In order to make it perfectly clear, I will read this question and answer to you again, and I am not concerned with time, I am concerned with your description of the job.
"Question: Let's go into the duties of that job for a moment and see what he was trying to take away from you. Now, there are only two possibilities, as it has been explained to me. If I am wrong, correct me. One would be the preparation for a mobilization, and the other would be the actual taking charge of this in the event of war. Otherwise, the post had no meaning. So the things you resisted his taking away from you, as I see it, was the right to be in charge of the preparation for mobilization, and secondly, the right to control in the event of war."
And you answered, "correct", did you not? to that question that it was correct?
A Yes. Now I wish to say that that difference between Goering and myself had absolutely nothing to do with the conversation of November, and that it was not exactly a difference of opinion between Goering and myself. of 1937, and it was not really a difference of opinion between Goering and myself, because I said right away, "You take over that office as Plenipotentiary for War Economy from me and turn it over to Goering." The War Ministry, von Blomberg, protested against this, not I, I was happy to turn over that office to Goering.
Q Is there anything in writing about that, Dr. Sschacht?
A Your documents which you have submitted here. I would like to ask my counsel to look for these documents and to present them during the re-examination. They have been submitted by the prosecution.
Q Now, isn't it a fact that your controversy with Goering was a controversy of a personal character between you and him for control, and not a controversy as to the question of armament? You both wanted to rearm as rapidly as possible. else, that I should not like to continue. I had had differences of opinion with Goering of factual nature. Now if you say whether it was armament, speed, or expense, I had great difficulties with Goering as far as opinions were concerned. I have never disputed that I wanted to rearm in order to gain equality for Germany, never. I wanted to rearm, Goering intended to go further, and here is one difference which cannot be overlooked.
Q Now I don't want to play upon words, and if you say my reference to it as a personal is a play upon words, you force me to go into what you told us about Goering.
Is it not a fact that you told Major Tilley this?
"Hitler I called an amoral type, but Goering I can only regard as immoral and criminal. By nature endowed with a certain bonhomie which he managed to exploit for his popularity, he was the most egocentric being imaginable. The assumption of political power was for him only a means for personal enrichment and personal good living. The success of others filled him with envy. His greed knew no bounds. His predilection for jewels, gold and finery was unimaginable. He knew no comradeship. Only so long as someone was useful to him was he friends with him, but only on the surface.
"Goering's knowledge in all fields equalled zero, especially in the economic field. Of all the economic matters which Hitler entrusted to him in the autumn of 1936 he had not the faintest notion, though he created an immense official apparatus and misused his powers as lord of all economy most outrageously. In his personal appearance he was so theatrical that you could only compare him with Nero. A lady who had tea with his second wife reported that he appeared at this tea in a sort of Roman toga and sandal studded with jewels, his fingers bedecked with innumerable jeweled rings and generally covered with ornaments, his face painted and his lips rouged."
Did you give that statement to Major Tilley?
Q And you say you had no personal differences with Goering?
A Mr. Justice, You ought not to confuse the different periods of time. I found out about these things later and not at the time of which you speak. That is the year 1936. Goering's complicity in the whole Gestapo set-up? had installed. I said that I tried to intervene against it. I do not dispute that. pecially as long as I do not know exactly what kind of a man he is.
Q All right. Let's take up foreign relations, about which you have made a good deal of complaint here. I think you have testified that in 1937 when you wer doing all of this rearming you did not envisage any kind of a war, is that right?
A That is not correct, what you just said, Mr. Justice. In 1937 I did not do everything to rearm, but from, the fall of 1935, on, I did everything to put the brakes on armament. whether you gave these answers to these questions:
Q "Let me ask you, then, in 1937, what kind of war did you envisage?
A "Never. We might have been attacked, invaded by somebody, but even that I had not expected.
Q "You had not expected. Did you expect a possibility of a mobilization and concentration of economic forces in the event of war?
A "In the event of an attack against Germany, certainly.
Q "Now, putting your mind back to 1937, are you able to say what sort of an attack you were concerned with?
