Morning Session
[The Defendant Funk resumed the stand.]
DR. SAUTER: Mr. President, I will continue my questioning of the Defendant Dr. Funk. On Saturday we were discussing the appointment of Dr. Funk as Reich Minister of Economics and now I turn to his appointment as President of the Reichsbank.
Witness, I believe it was in January 1939 when you also became President of the Reichsbank as successor to Dr. Schacht. How did that appointment come about?
FUNK: I had just returned from a journey about the middle of January 1939. I was called to the Führer and found him in a state of great agitation. He told me that the Reich Minister of Finance had informed him that Schacht had refused the necessary financial credits and that consequently the Reich was in financial straits. The Führer told me, in great excitement, that Schacht was sabotaging his policies, that he would not tolerate the Reichsbank’s interference with his policies any longer and the gentlemen in the Reichsbank Directorate were utter fools if they believed that he would tolerate it. No government and no chief of state in the world could possibly make policy dependent on co-operation or non-co-operation of the issuing bank.
The Führer further declared that from now on he himself, on the suggestions and demands of the Reich Minister of Finance, would fix all credits to be given by the Reichsbank to the Reich. He had given Lammers instructions to formulate a decree, together with the Reich Minister of Finance, by which the status of the Reichsbank, as established by the provisions of the Treaty of Versailles, would be changed, and whereby the terms for the granting of credits to the Reich would be determined by himself alone in the future.
The Führer further said that he was asking me to take over the direction of the Reichsbank, whereupon I replied that I would be glad to comply with his wish, but that first of all I had to have confirmation from him that the conditions for stabilization of currency would be maintained.
The opinion, which was voiced here by a witness, that inflation would be brought about through a further grant of credits at that time is wrong and totally untenable. Although 12,000 millions of credit can have an inflationary effect, 20,000 millions of credit will not necessarily tend toward inflation if the state has the necessary authority to stabilize prices and wages and to carry out the regulation and administration of prices, and if the people maintain the proper discipline in this respect, and if, finally, the money which as a result of increased credits represents excess purchasing power is diverted through taxes or taken up through loans; then, as far as the currency is concerned, there is absolutely no danger.
It is a fact that the Reichsmark, up to the final collapse, was kept on a stable basis. As far as the essentials of life are concerned, the purchasing power of money in Germany was secure. Of course, its value was limited insofar as consumers’ goods were produced only on a very limited scale, for almost all production was turned over to armaments.
DR. SAUTER: Dr. Funk, have you concluded?
FUNK: Just one moment, please. I believe this is a very important question.
In other countries as well, large credits were issued during the war which did not in any way cause an inflation. The national debt in the United States as well as in England was relatively, and in part even absolutely, higher than that in Germany. And in these countries, too, a correct financial policy overthrew the old thesis that a war would, of necessity, bring about the destruction of the monetary value.
The German people, up to the very end, until the terrible collapse, maintained admirable discipline. Money as a function of the state will have its value and currency will function so long as the state has authority to maintain it on a stable basis, to keep the economy under control, and as long as the people themselves maintain the necessary discipline.
Thus I took over this office not with the knowledge that Germany was now entering an inflation period but, on the contrary, I knew well that through maintenance of a suitable governmental policy the currency could be protected, and it was protected. However, the basic difference between Schacht’s position and my position lay in the fact that during Schacht’s time the Reichsbank could determine the granting of credits to the Reich, whereas this authority was taken from me, and the responsibility for domestic finances, therefore, was turned over to the Minister of Finance or of course to the Führer himself.
DR. SAUTER: Dr. Funk, I have another question. Perhaps, despite your poor state of health today, you might be able to speak a little more loudly so that the stenographers might understand you more easily. Please try, and we will make this as brief as possible.
Witness, then in addition to these offices of yours which we have discussed up to now, you finally had a further office as successor of Dr. Schacht, namely, that of Plenipotentiary General for Economy. Can you give us some details of your view in this connection in order to clarify your situation, your activity, and your achievements?
FUNK: This of all the positions I had was the least impressive. As the Reich Marshal correctly stated, and as Dr. Lammers confirmed, it existed merely on paper. That, too, was an essential difference between the position which Schacht had and the one which I had.
Schacht had been appointed Plenipotentiary General for War Economy. I, on the other hand, was the Plenipotentiary General for Economy. According to the Reich Defense Law of 1938, the Plenipotentiary General for Economy was to co-ordinate the civil economics departments in preparing for a war. But, in the meantime, these economic departments had been subordinated to the Delegate for the Four Year Plan, and I, as Plenipotentiary General for Economy, was also subordinate to the Delegate for the Four Year Plan.
Consequently, there was confusion and overlapping in matters of competence and authority as they had been laid down formally. The result was a directive of the Führer just a few months after the beginning of the war which de jure and formally transferred the authority of the Plenipotentiary General for Economy, as far as the civil economic departments were concerned, to the Delegate for the Four Year Plan.
DR. SAUTER: When was that?
FUNK: That was in December of 1939. There remained only a formal authority to issue directives, that is, I could sign directives on behalf of the five civil economic departments, which, according to the Reich Defense Law, were subordinate to the Plenipotentiary. I retained authority over the Ministry of Economics and the Reichsbank, which I had in any case.
DR. SAUTER: But you were subordinate even in these functions to the Delegate for the Four Year Plan; is that correct?
FUNK: Yes, like all civil economic departments. Only with the Ministry of Economics itself did I have a closer connection.
DR. SAUTER: Witness, in August 1939, that is, immediately before the beginning of the Polish campaign, you in your capacity as Plenipotentiary General for Economy summoned the civil economic offices to a meeting for discussions, and Document 3324-PS refers to this meeting. It seems to me important that you define your attitude on this point also, and especially with reference to the fact that apparently your letter to Hitler, dated 25 August, was a result of this meeting. This matter is mentioned in your trial brief on Page 24. Will you comment on it?
FUNK: In Schacht’s time there existed an office for the Plenipotentiary General for Economy, and a working committee was set up which consisted of the representatives of the various economic departments, as well as of the Ministry of the Interior, the Plenipotentiary for Administration, the OKW, and above all, of the Four Year Plan.
