Trial of the Major War Criminals Before the International Military Tribunal, Nuremburg, 14 November 1945-1 October 1946, Volume 12

by Various

Morning Session

THE PRESIDENT: Before we go on with the case of the Defendant Schacht, the Tribunal wishes to announce its decision on the applications by Dr. Sauter on behalf of the Defendant Von Schirach: The first application to which any objection was taken related to the group of documents Numbers 30, 31, 45, 68, 73, 101, 124, and 133. That application with respect to that group of documents is denied.

The next matter was an application in respect of Number 118(a). That application is granted and the document is to be translated.

The next was Number 121 and in that case the application is denied. As regard to witnesses, Dr. Sauter withdrew his application for the witness Marsalek.

In connection with the other applications, the Tribunal grants the application that Uiberreither should be called as a witness.

That is all.

DR. DIX: Yesterday, much to my regret, I neglected after an answer given by Dr. Schacht to my question as to whether he was disappointed by Hitler or whether he considered himself deceived by him, to read a passage from a document which deals with the same point. I am referring to a document which has been submitted to the High Tribunal and which has been quoted several times—Exhibit Schacht-34, Page 114 of the English text of the document book. This passage may be found on Page 124 of the English document book and reads as follows:

“Dr. Schacht, even in the years 1935-36, as may have been seen from numerous statements, had fallen into the role of a man, who in good faith had put his strength and ability at Hitler’s disposal but who now felt himself betrayed.

“Of the many statements made by Schacht, I quote only one which Schacht made at the occasion of a supper with my wife and myself in the summer of 1938. When Dr. Schacht made his appearance, it was evident that he was in a state of inner excitement and during the supper, he suddenly gave vent to his feelings, when, in deep agitation he almost shouted at my wife, ‘My dear lady, we have fallen into the hands of criminals—how could I ever have suspected that?’ ”

This is the affidavit made out by Schniewind.

Yesterday I mentioned three documents: namely, a speech made by Schacht on “Geography and Statistics” at Frankfurt-am-Main on 9 December 1936, then an article Schacht had written on the colonial problem and a speech given at Königsberg by Schacht.

I wish to submit these documents: The speech on “Geography and Statistics” at Frankfurt is the Document Schacht-19, Page 48, English Page 54. The theme on the colonial question is Exhibit Schacht-21, German version Page 53 and English version Page 59. The speech at Königsberg is Exhibit Schacht-25 of my document book, German version on Page 44 and English version Page 73.

Dr. Schacht, we stopped in the middle of 1934, shortly before you entered the Ministry of Economics, and when you became Minister of Economics, you were familiar with the happenings of 30 June 1934 and their legalization by the Cabinet. Did you not have any misgivings to enter the Cabinet or what reasons prompted you to put aside these misgivings?

SCHACHT: As far as my personal composure and comfort would have been concerned, it would have been very simple not to assume office and to resign. Of course, I asked myself what help that would be for the future development of German politics if I did refuse office. We were already at a stage in which any public and open opposition and criticism against the Hitler regime had been made impossible. Meetings could not be held, societies could not be established, every press statement was subject to censorship, and all political opposition, without which no government can thrive, had been prevented by Hitler through his policy of terror. There was only one possible way to exercise criticism and even form an opposition which could prevent bad and faulty measures being taken by the Government. And this opposition could solely be formed in the Government itself. Thus convinced, I entered the Government and I hoped in the course of the years to find a certain amount of support and backing among the German people. There was still a large mass of spiritual leaders, professors, scientists, and teachers, whom I did not expect simply to acquiesce to a regime of coercion. There were also many industrialists, leaders of economy, who I did not assume would bow to a policy of coercion incompatible with free economy. I expected a certain support from all these circles, support which would make it possible for me to have a moderating, controlling influence in the Government. Therefore, I entered Hitler’s Cabinet, not with enthusiastic assent, but because it was necessary to keep on working for the German people and exercise a moderating influence within the Government.

DR. DIX: In the course of time was no opposition ever developed within the Party?

SCHACHT: In answering that question, I would like to say that within the Party, of course, the decent elements were by far in majority; the greater part of the population had joined the Party because of a healthy instinct and with good intentions driven by the need in which the German nation found itself.

I would like to say about the SS, for instance, that in the beginning numbers of decent people joined the SS because Himmler gave the SS the appearance of fighting for a life of ideals. I would like to call your attention to a book written by an SS man which appeared at that time under the significant title, Schafft anständige Kerle (Let’s Make Decent Men).

But, in the course of time, Hitler knew how to gather around him all bad elements, within the Party and its organization, and to chain tightly all those elements to himself, because he understood how to exploit shrewdly any mistake, slip-up, or misdemeanor on their part. Yesterday I talked about drunkenness as a constituent part of Nazi ideology; I did not do that with the purpose of degrading anyone personally. I did it for another quite definite reason.

In the course of further developments, I observed that even many Party members who had fallen into this net of Hitler and who occupied more or less leading positions, gradually became afraid because of the consequences of the injustices and the evil deeds to which they were instigated by the regime. I had the definite feeling that these people resorted to alcohol and various narcotics in order to flee from their own conscience, and that it was only this flight from their own conscience that permitted them to act the way they did. Otherwise, there would be no explanation for the large number of suicides that took place at the end of the Nazi regime.

DR. DIX: You know that you are accused of being a participant in a conspiracy which had as its object an illegal violation of the peace. Did you at any time have secret discussions, or secret orders, or secret directives, which worked toward this objective?

SCHACHT: I may say that I myself never received any order or fulfilled any wish which might have been contrary to the conception of right. Never did Hitler request anything from me which he knew I would surely not carry out because it did not agree with my moral point of view. But neither did I ever notice or observe that one of my fellow ministers or one of the other leading men who did not belong to Hitler’s inner circle—of course, I could not control that circle—or anyone else whom I met in official contacts, showed in any way that there was an intent to commit a war crime; on the contrary, we were always very glad when Hitler came off with one of his big speeches in which he assured, not only the entire world, but above all the German people that he was thinking of nothing except peace and peaceful work. The fact that Hitler deceived the world and the German people, and many of his co-workers, is one of the things that I mentioned yesterday.

DR. DIX: Did you at any time—of course, I mean outside of your normal oath of office—take any oath or bind yourself in any other way to the Party or another National Socialist organization?

SCHACHT: Not a single oath and not a single obligation beyond my oath of office to the head of the State.

DR. DIX: Did you have close private relations with leading National Socialists, for example, with Hitler or Göring?

SCHACHT: I assume you mean a close friendly or social contact?

DR. DIX: Yes.

SCHACHT: I never had relations of that sort with Hitler. He repeatedly urged me in the first years to come to the luncheons at the Reich Chancellery where he was lunching with closer friends. I tried to do that twice. I attended twice at various intervals, and I must say that not only the level of the discussion at the luncheon and the abject humility shown to Hitler repulsed me but I also did not like the whole crowd, and I never went back again.

I never called on Hitler personally in a private matter. Of course, naturally, I attended the large public functions which all the ministers, the Diplomatic Corps and high officials, et cetera, attended, but I never had any intimate, social, or other close contact with him. That applies to the other gentlemen as well.

As a matter of course, in the first months of our acquaintance we visited each other on occasion, but all so-called social gatherings which still took place in the first period had a more or less official character. Close private relations simply did not exist.

DR. DIX: And does this answer apply to all the other leading National Socialists as well?

SCHACHT: All of them.

DR. DIX: When, for instance, did you speak for the last time with the following persons? Let us start first with Bormann.

SCHACHT: I gather from the use of the word “first” that you are going to mention others also.

DR. DIX: Yes, Himmler, Hess, Ley, and Ribbentrop.

SCHACHT: In that case I would like to make a few preliminary remarks: At the close of the French campaign, when Hitler returned triumphant and victorious from Paris, all of us—the ministers and the Reichsleiter and the other dignitaries of the Party as I assume, and state secretaries, and so forth—received an invitation from the Reich Chancellery to be present at the Anhalter Railway Station to greet Hitler on his arrival. Since I was in Berlin at the time, it was impossible for me to refuse this invitation. It was 1940, the conflict between Hitler and myself had been going on for some time, and it would have been a veritable affront if I had stayed at home. Consequently, I went to the station and saw a very large number of Party dignitaries, ministers and so forth, but, of course, I do not remember any more just who all these people were.

