Herr Vocke, in reply to the questions of Mr. Justice Jackson, you have explained the attitude and the statement of Herr Von Lumm about the incident in Brussels. You also told the Tribunal about the statement by Minister Severing, which he made about that incident not so long ago.


DR. DIX: Did you not also speak to the President of the Supreme Court of the Reich, Simons, who was at that time in the Foreign Office and knew the case very well? Did you not speak to him about that case?

VOCKE: Yes, I spoke to him and Ministerial Director Lewald. At that time I was a young assistant judge.

DR. DIX: You will have to tell the Tribunal who Lewald was.

VOCKE: It is correct that I spoke to Simons, who later became President of the Supreme Court of the Reich, and to His Excellency Lewald, who later became Undersecretary of State in the Reich Office of the Interior, about these matters which came officially to my knowledge in my capacity as expert in the Reich Office of the Interior.

Both gentlemen smiled at the self-important attitude of Von Lumm who made mountains out of mole hills and also at the misfortune of Herr Schacht. They smiled benevolently and saw the whole thing as a tremendous exaggeration.

DR. DIX: Thank you, that is enough. I have no further questions.

However, if the Tribunal will permit me, I should like to point out that Schacht mentioned here that on 2 January 1939 he spoke at great length to Hitler, in Berchtesgaden. I do not know whether I am confusing that with a statement made by a witness or with a statement made by him. I just wanted to point it out. If he were still sitting here as a witness, he could tell us about it.

Your Lordship. I bring that up because it was stated by Mr. Justice Jackson that Hitler did not receive Schacht in Berchtesgaden and that that was the cause of Schacht's decision to forward that memorandum. I only mention, as this witness here cannot know it, that Schacht did speak to Hitler. If he did not say so this morning or yesterday, he will say it at any time.

I cannot remember now. Sometimes one confuses private information with what rune has heard in the courtroom.

THE PRESIDENT: Put the microphone where the Defendant Schacht can speak from there and ask him the question.


3 May 46

[The microphone was placed before the defendants]

DR. DIX: Dr. Schacht, you have witnessed the cross-examination. Would you like to ten the Tribunal what happened?

SCHACHT: When I spoke here I said that I had a long conversation on 2 January 1939 with Hitler at Berchtesgaden on the Obersalzberg, and that after that conversation, in which the suggestion was put to me to create an inflation, I considered that the time had come to take that step which the Reichsbank afterwards took, to dissociate itself from Hitler and his methods.

[The microphone was returned to the witness.]

THE PRESIDENT: There is one question I want to ask you, Witness. Did the Defendant Schacht ever tell you that he had been appointed Plenipotentiary General for War Economy?



VOCKE: Well, I believe he was appointed to that office in 1935. I believe that is the date. I could not say for certain.

THE PRESIDENT: I did not ask you when he was appointed. I asked you when he told you.

VOCKE: I cannot recall that because we had nothing to do with these things. I only know that either in 1935 or 1936-I believe it was 1935-he received such an appointment.

THE PRESIDENT: Yes. The question I asked you was: Did the Defendant Schacht ever tell you that he had been appointed?


THE PRESIDENT: When did he tell you?

VOCKE: I think in 1935.

THE PRESIDENT: The witness can retire.

DR. DIX: May I put one last question to this witness?

Witness, did you have any idea of the importance of that office?

VOCKE: No. I never heard that Schacht had done anything in that function except that he had special letter headings for this. His activity in the Reichsbank continued in the same way as previously, without his selecting a staff for that office, and without-at least as far as my knowledge goes-his using the premises and facilities of the Reichsbank for this new office.

DR. DIX: Have you any knowledge as to whether he had a separate office or a separate staff for carrying on his activity as Plenipotentiary?

LOCKE: You mean commissioner general for armaments?


3 May 46

DR. DIX: Plenipotentiary for War Economy.

VOCKE: No, he had no separate office, and as I have said before, as far as I know he never had a staff.

THE PRESIDENT: The witness can retire.

[The witness left the stand.]

DR. DIX: May I begin with my documents? I can make the presentation of documents very brief and I am sure that I will conclude it before the end of the session, because I had an opportunity to submit a large portion of my documents during the interrogation of witnesses. May I make the general request that judicial notice be taken of everything I have not read and everything I do not propose to read. In this connection, I should like to point out that the entire contents of' my document book have, with one exception, either been submitted or will be submitted now as exhibits. The exception, the document which has not been submitted, is Exhibit Number 32. That is the frequently mentioned article of the Basler Nachrichten of 14 January 1946, which, for the reasons mentioned yesterday, has not been and will not be submitted by me.

