A. I was one of the first economic leaders in Austria; at the age of twenty-eight I was a director; and at thirty I was the general manager of the Viennese Settling Corporation. At the age of thirty-three I was leading a concern in the building trade. I was a functionary and executive of the Austrian National Bank and a member of the Austrian Customs Consul . I was a member of the Russian Credit Committee of the Town of Vienna; and I was a member of the Export Commission for the liquidation of the Austrian Credit Department. So, I had considerable economic practice and experience for the task. to me since I had last worked on economic questions relating to the Balkans in the central administration of the I.G. Farben in Berlin.
Q. Witness, several days ago , when I visited you here in prison, I submitted, to you a report from the Royal Greek Government, addressed to the International Military Tribunal, and I asked you to read it and state your views. Is it correct what is said, in this document? Is that correct?
DR. SAUTER: It is, Mr. President, document USSR 358, and it has the further number UK-28.
Q. (Continued) In this report of a commission the picture is created as if in some way German authorities -- and this goes back to the defendant Funk in the end -- had totally destroyed the Greek economic system, and it appears as if Greece had been exploited, and all that sort of thing. Please don't go into detail, but tell us briefly what your impression has been in this connection.
THE PRESIDENT: Yes, General Rudenko.
GENERAL RUDENKO: Mr. President, I would like to make the following statement for the Tribunal: In regard to the report of the Greek Government, which was presented before the Tribunal by the Soviet Prosecution as provided by Article 29 of the Charter, -- it seems to me that the question of 1 defense counsel, asking the witness to give his opinion on this particular matter, should be rejected because the witness is not competent to give his opinion in regard to the report of the Greek Government.
The defense counsel can ask him a concrete question in regard to any particular fact, but that is all.
DR. SAUTER: Mr. President, if it is desired, I can, of course, put tie questions individually, but of course, it will probably take a little longer but, if the Soviet Russian Prosecution does desire that, I shall be agreeabl I may ask the witness, therefore -
THE PRESIDENT: Wait a minute. Dr. Sauter, what exactly is it that you want to ask the witness about this report?
DR. SAUTER: In this report from the Greek Government, which has been submitted by the Russian Prosecution, it is stated that, country.
Also, that the country had been charged undue occupahad been handicapped severely, and all that sort of thing. himself with those problems in Greece, that these statements are partly true.
Also, that this state of affairs existed already when the German troops marched, in, so that they weren't created by Germany.
And, lastly, that the defendant Funk, particularly,
THE PRESIDENT: Well, can't you puta few short questions was in accordance with international law and was not unfair to Greece?
If you could do that, that would meet the case, wouldn't it?
DR. SAUTER: Yes. That is what I wanted to do, and I am BY DR. SAUTER:by Greece?
Minister; von Scwerin-Krosigk, and it was proposed that at some Q And as early as the war, how was the question of this clearing arrangement treated?
A Regarding the economic events in Greece. I can only give you any information on that based on my own observations, starting with October 1942. At that time, when I first went to Athens, the Greek currency him alreadybeen considerably affected anddestroyed, since the bank notes had increased by something like 3,000 per cent. apart from a progressing inflation an attempt had been made to transfer a German system to Greece according to German experiences. That had the consequence, of course, that the vendors of Greek goods, when they were paid later on, suffered certain losses, whereas, on the other hand, the importers of German goods, because they bought the Mark at the rate of 60 and paid it into clearings, with the rate for the selling price something like 3,000, made tremendous profits. introducing a German system in Greece, could only be stopped by transferring the black market increase into a free market. success, at the end of October 1941. Within a very few weeks all shops and markets were full of goods and rations, and the prices for food dropped to one-fifth, whereas industrial products were reduced to one-tenth. This success, in spite of increasing inflation, could be maintained for four months.
Q Dr. Neubacher, is it true that the defendant Funk, who was Reich Economic Minister at that time, did tell you during conversations or stated in correspondence he had with you that he was interested in seeing to it that in spite of the shortage of goods in Germany, a considerable amount of goods should be sent from Germany and other European countries particularly to Greece? task, and I agreed perfectly that a maximum of goods should be transported to Greece, and not only food -- I had secured 60,000 tons at that time -but also German export articles, since it was hopeless that an inflation or the result of an inflation should be stopped and the effect on prices if no goods were available.