DR. DIX: I beg your pardon for interrupting you. I have a rather poor memory for films and especially for newsreels, but I believe that that reception was shown in a newsreel and I believe that you were just about the only civilian who was present among those people.

SCHACHT: I personally did not see that film, but my friends told me about it. They mentioned especially that among all the gold braid, I was the only civilian in street clothes there. Of course, it could be ascertained from the film who was present at the time.

I mentioned this reception, for it might be possible that I said “Good morning” to many people and inquired about their health and so forth, and I also recall that I arrived at the station with the Codefendant Rosenberg in the same car, because there were always two people to a car. I did not attend the reception which followed at the Reich Chancellery. Rosenberg did go but I said, “No, I would rather not go. I am going home.”

DR. DIX: Then, I may assume that you probably saw the leading men, Hess, Ley, Ribbentrop, Rosenberg, Frick, Frank, Schirach, Speer, Sauckel, Seyss-Inquart, Kaltenbrunner, et cetera, then for the last time?

SCHACHT: It is possible that all these gentlemen were there, but I did not speak at length with any of them except Hitler himself.

DR. DIX: Did you speak with Hitler at that time?

SCHACHT: Hitler addressed me, and that was one of the strangest scenes of my life. We were all standing in line and Hitler passed everyone by rather quickly. When he saw me, he came up to me with a triumphant smile and extended his hand in a cordial manner, something which I had not seen from him for a long time, and he said to me, “Now, Herr Schacht, what do you have to say now?” Then, of course, he expected me to congratulate him or express my admiration or a similar sentiment, and to admit that my prognostication about the war and about the disaster of the war was wrong, for he knew my attitude about the war quite exactly. It was extremely hard for me to avoid such an answer and I searched my mind for something else to say, finally replying: “I can only say to you, ‘God protect you.’ ” That was the only significant conversation which I had that day. I believed the best way to have kept my distance was through just such a completely neutral and inconsequential remark.

DR. DIX: Well...

SCHACHT: But perhaps you would like me to refer to the individual gentlemen, and I can tell you with this exception just when I spoke to these gentlemen for the last time.

DR. DIX: Himmler?

SCHACHT: Himmler, I would judge that perhaps I talked to him last in 1936.

DR. DIX: Hess?

SCHACHT: Hess—of course I am not referring to the conversations here in the prison. I had not spoken with Hess for years before the beginning of the war.

DR. DIX: Ley?

SCHACHT: Ley, I had not seen him since the beginning of the war.

DR. DIX: Ribbentrop?

SCHACHT: I saw Ribbentrop last after my being thrown out of the Reichsbank, because I had to talk with him about the imminent journey to India, and that must have been, I would judge, February 1939. I have not talked with him since.

DR. DIX: Rosenberg?

SCHACHT: Rosenberg, always aside from this reception of Hitler’s, perhaps not since 1936.

DR. DIX: Frick?

SCHACHT: I perhaps saw Frick last in the year 1938.

DR. DIX: Schirach?

SCHACHT: I did not even know Schirach.

DR. DIX: Speer?

SCHACHT: I talked with Speer for the last time—and I can tell you this exactly—when I went to the World Exposition in Paris in the year 1937.

DR. DIX: Of course, you are always referring to the time before you were taken prisoner?

SCHACHT: Yes, of course, naturally here I have...

DR. DIX: Sauckel?

SCHACHT: Not since the beginning of the war.

DR. DIX: Seyss-Inquart?

SCHACHT: Seyss-Inquart, I would judge that I spoke to him for the last time in 1936, when I visited a colleague in the National Bank in Austria.

DR. DIX: Kaltenbrunner?

SCHACHT: I saw Kaltenbrunner for the first time here at the prison.

DR. DIX: We will refer to Hitler later. Frank is still missing.

SCHACHT: I saw Frank last perhaps 1937 or 1938.

DR. DIX: Most likely at the occasion of the speech you mentioned yesterday?

SCHACHT: Yes, possibly also afterwards at an official reception, but I do not believe that I saw him after 1938.

DR. DIX: Now, how about the leading men of the Wehrmacht, Keitel, for instance?

SCHACHT: I never had any contact with Keitel. I perhaps saw him at some social gathering, but never after 1938.

DR. DIX: Jodl?

SCHACHT: I made Herr Jodl’s acquaintance here in the prison.

DR. DIX: Dönitz?

SCHACHT: I met Dönitz for the first time here in the prison.

DR. DIX: Raeder?

SCHACHT: Herr Raeder, I believe I have known him for quite some time. In the beginning we exchanged occasional visits within the family, visits of a semiofficial character but always on a friendly basis; however, I believe that I have also not seen him or talked to him since 1938.

DR. DIX: Brauchitsch?

SCHACHT: I have not talked with Brauchitsch since 1939, or since 1938, since the Fritsch affair.

DR. DIX: How about Halder?

SCHACHT: As you know, I saw Halder in connection with the Putsch in the fall of 1938 but not after that.

DR. DIX: How often did you see Hitler after your dismissal as President of the Reichsbank?

SCHACHT: After my dismissal as President of the Reichsbank?

DR. DIX: Since January 1939.

SCHACHT: I saw him once more in January 1939 because I had to discuss my future activity, et cetera, with him. And on that occasion he asked me—he knew that I had long wished to take an extensive journey—that I might avail myself of this opportunity to take this journey now, so there would not be so much talk about my leaving the Reichsbank. Then we agreed on the trip to India. On that occasion I also saw Göring for the last time. And then—after my return in August, I did not see him again—then the war came, during the course of which I saw him twice.

Shall I tell you about those two occasions?

DR. DIX: Yes.

SCHACHT: I saw him once in February 1940. At that time various American magazines and periodicals had requested me to write articles on Germany’s interpretation of the situation, her desires, and her position in general. I had the inclination to do this, but because we were at war, I naturally could not do so without first informing the Foreign Minister. The Foreign Minister advised me that he had nothing against my writing an article for an American periodical, but that before sending off this article, he wanted to have the article submitted for censorship. Of course that did not appeal to me—I had not even thought of that—and, consequently, I did not write this article.

However, there were further inquiries from America and I said to myself, “It is not sufficient for me to talk with the Foreign Minister, I must go to Hitler in this matter.” So, with that aim, I called on Hitler, who received me very soon after my request, and I told him at that time, among other things, just what my experience with Herr Von Ribbentrop had been, and I further told him that I thought it might be quite expedient to write these articles; and that it seemed vital to me to have constantly someone in America, who by means of the press, et cetera, could enlighten public opinion as to Germany and her interests.

Hitler was favorably impressed with this suggestion of mine and said to me, “I shall discuss this matter with the Foreign Minister.” Consequently, this entire matter came to naught.

Then, later, through the good offices of my Codefendant, Funk, who probably had a discussion at that time with Ribbentrop about this matter, I tried to get at least an answer from Ribbentrop. This answer, given to Funk, was to the effect that it was still too early for a step of that sort. And that was my visit in 1940. Then I saw Hitler again in February of 1941...

DR. DIX: Pardon my interruption. So that we can avoid all misunderstandings, if Hitler had given you permission that you could have gone to America, just what would your activities have been? Tell us very briefly. I want no misunderstanding.

SCHACHT: First of all, I had not proposed going myself; I rather made a general suggestion. But, naturally, I would have been very glad to go to America for I saw a possibility...

THE PRESIDENT: The Tribunal does not think it is material to know what he would have done if something had happened which did not happen.

DR. DIX: I just wanted to preclude any misunderstanding. I said that misunderstandings—Well let us drop the subject.

[Turning to the defendant.] Then, let us go on to your second visit.

SCHACHT: In 1941, in February, I called on Hitler once more because of a private affair. The year before my wife had died and now I intended to remarry. As Minister without Portfolio, which I still was, I naturally had to inform the Reich Chancellor and head of the State of my intention and I called on him for that reason. There was no political discussion on this occasion. As I was going to the door, he asked me, “At one time you had the intention, or you advised me, that someone should go to America. It is probably too late for that, now.” I replied immediately, “Of course, it is too late for that now.” And that was the only remark of a political nature made. The conversation dealt mainly with my marriage, and since then I did not see Hitler any more.

DR. DIX: And now your relations with Göring?

SCHACHT: I did not see Göring either since 1939.