When Schacht resigned, the direction of this committee and of the office of the Plenipotentiary for Economy was transferred to Dr. Posse, his former State Secretary, whereas under Schacht State Counsellor Wohlthat had headed the office and the committee. These people, of course, had constant consultations, in which they discussed measures necessary in the economic sphere for waging war. And this was the organization of the Plenipotentiary for Economy which I dealt with in my speech in Vienna which had been mentioned here. It existed alongside the Four Year Plan, and in the main was charged with a smooth conversion of the civilian economy into a war economy in the case of war, and with the preparation of a war economy administration.
When, in August of 1939, there was a threat of war with Poland, I called together the chiefs of the civil economic departments, as well as the representatives of the Four Year Plan, and, in joint consultation, we worked out measures necessary for converting the civilian economy into a war economy in the case of a war with as little disturbance as possible.
These were the proposals which I mentioned in my letter to the Führer dated 25 August 1939, at a time when the German and Polish Armies already faced each other in a state of complete mobilization.
It was, of course, my duty to do everything to prevent dislocations of the civilian economy in the case of a war, and it was my duty as President of the Reichsbank to augment gold and foreign exchange assets of the Reichsbank as much as possible.
This was necessary first of all because of the general political tension which existed at the time. It would also have been necessary if war had not broken out at all, but even if only economic sanctions had been imposed, as was to be expected from the general foreign political tension which existed at the time. And it was equally my duty, as Minister of Economics, to do everything to increase production.
But I did not concern myself with the financial demands of the Wehrmacht, and I had nothing to do with armament problems, since, as I have already said, the direction of peacetime as well as war economy had been turned over to the Delegate for the Four Year Plan.
The explanation for the fact that at that time I kept aloof from the work of that committee is the following:
I personally did not believe that there would be war, and everyone who discussed this subject with me at that time will confirm this. In the months before the beginning of the war I concentrated my entire activity on international negotiations for bringing about a better international economic order, and for improving commercial relations between Germany and her foreign partners.
At that time it was arranged that the British Ministers Hudson and Stanley were to visit me in Berlin. I myself was to go for negotiations to Paris where, in the year 1937, I had come to know some members of the Cabinet when I organized a great German cultural fête there.
The subject of short-term foreign debts had again to be discussed and settled—the so-called moratorium. I had worked out new proposals for this, which were hailed with enthusiasm, especially in England. In June of 1939, an international financial discussion took place in my offices in Berlin, and leading representatives of the banking world from the United States, from England, from Holland, France, Belgium, Switzerland, and Sweden, took part in it.
These discussions led to results which satisfied all parties. At the same time I carried out the exchange or transfer of Reichsbank assets in foreign countries. This exchange of gold shares also was considered very fair and satisfactory in foreign banking circles and the foreign press.
In June of that year I went to Holland to negotiate trade agreements. I also participated in the customary monthly discussions of the International Clearing Bank at Basel as late as the beginning of July 1939, and despite the strong political tension which existed at the time I was convinced that a war would be avoided and I voiced this conviction in all my discussions, at home and abroad. And this is why during those months I was barely interested in the discussions and consultations on the financing of the war and the shape of war economy.
I had, of course, given instructions to the Reichsbank to use its available economic assets abroad as far as possible to obtain gold and generally to increase our foreign assets. But in the few months of my activity in this sphere before the war, the success of this endeavor of mine was slight. Our gold assets and foreign assets, as they were turned over to me by Schacht, remained on the whole unchanged until the war.
In my questionnaire to the Reichsbank Vice President, Puhl, I requested enlightenment on these transactions, since the Directorate of the Reichsbank and its managing director who, at that time, was Puhl, are bound to have information on this matter. The answer to this questionnaire, I am sorry to say, has not as yet arrived.
DR. SAUTER: Witness, you gave these details obviously to show that despite the political tension at the time you did not even think seriously of war.
FUNK: Not until August 1939.
DR. SAUTER: Now, in the course of these proceedings, we have heard about a series of discussions which Hitler had with generals and other personalities, and which concerned military and political matters. All these were discussions which we must say today stood in closest connection with preparations for war.
At which of these discussions were you present, and what did you gather from them?
FUNK: I was never called into political and military discussions, and I did not participate in any of these discussions which were mentioned here in connection with the charge of planning an aggressive war, so far as discussions with the Führer are concerned. I was also not informed about the contents of these discussions. And as far as I can remember, I was hardly ever present at the discussions with the Reich Marshal, when they dealt with this topic.
I have been confronted here with a meeting which took place in October of 1938.
DR. SAUTER: 14 October 1938? I can tell you the document number. It is 1301-PS.
FUNK: Yes.
DR. SAUTER: Were you present at that meeting?
FUNK: No.
DR. SAUTER: That was the meeting...
FUNK: Yes, that was the meeting in which, according to the indictment against me, Göring pointed out that he had been instructed by the Führer to increase armament to an abnormal extent. The Luftwaffe was to be increased fivefold, as speedily as possible.
The Prosecutor, according to the official record (Volume V, Pages 163, 164), asserts that, in this discussion, Göring addressed me in the words of a man who was already at war. I was not even in Germany those days but in Bulgaria, and consequently I could not participate in this meeting.
DR. SAUTER: Mr. President, as proof of the fact that the Defendant Funk was not in Germany at the time of this discussion with Göring on 14 October 1938 I have submitted several documents in the Document Book Funk; they are extracts from the Völkischer Beobachter, Numbers 5, 6, 7, and 8 of the Funk Document Book. These documents are submitted chiefly because they show that in fact from 13 October 1938 until 15 October 1938 Funk was at Sofia in Bulgaria, and therefore could not have been present at the Göring meeting on 14 October 1938.
What Funk said in Bulgaria about economic relations I need not read in detail. But I would like to refer especially to his speech of 15 October 1938, Funk Document Book Number 7, in which the Defendant Funk, particularly in the first paragraph, declared publicly that the thought of an economic union between the German economy and the Southeastern European economy was in his mind, and in which Funk quite definitely rejected a one-sided dependence of the economy of the southeastern states on the economic system of Germany.
Therefore I beg the Tribunal to take judicial notice of these documents as evidence and in order to save time I will not go into them further.
Witness, under Document Number PS-3562 the Prosecution has submitted a document dealing with a conference on 1 June 1939. You yourself did not attend this meeting, but according to the list of those present several representatives of your Ministry were there, as well as the representative of the Reichsbank. At this meeting the probable financial needs of the Reich in case of a war, the productive capacity of the Germany economy, and that of the Protectorate in case of a war were discussed. There is a marginal note in this record which says that the record was to be submitted to you. Can you state very briefly whether this was actually done?
