development which took place after the Treaty of Versailles. I mentioned only briefly that by the separation of German property abroad, the entire organization for German foreign trade was taken away and therefore great difficulties arose for German export. payment of reparations or any such payments. Nevertheless, all great powers, particularly those who were in competition with Germany throughout the rest of the world, resorted to increase of tariffs in order to exclude German merchandise from their markets or to create more difficulties for Germany's sales, so the opportunity to sponsor German export was diminished more and more. with lower wages, to maintain her export or to increase her export, the other powers resorted to different means in order to meet German competition, and I remind you that the various devaluations of foreign currency took place, which reduced the possibility of competition by German products. When that was not sufficient, the system of quotas was invented, which is to say that German goods which were imported to a country could not go beyond a certain quota; that was prohibited. Such quotas of German imports were established by Holland, France, and other nations, so here also German export was made increasingly difficult. could not pay private debts abroad anymore. As you have heard here, for many years I had warned against these debts. I was not listened to, however, and it may be interesting to state here briefly that Germany, against my advice, within five years had as many debts in other countries as the United States throughout 40 years before the First World War.
needed foreign money, and Germany at that time was active in colonial development and could make good use of foreign capital.
Now, however, came the last point. When we were no longer able to pay our interests abroad, some of the countries resorted to the method of not returning the amounts which Germany was supposed to receive for exports, but confiscated these funds, and from these funds our debts abroad were to be paid, that is, so to say, to be accounted for. That was the so-called clearing arrangement. The private assets were confiscated in order to satisfy the demands of foreign creditors. would make German export possible, and I established a simple principle which was, "I will only buy where people also buy from me." Therefore, I looked around for countries which were prepares to cover their needs in Germany, and I was prepared to buy merchandise there.
THE PRESIDENT: I don't know what we have got to do with this Dr. Dix.
BY DR. DIX: had nothing to do with it? of German economic production was armament production? that time I wasnot able to answer it because I could not recall as to what amounts Germany expended for armament. Now, we have here -- by the testimony of Field Marshal Keitel, we have heard that armament expenditures during 1934 - 1934, 1935 - 1936, 1937 and so on, during these years as long as the Reichsbank was still cooperating, amounted to five billions of marks and the next year, seven billions of marks and the next year, nine billions of marks, and that is an estimate which scientists have established. The total of the entire German economy during these years could be estimated as fifty to sixty billions of marks, approximately, and if I put that in relation to the armament expenditures, which have been stated here and in witness interrogations, then we find that armament expenditures amounted to about ten to fifteen per cent of the entire German economy during the years in which I had anything to do with it. your readiness, lack of readiness, to turn over the office of plenipotentiary for the war economy, and in order to prove your statement that General von Blomberg did not desire that you turn over that office, you have referred to a document which has been submitted by the prosecution. I am referring to document EC 244 and that is a letter by the Reich Minister von Blomberg to Hitler, of the 22nd of February, 1937. It has already been read so I do not have to do so, and may I only point out that in the last paragraph Blomberg expressed his desire and wish that the Fuehrer would direct or cause the Reichsbank president to remain in office, so that covers the statement made by Schacht. Furthermore, in the course of cross examination by Justice Jackson, mention was made of your credibility concerning colonial aspirations and from a different point of view of colonial politics without naval power -there was no naval power; Germany had no naval power -- can Germany discuss naval problems?
That was the question and answer; and in that connection, I would like to ask you: Did Germany have colonies before 1914?
Q Before? properties, did Germany have naval power in relation to Great Britain?
Q That covers it. Then there is another problem fromthe point of view of the credibility of your statements; mention has been made about the question of the ethical conflicts concerning the oath to Hitler, as you say, as head of state, and the intentions which you have manifested to overthrow Hitler, even to kill him. Of past history, don't you know of many cases where high officials of a state attempted to overthrow the head of a state to whom they had sworn an oath?