DR. DIX: Now, I am turning to a point which has been repeatedly stressed by the Prosecution, that is, the propaganda value of your participation at Party rallies, and I would like to remind you of what Mr. Justice Jackson has already mentioned in his opening statement. I am translating from the English because I have no German text:

“Does anyone believe that Hjalmar Schacht, seated in the first row at the Nazi Party Rally of 1935 and wearing the Party emblem, was only included in the film for the purpose of making an artistic effect? This great thinker, in lending his name to this threadbare undertaking, gave it respectability in the eyes of every hesitating German.”

Will you please state your opinion on this?

SCHACHT: First of all, I would like to make a few minor corrections. In 1935 I did not have a Party emblem. Secondly, Germans who were hesitating were no longer of any importance in 1935, for Hitler’s domination had been firmly established by 1935. There were only those people who were turning away from Hitler but none who were still coming to him. And then, I must really consider it as a compliment that I am called a figure of importance, a great thinker, and so forth; but I believe that the reasons for my being and working in the Hitler Cabinet have been set forth by me in sufficient detail, so that I need not go into that any more.

The fact that in the first years especially I could not very well absent myself from the Party rallies is understandable, I believe, for they were Hitler’s principal display of show and ostentation for the outside world, and not only did his ministers participate in the Party rallies but also a great many other representative guests.

May I add just a few more words?

I stayed away from the later Party rallies. For example, the Party Rally of 1935 mentioned by the Chief Prosecutor. That was the Party rally—and this is why I happen to remember it—at which the Nuremberg Laws against the Jews were proclaimed, and at the time I was not even in Nuremberg.

I attended the Party Rally in 1933 and in 1934. I am not certain whether I attended it in 1936 or 1937. I rather believe that I attended in 1936. I was decidedly missing at the later rallies and the last visit that I made at the Party Rally, which I have just mentioned, I attended only on “Wehrmacht Day.”

DR. DIX: At these Party Rallies were the prominent foreigners—you already mentioned that. Was the Diplomatic Corps represented by the chiefs of the diplomatic missions?

SCHACHT: I believe that with the exception of the Soviet Ambassador, in the course of years all other leading diplomats attended the Party Rally, and I must say, in large numbers, with great ostentation and seated in the first rows.

DR. DIX: How did you explain that? The Diplomatic Corps only really takes part in functions of State and this was a purely Party matter? How was this participation explained?

MR. JUSTICE JACKSON: I think this is objectionable. If it please the Tribunal, I am in a position to object, because I am not embarrassed by it, if there is any embarrassment, but for this witness to explain the conduct of the ambassadors of other countries seems utterly beyond probative value. His opinion of what the ambassadors were doing, why they attended a Party rally which he was lending his name to, doesn’t seem to me has any probative value. The fact that they attended I don’t object to, but it seems to me that for him to probe, unless he has some fact—and I want to make clear I don’t object to any facts that this witness knows, and I haven’t objected to most of his opinions which we have been getting at great length. But I think for him to characterize the action of foreign representatives is going beyond the pale of relevant and material evidence.

SCHACHT: May I make just one remark in reply?

THE PRESIDENT: I think we had better pass on, Dr. Dix.

DR. DIX: Yes, of course. However, I would ask to be given the permission to answer Mr. Justice Jackson briefly, not because I want to be stubborn, but I believe that if I answer now I can avoid later discussions and can save time thereby. I did not ask the defendant for his opinion. Of course Mr. Justice Jackson is right in saying that he is not here to give opinions about the customs of the Diplomatic Corps; but I asked him about a fact: How this participation on the part of the Diplomatic Corps, which is significant, was explained at that time. I consider this relevant, as will be seen more than once in the course of my questioning, and that is why I am saying it now, that throughout his and his political friends’ oppositional activities, it is of prime importance to know who gave them moral, spiritual, or any other support, and who did not support them. And thereby, of course, the outward demeanor of the official representatives of foreign countries during the whole period is of tremendous importance, with regard to the capacity of this opposition group to act. One can support such a group; one can be neutral to it, or one can also combat it from abroad. That is the only reason why I put my question, and I deem myself obligated to consider this angle of the problem also in the future.

THE PRESIDENT: Dr. Dix, I don’t think Mr. Justice Jackson’s objection was to the fact that the diplomatic representatives were there but to comment upon the reasons why they were there. If all you want to prove is the fact that they were there, then I don’t think Mr. Justice Jackson was objecting to that. What the defendant was going on to give, was his opinion of why the diplomatic representatives were there.

DR. DIX: I believe I do not need to make a further reply. He has already said that he does not wish to give an explanation, but if Your Lordship will permit me, I shall continue.

[Turning to the defendant.] Around that time, you certainly came into contact with prominent foreigners both officially and privately. What position did they take towards the trend of events at the time the National Socialists consolidated their power? And how did their attitude influence your own attitude and activity?

MR. JUSTICE JACKSON: May it please the Tribunal! I dislike to interrupt with objections, but I can’t see how it exonerates or aids this defendant, that prominent foreigners may have been deceived by a regime for which he was furnishing the window dressings with his own name and prestige. Undoubtedly there were foreigners, I am willing to stipulate there were foreigners, like Dahlerus, who were deceived by this set-up of which he was a prominent and slightly respectable part. But it does seem to me that if we are going to go into the attitude of foreigners who are not indicted here or accused that we approach endless questions.

I see no relevance in this sort of testimony.

The question is here, as I have tried to point out to Dr. Dix, the sole thing that is charged against this defendant is that he participated in the conspiracy to put this nation into war and to carry out the War Crimes and Crimes against Humanity incidental to it.

Now, I can’t see how the attitude of foreigners either exonerates or helps the Court to decide that question. If it does, of course I don’t object to it, but I can’t see the importance of it at this stage.

DR. DIX: I do believe that Mr. Justice Jackson...

THE PRESIDENT: Wait a minute, Dr. Dix, what exactly was the question that you were asking at that moment? What had it reference to?

DR. DIX: I asked the witness what the attitude was that was taken by prominent foreigners with whom he came into contact at that time, officially and privately during the period that the regime consolidated its power. Did they reject the regime, or were they sympathetic to it? In other words, just how far did these foreigners influence him and his thinking? And may I...

THE PRESIDENT: I think you know, Dr. Dix, that to ask one witness what the attitude of other people is is a very much too general form of question. Attitude—what does the word mean? It is far too general, and I do not understand exactly what you are trying to prove.

DR. DIX: I will make the question more precise.

How, Dr. Schacht, through your exchange of thoughts with foreigners, was your personal attitude influenced? How was your attitude and your activity influenced through the attitude of these foreigners?

[Turning to the Tribunal.] That is something which Dr. Schacht can testify to alone, because it is of an intimate nature and personal to Schacht. Your Lordship, I want quite openly to state the point to be proved which seems very relevant to the Defense and on which this question is based. I do not wish to conceal anything.

I, the Defense, maintain that this oppositional group—about which Gisevius has already spoken, and of which Schacht was a prominent member—that this group not only received no support from abroad, but that foreigners rendered the opposition more difficult. That is not a criticism that is leveled towards foreign governments.

There is no doubt that the representatives of these countries took that attitude in good faith and with a sense of duty in the service of their countries. But it was of decisive value for the attitude of these men of this oppositional group what position the foreign countries took to this regime; whether they respected or whether they supported it by precedence given its representatives, socially, as far as possible, or, through caution and reserve, showed their disinclination to it, thereby strengthening this oppositional group.

This evidence is of the utmost importance to me in the carrying on of the defense. I have stated it quite openly, and, as much as I can, I will fight for this piece of evidence.

THE PRESIDENT: Dr. Dix, the Tribunal has considered the argument which you have presented to it and they think that the investigation of these facts is a waste of time and is irrelevant. They will, therefore, ask you to go on with the further examination of the defendant.

DR. DIX: Dr. Schacht, you supported the rearmament through financing by the Reichsbank. Why did you do that?

SCHACHT: I considered that Germany absolutely had to have political equality with other nations, and I am of the same opinion today; and in order to reach this state, it was necessary that either the general disarmament which had been promised by the Allied powers would come into effect, or that if equal rights were to be obtained Germany would have to rearm on a corresponding scale.

DR. DIX: Was this financial help by the Reichsbank your work alone or was that decreed through the Directorate of the Reichsbank?