FUNK: No, it was not done. I have the document here. If this record had been submitted to me I would have affixed my initials “W. F.” to it. Besides, this document deals with the continuous discussions, which I have already mentioned, about the financing of the war, and the measures to be taken in the field of civilian economy in case of a war. The decisive measures for the financing were naturally prepared by the Reich Minister of Finance, and these measures were discussed at length in this conference at which the question of meeting the expenses through taxes was one of the chief topics. In any event, a variety of such discussions was carried on continuously at that time among the representatives of the various departments, and they took place in the office of the leading staff of the Plenipotentiary for Economy. By chance I have now found this name which earlier I could not remember: this was the institution—the committee—which was founded in the days of Schacht and was later continued.
DR. SAUTER: Dr. Funk, on 30 March 1939 you made a statement of your program in a speech before the Central Committee of the Reichsbank.
I have included these excerpts from the speech which have a bearing on this Trial in the Funk Document Book under Number 9. I am coming back to this speech because it was delivered before the Central Committee shortly after the defendant assumed his office as President of the Reichsbank, and represents his program as President of the Reichsbank in connection with various matters which have played a part here.
Dr. Funk, perhaps with just a few brief words you might give us the essential relevant points of your speech, insofar as the Prosecution is interested in them.
FUNK: I do not believe I need do that. I briefly mentioned a while ago that in these months I carried on international discussions about the necessity for a new order in international economic relations, and that I also pointed out Germany’s readiness to play a positive part. Therefore, I do not think I need read anything more from this speech; it is only meant to show that at that time I did not work on preparations for war but endeavored to bring about international economic understanding, and that these, my efforts were recognized publicly in foreign countries, especially in England.
DR. SAUTER: This intention to establish favorable and confident relations with foreign countries, that is, with their financial and economic circles, was, I am sure, a deciding factor in a later measure to which you already referred a little while ago, namely that compensation to foreign shareholders in the Reichsbank, who, I believe, existed chiefly in England, Holland, and Switzerland, was assessed and paid in a particularly loyal manner.
FUNK: Yes, I have stated that already.
DR. SAUTER: Dr. Funk, you mentioned earlier a letter which you wrote to Hitler. This letter would be interesting to me insofar as I would like to know just why you wrote it, and why in it you spoke of “your proposals,” even though in the main they were concerned with things which did not actually originate with you. Perhaps you will say a few words about this letter.
FUNK: The tone and contents of this letter can be explained from the general mood which existed everywhere in Germany at that time. Beyond that it is a purely personal letter to the Führer: In it I thanked him for his congratulations on my birthday. For this reason the letter is a little emphatic in its style. When I spoke of “my proposals,” this may be traced back to the fact that I had personally some time before explained to the Führer what measures would be necessary if a war broke out. And in the main, those were the measures which were adopted later as a result of conferences with the other economic offices, and to which I referred in this letter. Thus it was not quite correct for me to say “my proposals.” I should really have said, “The proposals worked out together with the other economic offices.”
DR. SAUTER: Dr. Funk, have you concluded?
FUNK: No. I would like to explain this whole letter with just a few words, since it is apparently one of the pillars of the Prosecution’s case against me.
As I have said, it was the time when the two mobilized armies faced each other. It was the time when the entire German people were in a state of great excitement because of the constant provocations and the ill-treatment of the German population in Poland. I personally did not believe that we would actually have war, for I was of the opinion that diplomatic negotiations could again be successful in preventing the threat of war and indeed in avoiding war itself. After the Führer’s almost miraculous successes in foreign policy, the heart of every true German had to beat faster in the expectation that in the East also Germany’s wishes would be fulfilled; that is, that my separated home province of East Prussia would be reunited with the Reich, that the old German city of Danzig would again belong to the Reich, and that the problem of the Corridor would be solved.
The overwhelming majority of the German people, including myself, did not believe that this question would end in war. We were rather convinced that England would be successful in exerting pressure on Poland so that Poland would acquiesce in the German demands on Danzig and the Corridor and would not bring on a war. The testimony of the witness Gisevius must have made clear to everyone in the world that England did nothing at that time to exert a soothing and conciliatory influence on Poland. For if the British Government knew that a conspiracy existed in Germany in which the Chief of the General Staff, the Chief of the OKW, the Chief of German Armament and other leading military personalities and generals were involved, and that an overthrow had been prepared for the event of war, then the British Government would have been foolish indeed if they had done anything to assuage and conciliate Poland. The British Government must have been convinced that if Hitler should go to war, a coup d’état, a revolution, an overthrow would take place, and that, in the first place, there would be no war and, secondly, that the hateful Hitler regime would be removed. Nobody could hope for more.
DR. SAUTER: Dr. Funk, we do not want to talk politics, but rather return to this letter of 25 August 1939. May I repeat the number, 699-PS. Let us at present deal only with this letter. If I understood you correctly, I can summarize your testimony as follows: This rather enthusiastic letter to Hitler was written because you were hopeful that Hitler would succeed in reuniting your home province of East Prussia with the Reich, and would now finally settle the Corridor problem without a war. Did I understand you correctly?
FUNK: Yes, but at the same time I feel I must state that I on my part did everything to ensure that in the event of war, peacetime economy would without disturbance be converted into a war economy. But this was the only time at which, as Plenipotentiary for Economy, I was active at all with regard to the other economic departments and the fact that I referred to my position in this letter may be explained quite naturally, because I was proud that I had for once done something in this official position—for every man likes to be successful.
DR. SAUTER: Dr. Funk, we are still concerned with the question of whether you knew of Hitler’s intent to bring about a war, especially to wage aggressive war and to make conquests through aggressive wars. I would like to put to you a few questions which, for the sake of simplicity, you can answer with “yes” or “no”; I would like to know only whether your knowledge and your presentiment agree with the statements made by a few witnesses and some codefendants.
For example, Reich Minister Lammers testified that you found it especially difficult to see Hitler at all, that an audience was granted you only once in a long while, and that even on one occasion I believe you waited for days with Lammers at headquarters for the promised audience, and that you had to leave again without having gained admittance. Is that correct?
FUNK: Yes, I am sorry to say.
