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.
I also ask that judicial notice be taken of its contents and want to read only one sentence on the last page. I quote: "The last heard from Schacht was indirect. In 1939 before the outbreak of the War, Lord Norman (then Mr. Montague Norman, Governor of the Bank of England), told me confidentially that he had just come back from Baslo where he had met Schacht who sent me his greetings. Lord Norman told me than that Schacht (who had returned from Baslo to German) was in great personal danger as he was very much in disgrace with the Nazis." That concludes volume one of my document book and I pass on to volume two which begins with the affidavit. I have to go through the individual affidavits but I shall not read any.
The first Exhibit is No. 34, which has frequently been quoted, the affidavit, and sworn testimony of the Banker and Swedish Consul General Schniewind at "Munich at the time. It is a very instructive and very exhaustive affidavit and in order to save time, there are eight passages which, would take up much time and I will only consider what I have read already from this affidavit and for the rest, I ask the Tribunal to take judicial notice. It has already been submitted, but I still have to submit Exhibit 35. I beg your pardon, but that has been submitted before. That is the affidavit of Dr. Franz Reuter. I submitted it before when I read the passage about the tendency, about the biography. Of the rest, I ask you to take judicial notice, the rest of this affidavit. Dr. von Scherpenberg, formerly legation counsellor at the legation in Germany, and the German office, and now at the Ministry of Justice at Munich, the son-in-law of Dr. Schacht. I read a passage and of the remainder, I ask you to take judicial notice.
The next one Exhibit 37-A. It has been submitted. There, also, is a passage, 154 of the German text, about the warning signal of the fact of the resignation of Schacht as Reichsbank president and of the balance, I ask you to take judicial notice. of Dr. Schacht in the Reichsbank Directorate at the same date as the witness we have just heard, Vocke.
I don't have to read anything. I just ask you to take judicial notice of its contents. submitted. I ask you to take judicial notice of its contents. I do not have to read anything.
The next is Exhibit 38, an affidavit of General Thomas. That has not been submitted yet and I submit it hereiwt h and ask to be permitted to read one passage, beginning on the first page. That is the English page 172 and 164 of the German text.
"Question: Schacht claims to have influenced Blomberg to retard rearmament. Can you give information on this matter? When was it?
"Answer: I was chief of the Army Economic Staff or of the Army Economic and Armament Office of the Supreme Command of the Wehrmacht (OKW) from 1934 to the time of my dismissal on January 1943 In this capacity I had connections with the Reich Minister for Economics and Reich Bank President Hjalmar Schacht. Undoubtedly until 1936 Schacht promoted rearmament by making available the necessary means. From 1936 on he used every opportunity to influence Blomberg to reduce the tempo and extent of the armament. His reasons were as follows:
"1. Risk to the currency.
"2. Insufficient production of consumer goods.
"3. The danger to foreign policy which Schacht saw in excessive armament for Germany. The last point frequently caused him to indicate repeatedly to Blomberg and me that by no means must the armament lead to a new war. There were also the reasons which led him to threaten Blomberg with resignation in 1936 and again in 1937. Both times I was delegated by Blomberg to influence Schacht not to carry out his threat of resignation. I was present during the conference between Blomberg and Schacht in 1937." Of the remainder of that affidavit by General Thomas, I ask you to take judicial notice.
The next Exhibit 39 has also been read in parts; that is to say, the part Schacht played in the incident of the 20th of July in connection with General Lindemann--an affidavit by Colonel Hans Gronau, and of the remainder, I ask the Tribunal to take judicial notice.
The same applies to the next Exhibit 40. That is a sworn statement, also by an assistant and collaborator of Schacht in the Finance Ministry, Dr. Asmis, concerning the happenings at the occasion of the dismissal of the Minister of Economics; a part of the remainder has been read, and I ask you to take judicial notice. retirement, Christian Schmidt. I have not read anyting and I ask to be permitted to read two passages.
