In the year '38, he issued a loan for a date of maturity when he knew that the loan before that was not yet digested; that the banks were still full of it; and the amount of the new loan he anticipated so highly that a failure had to occur. And we waited to see whether his calculations were correct. We were happy when that failure was apparent, and Schacht told it to Hitler. who wanted to take loans to increase their factories were prohibited to do so by Schacht and, therefore, stopped. But, also, the termination of the Reichsbank credit was not only a removal of the Reichsbank from armament affairs, but a serious blow to armament itself, as it could be seen in 1938, when financing proved to be extremely difficult in all fields and when Schacht was dismissed and resigned and had immediately returned to the direct credits of the issuing bank, which was the only means to maintain elastic credit, so-called indefinite credit, which Hitler needed and could never have received from Schacht. that law which was put to me, which Hitler issued after Schacht's dismissal, and I said "I am not going to have anything to do with it." Thereupon, I was immediately dismissed, ten days after the dismissal of Schacht.
Q Now, Mr. Vocke, is there any reason that the stoppage of financing of armament may have been purely economical? Do you have any cause, or any reason, or experience to show that Schacht was also afraid of the war and wanted to fight the possibility of a war by this stoppage of credit? tinuation in armament would lead to war became stronger and stronger.
Especially after the conference of Munich. In the meantime, Schacht know only one more thing and that was to find out means against Hitler's armament in preparing for war. These means, of course, were not only financial, but of sabotage and so on, as I described beofre. In the end, there was only the memorandum in which Schacht declared his resignation.
Q About that we will speak later. May I ask you first -- the Tribunal knows about the memorandum so you don't have to say anything about that. What I want to ask you is how, in your opinion, the opinion of you as a lawyer, that the financing of armament by the MEFO draughts was kept down? of course been examined before, and the question of legality hasbeen submitted to us, and the question as to whether that could be brought under the banking law, that question was examined. The more serious question, however, would have been whether these draughts were according to normal demands which a bank of issue should put to the portfolio and that question, of course, to that I answer No.
If one asks, why didn't the bank buy other papers by the MEFO draughts, the answer is that at that time there were no other papers on the market. -- That is, since the collapse on account of the pressure of the national economy. Already, in the spring, a means for the vitalization of the economy and credit had been restored, which followed a similar scheme -that is, long term credits, because it wasput before the bank either to observe what would happen or to assist the Government in the vitalization with the speed of the armament as long as the bank could. And all banks of issue were also put to the same ultimatum and reacted in the same sense. that, on the point of view of currency policy, the protfolio of the Reichsbank which had been frozen by the depression was made good. All the draughts, the traditional ones, and the legal ones, of the bank, and the policies -
Q I believe, Mr. Vocke, it will be sufficient to the Tribunal that in the end the lawyers of the Reichsbank approved the administration of draughts and the details of that, if your logic agrees, we can leave out. describe to the Tribunal the reasons which had caused the Reichsbank director to submit that memorandum to Hitler and what the tactical purposes were of that memorandum? have to stop armament, but that was not the Reichsbank's business. We had to limit ourselves to the question of our responsibility for the currency, therefore, the memorandum of the Reichsbank came with the question of how much currency -- the continuation of our financing of armament would endanger German currency and bring about inflation.
unlimited expenses of credits, and expenditures. The expenditures which we mean were for armament, that was quite clear.
THE PRESIDENT: We have all seen the memorandum, have we not?
DR. DIX: He is not speaking about the contents of the memorandum, but of the reason, the tactical reasons. BY DR. DIX: your testimony to the reasons of the memorandum. it demanded a limitation of foreign policy that shows clearly what we wanted to do in the limitation of our expenditures and limits of foreign political armament. We have pointed out that expenditures had reached a measure which could not be continued and that they had to be stopped. In other words, a red light had to be shown to the armament policies of the Reich. to Hitler? What did you expect, tactically? expenditures which had brought us to ruin had to be effected, because at the end of the year 1938 there was no more money available, but only a deficit of nearly one billion dollars. That had to be understood and the finance minister was on our side, and if they did not recognize that it had to come to a break and we were dismissed. There was no other alternative. It would have come to the unusual stage. It came to the unusual stage that the entire memorandum. memorandum of the Reichsbank is signed by the President or his deputy, is it not?
A That is true. We wanted to emphasize the opinion of the entire directorate and express it with that document to end rearmament.
Q Do you have any reason to show that Hitler recognized that fact?
