The question is here, as I have tried to point out to Dr. Dix, the sole
thing that is charged against this defendant is that he participated in
the conspiracy to put this nation into war and to carry out the War
Crimes and Crimes against Humanity incidental to it.
Now, I can’t see how the attitude of foreigners either exonerates or
helps the Court to decide that question. If it does, of course I don’t
object to it, but I can’t see the importance of it at this stage.
DR. DIX: I do believe that Mr. Justice Jackson...
THE PRESIDENT: Wait a minute, Dr. Dix, what exactly was the question
that you were asking at that moment? What had it reference to?
DR. DIX: I asked the witness what the attitude was that was taken by
prominent foreigners with whom he came into contact at that time,
officially and privately during the period that the regime consolidated
its power. Did they reject the regime, or were they sympathetic to it?
In other words, just how far did these foreigners influence him and his
thinking? And may I...
THE PRESIDENT: I think you know, Dr. Dix, that to ask one witness what
the attitude of other people is is a very much too general form of
question. Attitude—what does the word mean? It is far too general, and
I do not understand exactly what you are trying to prove.
DR. DIX: I will make the question more precise.
How, Dr. Schacht, through your exchange of thoughts with foreigners, was
your personal attitude influenced? How was your attitude and your
activity influenced through the attitude of these foreigners?
[_Turning to the Tribunal._] That is something which Dr. Schacht can
testify to alone, because it is of an intimate nature and personal to
Schacht. Your Lordship, I want quite openly to state the point to be
proved which seems very relevant to the Defense and on which this
question is based. I do not wish to conceal anything.
I, the Defense, maintain that this oppositional group—about which
Gisevius has already spoken, and of which Schacht was a prominent
member—that this group not only received no support from abroad, but
that foreigners rendered the opposition more difficult. That is not a
criticism that is leveled towards foreign governments.
There is no doubt that the representatives of these countries took that
attitude in good faith and with a sense of duty in the service of their
countries. But it was of decisive value for the attitude of these men of
this oppositional group what position the foreign countries took to this
regime; whether they respected or whether they supported it by
precedence given its representatives, socially, as far as possible, or,
through caution and reserve, showed their disinclination to it, thereby
strengthening this oppositional group.
This evidence is of the utmost importance to me in the carrying on of
the defense. I have stated it quite openly, and, as much as I can, I
will fight for this piece of evidence.
THE PRESIDENT: Dr. Dix, the Tribunal has considered the argument which
you have presented to it and they think that the investigation of these
facts is a waste of time and is irrelevant. They will, therefore, ask
you to go on with the further examination of the defendant.
DR. DIX: Dr. Schacht, you supported the rearmament through financing by
the Reichsbank. Why did you do that?
SCHACHT: I considered that Germany absolutely had to have political
equality with other nations, and I am of the same opinion today; and in
order to reach this state, it was necessary that either the general
disarmament which had been promised by the Allied powers would come into
effect, or that if equal rights were to be obtained Germany would have
to rearm on a corresponding scale.
DR. DIX: Was this financial help by the Reichsbank your work alone or
was that decreed through the Directorate of the Reichsbank?
SCHACHT: In the Reichsbank, the Leadership Principle was never applied;
I rejected the Leadership Principle for the Reichsbank. The Reichsbank
was governed by a group of men all of whom had an equal power to vote
and if there was a “tie,” the vote of the chairman was the decisive
vote, and beyond that the chairman had no rights in this board.
DR. DIX: You are familiar with the affidavit of the former Reichsbank
Director Puhl. Did—I put the question taking into consideration the
contents of this affidavit with which the Tribunal is acquainted—Puhl
also participate in giving financial help from the Reichsbank for
rearmament?
SCHACHT: Herr Puhl participated in all decisions which were made by the
Reichsbank Directorate on this question and not once did he oppose the
decision reached.
DR. DIX: It is known to you that the Reichsbank’s method of financing
consisted in the discounting of the so-called mefo bills. The
Prosecution have discussed this fact in detail and the afore-mentioned
affidavit signed by Puhl says that this method made it possible to keep
the extent of rearmament secret. Is that correct?
SCHACHT: We cannot even talk about keeping the armament a secret. I call
your attention to some excerpts from documents presented and submitted
by the Prosecution themselves as exhibits. I quote first of all from the
affidavit by George Messersmith, dated 30 August 1945, Document Number
2385-PS, where it says on Page 3, Line 19: “Immediately after the Nazis
came into power they started a vast rearmament program.” And on Page 8
it says: “The huge German armament program which was never a secret....”
Thus, Mr. George Messersmith, who was in Berlin at the time, knew about
these matters and I am sure, informed his colleagues also.
I continue quoting from Document Number EC-461. It is the diary of
Ambassador Dodd, where it says, under 19 September 1934, and I quote in
English for I just have the English text before me:
“When Schacht declared that the Germans are not arming so
intensively, I said: Last January and February Germany bought
from American aircraft people one million dollars worth of
high-class war flying machinery and paid in gold.”
This is from a conversation between Dodd and myself which took place in
September 1934 and he points out that already in January and February
1934 war aircraft...