I come now to Volume I of my document book, to the exhibits which have not yet been submitted; that is, first Exhibit Number 5 (Document Schacht-5) Adolf Hitler's Reichstag speech of 23 May 1933. That exhibit was read by Schacht in the course of his interrogation and is now being submitted.

I further submit Exhibit Number 23 (Document Schacht-23), the letter from Schacht to Hermann Goering, of 3 November 1942. Although that letter has been submitted by the Prosecution, we submit it again, and for the following reasons: In the copy which was submitted by the Prosecution, the date and the year were left out and, of course, as it has been translated literally, also in our copy. However, a confirmatory note by Professor Kraus based on the testimony given by Schacht has enabled us to make a note on it to the effect that it must be the letter of 3 November 1942, because it was that letter which caused the dismissal in January 1943. It is only submitted in order to make it easier for the Tribunal to ascertain the date. That was Exhibit Number 23.

Then I wish to submit Exhibit Number 27 (Document Schacht-27). I am not going to read it; I only ask that judicial notice be taken of it. That is the address given by Dr. Schacht at the celebration meeting of the Reich Economic Chamber in January 1937.

Then I submit Exhibit Number 29 (Document Schacht-29), excerpts from the book by Gisevius, which we want to put into evidence, and I ask you to take judicial notice. I will not read anything.


3 May 46

Exhibit Number 33 (Document Number Schacht-33) in my document book is a letter from a certain Morton, a former citizen of Frankfurt-on-Main, who emigrated to England, a man who was highly respected in Frankfurt. The letter is directed to the Treasury Solicitor in England and we have received it here from the Prosecution. I also ask that judicial notice be taken of its contents and want to read only one senten

ce on the last page. I quote:

"I last heard from Schacht indirectly. Lord Norman who was then Mr. Montague Norman, Governor of the Bank of England, told me confidentially in 1939 shortly before the outbreak of the war, that he had just come back from Basel where he had seen Schacht who sent me his greetings. Lord Norman also told me that Schacht, who had returned to Germany from Basel, was in great personal danger as he was very much in disgrace with the Nazis."

That concludes Volume I of my document book and I pass on to Volume II, which begins with the affidavits. I must go through the individual affidavits, but I shall not read any.

The first is Exhibit Number 34 (Document Schacht-34), which has frequently been quoted, the affidavit of the banker and Swedish Consul General, Dr. Otto Schniewind, who is at present in Munich. It is a very instructive and very exhaustive affidavit and in order to save time-there are 18 pages which would take up a lot of time-I will confine myself to what I have read from this affidavit; I ask the Tribunal to take judicial notice of the remainder. It has already been submitted.

However, I still have to submit Exhibit Number 35 (Document Schacht-35), which has not yet been submitted. I beg your pardon, but it has been submitted before. It is the affidavit of Dr. Franz Renter. I submitted it when I spoke here about the biased nature of this biography. I ask you to take judicial notice of the rest of this affidavit.

The next Exhibit Number 36 (Document Schacht-36) is an affidavit by Oberregierungsrat, Dr. Von Scherpenberg, formerly Embassy Counsellor at the Embassy in London, afterwards departmental chief at the Foreign Office and now at the Ministry of Justice in Munich, the son-in-law of Dr. Schacht. I have read a passage and I ask that judicial notice be taken of the unread portion.

The next is Exhibit Number-37(a) (Document Schacht-37(a)). It has been submitted. Here also a passage on Page 154 of the German text has been read, about the warning signal given abroad when Schacht resigned as Reichsbank President. I ask that judicial notice be taken of the remainder.


3 May 46

The next affidavit is by the same gentleman, who was also a colleague of Dr. Schacht in the Reichsbank Directorate at the same time as the witness Vocke, whom we have just heard. I submit it. There is no need to read anything. I only ask you to take judicial notice of its contents.

The next affidavit, Exhibit Number-37(c) (Document Schacht-37(c) ) is by the same gentleman and has already been submitted. I ask you to take judicial notice of its contents. There is no need to read anything.

The next is Exhibit Number 38 (Document Schacht-38), an affidavit by General Thomas. It has not been submitted yet, and I submit it now and ask to be permitted to read one passage, beginning on the first page; that is Page 172 of the English text and Page 164 of the German text:

"Question: Schacht claims to have influenced Blomberg to delay rearmament. Can you give any information on this matter? When was it?