A "I don't know sir.
Q "Did you have thoughts on that at the time?
A "No, never.
Q "Did you then consider that the contingency of war in 1937 was so remote as to be negligible?
A "Yes.
Q "You did?
A "Yes, I have never thought of a conflict with Russia.
Did you give those answers? before this Tribunal.
Q Now, you testified that you tried to divert Hitler's plan which was to move and expand to the East -- you tried to divert his attention to colonies instead.
Q What colonies? You have never specified.
Q And where were they located?
A Oh, what I told Hitler? I told Hitler we should try to get back a part of the colonies which belonged to us and the administration of which was taken away from us, so that we could work there.
Q What colonies? the future of Germany?
A Not those, but generally, colonial activity; and of course, first I limited my requests for colonies; I could only limit my request for colonies to our prop
A Not I personally called then that. That is what the Treaty of Versailles calls them. for the sort of Germany you had in mind creating.
A If you would like to replace the word "exploitation" by "development" I believe there will be no misunderstanding, and so far I agree with you.
Q Well, by "development" you mean trading, and I suppose you expected to make a profit out of trade.
the natural existing economic possibilities of the colonies, to have those developed. colonies instead of relying on expansion to the East. complete nonsense. was a necessary condition of the kind of Germany you wanted to create. thing toward the East; only colonial development was the solution.
Q And you proposed as a matter of policy that Germany's development should depend on colonies, as to which there was no overland trade route with Germany and which you knew would require naval power to protect?
A I don't think that -- how do you get that idea?
Q You don't get to Africa overland; you have to go by water at some point.
Q You were thinking only of air developments?
A No, no. I think of ships also.
Q Yes. And Germany was not then a naval power. power to protect the trade routes to the colonies you were proposing?
Q Then your plan was to leave the trade route unprotected?
A Oh, no. I believed that international law would be sufficient protection.
developments.
A Oh, no. I have explained here that he gave me the order in summer, 1936, upon my request to take up these colonial matters. Schacht?
"Question: In other words, at the time of your talks with Hitler, in 1931 and 1932, concerning colonial policy, you did not find him, shall we say, enthusiastic, about the possibility?
"Answer: Not enthusiastic, and not very much interested.
"Question: But he expressed to you what his views were alternatively to the possibility of obtaining colonies?
"Answer: No, we didn't go into other alternatives."
Did you give those answers? was not intent upon preserving the peace of Europe by all possible means. was an important factor in his Eastern policy.
A Well, one may express it that way. I don't know exactly what you mean by it.
Q Well, don't answer anything if you don't know what I mean, because we will make it clear as we go along. Except for the suggestion of colonies you proposed no other alternative to his plan of expansion to the East. alternative. answers:
"Question: Actually Hitler did not use the precise method that you say you favored?
"Answer: Not at all "Question:
Did you favor the method that he did employ?
"Answer: Not at all, sir.
"Question: What was there in his method that you didn't like?
"Answer: Oh, it was simply overrunning, just taking, the Austrians over the head -- or what do you call it? It was force, and I have never been in favor of such force."
Did you give those answers?
Q. Now, you have made considerable complaint here that foreigners didn't come to your support at various times in your efforts to block Hitler, have you not?
A. Certainly.
Q. You knew at the time of the Austrian Anschluss the attitude of the United States towards the Nazi regime, didn't you, as expressed by President Roosevelt?
A. Yes.
Q. And you knew of his speech suggesting that the Nazi menace ought to be quarantined to prevent its spread?
A. I don't remember, but I most certainly must have read it at that time. If that speech was published in Germany, then I must have read it.
Q. Goebbels let loose a campaign of attack on the President as a result of it, didn't he?
A. I assume that I read it.
Q. As a matter of fact, you jointed in the attack on foreigners who were criticizing the methods, didn't you?
A. When and where? Which attack?
Q. All right. After the Austrian Anschluss, when force was used, with your disapproval, you immediately went in and took over the Austrial National Bank, didn't you?