The first one is on the German text page 182; 190 of the English text:
"When the Bruenig Cabinet, which had been arranged by General von Schleicher" -- That is not correct. I think that should be different, but that isn't essential. --"When that was torpedoed be Schleicher himself, Schacht considered the early appointment of Hitler as head of the Government to be unavoidable. He pointed out that the great mess of the German people said yes to National Socialism, and that the left as well as the center had come to a state of complete passive resignation. The short life of transition cabinets of Papen and Schleicher was clear to him from the very beginning.
"Schacht decisively advocated cooperation of men of experience in their fields with National Socialism without accepting its program as a whole, which he always referred to ironically, and later frequently called it a really bestial ideology, when talking to me; But he held that the influencing of developments from important inner-power or positions was an absolute patriotic duty, and he strongly condemned emigrations and the flight to sulking corners." text, two very short passages:
I recall numerous talks with Dr. Schacht in which he stated that the war was an economic impossibility, and simply crazy. Thus, for instance, in the house of Dr. Fritz Tiesen in Muehlheim, who closely associated with Goering and Hitler before 1933, was in strong opposition since 1934, and who also fought against every thought of war as madness."
And, then, further down on the same page, only one sentence:
"The Himmler-Rosenberg Lebensraum plans against Russia were quoted by Schacht to be as an example, and ironically referred to as an example of the thoughts of Party ideas." His hobby horse was an understanding with England," and so on; and I ask you to take judicial notice of the remainder of the document.
subsequent director of the Upper Silesian Coke Works.
Now I come to Exhibit 43. That has already been submitted and read in part. It is the correspondence between the publisher of Ambassador Dodd's diary and Sir Neville Henderson. I ask you to take jucicial notice of the part not yet read, and whatever comes after Exhibit 43 has been submitted. I ask you to take judicial notice of its contents, and I forego the reading of it. Schacht.
THE PRESIDENT: Now the Tribunal will continue the case against the defendant Funk;
DR. SAUTER (Counsel for Funk) Mr. President, with your permission, I call first the defendant Dr. Funk himself into the witness box. as follows:
BY THE PRESIDENT:
Q Will you state your full name, please?
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.
DR. SAUTER: Mr. President, may I begin with one sentence: The defendant Funk has been a sick man for many years now, and before he came into the prison he had been in the hospital for some time. He was supposed to undergo an operation, which, however, due to conditions at the time, could not be carried out. He still is under medical supervision, medical treatment at this time.
under all circumstances wants to make his own defense as short as possible, I shall put only those questions to the defendant which are absolutely necessary so as to give you a clear picture about his person and his activities. BY DR. SAUTER:
Q Witness, when were you born? your life, and to simplify matters you can only answer with yes or no.
You are 56 years old. You were born in East Prussia.
Q You come from a merchant's family in Koenigsberg. political science, literature and music. You also came from a family which has produced a number of artists. and in the year 1910, on account of a bladder ailment, you became an editor with largo newspapers, and you told me that for a long time you couldn't make up your mind as to whether you should become a musician or a journalist. Then you decided for the latter, and in 1922, I believe, you became editor-in-chief of the "Berliner Boersenzeitung." Is that all correct? tendencies of that paper for which you worked for about ten years as editor-in-chief.
A The tendency of the paper was Prussia National. The newspaper was not tied up with any party. It was owned by an old publisher's family at Berlin. into the editor's office, to the Jewish question?
AAbsolutely neutral. They didn't even deal with the Jewish question,
Q From an affidavit by Dr. Schacht, I have seen that at that time--that is to say, during the '20's--you moved in circles where there were also Jews, and whore frequent discussions were held about questions of economic matters, such as gold currency, and so forth. Is that correct?
A I don't know anything about that circle.
Q Dr. Schacht has asserted that in an affidavit of the 7th of July 1945, PS-3936.
A I had much to do with Jews. That was in the nature of my profession. Every day at the stock exchange I was together with 4,000 Jews. chief?
