HJALMAR SCHACHT (Defendant): Hjalmar Schacht.
THE PRESIDENT: Will you repeat this oath after me: I swear by God—the Almighty and Omniscient—that I will speak the pure truth—and will withhold and add nothing.
[The witness repeated the oath.]
You may sit down.
DR. DIX: Please tell the Tribunal briefly about your descent?
SCHACHT: The families of both my parents have lived for centuries in Schleswig-Holstein, which until 1864 belonged to Denmark. My parents were both born as Danish citizens. After the annexation by Germany my father emigrated to the United States, where three of his older brothers had already emigrated, and he became an American citizen. My two brothers, who were older than I, were born there. Later my mother’s health prompted my father’s return to Germany.
I was educated in Hamburg. I studied at universities in Germany and in Paris, and after receiving my doctor’s degree I was active for 2 years in economic organizations. Then I began my banking career, and for 13 years I was at the Dresdner Bank, one of the large so-called “D” banks. I then took over the management of a bank of my own, which was later merged with one of the “D” banks, and in 1923 I abandoned my private career and went into public service as Commissioner for German Currency (Reichswährungskommissar). Soon afterwards I became President of the Reichsbank, and I held that office until 1930, when I resigned.
DR. DIX: Why did you resign as President of the Reichsbank at that time?
SCHACHT: In two essential points there were differences of opinion between the Government and me; one was the internal finance policy of the Government. With the terrible catastrophe of the lost war and the Dictate of Versailles behind us, it was necessary in my opinion to use thrifty and modest methods in German politics. The democratic and socialist governments of that period could not see that point, but carried on an irresponsible financial policy, especially by incurring debts which in particular were contracted to a very large extent abroad. It was quite clear that Germany, already heavily burdened with reparation payments, was under no circumstances in a position to build up as much foreign currency as was necessary for the payment of these debts. We were not even able to pay the reparations from our own economy.
Therefore I objected to the contraction of these debts in which the various governments of that period indulged, and to which they also encouraged communities and private companies. I objected to this financial policy and continually, abroad and at home, warned against such a policy of incurring foreign debts. The foreign bankers did not listen nor did the German Government. It was during that period that if in Berlin one passed the Adlon Hotel, Unter Den Linden, one could not be sure that a financial agent would not emerge and ask whether one did not need a loan.