Minister Funk dealt with exports to Greece from the viewpoint of an improvement of the economic situation there and supported it with every means at his disposal. from Germany to Greece had become impossible, made considerable efforts to try to see that goods should be transported on neutral ships, which idea was to be carried out if Britain were to give a safeguard to these ships; and that by means of these transports from Germany to Greece the famine in Greece was to be alleviated?
A I think that between 1941 and 1942 when I hadn't got to Greece yet that these events took place. In 1943 when shipping in Greek waters had come to an end for us, because all ships had been torpedoed and when railroads had become subject to sabotage and dynamiting and blowing up, I, with the help of the Swedish Ambassador, Alar, who was leading the International Relief for Greece, applied for British safeguard for transport to Greece of food supplies. The British agreed to this application, and when our means of transport had ceased to exist they used the Swedish boat "Halaren" once a year, loaded with German food supplies for Greece. actions, didn't he? question, a question which is unique in the economic world, and he has supported me in my efforts with every means at his disposal. Funk made particular efforts so that the occupation costs should be kept as low as possible, and that he was making efforts to achieve a point of view by which it would be better that a considerable share of occupation costs should be booked down to German accounts so that Greece shouldn't he overburdened too much financially? What do you know about that? situation in Greece was reported by me at intervals to Reich Minister Funk, and I know that he made my reports the basisfor his own influence, the influence he exercised.
He was perfectly aware of the fact that the Greek economic problem during the war and within the blockade was so terribly difficult that all efforts had to be made to prevent a complete dissolution of the food system and economic system in Greece, and he influenced that at all times.
currency, Drachma, was destroyed or that it deteriorated, or did he, to the contrary, act in the interest of supporting and backing the Greek currency, particularly for the purpose of preventing a catastrophe and a famine? Please say briefly what you knowabout that.
A Reichsminister Funk always made efforts in the latter sense.
He proved it by forcing exports to Greece, and finally, in accordance with the Four-Year Plan, which was making the most colossal sacrifice which was possible in Germany, namely the surrender of a considerable amount of gold for the purpose of slowing down the Greek inflation.
Q You say "a considerable amount of gold". We in Germany, as you know, had very little gold during the war. Can you tell us how large the amount of gold was which the defendant Funk sent to Greece at that time for the purpose of backing the Greek currency and for the purpose of preventing; the catastrophe? How much gold was it? ceived 1.3 million gold pounds to back the currency, and more than 1 million gold pounds of that went to Athens.
Q And now, Witness, I have a last question. Is it correct that particularly through Greek merchants all these efforts on the part of German economic chiefs and the German Minister of Economy were often prevented iron being successful, and that, to quote just one example, cases happened where German factories more selling German engines for 60 drachmas to Greek merchants, which 60 drachma had no value, and that Greek businessmen more selling these same motors which they were buying for 60 drachma from Germany to the German armed forces for 60,000 drachma apiece? These are supposed to be cases which you have ascertained and on which you have reported to the defendant Funk, and that is why I an asking; you whether that is true.
A On that, I have to make the following remarks. That did, in fact, happen, but I want to state that the Greek businessmen had to act like that. That was one of the consequences of inflation and the black market. inflation. Every child there is a businessman, and that is why the only method which was possible was that of obvious speculation which in itself is not amoral. It was a method of transferring the black market into a free market by means of of purely economic measures, and that was the end of those measures.
after all was a problem which also arose in France and played an important part, was solved by your activity in coordination With the defendant Funk? At the end of October of 1942 we started it.
DR. SAUTER: Thank you very much, Witness.
Mr. President, I have no further questions.
DR. STEINBAUER (Counsel for Seyss-Inquart): Mr. President, High Tribunal, for your information I an going to ask questions With reference to the Anschluss. BY DR. STEINBAUER: activities. Weren't you also active politically? Austro-German People's Union.
Q What were the aims of that Austro-German National Union?