[_The proceedings were interrupted by technical difficulties in the
lighting system._]
THE PRESIDENT: The Tribunal will adjourn.
[_A recess was taken._]
THE PRESIDENT: The Tribunal would like to know how long you expect to be
with your examination-in-chief of the defendant. You have already been
nearly a whole day, and the Tribunal think, in view of the directions in
the Charter, that the examination of the defendant ought to finish
certainly in a day.
DR. DIX: Your Lordship, there are two things I do not like to do, to
make prophecies which do not come true and to make a promise I cannot
keep.
May I answer the question by saying that I consider it quite impossible
for me to finish today. I am fully aware of the rules of the Charter,
but on the other hand I am asking you to consider that the Prosecution
have tried to prove the accusations against Schacht by numerous pieces
of evidence, directly and indirectly relevant facts, and that it is my
duty to deal with these individual pieces of evidence offered by the
Prosecution.
Please apply strict measures to my questions and if the Tribunal should
be of the opinion that there is something irrelevant, then I shall
certainly adhere to their ruling. However, I do think that I have not
only the right, but also the duty to put any questions which are
necessary to refute the evidence submitted by the Prosecution.
I shall, therefore, certainly not be able to finish today. I think—I
should be extremely grateful if you would not make me prophesy, it may
go faster and tomorrow I may finish in the course of the day but it may
even take the whole day—I cannot say for certain. In any case, I shall
make every effort to put only relevant questions. If the Tribunal should
be of the opinion that something is not relevant, I ask to be told so
after I have explained my standpoint.
THE PRESIDENT: I think you had better get on at once then, Dr. Dix, and
we’ll tell you when we think your questions are too long or too
irrelevant.
DR. DIX: Now, Dr. Schacht, we were considering the mefo bills, did you
consider them as a suitable means of keeping the rearmament secret? Have
you anything else to say to that question?
SCHACHT: The mefo bills as such, as far as rearmament was concerned, had
of course no connection with the question of secrecy, for the mefo bills
were used to pay every supplier. And there were, of course, hundreds and
thousands of small and big suppliers all over the country.
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.
DR. DIX: Earlier you briefly dealt with the question of keeping armament
secret in another connection. Have you anything to add to that?
SCHACHT: I think in a general manner it must be realized that State
expenditures do not come under the jurisdiction of the President of the
Reichsbank, and that the expenses and receipts of the State are under
the control of the Reich Minister of Finance, and consequently the
responsibility lies in his hands and it is his duty to publish the
figures. Every bill which the Reichsbank had in its possession was made
known every week.
DR. DIX: Is that what you have to add to your answer to the basic
question of allegedly keeping the armament program secret?
SCHACHT: Yes.
DR. DIX: You have also already explained on the side why you
fundamentally were in favor of rearmament. Have you anything to add to
that?
SCHACHT: Yes. A few very important remarks are, of course, to be made on
that and since this question concerns the chief accusation against me, I
may perhaps deal with it in greater detail.
I considered an unarmed Germany in the center of Europe, surrounded by
armed nations, as a menace to peace. I want to say that these states
were not only armed but that they were, to a very large part, continuing
to arm and arming anew. Especially two states which had not existed
before, Czechoslovakia and Poland, were beginning to arm, and England,
for example, was continuing to rearm, specifically with reference to her
naval rearmament in 1935, _et cetera_.
I should like to say quite briefly that I myself was of the opinion that
a country which was not armed could not defend itself, and that
consequently it would have no voice in the concert of nations. The
British Prime Minister Baldwin once said, in 1935:
“A country which is not willing to take necessary precautionary
measures for its own defense will never have power in this
world, neither moral power nor material power.”
I considered the inequality of status between the countries surrounding
Germany and Germany as a permanent moral and material danger to Germany.
I further want to point out—and this is not meant to be criticism, but
merely a statement of fact—that Germany, after the Treaty of
Versailles, was in a state of extreme disorganization and confusion.
Conditions in Europe were such that, for example, a latent conflict and
controversy existed between Russia and Finland and between Russia and
Poland which had considerable parts of Russian territory. There was
Russia’s latent conflict with Romania which had Bessarabia, and then
Romania had a conflict with Bulgaria about the Dobruja and one with
Hungary about Siebenbürgen. There were conflicts between Serbia and
Hungary, and between Hungary and nearly all her neighbors and between
Bulgaria and Greece. In short all of Eastern Europe was in a continuous
state of mutual suspicion and conflict of interests.
In addition, there was the fact that in a number of countries there were
most serious internal conflicts. I remind you of the conflict between
the Czechs and the Slovaks. I remind you of the civil war conditions in
Spain. All that will make it possible to understand that I considered it
absolutely essential that in the event of the outbreak of any
conflagration in this devil’s punch bowl, it was an absolute necessity
for Germany to protect at least her neutral attitude. That could not
possibly be done with that small army of 100,000 men. For that an
adequate army had to be created.
Here in prison I accidentally came across an edition of the _Daily
Mail_, dated April 1937, where the conditions in Europe were described,
and I beg you to allow me to quote one single sentence. I shall have to
quote it in English. It does not represent the views of the _Daily
Mail_; it only describes conditions in Europe.