A Yes, Hitler used the word such as that would be mutiny. I believe in the Army, I never said in the Army, but I believe that a thing like that in the Army would be considered mutiny if it is signed by severalpeople. Such things happen.
Q But you were not there. Who told you about that expression?
A I don't remember that any more. I believe it was Mr. Berger of the Finance Ministry. Hitler, a reference to his foreign political successes. flattery. In the same measure Schacht became a definite opponent of the Government. He used flattery, therefore, in that manner. In the beginning, where he spoke of the successes of Hitler he also used those tactics.
Q And what was the consequence of that memorandum? Please tell us briefly. dismissed. The results, however, were at the same time that one knew abroad what it had come to in Germany. My colleague Huelse had made statements in Basle saying that if we would be dismissed our friends would know how far it would have come.
Q Did Huelse tell you that?
DR. DIX: Your Lordship, shall we make a short pause here?
THE PRESIDENT: How much longer do you think you will take before you finish?
DR. DIX: It is very short. The documents will be very short. Shall I continue?
THE PRESIDENT: The Tribunal will recess.
BY DR. DIX:
Q Now, Mr. Vocke, you have described to the Tribunal how that dismissal of Schacht came about. Why did Schacht not do that before? Did he talk to you about it?
A No. Throughout the years 1936 and 1937 we could not make up our minds. At first there was still hope that Hitler could develop himself in a reasonable direction as a statesman, and finally, in 1938, the serious, objectionable moments came, particularly in connection with the Munich conference and then after the Munich conference. Then, indeed, there was serious fear that it would come to a war, and at that time we saw that we had to force the issue.
However, one has to consider the following: As a bank we could not come with political or military arguments or demands, which were not within our competence. The element of inflation, which we mentioned as menacing in that memorandum, had only appeared in the course of the year 1938, and the currency circulation had increased seriously during the last months, more seriously than throughout the five years before.
Q So that during that year you found a cause to jump? conclusion--and the high intelligence of Dr. Schacht is not disputed--that he was deceived and disappointed, as he himself says. And you yourself probably, on the basis of your knowledge of the personality of Schacht, had thoughts of your own as to how that deception or disappointment of Schacht could be explained. Therefore, if the Tribunal permits, I will be grateful if you could give us your personal impressions about that.
MR. JUSTICE JACKSON: Your Honor, may I make an objection? I don't understand how the operations of Mr.
Schacht's mind can be explained by someone else. I have had no objection to any facts which this witness has known. We have even let them detail here at great length private conversations. However, speculation on Schacht's mental operations, it seems to me, is beyond the pale of probative evidence.
THE PRESIDENT: Dr. Dix, as I think I have said before, you can't give, by one witness, the thoughts of another man; you can only give his acts and his statements.
DR. DIX: Yes, Your Lordship. When I thought of the question I said "if the Tribunal permits". I recognized the question of admissibility.
THE PRESIDENT: Yes; the Tribunal does not allow the question.
DR. DIX: Then we will leave that question. May I ask your Lordship this, then? Of course, I can still put questions about the treatment of the Jews by Schacht. exhaustively dealt with, so that it is not necessary for this witness to give us more examples of the attitude of Schacht. I would only ask to be permitted to put the same question concerning the Free Masons, because nothing has been stated about that. BY DR. DIX: Masons, or the attitude of Schacht to Free Masons?
A Yes. The Government and the Party demanded that the Free Masons should be removed from office. Schacht said: "I don't let anybody tell me what to do. Everybody knows that I myself am a Free Mason; how can I proceed against employees for the reason that they belong to the order of Free Masons?" And as long as Schacht was in office he kept Free Masons and promoted them.
Q Now, one last question. Do you have any knowledge of the fact that Schacht had economic advantages during the Hitler era beyond his regular income as an official?
A No; that was quite out of the question for Schacht. Besides, donations have never been offered to him. In every respect, so far as money was concerned, he was absolutely clean and correct. I can give examples, such as, for instance, when he left, he reduced his pension to less than half, below the pension of vice-presidents. He said, "These people have worked all their lives in the bank, and I only gave a few years of service." I could give more examples of Schacht's absolute correctness in that respect.
DR. DIX: I believe, if the Tribunal does not desire to hear it, that will not be necessary. witness.
THE PRESIDENT: Does any member of defendants' counsel wish to ask any questions? BY DR. STEINBAUER (Counsel for the defendant Seyss-Inquart): at the occasion of the annexation of Austria in March of 1938; that is to say, in general terms? 1938, one concerning the conversion of shillings into marks, and the other one to take over the Austrian National Bank by the Reichsbank.