A The Austro-German people's Union was an institution which stood above parties and religions, which was active in a one-sided manner, having the aim of bringing about a revision of the Anschluss Clause in the peace treaties and to solve the question of the Austro-German Anschluss by means of a plebescite and by peaceful means. In the committee of this Austro-German people's Union, all parties were officially represented with the exception of the National Socialists and Communist parties. The German organization of the same namewas under tire leadership of the Social Democrat president of the German Reichstag, Paul Loewe.
Q Thank you. I have a list of the committee here before me which is dated 1926, and you appear as trustee and as deputy of Paul Speiser. As treasurer is named Dr. Arthur Seyss-Inquart, and there is Dr. Benedikt Kautsky, a Georg Stern, and a certain Dr. Stolper.
Are these details correct?
commissions make efforts towards the Anschluss at that time? Germain, a movement started in Austria on a very broad basis, which wanted the reunion of this country, which was suffering from the deepest economic depression, with Germany. This movement was joined by men from all parties and all religions, as you can see from the names which you, Doctor, have just mentioned.
reference to the previous position of Vienna, what the feelings were regarding the Anschluss? seemed so far away was not dealt with in detail. There were no conceptions, but every Austrian, on the basis of his wellfounded historic feelings, was agreed that the town of Vienna should be given the rank of the second capital of Germany.
THE PRESIDENT: I'm sorry. The Tribunal isn't really or whether it was just or not.
The Tribunal is concerned with whether it was obtained by violence and force.
This evidence doesn't seem to be relevant at all.
DR. STEINBAUER: Mr. President, unfortunately I have because I am of the opinion -- and that doesn't only apply who participated in the Anschluss.
It is my opinion, therefore -- and I shall be very brief; I have only ot one what the general attitude was.
I have taken the liberty BY DR. STEINBAUER:
Q Witness, and then in '1938 you became mayor of the city of Vienna. This is now after the Anschluss. At that time, Seyss-Inquart was also Reich town governor for the Gau of Vienna, or rather the country of Austria, is that correct? Austrian Chancellor on the 30th of March 1938 in the morning. At that time Seyss-Inquart was Bundist Chancellor of Austria.
Q All right. Well, how long did you remain in office as mayor of Vienna?
A According to the Austrian constitution, until February 1939.
At that time, Gauleiter Buerckel because Gauleiter and Reich Town Governor of Vienna, and at the same time he became the supreme head of the communal administration.
Q Thank you. That is enough. And what was the situation between Seyss-Inquart on one side and the Commissioner for the Reich Union, Buerckel, on the other side?
A It Was notoriously bad. Buerckel did not take any notice of the confidences of Reichstag Governor Seyss-Inquart. He governed over his head, and he tried every method of slander, intrigue, and provocation to overthrow Seyss-Inquart and dishonor him.
DR. STEINBAUER: Thank you. I have no further questions.
THE PRESIDENT: Does the Prosecution wish to question?
COLONEL AMEN: No.
THE PRESIDENT: No questions?
COLONEL AMEN: No.
THE PRESIDENT: The witness can retire.
Dr. Kauffmann.
DR KAUFFMANN: There are still six interrogatories to be dealt with. I hope that I may have permission to submit them as soon as they are received, and may, perhaps, also reserve for myself the right, in accordance with the application made by me two days ago, to apply for one or the other witness in writing, that is, witnesses from amongst those who appear in the affidavits which the prosecution have submitted.
THE PRESIDENT: You mean you want to cross-examine somebody from whom the prosecution have submitted an affidavit?
DR. KAUFFMANN: Yes.
THE PRESIDENT: Are you speaking of affidavits which have already been put in
DR. KAUFFMANN: I am talking about the affidavits which have been submitted for the first time two days ago.
THE PRESIDENT: Well, the Tribunal thinks you should make up your mind very soon as to whether you want to cross-examine those persons.
DR. KAUFFMANN: I had intended to put that application to you, but the Tribunal told me to make that application in writing.
THE PRESIDENT: Oh, I see. Very well.
DR. KAUFFMANN: Apart from that, I have finished my case for today.
THE PRESIDENT: Very well.
DR. KAUFFMANN: Thank you.
THE PRESIDENT: Sir David, we understood that Dr. Dix wanted to have the question of his documents settled on behalf of the defendant Schacht. Did you anticipate that would take very long?