THE PRESIDENT: Dr. Dix, we aren't concerned with past history, are we?
You don't think the question of whether there are historical instances, is a legitimate question to pub to this witness?
DR. DIX: Then I will not pursue that point any longer; it is more argumentation and maybe I can use it later.
Q Now, returning to the question of colonies, isn't it correct that aside from your personal colonial aspirations, Germany within the German Reich government had prepared officially the qcquisition of colonies and later the administration and wasn't there a political office until 1942 or 1943 or thereabouts? nial demands are part of the Party program, Of course, also the Foreign Office has concerned itself with it and I believe also in the Party.
Q There was a colonial political office under Ritter von Epp? more in conclusion, did you want to express that the MEFO drafts should serve to put the brakes on rearmament because the signature of the Reich was typing up a means of the Reich government for repayment? MEFO bills was for five years and the date of maturity after five years necessary had to put brakes on armament automatically at that time.
Q Furthermore, Justice Jackson dealth with the subject "that the name of Schacht when he retained the office as minister without port folio, had propagandistic results in favor of the Nazi regime abroad and therefore served the Nazi regime," In this connection and in order to abbreviate and to shorten the presentation of my documents, may I read from my document, Exhibit 37; that is in the English text on page 157 and the German text 149, and the fifth page of that Huelse affidavit says:
"The foreign press drew from the dismissal" --that is, the dismissal of the Reichsbank President in 1939 -- " the correct conclusions and interpreted it as a warning signal. In that sense in repeated conversations, even at the end of 1938, and in agreement with Dr. Schacht, I had spoken with representatives of foreign issuing banks, whom I had met at board meetings of the Bank for International Payment and I informed them that the resignation of Schacht and the individual members of the Reichsbank Directorate would mean that things in Germany were following a dangerous path."
Schacht of the fact that in the biography of Reuter it is stated expressly that Schacht assisted the regime in the stage of struggle for power. That is the substance of it. That is true, as it occurred in Reuter's notes, but there is something else, and I believe we still have to submit that Exhibit 35, page 124 of the English text and 125 of the German text, and there we find on the second page of that long affidavit the following sentence which shows its limited value of that biography as a source of information. Reuter says in this affidavit, and I quote: "I had a biography of Dr. Schacht published twice, first at the end of 1933 by the R. KITTLER Publishing house in Berlin, and at the end of 1936 by the German Publishing Institute in Stuttgart. Besides a factual presentation of his life and his work, it also served the purpose to shield him from his attackers. Therefore the principles of purely objective historical research work, are not applicable to these publications, because defensive views required by the situation of the respective period had to be taken into consideration," One has to know and read if on wants to consider the value as evidence of that biography. And that concludes my questions.
THE PRESIDENT: The defendant can then retire.
DR. DIX: I come now to the witness Vocke. BY THE PRESIDENT:
Q. Will you state your full name?
A. Wilhelm Vocke.
Q. Will you repeat this oath after me: the pure truth, and will withhold and add nothing.
(The witness repeated the oath.)
THE PRESIDENT: You may sit down. BY DR. DIX:
Q. Mr. Vocke, you were a member of the Directorate of the Reichsbank. When did you enter the Reichsbank Directorate, and when did you resign from it?
A. Reichspresident Ebert, in 1919, appointed me a member of the Reichsbank Directorate, and Hitler, on the 1st of February 1939, dismissed me from office. Therefore, I was about 20 years a member of the Reichsbank Directorate, and of these, about ten years under Schacht.
Q. Excuse me, but I have to ask you, were you a member of the Party?
A. No.
Q. Were you a member of the SA?
A. No.
Q. Were you a member of the SS?
A. No.
Q. Were you a sponsoring member of the SA or SS?
A. No
Q. You had no connection with the Party?
A. No.
Q. When did you meet Schacht?
A. In 1915. At that time I made his acquaintance, but only later when he became Reichsbank Kommissar and Reichsbank President, I came to know him better.