SCHACHT: In the Reichsbank, the Leadership Principle was never applied; I rejected the Leadership Principle for the Reichsbank. The Reichsbank was governed by a group of men all of whom had an equal power to vote and if there was a “tie,” the vote of the chairman was the decisive vote, and beyond that the chairman had no rights in this board.

DR. DIX: You are familiar with the affidavit of the former Reichsbank Director Puhl. Did—I put the question taking into consideration the contents of this affidavit with which the Tribunal is acquainted—Puhl also participate in giving financial help from the Reichsbank for rearmament?

SCHACHT: Herr Puhl participated in all decisions which were made by the Reichsbank Directorate on this question and not once did he oppose the decision reached.

DR. DIX: It is known to you that the Reichsbank’s method of financing consisted in the discounting of the so-called mefo bills. The Prosecution have discussed this fact in detail and the afore-mentioned affidavit signed by Puhl says that this method made it possible to keep the extent of rearmament secret. Is that correct?

SCHACHT: We cannot even talk about keeping the armament a secret. I call your attention to some excerpts from documents presented and submitted by the Prosecution themselves as exhibits. I quote first of all from the affidavit by George Messersmith, dated 30 August 1945, Document Number 2385-PS, where it says on Page 3, Line 19: “Immediately after the Nazis came into power they started a vast rearmament program.” And on Page 8 it says: “The huge German armament program which was never a secret....”

Thus, Mr. George Messersmith, who was in Berlin at the time, knew about these matters and I am sure, informed his colleagues also.

I continue quoting from Document Number EC-461. It is the diary of Ambassador Dodd, where it says, under 19 September 1934, and I quote in English for I just have the English text before me:

“When Schacht declared that the Germans are not arming so intensively, I said: Last January and February Germany bought from American aircraft people one million dollars worth of high-class war flying machinery and paid in gold.”

This is from a conversation between Dodd and myself which took place in September 1934 and he points out that already in January and February 1934 war aircraft...

[The proceedings were interrupted by technical difficulties in the lighting system.]

THE PRESIDENT: The Tribunal will adjourn.

[A recess was taken.]

THE PRESIDENT: The Tribunal would like to know how long you expect to be with your examination-in-chief of the defendant. You have already been nearly a whole day, and the Tribunal think, in view of the directions in the Charter, that the examination of the defendant ought to finish certainly in a day.

DR. DIX: Your Lordship, there are two things I do not like to do, to make prophecies which do not come true and to make a promise I cannot keep.

May I answer the question by saying that I consider it quite impossible for me to finish today. I am fully aware of the rules of the Charter, but on the other hand I am asking you to consider that the Prosecution have tried to prove the accusations against Schacht by numerous pieces of evidence, directly and indirectly relevant facts, and that it is my duty to deal with these individual pieces of evidence offered by the Prosecution.

Please apply strict measures to my questions and if the Tribunal should be of the opinion that there is something irrelevant, then I shall certainly adhere to their ruling. However, I do think that I have not only the right, but also the duty to put any questions which are necessary to refute the evidence submitted by the Prosecution.

I shall, therefore, certainly not be able to finish today. I think—I should be extremely grateful if you would not make me prophesy, it may go faster and tomorrow I may finish in the course of the day but it may even take the whole day—I cannot say for certain. In any case, I shall make every effort to put only relevant questions. If the Tribunal should be of the opinion that something is not relevant, I ask to be told so after I have explained my standpoint.

THE PRESIDENT: I think you had better get on at once then, Dr. Dix, and we’ll tell you when we think your questions are too long or too irrelevant.

DR. DIX: Now, Dr. Schacht, we were considering the mefo bills, did you consider them as a suitable means of keeping the rearmament secret? Have you anything else to say to that question?

SCHACHT: The mefo bills as such, as far as rearmament was concerned, had of course no connection with the question of secrecy, for the mefo bills were used to pay every supplier. And there were, of course, hundreds and thousands of small and big suppliers all over the country.

Apart from that, before they could be taken to the Reichsbank, the mefo bills circulated among the public for at least 3 months and the suppliers who required cash used the mefo bills to discount them in their banks or to have advances made on the strength of them, so that all banks participated in this system.

But I should like to add also that all the mefo bills, which were taken up by the Reichsbank, were listed on the bill account of the Reichsbank. Furthermore, I should like to say that the keeping secret of State expenditure—and armament expenditures were State expenditure—was not a matter for the President of the Reichsbank but an affair concerning the Reich Minister of Finance. If the Reich Minister of Finance did not publish the guarantees which he had accepted for the mefo bills, then that was his affair and not mine. I am not responsible for that. The responsibility for that lies with the Reich Minister of Finance.

DR. DIX: The next question, Your Lordship, might arouse doubts as to its relevancy. I personally consider it irrelevant for the verdict in this Trial. However, it has been mentioned by the Prosecution, and for that reason alone I think it is my duty to give Dr. Schacht an opportunity to reply and to justify himself.

The Prosecution have represented the view that the financing by means of mefo bills, from the point of view of a solid financial procedure, was also very hazardous. One might adopt the view that that may have been the case or not to make this verdict...

THE PRESIDENT: Ask the question, Dr. Dix, ask the question.

DR. DIX: You have heard what I have in mind.

SCHACHT: It goes without saying that in normal times and under normal economic conditions such means as mefo bills would not have been resorted to. But if there is an emergency, then it has always been customary, and it has always been a policy recommended by all experts, that the issuing bank should furnish cheap money and credits so that the economic system can, in turn, continue to function.

Mefo bills, of course, were a thoroughly risky operation, but they were absolutely not risky if they were connected with a reasonable financial procedure and to prove this I would say that if Herr Hitler, after 1937, had used the accruing funds to pay back the mefo bills, as had been intended—the money was available—then this system would have come to its end just as smoothly as I had put it in operation. But Herr Hitler preferred simply to refuse to pay the bills back, and instead to invest the money in further armament. I could not foresee that someone would break his word in such a matter too, a purely business matter.

DR. DIX: But, if the Reich had met the bills and had paid, then means would no doubt have partly been lacking for further rearmaments and the taking up of the bills would therefore have curtailed armament. Is that a correct conclusion?

SCHACHT: That, of course, was the very purpose of my wanting to terminate the procedure. I said if the mefo bills were not met, it would obviously show ill-will; then there would be further rearming, and that cannot be.

DR. DIX: Earlier you briefly dealt with the question of keeping armament secret in another connection. Have you anything to add to that?

SCHACHT: I think in a general manner it must be realized that State expenditures do not come under the jurisdiction of the President of the Reichsbank, and that the expenses and receipts of the State are under the control of the Reich Minister of Finance, and consequently the responsibility lies in his hands and it is his duty to publish the figures. Every bill which the Reichsbank had in its possession was made known every week.

DR. DIX: Is that what you have to add to your answer to the basic question of allegedly keeping the armament program secret?

SCHACHT: Yes.

DR. DIX: You have also already explained on the side why you fundamentally were in favor of rearmament. Have you anything to add to that?

SCHACHT: Yes. A few very important remarks are, of course, to be made on that and since this question concerns the chief accusation against me, I may perhaps deal with it in greater detail.

I considered an unarmed Germany in the center of Europe, surrounded by armed nations, as a menace to peace. I want to say that these states were not only armed but that they were, to a very large part, continuing to arm and arming anew. Especially two states which had not existed before, Czechoslovakia and Poland, were beginning to arm, and England, for example, was continuing to rearm, specifically with reference to her naval rearmament in 1935, et cetera.

I should like to say quite briefly that I myself was of the opinion that a country which was not armed could not defend itself, and that consequently it would have no voice in the concert of nations. The British Prime Minister Baldwin once said, in 1935:

“A country which is not willing to take necessary precautionary measures for its own defense will never have power in this world, neither moral power nor material power.”

I considered the inequality of status between the countries surrounding Germany and Germany as a permanent moral and material danger to Germany.

I further want to point out—and this is not meant to be criticism, but merely a statement of fact—that Germany, after the Treaty of Versailles, was in a state of extreme disorganization and confusion. Conditions in Europe were such that, for example, a latent conflict and controversy existed between Russia and Finland and between Russia and Poland which had considerable parts of Russian territory. There was Russia’s latent conflict with Romania which had Bessarabia, and then Romania had a conflict with Bulgaria about the Dobruja and one with Hungary about Siebenbürgen. There were conflicts between Serbia and Hungary, and between Hungary and nearly all her neighbors and between Bulgaria and Greece. In short all of Eastern Europe was in a continuous state of mutual suspicion and conflict of interests.

