I refer the Tribunal to Document EC-369, which I have previously submitted in evidence as Exhibit Number USA-631. This document is a memorandum from the Reichsbank directorate to Hitler, under date of 7 January 1939, in which Schacht reviews in detail his fears of inflation. The seriousness of the situation may be seen generally from the entire text. I wish to quote several of the more crucial statements, one from the last paragraph on Page 3, the second sentence:
“We are, however, faced with the fact that approximately 3 billion Reichsmark of such drafts cannot now be paid, though they will be due in 1939.”
I quote from the upper half of Page 4:
“Exclusive of the Reichsbank there are approximately 6 billion Reichsmark mefo drafts which can be discounted against cash payment at any time at the Reichsbank, which fact represents a continuous danger to the currency.”
And I quote finally from the concluding paragraph of the memorandum:
“We are convinced that the effects on the currency caused by the policy of the last 10 months can be mended and that the danger of inflation again can be eliminated by strict maintenance of a balanced budget. The Führer and Reich Chancellor himself has publicly rejected, again and again, an inflation as foolish and fruitless.
“We therefore ask for the following measures:
“(1) The Reich as well as all the other public offices must not incur expenditures or assume guaranties and obligations that cannot be covered by taxes or by those funds which can be raised through loans without disturbing the long-term investment market.