DR. SAUTER: Now a further question: We have been confronted with several documents which say explicitly—I believe they are records of Lammers—that the Reich Minister of Economics, and at one time also the Reich Foreign Minister, had requested to be called in to these discussions, that Minister Lammers did his best to bring this about, but that Hitler did not allow it, that he expressly barred you and the Reich Foreign Minister from attending these discussions even though you pointed out that important matters of your department were being dealt with. Is that correct? Perhaps you can answer with just “yes” or “no.”
FUNK: The meeting which you mention is concerned with the deployment of labor. I myself had no direct connection with that, and the Foreign Minister probably did not have any marked interest in it either. So I assume that for these reasons the Führer did not need me, for as I said yesterday his directives for the conduct of economy were given, up to the year 1942, to the Reich Marshal as the man responsible for that field, and after 1942 the directives were given to Speer, because from that date on armaments dominated the entire economic life, and all economic decisions, by express order of the Führer, had to give way to armament needs.
DR. SAUTER: Dr. Lammers, in his testimony on 8 April, stated—I quote:
“The Führer objected many times, namely against Funk. There were various reasons for objecting to Funk. Hitler was skeptically inclined toward Funk and did not want him.”
Thus for the testimony of the witness Dr. Lammers. Can you explain why Hitler was disinclined toward you?
FUNK: No, only by the objective explanation that he did not need me.
DR. SAUTER: In other words, he considered any discussions with you superfluous.
FUNK: Yes.
DR. SAUTER: Witness, in connection with the topic of aggressive wars, I would be interested in the following: In the Indictment, on Page 30 of the German trial brief, it is set forth that you personally and through your official representatives, that is you personally as well as through the representatives who were appointed by you, participated in the preparation for the aggressive war against Russia, and as the sole proof for this Document Number 1039-PS, Exhibit USA-146, is submitted. From this document it appears that you, Defendant, at the end of April 1941, allegedly had a discussion with Rosenberg—who was responsible for the Eastern Territories—about the economic questions which would arise if the plans for attack in the East were to be carried through. I ask you, Dr. Funk, to note the date of this discussion: the end of April 1941, just a short time before the beginning of the war against Russia. In order to refresh your memory I want to point out that at that time, that is, before the war against Russia, Rosenberg had already been nominated as Hitler’s plenipotentiary for the uniform handling of problems in the Eastern Territories. I am asking you now to define your position and to say whether it can be derived from this discussion that you participated in an aggressive war against Russia or its planning and preparation, and if you did participate, how?
FUNK: I knew nothing about an aggressive war against Russia. I was very much surprised when I learned from Lammers that the Führer had made Rosenberg plenipotentiary for Eastern European problems. Lammers stated here that he had me advised of this nomination for personal reasons, because he knew that I was very much interested in economic relations with Russia. Indeed, our mutual efforts, Russia’s as well as Germany’s, had succeeded in considerably expanding our trade relations; for in earlier times, that is, before the first World War, German trade with Russia had been the decisive factor in the balance of German trade and had amounted to several thousand million gold marks.
The Russians—I must say this here—furnished us grain, manganese ore, and oil very promptly, while our deliveries of machines lagged behind for the natural reason that the machines had first to be produced since the Russian orders were mainly for specialized machines. To what extent army supplies were sent to Russia, I do not know, as I did not deal with these.
And so I was surprised by the appointment of Rosenberg. He called on me for a short discussion in which he told me that the task given to him by the Führer also included handling of economic problems. Thereupon I placed a ministerial director in my ministry, Dr. Schlotterer, at Rosenberg’s disposal to work on these problems. And when the Ministry for Eastern Affairs was founded, as far as I know, in July, Dr. Schlotterer, with some of his colleagues, took over the direction of the economic department in Rosenberg’s Ministry. And simultaneously, as far as I remember, Dr. Schlotterer became a member of Economic Operational Staff East. This was the institution of the Four Year Plan which has been mentioned repeatedly here during the proceedings and which dealt with all economic problems in the Occupied Eastern Territories.
Beyond that, I had nothing to do with these matters. Naturally I asked Lammers as well as Rosenberg just what this signified, and both of them told me that the Führer was of the opinion that a war with Russia would become unavoidable, that along the entire Eastern Front the Russians had concentrated large reinforcements, that the discussions with Molotov, in which I had no part at all, had been unsatisfactory, that the Russians were making demands regarding the Baltic, the Balkan regions, and the Dardanelles, which could not be accepted by Germany, by the Führer. At any rate, this affair was as complete a surprise to me as to the German people, and I am convinced that this war was a great shock to the German people.
THE PRESIDENT: The witness spoke of July. Did he mean July 1940?
DR. SAUTER: As far as I know, July 1941.
THE PRESIDENT: You mean July 1941? That was after the war with Russia had begun. The witness can answer for himself, I suppose, can he not?
[Turning to the defendant.] Did you mean July 1940?
FUNK: The discussion with Rosenberg was at the end of April or the beginning of May 1941, and the Rosenberg Ministry was founded in July 1941.
DR. SAUTER: I now turn to a different point raised by the Prosecution. You are accused of having, as Reich Minister of Economics, committed punishable acts in connection with the criminal plan to persecute the Jews and to eliminate them from economic life. These are the happenings of November 1938. Will you therefore now describe your activity in this respect.
FUNK: May I ask the Tribunal to give me time for a rather detailed account on this topic. Then the points which we will treat later can be dealt with much more briefly. This is the charge of the Prosecution which really affects me most gravely.
When I took over the Ministry of Economics in February 1938, I very soon received demands from the Party, and especially from Goebbels and Ley, to eliminate the Jews from economic life, since they could not be tolerated. I was told that people were still buying in Jewish stores, and that the Party could not permit its members to buy in such stores; the Party also took offense at the fact that some high state officials, and in particular their wives, were still shopping in such stores. The sectional chairmen of the Labor Front refused to work with Jewish managers. There were constant clashes, I was told, and there would be no peace if the measures which had already been introduced here and there were not extended gradually to eliminate the Jews completely from economic life.
The Law for the Organization of National Labor, which was decreed under my predecessors and which was also carried through by them in agreement with the German Labor Front, had assigned political and Party functions also to domestic economy. The plant manager was also responsible to the Party and above all to the State.