Q. I come now to the period of the First Reichsbank presidency of Schacht, that is, the year 1923. What was at that time the attitude of the Reichsbank Directorate to the candidacy of Schacht as Reichsbank President?
A. An attitude of disapproval.
Q. And for what reason?
A. The reasons were -
Q. Would you please make a pause after my question?
A. We had desired Helferich as candidate for president of the Reichsbank, because Helferich, in close cooperation with the Reichsbank, had created the Rentenmark and stabilization of currency. out of the file of Schacht, which referred to his activity under Herr von Jung in 1915. That was referring to the fact that Schacht, who had come from the Dresdner Bank, had rendered an assistance which von Jung did not consider quite correct, and therefore he had dismissed Schacht at that time. against Schacht, but Minister Severing stuck to the words, "It is not the wrost fruit which is eaten by worms," and Schacht was appointed president.
Q. So that Schacht came to you as President, and he must have known that the Directorate did not want him, or at least wanted somebody else. Therefore, I assume the question is in order as to what the relations were between that group of men, that is, the Reichs Bank Directorate, and the new President.
A. Schacht started in his office in January 1924. He called a meeting of all of us in which he spoke very frankly about the situation, and this was the substance of what he said:
"Now, you all have disapproved of me as President because I stole silver spoons, but now I am your President, and I hope that we will work together, and we will get everything straightened out."
That was the expression used by Schacht. "However, if the one or the other should not find himself able to comply and to cooperate with me, well, then he will have to assume the consequences, and I will gladly assist him to find another position."
itself very favorable. It was very good to work with Schacht. We recognized soon that he was a master in his and our field, and also in other respects his conduct was beyond reproach. He was clean, and there was no favoritism. He did not bring any favorites with him whom he wanted to sponsor. He also was a man who at all times tolerated controversy and differences of opinion, and even sponsored that. He did not appreciate assistants who were "yes men."
THE PRESIDENT: There is neither any charge nor any issue about this.
DR. DIX: That is quite correct, your Lordship, but I thought it would be helpful to touch those things, but we are now at the end, and will come to the Reichsbank presidency from 1933 on. BY DR. DIX:
Q. After the ansence of Schacht in 1933, he again became President of the Reichsbank. Did you have any conversations with him about his relations to Hitler and to the Party at all?
Q Would you like to describe to the Tribunal what Schacht's statements were to you? most literally. During the period when Schacht was not in office, about three years, I hardly ever saw him, maybe three or four times at occasions of the Wilhelmstift. He never visited me. Neither did I visit him, with the exception of one time. Schacht came into the bankmaybe he had some business there-- and he visited me in my office.
Q When was that? of power. We immediately came to speak about political questions and his relation to Hitler. I used that opportunity to warn Schacht seriously against Hitler and the Nazis. Schacht said to me, "Mr. Vocke, one has to give them a c chance, these people. If they are no good, they will disappear. They will be wiped away such as their predecessors were."
I told Schacht, "Yes, but it is also possible that the damage which will occur in the meantime for the German people will be so tremendous that it can never be repaired." "You are an old pessimist or the like, he left." after Schacht's re-entry into the Bank. That was probably during March 1933, or the beginning of April. Schacht at that time showed an ostentatious enthusiasm and I talked to him about his relation to the Party. I assumed that Schacht wa a member of the Party. I told him that I had not the intention to become a mem ber of the Party, and Schacht said to me, "You don't have to. You are not supposed to. What do you think? I wouldn't think even in my dreams of becoming a member of the Party. What do you think? I should accept the Party Program, the Party discipline? And then, think of it, when I speak to Hitler I should click my heels and say 'Mein Fuehrer', or when I write to him 'Mein Fuehrer' that is quite out of the question for me. I am and remain a free man."
he was on the climax of his approach to Hitler, and many a time I thought about it, whether it was true, and remained true, that Schacht was a free man. bitter experience that he had lost a great deal of his liberty, of his freedom that the financing of armament, which he had started, he could not stop at the moment when he desired to do so; and that it had become a chain in the hands of Hitler on which he could have filed for years until it broke. cerned the inner attitude of Schacht toward Hitler. Schacht never was a blind follower. It was incompatible with his character, with his nature, to sign himself over to somebody, or sell himself and be devoted blindly to somebody.