Dr. Schacht, as a witness, stated yesterday that on the 11th of March he had been asked what exchange rate, in the event one would march into Austria, he would consider correct; and he answered that question by saying that according to the last rate at the stock exchange, two shillings for one mark would be correct.
After the Anschluss, my client, Dr. Seyss-Inquart objected to the under-valuation of the shilling, and he achieved the result that a rate of one-fifth was established. Is that correct relation or exchange rate. The Reichsbank Directorate dealt with that question only after the march into Austria, and it proposed the relation which was according to conditions, and there was only a slight difference. It was the job of the Government, which, in order to buy the favor of the Austrian population, wanted to make them a present.
Q. The second law deals with the Austrian National Bank. The witness, Dr. Schacht, has said today that the Austrian National Bank was not liquidated, but --- as he expressed himself -- amalgamated. I looked up that law and it states expressly in paragraph 2 that the Austrian National Bank is to be liquidated. That is 2312-PS, Now, I ask you, Witness, do you know anything about it? Was the Austrian National Bank, as bank of issue, left functioning or was it liquidated?
A. The right of issue, of course, fell to the Reichsbank which, as far as I know, took over the Austrian National Bank in Vienna, and I don't know any details. May colleague, Kesnik took care of it.
Q. But maybe you will remember if approximately if I quote you from the official reports of the Austrian National Bank that the gold reserve of the Austrian National Bank in March, 1938, amounted to 243 million schillings -in the hands of the banks. That is about 400 million schillings gold value taken over by the Reichsbank from the Austrian National Bank.
A. I don't recall these facts any more, but if it was done, it was done by law, by the government.
Q. Yes. I have that law of the 17th of March. I just wanted to correct it and to point out that Schacht must have made a mistake unintentionally. In fact, it says in the law, which was signed, "shall be liquidated." I have no other questions.
BY DR. LATERNSER (Counsel for General Staff and OKW).
Q. Witness, you have said before that Dr. Schacht was to be distinguished from high military leaders because he remained a free man toward the regime. I wanted to ask you now concerning that, since that statement includes a judgement of high military leaders. Which high military leaders do you know personally?
A. Not a single one.
Q. Then would you maintain that judgment?
A. In all circles of the Reichsbank General Keitel and other gentlemen were considered too servile and too soft toward Hitler.
Q. But if you had no personal knowledge of these personal acquaintances, don't you think this is a rather serious judgement to make, such as you have made?
A. I believe so, yes.
DR. LATERNSER: I have no further questions.
THE PRESIDENT: Do any of the other Counsel wish to cross-examine? BY MR. JUSTICE JACKSON:
Q. Witness, when you met Dr. Schacht first, as I understand it, it was on the occasion of an official visit which you paid to von LUMM in Brussels?
A. Yes.
Q. In the first years of the First World War?
A. Yes.
Q. Schacht then held some position on von Lumm's staff?
A. Yes.
Q. What was Schacht's position?
A. I cannot say that. He was just one of the staff. I did not have anything further to do with him except that von Lumm, when I was sent to Brussels one time, in order to discuss something with Lumm, took the opportunity to present his assistants, and among them was also Schacht. That was just the time I met him.
Q. And what was von Lumm's position? What was he doing in Brussels?
A. He was Commissioner for Banking, with the General Command.
Q. General Command under the German Army?
A. Bank Commissioner, Commissioner for the Banks -- of the Occupation -
Q. Named by Germany.
A. Without doubt.
Q. Well, he was a German, not a Belgian.
A. Yes, he was a German.
Q. Now, some time after that Schacht was idsmissed by von Lumm, was he not
A. Yes.
Q. And you had a discussion with von Lumm about that and also one with Schacht about it, did you not?
Q. Tell me whether you had the visit -
A. I read the official reports about the dismissal of Schacht in Berlin. spoken about these things at the time when he became Reichsbank President and one day spoke about it.
Q. Now, before Schacht went on the staff of von Lumm, he was director of the Dresdner Bank.
A. Yes.
Q. And the dismissal was because Schacht had delivered to that bank a considerable amount of Belgian francs.
A. Yes. I don't know how large that amount was.
Q. But it was considerable.
A. Maybe.
Q. And that, von Lumm thought, gave to the Dresdner Bank an advantage which was incompatible with Schacht's duties as a public official?