SIR DAVID MAXWELL-FYFFE: If I might just consult Mr. Dodd--I don't think it will, but I would just like to verify that, if Your Lordship will allow.
THE PRESIDENT: What does Dr. Dix say?
DR. DIX: I don't think it will take a long time, perhaps a quarter of an hour. However, I shall have to reply to the Prosecution, and therefore the length of my reply depends upon the length of the statement to be made by the Prosecution.
THE PRESIDENT: Yes. Well, it would seem to have some advantages to take it now, because otherwise we have got to stop at some particular time, and we ashn' know how long it is going to take. If we take it now, it doesn't so much matter and then we could go on with Dr. Thoma afterwards.
SIR DAVID MAXWELL-FYFFE: If Your Lordship pleases, my friend Mr. Dodd thinks it will take about a half hour.
THE PRESIDENT: Very well. Dr. Thoma, you have no objection to that, have you
DR. THOMA: No.
THE PRESIDENT: Very well.
MR. DODD: Mr. President, I have before me an index which is submitted by DR. Dix on behalf of the Defendant Schacht. have objected.
THE PRESIDENT: Yes. I am not sure that I have that index before me. Do you have a copy of it we could have?
MR. DODD: I have just the one copy, which was supplied to us by Dr. Dix.
THE PRESIDENT: Has it been supplied to the Tribunal?
MR. DODD: I don't think so; I don't know. Apparently Dr. Dix is shaking his head and saying "no".
THE PRESIDENT: Perhaps you could indicate what the documents are without our having it before us.
Would you give the numbers when you indicate the documents?
DR. DODD: Yes, Your Honor. "Failure of a Mission." Number 2 is an excerpt from that book, and so is number 3. We object to all of those on the ground that they only represent the opinion of Sir Neville Henderson; they do not recount historical fact.
Number 4 is an excerpt from a book written about Dr. Schacht by a man by the name of Karl Bopp. We object to that on the same ground, that it is the opinion of the author and not pertinent here.
Exhibit No. 5 is an excerpt from the book written by Mr. Sumner Welles, "The Time for Decision". Our objection to this excerpt is based on the same ground; it contains only an opinion of Mr. Welles and, however valuable in some places, it is incompetent here.
Exhibit No. 6 is the book by Viscount Rothermere, which was already passed upon by the Tribunal with respect to the application of the defendant Goering. We renew the objection that was made at that time, citing again that it is only the opinion of this gentleman and is of no value before this Tribunal.
Exhibit No. 7 is the Messersmith affidavit, which was offered in evidence by the prosecution. We have no objection to that, of course.
Exhibit No. 8 is also a prosecution exhibit; no objection. von Blomberg, and we have no objection to that.
Passing on, we have no objection until we reach Exhibit No. 14, Ambassador Dodd's diary, and it is not really an objection there. We ask that we be given the dates of the entries--they have not been given to us thus far--or the pages from the diary from which it is intended to quote.
We go on to Exhibit No. 18. The intervening exhibits, of course, we have no objection to.
THE PRESIDENT: Mr. Dodd, I understand this is really a question of what shall be translated, is it not?
MR. DODD: Yes. We are objecting now, because we want to save the labor of translation.
THE PRESIDENT: Yes. Then you go on to 18.
MR. DODD: Yes. No.18 consists of three parts, (a), (b) and (c). They are statements of Paul Boncour, of Briand, and of Lord Cecil. They are statements about Germany's right to rearm. We object to them because they are not statements made by officials of any of these two governments; no source is given in the excerpt which is to be quoted, and it appears that they are nothing more than opinions, given after these men had retired from office.
Passing on, then, we come to Exhibit No. 33. That is a speech by Dr. Schacht in 1937. Our only question about it--we are not questioning at all its relevancy, of course, but we would like to know whether or not the original is available; we haven't been able to find out yet.
Number 34 is a speech by Adolf Hitler. It is very brief, and I am rather loath to make too much objection to it, except that I cannot see its relevancy here. It doesn't seem to pertain to any of the issues that have been raised, and unless Dr. Dix has something in mind that we have not been apprised of, we would object to it.