A. That was my duty.
Q. Yes. Well, you did it.
A. Of course.
Q. And you liquidated it for the account of the Reich.
A. Not liquidated; I merged it.
Q. All right.
A. Amalgamated.
Q. Amalgamated it. And you took over the personnel.
A. Everything.
Q. Yes. And the decree doing so was signed by you.
A. Certainly.
Q. Yes. And you called the employees together on the 21st day of March 1938.
A. Yes.
Q. And made a speech to them.
A. Yes.
Q. And did you use this language among others -
A. Certainly.
Q. Well, you haven't heard it yet.
A. Yes, we heard it during the case of the Prosecution.
Q. Well, I would like to quote some of it to you and remind you of it.
"I think it is quite useful if we recall these things to our mind in order to expose all the sanctimonious hypocrisy exuding from the foreign press. Thank God, these things could after all not hinder the great German people on their way, for Adolf Hitler has created a communion of German will and German thought; he holstered it up with the newly strengthened Wehrmacht, and he then finally gave the external form to the inner union between Germany and Austria.
"I am known for sometimes expressing thoughts which give offense and there I would not like to depart from this custom."
"Hilarity" is noted at that point in your speech.
"I know that there are even here in this country a few people -- I believe they are not too numerous -- who find fault with the events of the last few days. But nobody, I believe, doubts the goal and it should be said to all gramblers that you can't satisfy everybody. One person says he would have done it maybe in one way, but the remarkable thing is that they did not do it" -and in parentheses there appears the word "hilarity". Continuing with your speech," -- that it was only done by our Adolf Hitler (Long continued applause) and if there is still something left to be improved, then those grumblers should try to bring about these improvements from the German Reich and within the German community, but not to disturb it from without."
Did you use that language?
A. Yes.
Q. In other words, you publicly ridiculed those who were complaining of the methods, didn't you?
A. If that's the way you see it.
Q. Then, you also, in addressing the personnel of the Austrian National Bank which you were taking over, said this:
"I consider it completely impossible that even a single person will find his future with us who is not wholeheartedly for Adolf Hitler. (Strong continue applause; shouts of Sieg Heil)" Continuing with the speech:
"Whoever does not do so had better withdraw from our circle of his own accord. (Stormy applause)."
Is that what happened?
A. Yes, they all agreed.
Q. Now, had the Reichsbank, before 1933 and 1934, been a political institution?
A. No.
Q. Had politics been in the Reichsbank?
A. Never.
Q. Well, on this day, speaking to its employees, you said this, did you not:
"The Reichsbank will always be nothing but National Socialist, or I shall cease to be its manager. (Heavy, protracted applause)" Did that happen?
A. Yes.
Q. Now, sir, you have said that you never took the oath to Hitler.
A. Yes.
Q. I ask you if this is what you, as head of the Reichsbank, required of your employees who you were taking over in Austria, and I quote:
"Now I shall ask you to rise. (The audience rises.) Today we pledge allegiance to the great Reichsbank family, to the great German community; we pledge allegiance to our newly arisen, powerful Greater German Reich, and we sum up all these sentiments in the allegiance to the man who has brought about all this transformation. I ask you to raise your hands and to repeat after me:
"I swear that I will be faithful and obedient to the Fuehrer of the German Reich and the German people, Adolf Hitler, and will perform my duties conscientiously and selflessly.
(The audience takes the pledge with uplifted hands.)
"You have taken this pledge. A scoundrel he who breaks it. To our Fuehrer a triple 'Sieg Heil'."
Is that a correct representation of what took place?
A. The oath was the required civil service oath and it was quite according to that which I said yesterday, that the oath was given to the head of the state, as I explained before. "We stand united for the German people" -- I don't know exactly what the expression was, just the same thing you said in that oath.
Q. I have referred to EC-297, United States Exhibit 632 in the course of this. That is the exhibit I have been using. Hitler?
A. Yes. One cannot take a visible oath to an idea. Therefore, one has to use a person. But I said yesterday that I did not take an oath on Ebert or Hindenburg or the Kaiser personally, but on the head of state as representa tive of the people.