A. That, at any rate, was von Lumm's impression, from a very severe point of view, and Schacht did not have that point of view.
Q. And von Lumm called a meeting and reproached Schacht?
A. Yes.
Q. And Schacht then gave an answer to von Lumm which von Lumm considered was not sincere but was merely a lie?
A. Yes. That was von Lumm's point of view.
THE PRESIDENT: The Russian translation isn't coming through.
(A short pause.)
Is it all right now?
(The trial proceeded.) Lumm, Schacht told you that it was perhaps not a quite open answer but not a lie? directors of the Reichsbank were opposed to Schacht's appointment as President, as you have testified. behavior of Dr. Schacht in the Belgian bank affair was not quite fair and not quite correct.
Q Now, when Dr. Schacht came back to the Reichsbank under the Nazi regime, as I understand it, there was a good deal of resentment and reserve -- or coolness -- towards him on the part of the Reichsbank directorium, because he "in our eyes then was a Nazi. He was in close touch with Hitler and kept some things secret from us, his colleagues." That is correct, Is it not?
A I could not say that. Indeed, there was a sentiment against Schacht, as I have explained before, since I had assumed -- though we were wrong about it -that he was a Nazi. But whether Schacht kept things secret from us, it is possible but I don't know it.
Q Now, didn't you say in a statement that he was in close touch with Hitler and kept some things secret from "us, his colleagues"? A I don't know whether he kept things secret from up it is possible, but I could not prove it. reached in our currencies system, circulation, price and wages system, "rumors came to our ears through semi-official channels that Dr. Schacht had given Hitler this promise to finance armaments"? Did you not say that?
A That Schacht had given the promise to Hitler? Well, in certain circles there were rumors of that nature. Whether it is true, I could not say.
Q Now, you felt after the Munich Agreement and after Hitler's speech at Sauerbrucken that destroyed all hopes of peace, did you not? persuade Schacht that a decision had to be forced?
Q Dr. Schacht agreed with you but hesitated to take the decisive step?
A Yes. He said not to the fact that Schacht objected, but the date at which our memorandum should be submitted; he would have reserved the right for him to determine that date, and each one of us had definite wishes for corrections and additions. It took from October until the 7th of January until the memorandum was really sent out.
Q The agreement was prepared by you and Pilseck?
Q And you approached Dr. Schacht again on it? about the best moment to bring it before Hitler? finally sent that memorandum?
A That I don't know. I hear here for the first time that Hitler refused to receive Schacht in Berchtesgaden. It may be. I only heard that Schacht was at Berchtesgaden and after his return, according to my recollection he talked about his meeting with Hitler and that now the moment had come to send him the memorandum according to my translation it says:
"Finally, in December 1938, he resolved to sign it after a last try to speak with Hitler in Bercgtesgaden."
Q Considerable difficulty; inflation was just around the corner, as you might say. Mefo bills which had to be covered, and there was a deficit of 1 billion, and the Finance Minister came to see us and asked us to bridge that difficulty because otherwise, on the 1st of January, he could not pay the salaries. We refused. We did not give him a single pfe*nig, and we told him nothing better could happen than that bankruptcy would be manifested by the possibility of continuing that system and rearmament He received money from private banks. this course of the Reichsbank, is that not true? ness would end up in trouble. grants, which in March 1938 were to mature, and from then on the Reichsbank did not give any armament credits anymore. ly discuss it with Schacht and find he had turned very bitterly against the Government? often, every few months in the beginning, and then later on I saw him only once or twice in a long time. But Schacht, not only after his dismissal but at least throughou the entire year 1938, had become a bitter enemy of Hitler.
Q And you said, "In his heart he hopes, I think, he would be called after Hitler's defeat to help for a new and better order of things in Germany."
A Certainly. Schacht in Guehlem spoke to me about the men who would have to come after Hitler would be overthrown, and in conversation we mentioned ministers who then could save Germany from despair, and Schacht was certain that he also would be called to assist.
MR. JUSTICE JACKSON: No further questions, your Honor.
THE PRESIDENT: Do any of the other Prosecution want to cross examine? BY DR. DIX:
Q Mr. Vocke, in reply to the question of Justice Jackson, you have explained the attitude and the statement of Herr von Lumm about the incident in Brussels. You also told the Tribunal the statement by Minister Severin, which he made about that incident not so long ago.
