He created an automatic brake for armament expenditure through the mefo bills, which from the technical and financial point of view was a somewhat bold measure, although legally tenable. These served at first to finance the armament expenditure but restricted further armament expenditure after their expiration on 1 April 1939 because the Reich was obligated to redeem them. Schacht’s foresight proved true. The increase in employment brought such a rise in the state revenues that it would not have been difficult to liquidate the mefo bills at their expiration 5 years later. Keitel’s statement has proved that during the budget year beginning 1 April 1938, 5,000 million marks more were spent for armament than during the preceding year, although as from 1 April 1938 the Reichsbank credits had completely ceased. Half of the 5,000 millions would have sufficed to redeem the mefo bills which matured during the budget year beginning 1 April 1939. The use of this money for further rearmament would have been avoided; but this was exactly what Schacht intended. From the beginning he had limited the validity of the mefo bills to 5 years; he stopped the credit assistance of the Reichsbank on 1 April 1939 in order to limit armament. It was impossible for Schacht to foresee that Hitler would simply break a strict credit obligation and not redeem the bills. These facts in themselves show that his attempts to resign could have had no other reason than opposition to any further armament, and the refusal to accept responsibility for it. In this sense the assertion of the Prosecution that he wanted to evade responsibility is completely correct.
Nothing indicates that any other motives than those which are obvious from the facts just mentioned caused him to make this attempt to relinquish his duties. If the Prosecution maintains that the reason was his antagonism to Göring, this is also correct insofar as Schacht was an opponent of the Four Year Plan, of which Göring was the chief. That the reason was rivalry of power is a pure supposition, an interpretation of actual events which justifies the quotation: “Interpret to your heart’s content; should you fail to explain, you will at least insinuate.”
The Reichsbank memorandum of November 1938, which led to the dismissal of Schacht and most of his collaborators including Vocke, is also unequivocally and forcibly opposed to armament. It naturally had to contain reasons for this which were derived from the departmental jurisdiction of the Reichsbank. Its aim was obvious. Hence Hitler’s remark, “This is mutiny.” The memorandum ends with the demand for control of the capital and loan market as well as the management of taxation by the Reichsbank. Compliance with this demand would have deprived Hitler of every possibility of raising money for further armament, and therefore this demand was unacceptable to him. Schacht and his colleagues knew this. Accordingly, they deliberately sought a break by this step. Schacht now bore no further responsibility. From now on he could devote himself exclusively to the plans for a coup d’état by the conspiracy group to which he belonged. He became a traitor to Hitler. By remaining Minister without Portfolio, he hoped to learn more about what went on than if he resigned altogether; this was vital for the aims of his conspiracy group. I shall return to this point later.
The fact of armament, as such, therefore, proves absolutely nothing for the assertion of the Prosecution that Schacht deliberately contributed to the preparation of a war of aggression. Simultaneous economic armament, however, belongs of necessity to armament in the modern sense. On the German side this was already recognized for the first time at the beginning of the first World War by two very important German Jews, the founder of the Hamburg-America Line, Albert Ballin, and the great German industrialist, Rathenau. This is the same Rathenau who made the wonderful speech on peace during the Genoa Conference, which was received with wild applause by the delegates of those very powers which had opposed his country but 4 years previously as enemies, and who, as German Foreign Minister, was the victim of an anti-Semitic outrage in the early twenties. I probably can assume that the personality of Albert Ballin is known to the Court. Both men recognized, at the very outbreak of the first World War, the error of omitting economic mobilization. Rathenau then organized the so-called War Raw Materials Department of the War Ministry. The first Plenipotentiary General for War Economy, for this is what he really was, was thus ideologically a pacifist; and certainly since that time there is probably no mobilization plan by any nation which does not provide for the purely military armament to be accompanied by a corresponding economic preparation for war. Therefore, the designation of a Plenipotentiary General for War Economy, even if he had taken up his duties, which as the evidence demonstrates most convincingly he never did but remained a dummy, does not show anything in the way of proof that the intention to wage a war of aggression existed. This post is equally necessary when arming for defense. The same applies to the institution of the Reich Defense Council, the Reich Defense Committee, et cetera. As such they are the same harmless, matter-of-course factors. They have no incriminating value. Only their misuse for the purpose of a war of aggression would be incriminating. However, Schacht’s criminal intention in this respect has not been established, nor has anything else been found. I therefore refrain from going into details on this subject.
In conclusion, the Prosecution sees something incriminating in the so-called maintenance of secrecy regarding certain mobilization measures and mobilization arrangements, as for example the second Reich Defense Law. Here, too, a natural and worldly-wise way of thinking deprives these findings of any incriminating character. All nations are accustomed to treat mobilization and armament measures as secret. Upon further consideration and after closer observation this practice can, of course, be recognized as a very superfluous routine matter. Only plans and technical details can be really kept secret. The fact of rearmament as such can never be kept secret. The same applies to the existence of a large body which is to serve the purpose of this rearmament. Either it becomes known because it starts to function, or, like the ominous Defense Council, it remains hidden and secret only because it does not function.
In the memoirs of a Czarist officer regarding his experiences in the Russo-Japanese war I found the following humorous observation:
“If I, as a member of the General Staff, wished an incident to become known, I had it classified as ‘secret’ and my wish was fulfilled. If I wished to keep something secret, which was almost an impossibility, I unobtrusively gave it free circulation and occasionally my wish was fulfilled.”
One should not quibble in a vacuum; but if one wishes to find the truth, one must take into account the teachings of experience based on hard facts.
Thus, the fact of the military activation of Germany after the seizure of power by Hitler and the subsequent rearmament was never a secret to the world. The main proceedings have produced a great deal of evidence to this effect. We know the report of Consul General Messersmith; we know his sworn testimony of 30 August 1945, submitted by the Prosecution under Number 2385-PS, according to which the armament program—he speaks of a giant armament program immediately following the seizure of power—and the rapid development of the air program had been apparent to everybody; it had been impossible to move in the streets of Berlin or in any other city of importance in Germany without seeing pilots or aviators in training. He expressly states, on Page 8 of his testimony, that this giant German rearmament program was never a secret and was quite publicly announced in the spring of 1935.
I would like to remind you, amongst a great deal of other evidence, of the remark of Ambassador Dodd, who contends that he pointed out to Schacht that the German Government had bought high-grade airplanes from American airplane manufacturers for 1 million dollars and had paid for them in gold. Even if Ambassador Dodd perhaps made a mistake in this detail, yet all this still proves that German rearmament—the extent of which was surely even overestimated abroad at that time—must have been, at the very best, an open secret.