Some Jewish managers readily succumbed to the pressure and sold their businesses and enterprises to people and at prices of which we did not approve at all. I had made private agreements with individual Jewish leading men in banking, heavy industry, and the big stores, and had thus brought about their withdrawal from positions in economic life. There was no peace, and we had to try within a certain time and in line with certain legal decrees to force back and gradually eliminate Jewish influence from economic life. In this connection, I personally always represented the view that, first of all, the process should be carried out slowly, with intervals of time; secondly, that the Jews should be given adequate compensation, and thirdly, that one might leave certain economic interests in their hands, especially their security holdings; and I particularly emphasized this in the meeting with Göring which has been mentioned here so frequently.
Now while these developments were taking shape, the terrible happenings of the night of 9-10 November 1938, originating in Munich, burst upon us and affected me personally very deeply. When I drove to my ministry on the morning of 10 November, I saw on the streets and in the windows of the stores the devastation which had taken place and I heard further details from my officials in the Ministry. I tried to reach Göring, Goebbels, and I think Himmler, but all were still traveling from Munich. Finally I succeeded in reaching Goebbels. I told him that this terror was an affront against me personally, that through it valuable goods which could not be replaced had been destroyed, and that our relations with foreign countries, upon which we were particularly dependent at this time, would now be disturbed noticeably.
Goebbels told me that I personally was responsible for this state of affairs, that I should have eliminated the Jews from economic life long ago, and that the Führer would issue an order to Reich Marshal Göring according to which the Jews would have to be completely eliminated from economic life; I would receive further details from the Reich Marshal. This telephone conversation with Goebbels was confirmed by him later, and witnesses will verify this.
The next day, 11 November, I was informed that there was to be a meeting on the 12th with Göring in his capacity as Delegate for the Four Year Plan, for the purpose of settling the Jewish problem. The Delegate for the Four Year Plan had given instructions to the Ministry to prepare a draft for a decree which was to be the basis of laws for the elimination of the Jews from economic life.
On the 12th this meeting, which has been discussed here frequently, took place. There was a discussion with the Reich Marshal in the morning at which the Gauleiter were present. The Reich Marshal was highly excited; he said that he would not tolerate this terror and that he would hold the various Gauleiter responsible for what had happened in their Gaue.
After this meeting I was therefore comparatively relieved, but at the meeting, of which the record has been read here several times, Goebbels very soon produced his very radical demands and thereby dominated the whole of the proceedings.
The Reich Marshal became increasingly angry and in this mood he gave way to the expressions noted in the record. Incidentally, the record is full of gaps and very incomplete. After this meeting it was clear to me that now indeed the Jews would have to be eliminated from economic life, and that in order to protect the Jews from complete loss of their rights, from further terror, attacks, and exploitation, legal measures would have to be decreed. I made provisions, and so did the Minister of Finance, the Minister of the Interior, the Minister of Justice, and so on, for the execution of the original decree of the Delegate for the Four Year Plan in which the transfer of Jewish businesses and Jewish shares to trustees was stipulated. The Jews were compensated by 3 percent bonds, and I always saw to it that, as far as the Ministry of Economics was involved in this, this decision was carried out faithfully and according to the law and that the Jews did not suffer further injustice. There was at that time certainly no talk of an extermination of the Jews. However, a plan for the organized emigration of the Jews was briefly discussed at that meeting. I personally did not participate in any way in the terroristic, violent measures against Jews. I regretted them profoundly and sharply condemned them. But I had to authorize the measures for the execution of those laws in order to protect the Jews against a complete loss of rights, and to carry through in an orderly manner the legal stipulations which were made at that time.
DR. SAUTER: Dr. Funk...
THE PRESIDENT: We had better adjourn now.
[A recess was taken.]
DR. SAUTER: Witness, before the intermission we last spoke of your activity concerning the decrees for the exclusion of Jews from economic life and you told us about the minutes of the session with Göring on 12 November 1938. That is Document Number 1816-PS.
You have already mentioned that the minutes of that conference were poorly edited and are full of omissions, but we can see from these minutes that you openly and definitely exerted a restraining influence and that you tried to save one thing or another for the Jews. I see, for instance, from the minutes that during the conference you repeatedly maintained that the Jewish stores should be reopened again speedily. Is that correct?
FUNK: Yes.
DR. SAUTER: You also pleaded, according to the minutes, that the Jews should be able to keep their shares and interests. That is shown in a question which you put. Is that correct?
FUNK: I have already said that I had thought, up to the time of that conference, that the Jews could keep their securities; and in the course of the conference I said that it was quite new to me that the Jews should also surrender the securities they possessed. Ultimately they got 3 percent government bonds in settlement, but they had to hand over all their shares and other interests.
I was also against a ruling of that kind because the Government would then take over a huge number of securities and the conversion of such securities was of course difficult.
DR. SAUTER: From the minutes it also appears that Heydrich was in favor of placing the Jews in ghettos, and you recall that the Prosecution has already mentioned that here.
What was your attitude, Dr. Funk, to Heydrich’s proposal at that time?
FUNK: I was against ghettos for the simple reason that I considered a ghetto a terrible thing. I did not know any ghettos, but I said that 3 million Jews can surely live among 70 million Germans without ghettos. Of course, I said that the Jews would have to move together more closely, and one would have to assist the other, for it was clear to me, and I also said so during the conference, that the individual Jew could not exist under the conditions which were now being created for him.
DR. SAUTER: In that connection, Mr. President, may I be permitted to point out two affidavits which I included in the Funk Document Book under Number 3 and Number 15, and may I ask you to take official notice of their complete contents as evidence?
Affidavit Number 3 in the document book, on Page 12 of the text, is one by the defendant’s wife, signed by her about the beginning of the Trial on 5 November 1945. From that affidavit, of which I shall summarize the essential passages, we can see that at the time of the excesses against the Jews in November 1938 the defendant, together with his wife and his niece, was in Berlin, and therefore not in Munich where the so-called “Old Fighters” were assembled and where Minister Dr. Goebbels quite suddenly and to the surprise of everyone gave the order for these Jewish pogroms. Frau Funk confirms in her affidavit that her husband, as soon as he heard of these excesses, called Dr. Goebbels over the telephone in great excitement and asked him:
“Have you gone crazy, Goebbels, to commit such outrages? It makes one ashamed to be a German. Our whole prestige abroad is being lost. I am trying day and night to preserve the national patrimony and you throw it recklessly out of the window. If this beastly mess does not stop immediately, I will throw everything overboard.”