A. Yes.
Q Didn't you also speak to the Reich Court President, Simons, who was at that time in the Foreign Office and knew the case very well? Didn't you speak to him about that case? Simons andthe later Under Secretary of State in the Ministry of the Interior. I spoke about the thing which came to my knowledge officially. big things out of trifles, and they smiled about it, and also about the misfortune of Mr. Schacht. They smiled benevolently and they called the whole thing a tremendous exaggeration.
DR. DIX: I thank you. That is all. I have no further questions. according to my recollection, Schacht mentioned here that on 2 January 1939 he spoke to Hitler. I don't know whether I am confusing that with a statement made by a witness or with a statement he has made to me.
I just wanted to point it out. If he were still sitting here as a witness, he could tell us about it. Jackson that Hitler had not received Schacht, and that that would have caused the decision of Schacht to present that memorandum. This witness here cannot know it, but Schacht saw Hitler, spoke to Hitler, and if he hasn't said that this morning or yesterday, he can say it at any time.
tion with what one has heard in the courtroom.
THE PRESIDENT: Put the microphone where the defendant Schacht can speak from there and ask him the question.
DR. DIX: You have witnessed the cross examination. Would you like to tell the Tribunal?
DEFENDANT SCHACHT: When I spoke here, I said that I had a long conversation on the 2nd of January 1939 with Hitler at Berchtesgaden at the Obersalzberg and that after that conversation in which I spoke of inflation, I considered to that the time had come to take that step which the Reichsbank undertook, to separate itself from Hitler and his methods.
BY THE PRESIDENT:
Q There is one question I want to ask you. Did the defendant Schacht ever tell you that he had been appointed General Plenipotentiary for War Economy
Q When?
A Well, I believe that he was appointed to that office in 1935. I believe that is when; I couldn't say it for sure.
Q I didn't ask you when he was appointed. I asked you when he told you.
A I don't know that any more because we had nothing to do with these things. I only know that in approximately '35 or '36 -- I believe, rather, '35
Q Yes. The question I asked you was: Did the defendant Schacht ever tell you that he had been appointed?
Q When did he tell you?
THE PRESIDENT: The witness can retire.
DR. DIX: May I put a question in this connection? BY DR. DIX:
A No. I never heard that Schacht had done anything in that function. His activity in the Reichsbank continued in the same was as previously, without his selecting a staff, a special staff for that office, and without -- at least, ac cording to my knowledge -- his using the offices of the Reichsbank for the functions of the Reichsbank for that.
separate staff for that activity as General Plenipotentiary?
A You mean General Commissioner for Armament? I know he never had a staff.
THE PRESIDENT: The witness can retire.
DR. DIX: May I begin with my documents? The presentation of documents, I can make very brief and I am sure that I will conclude it before the end of the session because I had an opportunity to submit a large portion of my documents during the interrogation of witnesses. Generally, may I express the request to the Tribunal to take in evidence and to take judicial notice of whativer I have not read and what I am not going to read. In that connection, I should like to point out that the entire contents of my document be with one exception, have either been submitted or will be submitted now. The exception, the document which has not been submitted, is exhibit 32. That is the frequently mentioned article of the Basler News, of the 14th of January 1946, Exhibit 32, which for the reasons mentioned yesterday, has not been submitted by me and which I am not going to submit therefor. which have not been submitted yet; that is, first exhibit No.5. The Reichstag speech of Adolf Hitler of the 23rd of May 1933. That exhibit was read by Schacht in the course of his interrogation and is now being submitted. of the 30th November 1942. Though that letter was already submitted by the prosecution, we submit it again, and for the following reasons: In the copy which wassubmitted by the prosecution, the date and the year was left out and, of course, also, in our copy, about a remark by Professor Kraus on the basis of the testimony made by Schacht and we have marked on it so that it must be the letter of 30th November 1942, because it is actually the letter which caused the dismissal. It is only submitted in order to facilitate for theTribunal, to find thedate. That was Exhibit 23.
Then I wish to submit Exhibit 27. I am not going to read it. I just want to have judicialnotice taken of it. That is theaddress of Dr. Schacht at the celebration meeting of the Reich Economic Chamber, of January, 1937. want to put into evidence and I ask you to take judicial notice. I will not read anything.
Exhibit No. 33, and in my document book is a letter by Morton, a former citizen of Frankfurt on Main, who emigrated to England, a well-reputed man who was in Frankfurt before, and the letter is directed to the Treasury Solicitor, and we have received it here from the Prosecution.