If one would like to characterize Schacht's relations, that he said "Fuehrer, your command, I follow; the Fuehrer commands to finance armament," he woul have said "I finance armament and the Fuehrer may decide to what use to put it, whether for peace or war." That was incompatible with Schacht's attitude and character. He was not a man who thought along Subaltern lines or who would thro away his liberty, and that distinguished Schacht fundamentally from a great man rather high political and military positions in Germany.
Schacht's relation, such as I came to know it from his character and from his statements, I would like to describe in the following manner: Schacht admired the tremendous dynamism of that man, which he found in the national field, and he put that man on his account, and he hoped to find a tool in him for his own plans, Schacht's plans, for a peaceful political and economic reconstruction and strengthening of Germany. statements made by Schacht. him, Schacht, to finance armament for an aggressive war. You, Mr. Vocke, were a member of the Reichsbank directorate and through out the years you have worked with him. Therefore, I ask you to tell the Tribunal whether, from conversations or observations of the activity and the work of Dr. Schacht, you could state anything which would justify such a reproach.
A No. Schacht has often emphasized that only a peaceful development could bring Germany back, and never have I heard an intimation made by him that he knew anything about war-like intentions of Hitler. I have tried to remember and have found in my memory three or four incidents which would answer that question quite clearly. I should like to bring them up in this connection. 1933. Luther, when the coverage by the Reichsbank was brought down--
DR. DIX: I may interrupt for the information of the Tribunal. Luther was a predecessor Schacht in office. had sent me to England in his despair in order to acquire a large credit in gold from the Bank of England which would re-establish confidence in the Reichsbank. Governor Norman was quite prepared to help me, but he said that it would be necessary for that purpose also to approach the Federal Reserve Bank of New York, the Bank of France, and the International Bank in Basle. That happened, and the credit amounted to 420 million gold marks, but the inclusion of the Bank de France created political difficulties which delayed that credit for about ten or twelve days.
part of the credit had already been used up. The gold was torn out of our hands, and I told Luther, "That credit has lost its usefulness, and we have to repay it immediately. Our honor is our last asset. The banks which have helped us shall not lose a single pfennig." in substance, "What one has, one has. We do not know for what purpose we may still need that gold very urgently." And so that credit was carried through the years. going to understand this, and he understood me immediately, and he agreed with me immediately, without further hesitation, he repaid that credit. He had no other thought as to what purpose one could use that tremendous amount of gold, and I told myself that if Schacht had known of plans for a war, he would have been a fool to pay back the 420,000,000 of gold marks.
but I believe in 1936. At that time, the Reichsbank received a letter from the Commander of the Army or the General Staff, Top Secret, with the request to list the gold reserves of the Reichsbank and to remove them from the areas at the edge of Germany to a zone in the interior. The reasons given were the following: In case of a threatening two front attack on Germany, the command of the Army was still determined to evacuate the outward areas and to limit itself to a central zone which had to be defended under all circumstances. I still remember from the map which was attacked to the letter that the line of defense in the east-
THE PRESIDENT: It seems to the Tribunal that this is
DR. DIZ: Your Lordship, on that map which the witness
THE PRESIDENT: At what time?
DR. DIX: 1936. I only understood him to say-- Maybe have been about 1936, in my estimation.
DR. DIX: I believe that it is quite relevant. May the witness continue?