That literally was the telephone conversation which at that time the defendant had from Berlin with Dr. Goebbels. And the remaining contents of that affidavit are concerned with intercessions which the defendant made for individual Jewish acquaintances. And, Gentlemen, there is a similar vein in the affidavit by Heinz Kallus, who was ministerial counsellor in the Ministry of Economics under the Defendant Funk.
I have submitted this affidavit as Number 15 of the Funk Document Book. It is dated 9 December 1945, and this witness also confirms that Funk was, of course, extremely surprised by these excesses, and that he thereupon immediately got in touch with the competent authorities in order to prevent further outrages.
Thus these affidavits largely confirm the account which the Defendant Funk himself has given. In connection with this affair concerning the Jews, I should like to return to Document Number 3498-PS, which can be found on Page 19 of the trial brief against Funk. That is a circular letter by Funk of 6 February 1939, published in the official gazette of the Reich Ministry of Economics, and from it I quote:
“To what extent and rate the authority of the Four Year Plan is to be used depends on instructions given by me in accordance with the directives of the Delegate for the Four Year Plan.”
I quote this because, here again, in an official publication of that time, the Defendant Funk expresses clearly that, in this field too, he had merely to obey and to execute the directives of the Four Year Plan. Is that correct, Dr. Funk?
FUNK: Yes.
DR. SAUTER: Dr. Funk, you said earlier that in keeping with your entire past and your basic principles, and in keeping with your entire philosophy, you considered as particularly severe the charge concerning the elimination of Jews from economic life. And in this connection I want to put to you that during an interrogation in Nuremberg on 22 October 1945, you finally broke into tears and told the interrogating officer, “At that time I should have resigned. I am guilty.” And this was quoted literally on one occasion in the course of the proceedings. Perhaps you can tell us how that remark and that breakdown on your part occurred which I find mentioned in the record.
FUNK: I had at that time just been brought from hospital into prison.
DR. SAUTER: Dr. Funk, one question...
FUNK: I did not know before that I had been accused of being a murderer and a thief and I do not know what else. I was sick for 9 or 10 weeks, and from the hospital bed I was brought here during the night. During those days my interrogations here started immediately. I must admit that the American officer who interrogated me, Colonel Murrey Gurfein, conducted the interrogation with extreme consideration and forbearance and again and again called a halt when I was unable to go on. And when I was reproached with these measures of terror and violence against the Jews I suffered a spiritual breakdown, because at that moment it came to my mind with all clearness that the catastrophe took its course from here on down to the horrible and dreadful things of which we have heard here and of which I knew, in part at least, from the time of my captivity. I felt a deep sense of shame and of personal guilt at that moment, and I feel it also today. But that I issued directives for the execution of the basic orders and laws which were made, that is no crime against humanity. In this matter I placed the will of the State before my conscience and my inner sense of duty because, after all, I was the servant of the State. I also considered myself obliged to act according to the will of the Führer, the supreme Head of the State, especially since these measures were necessary for the protection of the Jews, in order to save them from absolute lack of legal protection, from further arbitrary acts and violence. Besides, they were compensated and, as can be seen from the circular letter which you have just quoted, I gave strict instructions to my officials to carry out these legal directives in a correct and just way.
It is terribly tragic indeed that I in particular am charged with these things. I have said already that I took no part in these excesses against the Jews. From the first moment I disapproved of them and condemned them very strongly, and they affected me personally very profoundly. I did everything, as much as was within my power, to continue helping the Jews. I never thought of an extermination of the Jews, and I did not participate in these things in any way.
DR. SAUTER: Dr. Funk, as you are just speaking of the fact that you did not think of an extermination, an annihilation of the Jews, I want to refer to a document which has been quoted before: Number 3545-PS; it was submitted by the Prosecution. As you may recall, this is the photostat of the Frankfurter Zeitung of 17 November 1938, an issue which appeared only a few days after the incidents with which we are now concerned. In that issue of the Frankfurter Zeitung a speech of yours was published in which you deal with the legal measures for the exclusion of Jews from German economic life, and you will recall that the Prosecutor, in his speech of 11 January 1946, charged you, and I quote: “...that the program of economic persecution of the Jews was only part of a larger program for their extermination.”
And that is in conformity with a phrase in your trial brief which says that it was merely a part of, literally, “a larger program for the extermination of the Jews.” Now, in all the statements which you made during that time, I nowhere find an indication that you favored an extermination, an annihilation of the Jews, or that you had demanded it. What can you say about that view of the Prosecution?
FUNK: Never in all my life, orally or in writing, have I demanded an extermination or annihilation of the Jews or made any statement to that effect. Apparently this is an utterance of the Prosecutor, which, in my opinion, is based only on imagination or the state of mind in which he has viewed the things from the beginning. I myself have never advocated the extermination of the Jews and I did not know anything of the terrible happenings which have been described here. I did not know anything. I had nothing to do with them; and afterwards, as far as I recall, I never took part in any measures against the Jews, since these matters were no longer dealt with in my departments. With the exception of these legal measures, these executive orders, I do not believe that within my departments I ever again authorized anything further connected with Jewish affairs.
DR. SAUTER: Is it correct, Dr. Funk, that in connection with the carrying out of these directives which you had to issue, you yourself intervened on behalf of a large number of individuals who had to suffer under these directives and who approached you personally for aid, and that you did this in order to mitigate the effect of these decrees?
FUNK: I saw to it that these directives were followed in a fair way and according to the laws. However, the carrying out of these decrees was the responsibility not of the Ministry but of the district president and of the offices dependent on the Gauleiter in the Reich. Many complaints reached me about the manner in which Aryanization was carried out, and my officials will confirm that I intervened in every case when I was informed of such abuses. I even dismissed an official of that department when I heard of incorrect behavior; later I also parted with the department head.
DR. SAUTER: Why?
FUNK: Because these abuses had occurred. Just as previously I had done everything in my power to aid the Jews to emigrate by making foreign currency available to them, so now, in carrying out these directives, I did everything in my power within the scope of possibility to make things bearable for the Jews.
DR. SAUTER: Mr. President, this question as to what Funk’s attitude was in practice toward the carrying out of these decrees which he himself as an official had to issue—this question I have also treated in a questionnaire approved by you, which has been submitted to the former State Secretary Landfried. That questionnaire was returned some time ago but it was discovered that a wrong questionnaire had been sent out by the office, and the correct answer was received only on Saturday. It is now being translated and I assume that this correct answer, this testimony of State Secretary Landfried, will be submitted to you in the course of the day and that it can then be entered in the appendix as Document Number 16. I presume, nevertheless, that there will be no objection to my reading the short answer of the witness Landfried in connection with this matter. Herr Landfried was from 1939 to 1943 state secretary...