THE PRESIDENT: What does it deal with, Mr. Dodd?
MR. DODD: It deals with rearmament, generally, but it doesn't say anything about Dr. Schacht or any of the allegations here. It seems to be just a general statement about rearmament.
We have an objection to Exhibit No. 37. It is a letter from Dr. Schacht to Mr. Leon Fraser. Our objection is that we would like to know whether or not the original is available and if it is why we would have no objection. Switzerland, about what Dr. Schacht's thoughts were, and we object to that. The author is unknown, to begin with. It is only a newspaper account and seems to be immaterial and unimportant here.
Exhibit No. 39 is a letter written by one Richard Merton, addressed to the Solicitor of the Treasury in Great Britain. It was forwarded here to the General Secretary, I believe. In any event, we object to it on the ground that it is not competent.
It purpots to tell what Merton thought about Schacht and about some assistance that Merton received from Schacht. We would suggest that if Dr. Schacht's counsellor, Dr. Dix, feels that Merton has really some pertinent and relevant testimony to give here, it could be done by way of an interrogatory; he is in London, and it would be, we submit, a more proper way to proceed, rather than offering this letter, which was written without any direction or basis.
Then we move down to Exhibit No. 49, being correspondence between the publisher of Ambassador Dodd's diary and Sir Neville Henderson. It is reprinted in the volume containing Dodd's diary. It is rather vague to me just what the relevance of that entry is here, or how it could be shown in that fashion.
THE PRESIDENT: Is it long?
MR. DODD: Not very long, no. from 54 to 61. We are only informed that 54 is the record of Goering's testimony before this Tribunal, and so on, the record of so and so before the Tribunal; three excerpts from Goering testimony and four from the statements of Lt. Brady Bryson, made in connection with the prosecution's presentation of the case against the defendant Schacht. I, of course simply say that it is unecessary to have these translated or do anything more than refer to them They are already in the record, and I don't know just what Dr. Frick has in mind. I have no objection, of course, to his reference to them or any other such use as he may properly make.
THE PRESIDENT: Are those excepts long ?
MR. DODD: Well, I don't know. It is just a matter of copying them over again from the record. They are already in the record of this Court.
THE PRESIDENT: Yes.
MR. DODD: You see, if Your Honor pleases, I don't have them before me.
That amounts to our view on the applications of Dr. Schacht's counsel at this time. If there are any questions , I should be glad to answer them. I haven't gone into much detail here.
THE PRESIDENT: No, that is all right. Dr. Dix can answer now. Yes, Dr. Dix.
DR. DIX: As far as the objections are concerned, raised to Nos. 1 to 6, I agree with Mr. Dodd that these documents are more or less matters of argumentation than evidence.
The fact that prominent persons abroad represented the same views which were the basis for his attitude, even regarding the rearmament, will be referred to by Schacht. He will quote these opinions; and I, too, in my final speech, shall refer to these passages for the purpose of argumentation. If Mr. Dodd says, therefore, that this is not so much evidence as it is argument, then he is right. to the Tribunal as evidence; we are merely arguing--or rather we are talking-about the question whether these documents should be translated, so that if either Schact during his examination quotes them or if I quote then during the presentation of my case,the Tribunal would be in a position to follow the quotation comfortably. We have made the observation that the Tribunal -and this seems fairly obvious--like to see, when documents are being quoted here, that they are put at heir disposal in translation so that they can follow exactly.
Regarding these passages, therefore -- Nos. 1 to 6 -- and, incidentally, the same applies to all the other exhibits contained under No. 18--would it not be possible for me to ask for them to be--correction: I am not asking for then to be admitted in evidence; I an merely recommending that translations should be permitted in everybody's interest, so that in the event of quotation it can be put before the Tribunal. It is merely a question of suitability and comfort. This applies to 1 to 6 and all documents contained under 18.
THE PRESIDENT: Hasn't the Tribunal already ruled that both the document books of Viscount Rothermere and the speech or book of Mr. Paul Boncour are not to be put in evidence and are not to be referred to?