"Answer: I was Chief of the Army Economic Staff, that is the Army Economic and Armament Office at the High Command OI the Wehrmacht (OKW) from 1934 to the time of my dismissal in January 1943. In this capacity I had connection with the Reich Minister of Economics and Reich Bank President Hjalmar Schacht. Up till 1936 Schacht undoubtedly promoted rearmament by making available the necessary means. From 1936 on he used every opportunity to influence Blomberg to reduce the tempo and extent of rearmament. His reasons were as follows:

"1. Risk to the currency. "2. Insufficient production of consumer goods.

"3. The danger to the foreign policy, which Schacht saw in excessive armament of Germany.

"Concerning the last paint he frequently spoke to Blomberg and me and said that on no account must rearmament be allowed to lead to a new war. These were also the reasons which led him to hold out to Blomberg in 1936 and again in 1937 the threat that he would resign. On both of these occasions I was delegated by Blomberg to dissuade Schacht from carrying out his threat to resign. I was present during the conference between Blomberg and Schacht in 1937."

I ask you to take judicial notice of the remainder of that affidavit by General Thomas.

The next Exhibit is Number 39 (Document Schacht-39); parts of it have been read, that is to say, the part Schacht played in the incident of the 20th of July together with General Lindemann; it is


3 Play 48

the affidavit by Colonel Gronau. I ask the Tribunal to take judicial notice of the remainder.

The same applies to the next Exhibit Number 40 (Document Schacht-40). That is a sworn statement, also by a colleague of Schacht in the Ministry of Economics, Kammerdirektor Asmus, now in retirement. I have also read parts of this already, namely, the passages concerning the happenings at the time of the dismissal as Minister of Economics; and I ask you to take judicial notice of the remainder.

Then we come to Exhibit Number 41 (Document Schacht-41), which is the affidavit by State Secretary Carl Christian Schmid, also in retirement. I have not yet read anything and I ask to be permitted to read two passages.

The first one is on Page 182 of the German text; Page 190 of the English text:

"When the Bruening Cabinet, which had been arranged by General Von Schleicher. . ."-That is not legible. I think that should be different, but it is not legible.-"When that was torpedoed by Schleicher himself, Schacht considered the early appointment of Hitler as head of the Government to be unavoidable. He pointed out that the great mass of the German people said 'Yes' to National Socialism, and that the Left as well as the Center had come to a state of complete passive resignation. The short life of the transition cabinets of Papen and Schleicher was clear to him from the very beginning.

"Schacht decisively advocated the co-operation in National Socialism of men experienced in their respective fields, without acceptance of its program as a whole, which he always referred to ironically, later frequently calling it 'a really bestial ideology' in conversation with me; but he held that the influencing of developments from important inner power positions was an absolute patriotic duty, and he strongly condemned emigration and the resort to easy armchair criticism."

And then on Page 184 of the German text, 192 of the English text, two very short passages:

"I recall numerous talks with Dr. Schacht in which he stated that war was an economic impossibility and simply a crazy idea, as, for instance, when he was in Muelheim at the house of Dr. Fritz Thyssen, who was closely associated with Goering and Hitler before 1933 but was in strong opposition from 1934 on and also opposed any idea of war as madness."

And, then, further down on the same page, only one sentence: "When Schacht spoke to me he used to refer ironically to the Himmler-Rosenberg Lebensraum plans against Russia as an


3 May 46

example of the mad presumption of extremist Party circles. Schacht's special fad was an understanding with England,"

and so on; and I ask you to take judicial notice of the remainder of the document.

The same applies to the whole of Exhibit Number 42 (Document Schacht-42), an affidavit by the director of the Upper Silesian Coke Works, Berckemeyer.

I come now to Exhibit Number 43 (Document Schacht-43). That has already been submitted and read in part. It is the correspondence between the publisher of Ambassador Dodd's Diary and Sir Nevile Henderson. I ask you to take judicial notice of the part not yet read, and whatever comes after Exhibit 43 has been submitted. I ask you to take judicial notice of its contents, and I forego the reading of it.

That brings me to the end of my presentation in the case of Schacht.

THE PRESIDENT: Now the Tribunal will continue the case against the Defendant Funk.

DR. FRITZ SAUTER (Counsel for Defendant Funk): Mr. President, with your permission I call first the Defendant Dr. Funk himself to the witness box.

[The Defendant Funk took the stand.]