In addition, there was the fact that in a number of countries there were most serious internal conflicts. I remind you of the conflict between the Czechs and the Slovaks. I remind you of the civil war conditions in Spain. All that will make it possible to understand that I considered it absolutely essential that in the event of the outbreak of any conflagration in this devil’s punch bowl, it was an absolute necessity for Germany to protect at least her neutral attitude. That could not possibly be done with that small army of 100,000 men. For that an adequate army had to be created.

Here in prison I accidentally came across an edition of the Daily Mail, dated April 1937, where the conditions in Europe were described, and I beg you to allow me to quote one single sentence. I shall have to quote it in English. It does not represent the views of the Daily Mail; it only describes conditions in Europe.

I quote:

“All observers are agreed that there is continual peril of an explosion and that the crazy frontiers of the peace treaties cannot be indefinitely maintained. Here, too, rigorous non-interference should be the King of the British chariot. What vital interests have we in Austria or in Czechoslovakia, or in Romania, or in Lithuania or Poland?”

This merely describes the seething state of Europe at that time, and in this overheated boiling pot which was always on the point of exploding, there was Germany, unarmed. I considered that a most serious danger to my country.

Now, I shall probably be asked whether I considered Germany threatened in any way. No, Gentlemen of the Tribunal, I did not consider Germany threatened directly with an attack, nor was I of the opinion that Russia was likely to attack Germany. However, for example, we had experienced the invasion of the Ruhr in 1923 and these past events and the actual situation made it imperative for me to demand equality for Germany and to support a policy that would attempt to achieve this.

I assume that we shall deal with the reasons for the carrying out of the rearmament and with the reaction of foreign countries, et cetera.

DR. DIX: What did you know at the time about Germany’s efforts to cause the other nations to disarm? Did that have anything to do with your decisions?

SCHACHT: Let me tell you the following:

Fundamentally, I was not in favor of rearmament. I only wanted equality for Germany. That German equality could be brought about either by means of disarmament on the part of the other nations or by our own rearmament. I would have preferred, in fact I desired disarmament on the part of the others, which anyway had been promised to us. Consequently I most zealously tried all along for years to prevent a rearmament, if general disarmament could be brought about.

The disarmament on the part of the others did not take place, although the Disarmament Committee of the League of Nations had repeatedly declared that Germany had met her obligations regarding disarmament.

To all of us who were members of the so-called National Government at the time, and to all Germans who participated in political life, it was a considerable relief that during the first years Hitler, again and again, strove for and suggested general disarmament. Afterwards, of course, it is easy to say that that was a false pretense and a lie on Hitler’s part, but that false pretense and that lie would have blown up quite quickly if the countries abroad had shown the slightest inclination to take up these suggestions.

I remember quite well what was told Foreign Minister Eden of Great Britain when he visited Germany at the beginning of 1934, because I was present at the social festivities. Quite concrete proposals concerning Germany’s obligations in all disarmament questions, in case disarmament on the part of the others was begun and carried out, were made to him. It was promised to Eden that all so-called half-military units, like the SS, the SA, and the Hitler Youth, would be deprived of their military character if only the general disarmament could be accelerated by those means.

I could produce a number of quotations regarding these offers to disarm, but since it is the wish of the President not to delay the proceedings, I can forego that. They are all well-known statements made by statesmen and ministers, ambassadors, and such, all of which have the same tenor, namely, that it was absolutely essential that the promise made by the Allies should be kept; in other words, that disarmament should be carried out.

DR. DIX: Excuse me if I interrupt you, but we can do it more quickly and more simply by asking the Tribunal to take judicial notice of Exhibit Number Schacht-12, which I have been granted, without my reading it, Page 31 of the English translation of my document book. These are pertinent remarks and speeches made by Lord Cecil and others, by the Belgian Foreign Minister, et cetera. There is no need to read them; they can be presented. I just hear that they have been presented, and I can refer to them.

Pardon me, please. Continue.

SCHACHT: Well, in that case I am finished with my statement. Hitler made still further offers but the other countries did not take up a single one of these offers, and thus, unfortunately, only one alternative remained, and that was rearmament. That rearmament carried out by Hitler was financed with my assistance, and I assume responsibility for everything I have done in that connection.

DR. DIX: Do I understand you correctly? Can one draw the conclusion from your statement that there were other reasons for your assistance in the rearmament program, that you had the tactical consideration that, by putting German rearmament up for discussion, the debate on disarmament amongst the other governments might be started again? This debate, so to say, had died down?

SCHACHT: If I may, I will illustrate it briefly by means of an example:

Two parties have a contract with each other. One party does not live up to that contract, and the other party has no way of making him fulfill his obligations. Thus the other party can do nothing except, in turn, not adhere to the contract. That is what Germany did. That is what I supported. Now, of course, I must say that I had expected a type of reaction which in such a case must always be expected from the partner to a contract, namely, that he would say, “Well, if you do not keep up the contract either, then we shall have to discuss this contract again.”

I must say—and I can quite safely use the word—it was a disappointment to me that Germany’s rearmament was not in any way replied to by any actions from the Allies. This so-called breach of contract on Germany’s part against the Versailles Treaty was taken quite calmly. A note of protest was all; nothing in the least was done, apart from that, to bring up again the question of disarmament in which I was interested.

Not only was Germany allowed to go on rearming but the Naval Agreement with Great Britain did, in fact, give Germany the legal right to rearm contrary to the Versailles Treaty. Military missions were sent to Germany to look at this rearmament, and German military displays were visited and everything else was done, but nothing at all was done to stop Germany’s rearmament.

MR. JUSTICE JACKSON: If the Tribunal please, I cannot see the point of all this detail. We have conceded that rearmament here, except as it was involved with aggressive purposes, is immaterial. As I said in the opening, the United States does not care to try here the issues of European politics, nor are they submitted to this Tribunal for decision.

The sole question here is the Indictment, charging arming with the purpose of aggression.

I do not want to interfere with the defendant giving any facts that bear on his aggressive intentions, but the details of negotiations, of European politics and charges and countercharges between governments, it seems to me, lies way back of any inquiry that we could possibly make, and the details of this matter seem to me not helpful to the solution of the issues here, and I think was ruled out by the Tribunal in the case of Göring, if I am not mistaken.

THE PRESIDENT: Well, Dr. Dix, it all seems to be a matter of argument, and argument isn’t really the subject of evidence.

DR. DIX: I do not believe so, Your Lordship. What Mr. Justice Jackson said is quite correct. Schacht is accused of having assisted in bringing about an aggressive war, but this assistance of his is supposed to have consisted in the financing which he carried out.

THE PRESIDENT: Go on, Dr. Dix, and do try to make it as short as possible.

DR. DIX: I think you had come to the end of that question anyway.

May I refer in this connection to one of the motives for Dr. Schacht’s assistance in rearmament. It was his hope to renew the debate on disarmament. May I draw your attention to Exhibit Number Schacht-36, Page 141 of the German text, and Page 149 of the English text? It is an affidavit from Dr. Schacht’s son-in-law, Dr. Von Scherpenberg. On Page 2 of that affidavit you will find the following brief paragraph which I propose to read; in fact, I can confine myself to one sentence:

“He”—that is to say, Schacht—“considered rearmament within certain limits to be the only means for the re-establishing of the disturbed equilibrium and the only means of inducing the other European powers to participate in a limitation of armaments which, in opposition to the Versailles Treaty, they had sought to avoid.”

That is a statement of Scherpenberg regarding conversations which Schacht had had at that time. It is, therefore, not an ex post facto opinion; it is the report of a conversation which he, Scherpenberg, had with his father-in-law Schacht at that time. That is just an additional remark I wanted to make.

[Turning to the defendant.] You have spoken about the rearmament on the part of the other states, particularly Czechoslovakia and Poland, but can you tell us whether at the time you knew of or heard any exact details regarding the state of armament of those two states?

SCHACHT: I know only that it was known about Russia that in 1935 she announced that her peacetime army should be increased to 960,000 men.