THE PRESIDENT: Has the Prosecution seen the document?
DR. SAUTER: Yes, the Prosecution has the document.
MR. THOMAS J. DODD (Executive Trial Counsel for the United States): We haven’t seen this document. We have seen the German text. I don’t read German and I haven’t had an opportunity to read it. It hasn’t been translated.
THE PRESIDENT: The document can be submitted after the Prosecution has seen it. You needn’t submit it at this moment. Have you any other witness or not?
DR. SAUTER: Not in connection with this topic.
THE PRESIDENT: No, no, but are there any other witnesses at all?
DR. SAUTER: One witness, Dr. Heidler, but for other subjects.
THE PRESIDENT: And presumably the defendant will be cross-examined.
DR. SAUTER: Yes.
THE PRESIDENT: These documents will be translated by then.
DR. SAUTER: Yes. Mr. President, if you so desire, then I will have to submit that document later, separately.
THE PRESIDENT: Yes.
DR. SAUTER: Dr. Funk, I come now to an accusation which, according to my knowledge, has not been mentioned in the trial brief yet; it concerns the problem of the occupied territories, that is, the spoliation of the occupied territories, costs of occupation, clearing systems, stabilization of currency, and the like. The Prosecution asserts that you actively participated in the program of criminal exploitation in the occupied territories. That can be found in the record of the proceedings on 11 January 1946 (Volume V, Page 167). That accusation is not further specified, but in the session of 21 February (Volume VIII, Page 60) there is a mere reference to a decree of the Reich Minister for the Occupied Eastern Territories, the Defendant Rosenberg. That decree was submitted by the Prosecution as Document Number 1015-PS; it is a decree by the Minister for the East, Rosenberg, to the Reich commissioners in the Occupied Eastern Territories. The decree informs the Reich commissioners of the task of the Einsatzstab Rosenberg—it has already been mentioned here on several occasions—namely, that of safeguarding objects of cultural value. I think I may assume that the Reich Ministry of Economics had nothing to do with cultural treasures as such. But—and that is very peculiar—it appears from Rosenberg’s letter of 7 April 1942 that a copy of it went not only to various other offices but also to you, that is to say, to the Reich Minister of Economy. And from that fact—apparently from that fact alone—the Soviet prosecutor has deduced the charge that you actively participated in the spoliation of the occupied territories. I had to explain the connection in such detail in order to show exactly with what we are dealing. Can you speak quite briefly about it?
FUNK: Up to the time of this Trial I did not even know what the Einsatzstab Rosenberg was, what its tasks were, what it was doing. I have no knowledge that the Ministry of Economics had anything at all to do with the safeguarding of cultural treasures. I cannot say anything about it.
DR. SAUTER: You cannot say anything about this?
FUNK: No, not with regard to the Einsatzstab Rosenberg. About the policy in the occupied territories, I can say a great deal...
DR. SAUTER: That does not interest us now.
FUNK: But you will probably want to hear that later.
DR. SAUTER: Then, Dr. Funk, in the questionnaire sent to Dr. Landfried which I have mentioned before, I asked five or six questions concerning your attitude to the economic policies in the occupied territories. I also put questions to him on whether you had given directives to the military commanders or the Reich commissioners for the occupied territories, or the heads of the civil administration in Alsace-Lorraine, and so on. Furthermore, I asked whether it is correct that economic directives also for the occupied territories did not come from you as Reich Minister of Economics but from the Delegate for the Four Year Plan. Then I asked about your attitude toward the question of exploitation of occupied territories, particularly in the West, the black market, devaluation of currency, and the like.
I cannot read the statements of the witness Landfried at this moment, because, through an error in the office, the answers from Landfried arrived only last Saturday. Since your personal testimony is now being heard, do you yourself wish to add anything to these questions, or would you just like to underline what I shall submit to the Tribunal as soon as I have received the translation? I put this question because it is practically the last opportunity for you to refer to these subjects.
FUNK: I should like to state my position on various matters, but the details of these problems can naturally be better explained by the state secretaries than by myself.
Concerning the directives to occupied territories, the Reich Marshal, as well as Reich Minister Lammers, has stated here that I, as Reich Minister for Economics, had no authority to issue instructions. The Reich Marshal, during his testimony here, stated, and I marked it down, “For the directives and the economic policies carried out by the Minister of Economics and Reichsbank President Funk, the responsibility is fully and exclusively mine.”
And concerning the occupied territories, he also said that if I had issued special instructions in the course of official business between the ministry and the administrative offices in the occupied territories, then they derived from the general directives of the Reich Marshal and, as he said, were always based on his personal responsibility.
The position was that directives to the occupied territories in the economic field could only be given by the Delegate for the Four Year Plan. The carrying out of economic policy was the task of the military commanders or the Reich commissioners who were directly subordinate to the Führer. The military commanders, as well as the Reich commissioners, had under them officials from the various departments; among them, of course, also officials from the Ministry of Economics and the Reichsbank; and even private enterprise was represented. There was, of course, close co-operation between the offices of the military plenipotentiaries, the Reich commissioners, and the representatives of the various home departments, with the exception of occupied territories in Russia where the Reich commissioners were subordinate to a special minister, that is, the Reich Minister for the Occupied Eastern Territories. This was an exception, but if we as a ministry wanted to have anything done by the military commanders or the Reich commissioners, we had to make a request or procure an order from the Delegate for the Four Year Plan.
The same applies to the heads of the civil administration in Alsace-Lorraine and in other territories where a civil administration had been set up. Here also, the numerous departments of the Ministry of Economics and the Reichsbank had no direct authority to issue directives.
However, I emphasize again that of course close official contact existed between the directing authorities in the occupied territories and the respective departments in Germany.
I myself—and witnesses will confirm this in questionnaires still outstanding, or in person—made the greatest efforts to protect the occupied territories from exploitation. I fought a virtually desperate struggle throughout the years for the maintenance of a stable currency in these territories, because again and again it was suggested to me that I should reduce the exchange rate in the occupied territories so that Germany could buy more easily and more cheaply in these countries; I did everything that could be thought of to maintain economic order in these territories. In one case, in Denmark, I even succeeded, in the face of opposition from all other departments, in raising the value of the Danish krone, because the Danish National Bank and the Danish Government requested it for justifiable reasons.