DR. DIX: I only know of an order of the Tribunal concerning those statements regarding the justice or injustice committed through the Versailles Peace Treaty, and that order of the Tribunal we shall of course obey. But the quotation of these passages will not serve the purpose of discussing the justice or injustice connected with the Versailles Treaty. That is neither intended by Schacht nor myself. Only so as to quote an example:
A certain attitude of Schacht's is being used as an indictment by the Prosecution that by supporting rearmament he was wanting and supporting aggression.
That he wants to disprove by referring to the fact that this and the other promiment foreign personality represented the same view and that he couldn't possibly mean to further German aggression by adopting that view. That is only one example. But not at any rate, therefore, so as to give scientific lectures on the justice or the injustice of the Versailles Treaty, which I hadn't intended in any event, since I feel that for such arguments there wouldn't be a favorable reception. I don't propose to make statements which wouldn't be favorably received. May I continue?
I beg to apologize. I have only just heard Mr. Dodd's statements and I have to reply very quickly. I have to get the passages together.
I have noted down that under No. 18, which I have just mentioned, which is the same situation as 1 to 6, that Mr. Dodd is missing the authors. That may be due to the fact that he has only had the index to the document. In the actual documents the sources are quoted.
I now turn to No. 37. It is Schacht's letter to a certain Fraser. The way I understood Mr. Dodd was that he wasn't raising objections but that he wanted to know where the original document is located. Well, it is a letter from Schacht to Fraser, the late president of the First National Bank, so that the original of that letter--if it still exists--would be among Mr. Fraser's things, to which I have no access.
One moment, Mr. President: Schacht--that is to say we--have only a copy, and that copy is signed personally by Schacht. It is a so-called "auto-copy". It is that copy which was deposited in Switzerland during the war, because of its contents. This auto-copy, signed personally by Schacht, is in my possession, and from that originates the copy in the document book. The correction of the wording has been certified by Professor Kraus, so that I think as far as the identification is concerned we have coped with it sufficiently.
Now, so much with No. 37. Then I have made a note regarding No. 34. Just one moment, please. No. 34 is another case where the source is missing. The same applies as before. The source is stated in the document book.
It is the document of German politics which has been used a great deal.
Then there have been objections -
THE PRESIDENT: Dr. Dix, the objection to 34 was not that the original wasn't available but that it was a speech by Hitler which was about rearmament and didn't seem to be relevant.
DR. DIX: Yes, that is correct. Thank you very much, Mr. President.
Mr. Dodd, of course, could not recognize the relevancy of the document. Only Schacht could recognize that, since he alone knew the inner developments. This is a speech of Hitler in which there is a passage which confirmed the slowly developing suspicion on Schacht's part that this policy may be directed towards aggression. It didconfirm the suspicion that Hitler may have been wanting it, and this passage of Hitler's speech of the 20th of February, 1938, backed this suspicion. The whole reflection of his inner conceptions of Hitler and his policy, beginning in 1933 and until distrust started, and as far as preparations for a revolt -- all that in connection with the inner developments is very strongly backed in this speech, which isa milestone in that development. For that reason I think it is proved that it is important evidence. That is document 34.
Then there was 38. That is the article from the "Basler Nachrichte --the Balse News. In my opinion it is an article of the greatest importance and relevancy. At any rate, I shall fight for that document to the very last house and the very last man.
Subject: (a) Before the war; the fight against the war; during the war; the fight and the attempts to bring about an early peace and the fight against a spreading of the war.
Now Schacht, in 1941 -- that is to say, before Russia's entry into the war and before the entry into the war of the United States -- had a conversation with a national economist from the United States, which he didn't recollect until just now, when an acquaintance sent him that article which had appeared in the Basle News of the 14th of January 1944. So he said, "Of course, now I remember. Four years ago, in the spring of 1941, I had talked to a national economist from America, and we had this discussion. The name, unfortunately, he had forgotten. Once more, this conversation shows his efforts as late as 1941 to fight particularly against any spreading of the war and to make plans and make contacts which would serve the purpose which he was aiming at -- particularly the coming into contact with the United States and the men near President Roosevelt.
took place, and we cannot call upon this professor because Schacht has forgotten his name. But it is the professor himself who anonymously is speaking in this edition of the 14th of January 1944.
THE PRESIDENT: What is the nature of the conversation you say is reported in this newspaper?