THE PRESIDENT: Yes. up to Stettin; The western line I can not remember quite clearly, but Baden and the Rhineland were outside of it. the threat of a two front attack on Germany, about the tremendous sacrifice of German territory, and about the idea that the Reichs bank, in the event of an occupation by the enemy, would have to leave these territories without any financial support.
Therefore, we refused that request, but, so far as the gold was concerned, we placed it in Berlin, Munich, Nurnberg, and so on. top secret document, about the defensive character of our armaments and preparations.
I come to a third incident. That was in 1937. At that time Schacht, when the economy was running smoothly already but more and more money had to be put in, asked for the support of the German professors, national economists, and asked them to a meeting in order to make them cooperate in a creative way. On that occasion, a participant asked the question of Schacht, "What will happen if a ar breaks out?" Schacht got up and said, "Gentlemen, then we are through. Then all is over, and I should like you not to talk about this anymore because we could not speak about that now." will show Schacht's attitude. That was a conversation immediately after the outbreak of the war during the first few days. Schacht, Huelse, Dreise, Schniewind and I met for a confidential conversation. The first thing that Schacht said was, "Gentlemen, that is a fraud such as the world has never seen before. The Poles have never received the German ultimatum. The newspapers are lying in order to deceive the German people. The Poles have been invaded, attacked. Henderson did not even receive the ultimatum, but only a short excerpt from the note and that orally. If at any time at the beginning of a war, the question of guilt was clear, then it is so in this case. That is a crime such as one can not think of a worse one."
Then Schacht continued, "What an act of insanity to start a war with a military power like Poland, which is led by the best French general staff officers. Our armament is no good. It is made without sense and plan. Money has just been wasted."
Then Schacht received the answer, "But we have an air force, which is something." Schacht said, "The air force does not decide a war, but only the ground forces. we have no heavy cannon, no tanks; in three weeks the German armies in Poland will bog down, and then think of the coalition against us."
Those were Schacht's words, which made a deep impression on me, and which for me are a definite and clear answer to the question which Dr. Dix has put to me.
Q Now, in the course of these years from '33 to '39, did Schacht ever speak to you about alleged or assumed war plans of Hitler?
Q What was Schacht's attitude to the thought of a war; did he ever mention that to you?
A Yes, of course, quite often. Schacht always emphasized that war destroys both the victor and the victim and, in his and our field, he emphasized the example of the victorious powers whose economy and currency had been devaluated. England had to devaluate its currency; in France there was a complete corruption of finances, not to speak of other powers, such as Belgium, Poland, Roumania, and Czechoslovakia.
Q These were statements by Schacht?
A Yes, Schacht, which he made quite frequently. All the more, Schacht emphasized the situation in neutral countries. Schacht pointed out, again and again, "There will be conflicts and war again, but for Germany there is only one policy, absolute neutrality," And he brought up the example of Switzerland, Sweden, and so on, who by their neutral attitude had become rich and powerful, and Schacht also emphasized that strongly. explain then or, rather, how did Schacht explain to you that he at all financed armament? which existed in every country, in every nation of the world, was also necessary for Germany for political.
Q May I interrupt you. I want you to state only those facts which Schacht told you, not your opinions about what Schacht may have thought, but only what Schacht actually said to you.
A Yes, Schacht said, "A foreign policy without armament is impossible in a long run." Schacht also said, neutrality, which he demanded for Germany in case of conflict between largo powers, had to be an armed neutrality. Schacht considered armament necessary because, otherwise, Germany would be continuously powerless among armed nations. He did not think of a certain definite attack from any side, but he said, "In every country there is a war party which may come to power today or tomorrow and a completely helpless Germany, surrounded by other nations, is impossible.
It is, in fact, a danger for peace because it is an opportunity." revitalize German economy as a whole. The building industry, which is the backbone of economy, should be revitalized, and only in that way unemployment could be tackled. Rhineland, and did you have conversations with Schacht concerning the fact that this kind of policy of Hitler, such as it continued, could possibly lead to a war, at least an armed intervention by other nations which did not approve of such policies? Did you ever have such conversations; were there any such conversations between you and Schacht?