THE PRESIDENT: Will you state your full name, please?

WALTER FUNK (Defendant): Walter Emanuel Funk.

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

[The defendant repeated the oath in German.]

THE PRESIDENT: You may sit down.

DR. SAUTER: Mr. President, may I begin with one observation: The Defendant Funk has been a sick man for many years now, and before he came into the prison he had been in hospital for some time. He was supposed to undergo an operation, which, however, due to conditions at the time, could not be carried out. He still is under medical treatment. In consideration of that fact, and because the defendant is extremely anxious to conclude his own interrogation as soon as possible, I shall put only those questions to the defendant which are absolutely necessary to give you a clear picture about his person and his activities.

[Turning to the defendant.] Witness, when were you born?


3 May 46

FUNK: On 18 August 1890.

DR. SAUTER: So you are now 56?

FUNK: Yes.

DR. SAUTER: First, I want to put to you the most important particulars of your life, and to simplify matters you may answer only with "yes" or "no."

You are 56 years old. You were born in East Prussia?

FUNK: Yes.

DR. SAUTER: You come from a merchant's family in Konigsberg?

FUNK: Yes.

DR. SAUTER: Then you studied in Berlin at the university, 1a\v and political science, literature and music. You also come from a family which has produced a number of artists.

FUNK: Yes.

DR. SAUTER: During the World War you were first in the Infantry, and in 1916, because of a bladder ailment, you became unfit for service?

FUNK: Yes.

DR. SAUTER: Then you became an editor with several large newspapers, and you told me that for a long time you could not make up your mind whether to become a musician or a journalist. Then you decided for the latter, and in 1922, I believe, you became editor in chief of the Berliner Borsenzeitungt. Is all that correct?

FUNK: Yes.

DR. SAUTER: Now perhaps you will tell us what were the political tendencies of that paper on which you worked for about ten years as editor in chief?

FUNK: The tendency of the paper was somewhere between the Center and the Right. The newspaper was not tied to any party. It was owned by an old Berlin family of publishers.

DR. SAUTER: What was the attitude of that paper to the Jewish question before you took on the editorship and during the time when you were editor in chief?

FUNK: Absolutely neutral. It did not deal in any way with the Jewish question.

DR. SAUTER: From an affidavit by Dr. Schacht, I have seen that at that time-that is to say, during the twenties-you moved in circles which were also frequented by Jews, and where economic and political matters, such as gold currency, et cetera, were often discussed. Is that correct?


3 May 46

FUNK: I do not know anything about that.

DR.SAUTER: Dr. Schacht has asserted that in an affidavit of 7 July 1945 (Document Number 3936-PS).

FUNK: I had a lot to do with Jews. That was in the nature of my profession. Every day at the stock exchange I was together with 4,000 Jews.

DR. SAUTER: Then in 1931 you resigned your post as editor in chief?

FUNK: Yes.

DR. SAUTER: What were the reasons for that?

FUNK: I was convinced that the National Socialist Party would come to power in the Government, and I felt called upon to make my own political and economic opinions heard in the Party.

DR. SAUTER: Would you like to explain a little more in detail what kind of opinions you had, Dr. Funk, especially concerning the clashes between parties, between classes at that time?

FUNK: The German nation at that time was in sore distress, spiritually as well as materially. The people were torn by Party and class struggle. The Government, or rather the governments, had no authority. The parliamentary system was played out, and I myself, for 10 or 12 years before that, had protested and fought publicly against the burden of the Versailles reparations, because I was convinced that those reparations were the chief cause of the economic bankruptcy of Germany. I, myself, have fought all my life for private enterprise, because I \vas convinced that the idea of private enterprise is indissolubly bound up with the idea of the efficiency and worth of individual human beings. I have fought for the free initiative of the entrepreneur, free competition, and, at that time in particular, for putting an end to the mad class struggle, and for the establishment of a social community on the basis of the industrial community.

All those were ideas to which I found a ready response in my conversations, particularly, with Gregor Strasser.

DR. SAUTER: Who was Gregor Strasser, would you tell the Tribunal briefly?

FUNK: Gregor Strasser at that time was leader of the Reich Organization Office of the National Socialist Party and was generally considered to be the second man after Adolf Hitler. I have...

THE PRESIDENT: This is the time to break off.

[The Tribunal adjourned until 4 May 1946 at 1000 hours.]


Nuremberg Trials Page Volume 13 Menu

127 Wall Street, New Haven, CT 06511.