Q. You told your employees that all of the sentiments of this oath were summed up in the allegiance to the man, didn't you?
A. No.
Q. Isn't that what you said?
A. No. Don't you want to read it again? It does not mean the man, but the leader. That is the head of the state.
Q. Well, no matter what you took the oath to -
A. (Interposing) Excuse me. There is a great difference.
Q. Well, we'll get to that. Whatever you took the oath to, you were breaking it at the very time, were you not?
A. No. I never broke the oath to this man as representative of the German people, but I broke the oath when I found out that that man was a criminal.
Q. When you plotted to cause his death?
A. Yes.
Q. Do you want to explain to the Tribunal how you could cause the death of ADolf Hitler without also causing the death of the head of the German State?
A. There is no difference, because unfortunately that man was the head fo the German nation.
Q. You say you never broke the oath?
A. I don't know what you want to express by that. Certainly I did not keep the oath which I took to Hitler, because Hitler himself was a criminal who did not keep his word, and there was no other head of state. I don't know what you want to say, but I did not keep my oath to him and I am proud of it.
Q. So you were administering to your employees an oath which at that moment you were breaking and intending to break?
A. Again you confuse different periods of time. That was during a time im March '38 when, as you have heard before, I still had my dounts, and therefore it was not clear in my mind just exactly what kind of a man Hitler was. Only when in the course of 1938 I found out that Hitler was eventually walking into a war, did I break the oath.
Q. When did you gind him walking into a war?
A. When, in the course of the year 1938, by and by, judging from the events, I could assume that eventually Hitler would steer into a war, that is to say, intentionally. Then only did I break my oath.
Q. Well, you stated yesterday that you started to savotage the government in 1936 and '37.
A. Yes, because I did not want excessive armament.
Q. Yes. And you were administering -
A. (Interposing) Excuse me. Because I did not want excessive armament.
Q. And we find you administering an oath to the employees to be faithful and obedient.
Now, I ask you if you didn't make this statement in interrogation:
"Question: But you make this statement at the end of the oath, after everybody had raised his hand and made his oath. Did you way the following, 'You have expressed this oath.
A bad fellow who breaks it.'?
"Answer: Yes, I agree to that and I must say that I myself broke it.
"Question: Do you also say that at the time that you urged this upon the audience that you already were breaking it?
"Answer: I am sorry to say that internally I was very shaken in my loyalty already at that time, but I hoped that things would turn out well at the end."
A I am glad that you quote this. I am glad that you have quoted that because it confirmed clearly what I have just said; that I was in a state of doubt and that I still had some hope that everything would come out all right; that is to say, that Hitler would develop into the right direction, so it confirms exactly what I have just said. Schacht. truth, Mr. Justice. of course? the date? been issued began to become due, didn't they, in 1938 and 1939? been due at the earliest in June 1939. They only had been issued for five years and I assume that the first of these notes were issued in the Spring of 1934, so that the first one became due in the Spring of 1939.
Q Well, this is the question and answer. You correct. me if I am wrong.
"Q Well, did you in the Reichsbank utilize funds which were available?
Let me put it this way: As these MEFO bills became due, what did you do about them?
"A I asked the Minister of Finance whether he could some in 1938 or 1939, I think.
The first MEFO bills would have come to repayment and of course he said 'I can't'." You had that conversation with the Finance Minister while you were still president of the Reichsbank?
A Mr. Justice, you can be sure that you will understand that from the entire financial problem, we became worried as to whether we would got our bills paid or not; that is, our bonds, and I have explained to the Tribunal already that in the second half of the year 1938, the Finance Minister got into difficulties and he came to me in order to borrow funds; therefore, I told him "Listen, in what kind of a situation did you get? You will soon have to repay the first MEFO bills to us. Aren't you prepared for that?" And, now, it turned out that was in the Fall of 1938 that the Reich Finance Minister had not made any preparations in order to meet the payment of the MEFO bills and that, in the Fall of 1938, made the connection between the Reich Finance Minister and the Reichsbank extremely difficult.