A Not in the sense of your question. Schacht did speak to me about the incidents at the occasion of the reoccupation of the Rhineland; and that is to say, he explained to me that at that time Hitler, as soon as France assumed a menacing attitude, was determined to withdraw his occupation forces; that Hitler was only stopped by von Neurath, who told me: "I was against that stop but, after you've done it, you've got to stand for it." What Schacht told me at that time about Hitler's attitude was anything rather than that Hitler appeared to be eager for war. Schacht also felt, as he told me, that the friendship with Poland and Hitler's policy during the first years, also with respect to Alsace-Lorraine, were peaceful policies. Later, only, he had objections in foreign political respects.
Q What were Schacht's principles in the way of foreign policy and in connection with his attitude to Hitler's foreign policy? gained influence on foreign politics, in whom Schacht saw the most incapable and irresponsible advisor of Hitler, but before that already there were serious differences of opinion between Schacht and Hitler's foreign policies.
For instance, towards Russia, Schacht already during '28 and '29, had reconstructed his connections with Russia by long termed credits and he has often been attacked on account of it; but he said, "I know what I'm doing.
I also know that the Russians are going to pay punctually and correctly. They have always done it." And Schacht was very angry and unhappy when the attacks of Hitler to that policy spoiled business with Russia and stopped it. of business with China and was just about to develop it to a large extent when Hitler, by his choice of Japan and the withdrawal of German advisors to Chiang-Kai-Chek, here also destroyed all of Schacht's plans. Schacht saw a very serious and very fateful mistake in that and said that Japan would never be able or willing to substitute for the business with China. States, with England, and with France. Schacht admired Roosevelt and he was proud that Roosevelt, through the diplomatic doctrine, was maintained in connection with him. Schacht was convinced of the necessity to maintain good relations, sound relations, with England and France, and just for that reason he seriously disapproved of the fact that Ribbentrop was sent to London.
Schacht was against Hitler's policy towards Italy. He knew that Mussolini didn't want to have anything to do with that, and he considered him the most unreliable and the weakest partner. heard about his murder with indignation. And then, after the occupation of Austria, he disapproved of much which happened there.
May I, in that connection, speak briefly about Schacht's colonial policy, which was a sort of hobby-horse of Schacht's and about which he once made a speech? I may illustrate Schacht's opinions by stating orders which I received from him. Schacht's ideas were to make an arrangement with the powers, England, France, and so on. To achieve that they should purchase part of the Portuguese colonies in Angola and give them to Germany for its economicuse, and he presents experts' opinions-
THE PRESIDENT: The Tribunal thinks that this is being given in far too great length. BY DR. DIX:
Q Well, we can leave out the individual examples. The late Fieldmarshal Blomberg has made a statement to the effect that the Reichsbank received every year written information about the state of rearmament. Do you, who were a member of the directorate, know anything about this information? your experience about the attitude of Schacht to his assistants, do you consider it possible that Schacht personally received that information, but did not tell any of his assistants of the Reichsbank Directorate about it? thereby rearmament; and, if he has tried it and if you can affirm it, what were his reasons? believe, around '36, when economy was running fully and further armament looked like a spiral without end. The Reichsbank was locked and, I believe, in '36, Schacht started with serious attempts to put an end to armament on his part. consisted?
A These attempts went on through the following years: First, Schacht tried to influence Hitler and had to find out that this was useless. His influence was decreasing as soon as he made any such attempt. He tried to find assistance among the ministries and, also, among the generals. He also tried to convince Goering, and he thought he had won him, but it did not work. Schacht has then fought for it and, finally, with success, that at first the Reichsbank credits for armament should stop, and that success occurred in the beginning of March, '38. But that did not mean that he discontinued his efforts to step rearmament as such, but he continued with all means, also by means of sabotage.