I opposed the increase of occupation costs in France in 1942 as well as in 1944. The memorandum of the Reichsbank which I authorized was quoted here by the American Chief Prosecutor.
The occupation costs were determined not by the Minister of Economics and the President of the Reichsbank but by the Minister of Finance and the Quartermaster General—in other words, by the highest Wehrmacht commands—and in the case of France, Denmark, and other countries, also by the Minister for Foreign Affairs.
Therefore, I did whatever I could possibly do—whatever was within my power—to keep the economy of the occupied territories in good order. I was successful finally in persuading the Reich Marshal to issue a decree which prohibited all German personnel from buying on the black market; but that happened only after many abuses in this respect had already occurred.
I want to emphasize also that I considered it necessary for the maintenance of order in the occupied territories that social life there should not be disturbed, and that, therefore, as a matter of principle I was always against the forced or excessive deportation of foreign workers from the occupied territories to Germany.
I also expressed this in a conference with Lammers, which has been mentioned here. My state secretaries can confirm that. On the other hand it was naturally clear to me that Sauckel was in a very difficult, indeed desperate, situation. Again and again manpower for German economy was demanded of him. But, particularly after I had turned over the entire civil production to Speer and engaged in central planning, it was not only not to my advantage, from the point of view of my work, that manpower was brought to Germany from abroad, but it was indeed in my interest that the workers should remain in the occupied territories since the production of consumer goods had been transferred to a large degree to these territories; for as minister responsible for providing consumer goods to the population I had a great interest in seeing that orderly work should be done in the occupied territories and that no economic or social disturbances should occur.
I believe, however, that it will be more to the purpose if my two state secretaries and the Vice President of the Reichsbank, the acting Director of the Reichsbank, Puhl, make detailed statements on these problems, because they were more closely connected than I with carrying matters into practice.
If the accusation is made against me that with the aid of the clearing arrangements we spoliated occupied territories and foreign countries, I can only say that the clearing arrangement was not originally introduced by us in our dealings with the occupied territories or during the war, but that it was the normal method of trade between Germany and her business partners. It was a system which had been forced upon us—and that has been pointed out by Schacht—when other nations resorted to using the proceeds of German exports for the payment and amortization of German debts.
At all times, however, I have emphasized that the clearing debts were real debts for merchandise, and that is important. I have said again and again that this clearing debt was a genuine debt of the Reich and would be repaid at the rate, the purchase value which was in force at the time when we entered into these obligations. I especially stated that, in detail and as clearly as possible, in my last speeches in Vienna in March 1944, and in Königsberg in July 1944.
Beyond that, in July, I made the suggestion that after the war the clearing debt should be transformed into a European loan, so that it should not remain on the narrow plain of a bilateral exchange of goods but be effectively commercialized; from this can be seen distinctly that I always considered that clearing debt a genuine debt, so that the nations in the occupied territories who had such claims on Germany could and would be satisfied with the war—and, as I constantly emphasize, at the same rates that existed at the time when the debt was incurred. If, however, the countries would have had to pay reparations on the basis of peace treaties, then these reparations of course, quite reasonably, could only have been paid in goods; and then, equally reasonably, it would have been possible to create a balance between German debts and German claims.
But I never left any doubt about the fact that the clearing debt was to be considered a true debt. Therefore, I have to reject the accusation that with the aid of the clearing system we exploited the occupied territories. And I have to reject even more strongly the accusation that I share responsibility for the burden of unbearable expenses, particularly occupation costs and other outlays of money, which were imposed on the occupied territories. It can be proved that I always objected to excessive financial burdening of the occupied territories. The witnesses will later testify and confirm this.
DR. SAUTER: Mr. President, the defendant has referred to two speeches which he made in Vienna and in Königsberg. These are two addresses which deal in part with the subject of clearing debts, and in part also with the defendant’s favorite subject of a European economic union between Germany and her neighbor nations, that is to say, an economic union on the basis of full equality.
In the interest of time, may I just ask that judicial notice be taken of these speeches, the essential content of which has been stated partly by the defendant and partly by me: The speech of the defendant at Vienna on 10 March 1944, Number 10 in my document book, and the speech in Königsberg on the occasion of the 400th anniversary of the university of his home province, on 7 July 1944, Number 11 in my document book.
MR. DODD: Mr. President, if this Document Number 11 is offered by the defense for the purpose of showing what this defendant’s policy was toward the occupied countries, then I think it is proper for me to point out that the speech did not refer to the occupied countries but rather to the satellite states of Germany.
DR. SAUTER: Mr. President, may I also call attention to Document Number 3819-PS, which has already been submitted by the Prosecution. That is the record, which the defendant has mentioned, of the meeting with Minister Lammers on 11 July 1944.
According to this record, the Defendant Funk was present at that meeting, and mention is made of him in one sentence only; I quote, on Page 8 at the bottom: “Reich Minister Funk expects considerable disturbances of production in non-German territories in case of ruthless raids.”
This sentence, if taken from its context, is difficult to understand, but viewed in its proper connection, it makes it clear that the Defendant Funk wanted to warn against violent action in the recruitment of foreign workers for German production and for German armaments. He warned against any violent measures—against raids, as they are called in the protocol, because thereby, in his opinion, production in the occupied territories would be disturbed.
Then, Mr. President, may I mention another document. It is Document Number 2149-PS, and it contains the following: A statement of the Reichsbank, dated 7 December 1942, “concerning the question of increasing French contributions to occupation costs.”
May I say in advance that the cost of occupation in France was increased, but not upon the suggestion of the Defendant Funk and not with his approval, but in spite of his protest. And this statement to which the Defendant Funk has referred, and which I have just quoted—it is dated 11 December 1942—lists in detail the reasons why Funk and his Reichsbank very definitely protested against any increase in the cost of occupation.
In this connection, may I be permitted to question the Defendant Dr. Funk on the cost of occupation in Greece.
[Turning to the defendant.] Did you hear the testimony of the witness Dr. Neubacher, who was Minister to Romania and Greece, and who confirmed that there, also, you tried to reduce the cost of occupation?
THE PRESIDENT: Are you going to be much longer?
DR. SAUTER: Yes, I believe, Mr. President, it would be better if we adjourned now. I still have to put a few questions.