Then I knew that in Czechoslovakia, for instance, the installation of airdromes was one of the leading tasks of rearmament. We knew that Great Britain’s Navy was to be stepped up.

DR. DIX: Did you later on completely abandon your idea of general disarmament?

SCHACHT: To the contrary, I used every opportunity, in particular during conversations with men from abroad, to say that the aim should always be disarmament, that, of course, rearmament would always mean an economic burden for us, which we considered a most unpleasant state of affairs.

I remember a conversation which I had with the American Ambassador Davies. His report of this conversation is incorporated in an exhibit that has been submitted to the Tribunal. It is an entry in a diary which is repeated in his book, Mission to Moscow, and it is dated as early as 20 June 1937, Berlin. He is writing about the fact that among other things he and I had talked about disarmament problems, and I need only quote one sentence. I do not have the number of the document, Your Lordship, but it has been submitted to the Tribunal.

DR. DIX: It is Exhibit Schacht-18, German Page 43, English Page 49.

SCHACHT: Since I have only the English text, I shall read from it.

Davies writes:

“When I outlined the President’s (Roosevelt) suggestion of limitation of armament to defensive weapons only, such as a man could carry on his shoulder, he (means Schacht) almost jumped out of his seat with enthusiasm.”

It becomes clear, therefore, from Ambassador Davies’ remark that I was most enthusiastic about this renewed attempt and the possibility of an imminent step towards disarmament as proposed by President Roosevelt.

In this same book, Davies reports a few days later on 26 June 1937 about the conversation he had with me, in a letter addressed to the President of the United States. I quote only one very brief paragraph—in English again:

“I then stated to him (that is, Schacht) that the President in conversation with me had analyzed the European situation and had considered that a solution might be found in an agreement among the European nations to a reduction of armaments to a purely defensive military basis and this through the elimination of aircraft, tanks, and heavy equipment, and the limitation of armaments to such weapons only as a man could carry on his back, with an agreement among the nations for adequate policing of the plan by a neutral state. Schacht literally jumped at the idea. He said: ‘That’s absolutely the solution.’ He said that in its simplicity it had the earmarks of great genius. His enthusiasm was extraordinary.”

DR. DIX: To what extent did you want rearmament?

SCHACHT: Not beyond equality with every single one of our neighbor states.

DR. DIX: And did Hitler talk to you of far-reaching intentions, or did you hear of any?

SCHACHT: At no time did he tell them to me, nor did I hear from anyone else, whether he had made remarks about further intentions.

DR. DIX: Were you informed about the extent, the type and speed of rearmament?

SCHACHT: No, I was never told about that.

DR. DIX: Had you set yourself a limit regarding this financing or were you prepared to advance any amount of money?

SCHACHT: I was certainly, by no means, ready to advance any unlimited amount of money, particularly as these were not contributions; they were credits which had to be repaid. The limits for these credits were twofold. One was that the Reichsbank was independent of the State finance administration, and the supreme authority of the State as far as the granting of the credits was concerned. The Board of Directors of the Reichsbank could pass a resolution that credits were to be given, or were not to be given, or that credits were to be stopped, if they considered it right, and as I was perfectly certain of the policy of the Board of Directors of the Reichsbank—all of these gentlemen agreed with me perfectly on financial and banking policy—this was the first possibility of applying a brake, if I considered it necessary.

The second safeguard—limit was contained in the agreement which the Minister of Finance, the Government, and of course Hitler had made—the mefo bills, of which these credits consisted, were to be paid back when they expired. They were repayable after 5 years, and I have already said that if the repayments had been made, funds for rearmament would naturally have had to decrease. Therein lay the second possibility of limiting the rearmament.

DR. DIX: Will you please give now to the Tribunal the figures which you were dealing with at the time?

SCHACHT: We went up to...

MR. JUSTICE JACKSON: We have no desire to enter into controversy about the figures of financing rearmament. It seems that the detail of dollars and cents or Reichsmarks is unimportant to this, and terribly involved. We aren’t trying whether it cost too much or too little; the purpose of this rearmament is the only question we have in mind. I don’t see that the statistics of cost have anything to do with it.

THE PRESIDENT: Dr. Dix, we would like to know what figures the accused and you are talking about.

DR. DIX: The amounts that Schacht as President of the Reichsbank was ready to grant for the rearmament program; that, no doubt, is relevant, because if those amounts remained within such limits as might possibly be considered adequate for defensive rearmaments in case of emergency, then, of course, the extent of that financial assistance is a very important piece of evidence regarding the intentions which Schacht was pursuing at the time. That is the very thing that, in the case of Schacht, Mr. Justice Jackson considers relevant, namely, whether he helped prepare for an aggressive war. If he were considering only the possibility of a defensive war in his financing and placed only sums at the disposal of the rearmament program which would never have allowed an aggressive war, then that would refute the accusation raised by the Prosecution against the defendant, and I think that the relevance of that question cannot be doubted.

THE PRESIDENT: Are you saying that if the Defendant Schacht placed at the disposal of the Reich, say, 100 millions, or whatever the figure is, it would be defensive, and if he placed 150 millions, it would be not defensive, or what? Is it simply the amount?

DR. DIX: No, I want to say that if, as will be proved, he only wanted to give 9 and later on gave hesitatingly and unwillingly 12 millions for the purpose, then that contribution can never have been aimed at an aggressive war.

THE PRESIDENT: It is simply the amount?

DR. DIX: Yes, only the size of the amount.

THE PRESIDENT: Well, that can be stated very shortly, but as for details of finance...

DR. DIX: I am also of the opinion that we have talked about it too long. I was only going to ask, “What amount did you give?” and then the objection was raised, and thus the discussion was drawn out. May I put the question?

THE PRESIDENT: Yes.

DR. DIX: [Turning to the defendant.] Well, then, what amount did you intend to grant?

SCHACHT: Naturally as little as possible; however, what I contributed is what is decisive. I placed at their disposal—to give one figure and to be very brief—until 31 March 1938, credits amounting to a total of 12,000,000,000 Reichsmark. I have discussed that with one of the interrogators of the British Prosecution, who asked me about the subject, and I replied that that was about one-third of the amount which was spent on rearmament. After that, without the Reichsbank, beginning with 1 April 1938, the figure stated in that budget year for rearmament was 11,000,000,000, and in the subsequent year, 20,500,000,000, and of that not a pfennig came from the Reichsbank.

DR. DIX: That was after your resignation, was it not?

SCHACHT: That was after I had stopped credits.

For the record I should like to say that I think I made a mistake before. I said millions instead of milliards, but I think it is obvious what I meant. I wanted only to correct it.

DR. DIX: Now, then, Dr. Schacht, the Prosecution have stated that on 19 February 1935 the Ministry of Finance received authority to borrow unlimited amounts of money if Hitler ordered them to do so.

SCHACHT: Here, again, the prosecutor did not see things in the proper light. The President of the Reichsbank is not responsible for the actions of the Reich Minister of Finance. I think the President of the Federal Reserve Bank in New York can hardly be held responsible for the things done by the Secretary of the Treasury in Washington.

DR. DIX: You have also been accused that the debt of the Reich increased three times during the time while you were President of the Reichsbank.

SCHACHT: I might just as well be accused of being responsible for the fact that the birth rate in Germany rose sharply during the time I was President of the Reichsbank. I want to emphasize the fact that I had nothing to do with either.

DR. DIX: You were not responsible for the same reason.

SCHACHT: No, of course I am not responsible for that.

DR. DIX: And presumably the same applies to the point made by the Prosecution that you allegedly drafted a new finance program in 1938?

SCHACHT: On the contrary, I refused to do anything else for the financing of rearmament; the finance program was drafted by a state secretary in the Reich Finance Ministry, and it looked like it.

DR. DIX: One of your economic policies, during the time you were Minister of Economy, and which you have been accused of as being a preparation for war, was the so-called “New Plan” (Neue Plan). What was that?

SCHACHT: May I first of all say that the New Plan had nothing at all to do with rearmament. Germany, after the Treaty of Versailles, had fallen into a state of distress, economically speaking and especially export...

DR. DIX: Your Lordship, if the Tribunal is of the opinion that the New Plan has nothing to do with the rearmament and preparations for war—I think the Prosecution are of the opposite opinion—then, of course, the question is irrelevant, and I will drop it. I am only putting it because the New Plan has been used in the argumentation of the Prosecution.

