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.