Q Now, taxes didn't yield any sufficient revenue to discharge those bills, did it?
A Yes; I have explained yesterday already that risk which was in the MEFO bills, which I had admitted from the very beginning, that that was not really a risk connected with a reasonable finance policy; that is, from the year 1938, one would have not continued to arm and make unnecessary expenses but if, instead, one would have used money received from bonds and taxes for the repayment of the MEFO bills.
Q All I am asking you at the present moment, Dr. Schacht, is that these bills could not be paid out of the revenue from taxes.
Q They could have? but they were not repaid, but the money was used to continue rearming. May I say one more thing to explain it to you better and to inform you better? concerned with what kind of moss you were in.
Q The MEFO bills were due and could not be paid?
Q They were shortly to mature?
A Yes, but they could have been paid. That is a mistake if you say that they could not be paid.
Q Well, they couldn't be paid out of the current year's taxes, could they?
A Yes, indeed. You are not interested and don't want me to tell you, but I am quite ready to explain it. had produced unsatisfactory results, hadn't they?
A No, very little success. The capital market was not good. a shortage in the public subscription?
Q And the result had been unsatisfactory?
Q Now, did you not make this answer to the interrogator's question:
"Q But I am asking you whether during that period continue to finance armaments?
"A Sir, either these MEFO bills had to be refunded no money to do it, and I couldn't procure any money for course, I continued."
Did you give that answer? did not have the funds for repayment of the MEFO bills. He didn't use them for that purpose but for rearmaments.
If he had used this means to pay the MEFO bills, everything would have been all right. continue the plans of rearmament after 1938, didn't you?
A Mr. Justice, since I was like that, a large part of the MEFO bills was already in the open market, the money market and capital market. If that market, now, from the part of the government was too heavily taxed, when the people brought the MEFO bills to the Reichsbank and the Reichsbank had promised to cash them, that was the great obstruction to my policies by the policy of the Reich Finance Minister, which was based on the fact that the Reich Finance Minister financed armament instead, as he had promised to cash the MEFO bills. would result in your retirement from the Reichsbank?
Q Now, we come to Czechoslovakia. Did you favor the policy of acquiring the Sudetenland by threat of resort to arms? acquired as wrong and reprehensible.
A I don't know when I could have done that. I said that the Allied politics made the donation of the Sudetenland to Hitler, whereas I always had expected that the Sudeten Germans would get autonomy.
Q Then you approved of Hitler's policy in handling the Sudetenland situation? Is that what you want to be understood as saying? anything else. Allies, as I understand you?
A No, that also applies to the Caechs and maybe the Germans; I don't know; I certainly don't want to be the judge here. didn't make these replies to questions:
"Q Now, I am coming back to the march against Czechoslovakia which "A Yes.
"Q Did you at that time favor the policy of acquiring the Sudetenland?
"A No.
"Q Did you favor at that time the policy of threatening or menacing the Czechs by force of arms, so as to acquire the Sudetenland?
"A No, certainly not.
"Q Then I ask you, did it strike you at that time or did it come to the Czechs, was the Wehrmacht and the armament industry?
"A He could not have done it without the Wehmacht." Did you give those answers?
Q Continuing:
"Q Did you consider the manner in which he handled the Sudeten question, wrong or reprehensible?
"A Yes.
"Q You did?
"A Yes, sir.
"Q And did you have a feeling at that time, looking back on the in part an army of your own creation?
Did that ever strike you?
"A I cannot deny that, sir." with it, didn't you?
A How can you say such a thing? I could not know, I did not know that Hitler would need the army in order to threaten other nations. didn't you? territory, didn't you?
A But excuse me. He did not take it with violence. The Allies have given it to him. That had all been set led peacefully. and what part you played in the Wehrmacht.
Q No. What I mean is this, referring to your interrogation of the 17th of October.
"Q Now, after the Sudetenland was taken over by the Munich Sudeten territory?
"A I think we took over the affiliations of the Czech Bank of