THE PRESIDENT: If you say, and the defendant has just said that the New Plan had nothing to do with rearmament, I think you might leave it for cross-examination and you can raise it again in re-examination if it is cross-examined.

DR. DIX [Turning to the defendant]: In that case I shall not ask you about the barter agreements, either. I shall leave it to the Prosecution to bring it out during the cross-examination. I cannot see what it has to do with the preparation for war.

Now, you have already stated that you strove to remove the Versailles Treaty by means of peaceful negotiations, or at least, to modify it. In the opinion which you held at that time did any such means for a peaceful modification of the Versailles Treaty still exist?

SCHACHT: In my opinion, there were no means other than peaceful ones. The desire to modify the Versailles Treaty by means of a new war was a crime.

DR. DIX: Well. But now you are being accused that the alleged preparations for war, which really were a countermeasure to the general rearmament although not a preparation for an aggressive war, were nevertheless a rearmament, and as such, were an infringement of the Treaty of Versailles. I assume that you, at the time, decided to help finance that rearmament only after giving the problem due legal and moral considerations. What, exactly, were these considerations?

SCHACHT: I think I have already answered that question in detail. I need add nothing else.

DR. DIX: Very well. Insofar as you know, was this attitude of yours, the attitude of a pacifist and of someone who was definitely opposed to the extension of living space in Europe, known abroad?

SCHACHT: As long as I have been President of the Reichsbank, that is to say from March 1933—and I am, of course, only talking about the Hitler regime—my friends and acquaintances abroad were fully informed about my attitude and views. I had a great many friends and acquaintances abroad, not only because of my profession but also outside of that and particularly in Basel, Switzerland, where we had our monthly meeting at the International Bank, with all the presidents of the issuing banks of all the great and certain neutral countries, and I always took occasion at all these meetings to describe quite clearly the situation in Germany to these gentlemen.

Perhaps I may at this point refer to the so-called conducting of foreign conferences or conversations. If one is not allowed to talk to foreigners any more, then one cannot, of course, reach an understanding with them. Those silly admonitions, that one had to avoid contact with foreigners, seem entirely uncalled for to me, and if the witness Gisevius deemed it necessary the other day to protect his dead comrades, who were my comrades too, from being accused of committing high treason, then I should like to say that I consider it quite unnecessary. Never at any time did any member of our group betray any German interests. To the contrary, he fought for the interests of Germany, and to prove that, I should like to give you a good example:

After we had occupied Paris, the files of the Quai d’Orsay were confiscated and were carefully screened by officials from the German Foreign Office. I need not assure you that they were primarily looking for proof whether there were not any so-called defeatists circles in Germany which had unmasked themselves somewhere abroad. All the files of the Quai d’Orsay referring to my person and, of course, there were records of many discussions which I had had with Frenchmen, were examined by the Foreign Office officials at that time, without my knowing it.

One day—I think it probably happened in the course of 1941—I received a letter from a German professor who had participated in this search carried out by the Foreign Office. I shall mention the name so that, if necessary, he can testify. He is a Professor of Finance and National Economy, Professor Stückenbeck of Erlangen, and he wrote me that at this investigation...

THE PRESIDENT: The Tribunal cannot see any point in this, so far as this Trial is concerned. In any event, if the defendant says that he did not, in any way, give away the interests of Germany, surely that is sufficient. We do not need all the details about it. What it has got to do with this Trial, I do not know.

DR. DIX: I think, Your Lordship, that that was not the point of the statement. What he wants to say is that reliable men abroad knew him and were acquainted with the fact that he was certainly a man of peace and not a man who prepared aggressive wars, and that applies even to the period of rearmament.

THE PRESIDENT: But he said that 5 minutes ago.

DR. DIX: I do not think the question of Professor Stückenbeck is so important, but it certainly seems pertinent to me what Ambassador Davies said about his conversation with the then Foreign Commissar of the Soviet Republic, Litvinov. This is contained in Exhibit Schacht-18 of my document book. It is Page 43 of the German text, and Page 49 of the English text. May I read one paragraph, and then ask Dr. Schacht briefly whether that statement of Ambassador Davies corresponds to his recollection? It is Davies’ report, an extract from his book Mission to Moscow. A report is there to the Secretary of State in the United States. The passage is on Pages 108 and 109.

“Pursuant to an appointment made, I called upon Commissar for Foreign Affairs Litvinov to present my respects before departure for the United States.

“I then stated that the European situation in its elementals looked simple and that it was difficult to understand why the statesmanship of Europe could not provide that England, France, Germany, Italy, and Russia should agree to preserve the territorial integrity of Europe and through trade agreements provide Germany with raw materials, thereby giving the assurance that she could live, which would relieve the peoples of Europe and the world of these terrific burdens of armament and of the fear of catastrophic war. The prompt rejoinder was: ‘Do you think Hitler would ever agree to anything like that?’ I said that I did not know, but that it was my opinion that there was a very substantial body of influential and responsible men in Germany that such an idea would appeal to. Litvinov replied that he thought that might be so; that Schacht was of that type; he did not think they could prevail against Hitler and the political and military forces dominant in Germany.”

And now I ask you, do you remember that conversation with Davies?

SCHACHT: I think there must be a mistake. I did not speak to Davies about this, I spoke to Litvinov. This is a report of Davies to the Secretary of State, about which I did not know.

DR. DIX: Yes, you are perfectly right.

It has been repeatedly emphasized by the Prosecution that your knowledge of Hitler’s intentions of war resulted also from your being Plenipotentiary for War Economy and a member of the Reich Defense Counsel. Göring has made a detailed statement on it. Have you anything new to add to Göring’s statement?

SCHACHT: I think the witness Lammers has also talked about it. I should like merely to confirm that the first Reich Defense Counsel of 1935 was nothing other than the legalization of a committee which existed before 1933, made up of ministerial officials who were supposed to deal with economic measures as well as administrative measures, which might have to be taken in the event of a threat of war against Germany.

DR. DIX: How often did you have a meeting especially with the Minister of War and the Plenipotentiary for Administration?

SCHACHT: This famous triumvirate, this Three Man College described by one of the prosecutors as the cornerstone of war policy, never met at all, and it is no wonder that we lost the war, if that was the cornerstone.

DR. DIX: The Prosecution have also referred to the report of the Ministry of War regarding the task of the Reich Defense Counsel of 1934. It is Document Number EC-128, Exhibit Number USA-623. Have you anything in particular to add to that?

SCHACHT: Yes, I should like to have permission to quote one very brief paragraph. I see there are only two sentences. This report contains the following statement:

Referring to the experiences of World War I, that is 1914 to 1918, and I quote—I shall have to do it in English since I have only the English, I quote:

“At that time we were able to extend our bases for raw materials and production toward the West: Longwy, Briey, Tourcoing, Roubaix, Antwerp (textiles), and toward the East, Lodz, and Southeast (ore mines in Serbia and Turkey, mineral oils in Romania). Today we have to reckon with the possibility of being thrown back in our own country and even of being deprived thereby of most valuable industrial and raw material in the West and in the East.”

I think that if anyone wanting to prepare an aggressive war had calculated in September 1934 that one would have to protect oneself against the possibility of such a situation arising, that this is the best proof that there can be no question of an aggressive war at all.

DR. DIX: In that connection, under the heading of “peaceful efforts,” can you perhaps also tell the Tribunal what your peaceful efforts were, to have the reparations clauses of the Versailles Treaty modified or even abolished?

SCHACHT: From the very first moment, after the reparations were determined in 1921 or so, I fought against this nonsense with the argument that the carrying out of those reparations would throw the entire world into economic chaos. One cannot, during one generation, pay 120,000,000,000 Reichsmark or about 2,000,000,000 Reichsmark yearly, as at that time...

DR. DIX: We would like to make it brief. Will you please talk only about your peaceful efforts and not about national economy?

SCHACHT: All right, I will not talk about national economy.

I fought against it and, as time went by, I did succeed in convincing the people of almost all the countries that this was sheer nonsense. Therefore in July of 1932, if I am not mistaken, the then Reich Chancellor Papen was in a position to affix his signature to an agreement at Lausanne, which reduced reparations, de jure, to a pending sum of 3,000,000,000, and which, de facto, canceled reparations altogether.