Q What were the reasons for that? come to power in the Government, and I felt that it was up to me to express my own political and economic opinions within the Party. kind of opinions you had, Dr. Funk, especially concerning the questions of clashes between parties, between classes, and so one spiritually as well as materially. The people by the struggle of parties and classes was torn apart. The Government, or rather the Governments, had no authority. The parliamentary system was out, and I myself, 10 or 12 years before that, had protested and fought publicly against the burdens of tribute of Versailles, because I was of the conviction that those tributes were the primary cause for the economic bankruptcy of Germany.
23-1 private economy, because I was convinced that the idea of private enterprise is connected with the idea of the difference of capacities and capabilities of individual human beings. I have fought for the right of free enterprise, free initiative, for a free competition, and, at that time in particular, for the removal of that wild struggle of classes, and for the reestablishment of a social national community on the basis of the industrial community. conversations, particularly, with Gregor Strasser. briefly? party organization of the National Socialist Party and was generally considered to be the second man of Adolf Hitler.
THE PRESIDENT: This is the time to break off.
(The Tribunal adjourned until 4 May 1946, at 1000 hours.)
DR. SAUTER: Mr. President, may I continue with my testimony and examination of the witness Funk BY DR. SAUTER:
Q Dr. Funk, yesterday you gave us a rather brief account of your life, told us that you are 56 years of age, that you have been married for 25 years, that you were Editor in Chief of the Berliner Boersenzeitung, and in conclusion you told us yesterday what your convictions were regarding the development of Germany for the future. Perhaps you can reiterate on some of these points where you were interrupted through the recess yesterday, and since your health was in such a poor state yesterday that at the close of the day you could scarcely remember what you had told the court during the day. What conviction did you have about the economic and political prospects for Germany in the future at the time when you entered the party? Perhaps you can just briefly sketch what you said yesterday. This crisis was caused chiefly through reparations and the way in which these reparations had to be met, and also through the inability of the regime at that time to master the economic problems which were plaguing the country at the time. The most disastrous problem in the matter of paying tribute was that German marks in immense volumes were being transferred abroad to foreign countries without receiving anything in return. As a result of that, in foreign countries there was an over-balance of Reichsmarks. As aresult there was an inflation in Germany. People who had German currency bought Germany out. Therefore, there was a large indebtedness on the part of German industry, and it was an almost unbearable debt to foreign countries. It was all a short time debt. There was financial estrangement in industry.
There was much more debt than we could handle, in every country. There was a complete impoverishment of citizens and of the middle class stratum of society which was the chief bearer of German culture. Each third German family was unemployed, and the Government itself had neither the power nor the courage to master these economic problems. alone; it was necessary that first of all there should be a government with full authority and responsibility, and that a unified political will should be founded among the people. The National Socialists at that time captured 40 per cent of the Reichstag mandates; the people streamed to this party in millions and millions, especially youth which was fired by the ideology and the personality of the Fuehrer which acted like a tremendous and huge magnet. The economic program of the Party was unclear and in my opinion was essentially based on propaganda to serve their purpose; and even in Party circles with which I came into contact in the year 1931, this Party program was discussed and argued very vehemently. in Chief of a largo middle class paper to make myself independent by founding an economical political press information service which was transmitted to the various branches of the economy, also to the leading party circles, and also to circles which belonged to the German National Party and other parties.
Q Dr. Funk, just a little while ago you said approximately that according to your then current opinion of perhaps the year 1931 that only a government with full authority and full responsibility, that is, only a strong state and one with a unified political will could save Germany from the crisis which Germany was going through then; this crisis which was a result of the first World War. At that time did you perhaps have a thought whether the leadership principle, the Fuehrer prinzip which developed increasingly with time, whether this leadership principle could coincide with your ownreconomic ideas? Or let us put it negatively; at that time could you foresee betterments resulting from this leadership principle?
Will you clarify your position on that point?