DR. DIX: Did you then continue your definitely peaceful efforts in other fields? You have already touched upon the negotiations in Paris regarding the colonial question. I wonder if you have anything to add to that in this connection?

SCHACHT: I do not remember at the moment how far I had gone at the time, but I think I reported on the negotiations in detail, so I need not repeat.

DR. DIX: George Messersmith, the often-mentioned former Consul General of the United States in Berlin, states in his affidavit Document Number EC-451, Exhibit Number USA-626, to which the Prosecution have referred, that he is of the opinion that the National Socialist regime could not have been in a position to stay in power and build up its war machine if it had not been for your activity. At the end of the case for the Prosecution, the Prosecution present that thesis of Messersmith. Therefore I should like you to make a statement on this subject.

SCHACHT: I do not know whether that completely unsubstantiated private opinion of Mr. Messersmith has any value as evidence. Nevertheless, I should like to contradict it by means of a few figures. I had stated earlier that until 31 March 1938, the Reichsbank had given 12,000,000,000; that is to say, during the first fiscal year, about 2,250,000,000, and during the subsequent 3 years, 3,250,000,000 per annum. During those years—the Codefendant Keitel was asked about that when he was examined here—the armament expenditures, as Keitel said, amounted to the following:

In the fiscal year 1935-1936—5,000,000,000.

In the fiscal year 1936-1937—7,000,000,000.

In the following fiscal year—9,000,000,000.

And at that stage the assistance from the Reichsbank ceased. In spite of that, during the following year and without any assistance from the Reichsbank, the expenditure for armament increased to 11,000,000,000, and in the following year it climbed to 20,500,000,000.

It appears, therefore, that even without the financial genius of Herr Schacht, they managed to raise the funds. Just how they did so is another question.

DR. DIX: I duly put these figures to the Defendant Keitel. I do not think that the Tribunal had the document at the time. It is now available and has the Exhibit Number Schacht-7. It is Page 15 of the German text and Page 21 of the English text. Herr Keitel could, of course, only refer to the first column, that is to say, total expenditure; but there is a second and a third column, in this account, and these two are calculations made by Schacht, calculations regarding what was raised with the help and without the help of the Reichsbank.

I do not intend to go through it in detail now. I should merely like to have your permission to ask Dr. Schacht whether the figures calculated by him, in Columns 2 and 3 of the document, were calculated correctly.

SCHACHT: I have these figures in the document before me. The figures are absolutely correct and again I want to declare that they show that, during the first year after the Reichsbank had discontinued its assistance, no less than 5,125,000,000 more were spent without the assistance of the Reichsbank, that is to say, a total of 11,000,000,000.

DR. DIX: Up to now you have stated to the Tribunal that you were active against a dangerous and extensive rearmament and you showed that by tying up the money bag. Did you oppose excessive rearmament in any other way, for instance, by giving lectures and such?

SCHACHT: Many times I spoke not only before economists and professors who were my main auditors, but I often spoke upon invitation of the Minister of War and the head of the Army Academy before high-ranking officers. In all these lectures I continually referred to the financial and economic limitations to which German rearmament was subject and I warned against excessive rearmament.

DR. DIX: When did you first gather the impression that the extent of German rearmament was excessive and exaggerated?

SCHACHT: It is very difficult to give you a date. Beginning in 1935, I made continuous attempts to slow down the speed of rearmament. On one occasion Hitler had said—just a moment, I have it here—that until the spring of 1936 the same speed would have to be maintained. I adhered to that as much as possible, although, beginning with the second half of 1935, I continuously applied the brake. But after 1935 I told myself that, since the Führer himself had said it, after the spring of 1936 the same speed would no longer be necessary. This can be seen from Document 1301-PS in which these statements of mine are quoted, statements which I communicated to the so-called “small Ministerial Council” (kleiner Ministerrat). Göring contradicted me during that meeting, but I of course maintain the things which I said at the time.

After that I constantly tried to make the Minister of War do something to slow down the speed of rearmament, if only in the interest of general economy, since I wanted to see the economic system working for the export trade. Proof for the fact of just how much I urged the Minister of War is contained in my letter dated 24 December 1935, which I wrote him when I saw the period desired by Hitler coming to an end, and when I was already applying the brake. It has also been presented by the Prosecution as Document Number EC-293. In the English version of the document it is on Page 25.

I beg to be allowed to quote very briefly—all my quotations are very brief—from that document. I wrote a letter to the Reich Minister of War, and I quote:

“I gather from your letter dated 29 November”—and then come the reference numbers—“that increased demands by the Armed Forces for copper and lead are to be expected, which will amount to practically double the present consumption. These are only current demands, whereas the equally urgent provisions for the future are not contained in the figures. You are expecting me to obtain the necessary foreign currency for these demands, and to that I respectfully reply that under the existing circumstances I see no possibility of doing so.”

In other words, Blomberg is asking that I should buy raw materials with foreign currency, and I am stating quite clearly that I do not see any possibility of doing so.

The document goes on to say—and this is the sentence regarding the limit up to 1 April. I quote:

“In all the conferences held with the Führer and Reich Chancellor up to now, as well as with the leading military departments, I have expressed my conviction that it would be possible to supply the necessary foreign currencies and raw materials for the existing degree of rearmament until 1 April 1936. Despite the fact that, due to our cultural and agrarian policies which are being repudiated all over the world, this has been made extremely difficult for me and continues to be difficult, I still hope that my original plan may be carried out.”

That is to say, that I thought this proposed program could be carried out up to 1 April, but not over and beyond that.

DR. DIX: It is a fact that Minister of Transportation, Dorpmüller, was trying to raise credits for railway purposes. What was your attitude as President of the Reichsbank towards this?

SCHACHT: During a conference between the Führer, Dorpmüller, and myself, at which the Führer strongly supported Dorpmüller’s demands, I turned that credit down straightway, and he did not get it.

DR. DIX: The meeting of 27 May 1936 of the so-called “small Ministerial Council,” presided over by Göring, has been discussed here. The Prosecution contend that intentions of aggressive war became apparent from that meeting. Did you have any knowledge of that meeting?

SCHACHT: What was the date, please?

DR. DIX: 27 May 1936.

SCHACHT: No. I was present during that conference and I see nothing in the entire document pointing to an aggressive war. I have studied the document very carefully.

DR. DIX: It has furthermore been stated against you what is contained in the report of Ambassador Bullitt, Document Number L-151, Exhibit USA-70, dated 23 November 1937. You have heard, of course, that the Prosecution are also drawing the conclusion from that report that there were aggressive intentions on Hitler’s part. Will you please make a statement about that?

SCHACHT: I see nothing in the entire report to the effect that Hitler was about to start an aggressive war. I was simply talking about Hitler’s intentions to bring about an Anschluss of Austria, if possible, and to give the Sudeten Germans autonomy if possible. Neither of those two actions would be aggressive war, and apart from that, Mr. Bullitt says the following with reference to me in his report about this conversation. I quote: “Schacht then went on to speak of the absolute necessity for doing something to produce peace in Europe....”

DR. DIX: The memorandum of this conversation is also contained in my document book as Exhibit Number Schacht-22. It is on Page 64 of the English text and Page 57 of the German text.

We shall now have to deal in greater detail with your alleged knowledge of Hitler’s intentions to start war. First of all, speaking generally, did Hitler ever, as far as you know...

SIR DAVID MAXWELL-FYFE: My Lord, I asked Dr. Dix if he would object if the Tribunal would allow me, since he is passing to a new point, to mention the question of the Raeder documents. I had a discussion with Dr. Siemers. There are still some outstanding points, and we should be grateful if the Tribunal would hear us this afternoon, if possible, because the translating division is waiting for the Raeder documents to get on with their translations.

THE PRESIDENT: How long do you think it will take, Sir David?

SIR DAVID MAXWELL-FYFE: Not more than a half hour, My Lord.

THE PRESIDENT: If the translation department are waiting, perhaps we had better do it at 2 o’clock.

SIR DAVID MAXWELL-FYFE: If Your Lordship pleases.

THE PRESIDENT: If it is only going to take a half hour. It isn’t likely, I suppose, to take more than that?

SIR DAVID MAXWELL-FYFE: I don’t think it will take more than that.

THE PRESIDENT: We will do that at 2 o’clock, and now we will adjourn.

[The Tribunal recessed until 1400 hours.]

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