Chapter XII: on Persecution of the Jews.) (2)

Funk both personally and through duly designated representatives also participated in the planning which preceded the aggression against the USSR. Thus, in April 1941, Rosenberg, after he had been appointed deputy for centralized treatment of problems concerning the Eastern Territories, discussed with Funk the economic problems which would be raised when the plans for aggression in the East were carried out (_1039-PS_). At that time Funk appointed Dr. Schlotterer as his deputy to work with Rosenberg in connection with the exploitation of the Eastern Territories. Funk’s deputy met with Rosenberg almost daily.

E. _FUNK WAS A MEMBER OF WAR-PLANNING AGENCIES WHICH WERE RESPONSIBLE
FOR POLICIES AND ACTS CONTRARY TO THE LAWS OF WAR._

After the launching of the Nazi aggression against Poland, Funk, in his capacities as Minister of Economics, President of the Reichsbank, and Chief Plenipotentiary for Economics, and as a member of the Central Planning Board (to which he was appointed in September 1943), actively participated in the waging of aggressive war on the economic front. Moreover, by virtue of his membership in the Central Planning Board, which formulated and directed the execution of the program for the enslavement, exploitation, and degradation of millions of foreign workers, Funk shares special responsibility for the Nazi Slave Labor Program. (See Chapter X on the Slave Labor Program. This special aspect of Funk’s responsibility was left for development by the French prosecuting staff.)

F. _CONCLUSION._

It is clear that Funk was a central figure in the Nazi conspiracy and that, as a member of the Nazi inner circle, he helped formulate, was aware of, and promoted the realization of, the conspirators’ program. He knew, moreover, that this program envisaged the use of terror and force within and if necessary outside of Germany, and that it contemplated the use of criminal means. Funk, by promoting the conspirators’ accession to power and the realization of their program, signified his approval of such crimes.

The evidence has also established that, after the Nazi seizure of power, Funk promoted the achievement of the conspirators’ program by virtue of his activities in the Ministry of Propaganda, activities which fomented and carried out the persecution of Jews and dissidents; which psychologically mobilized the German people for aggressive war; and which reduced the willingness and capacity of the conspirators’ intended victims to resist aggression. Funk also participated, as Minister of Economics, in the formulation and execution of the policy for the complete elimination of the Jews from the German economy.

As Minister of Economics, President of the Reichsbank, and Chief Plenipotentiary for Economics, Funk mobilized the German economy for aggressive war, with full knowledge of the conspirators’ plans for aggression. Moreover, in these capacities, and as a member of the Ministerial Council for the Defense and the Central Planning Board, he also actively participated in the waging of aggressive wars. Finally, by virtue of his membership in the Central Planning Board, which formulated and directed the execution of the program for the enslavement, exploitation, and degradation of millions of foreign workers, he bears a special responsibility for the war crimes committed in the execution of that program.

* * * * *

LEGAL REFERENCES AND LIST OF DOCUMENTS RELATING TO WALTER FUNK

│ │ │
Document │ Description │ Vol. │ Page
│ │ │
│Charter of the International Military │ │
│ Tribunal, Article 6. │ I │ 5
│International Military Tribunal, │ │
│ Indictment Number 1, Section IV (H);│ │
│ Appendix A. │ I │ 29, 62
│ ———— │ │
│Note: A single asterisk (*) before a │ │
│document indicates that the document │ │
│was received in evidence at the │ │
│Nurnberg trial. A double asterisk (**)│ │
│before a document number indicates │ │
│that the document was referred to │ │
│during the trial but was not formally │ │
│received in evidence, for the reason │ │
│given in parentheses following the │ │
│description of the document. The USA │ │
│series number, given in parentheses │ │
│following the description of the │ │
│document, is the official exhibit │ │
│number assigned by the court. │ │
│ ———— │ │
699-PS │Letter from Funk to Hitler, 25 August │ │
│1939, reporting on economic affairs. │ │
│(GB 49) │ III │ 509
│ │ │
*1039-PS │Report concerning preparatory work │ │
│regarding problems in Eastern │ │
│Territories, 28 June 1941, found in │ │
│Rosenberg’s “Russia File”. (USA 146) │ III │ 695
│ │ │
*1301-PS │File relating to financing of armament│ │
│including minutes of conference with │ │
│Goering at the Air Ministry, 14 │ │
│October 1938, concerning acceleration │ │
│of rearmament. (USA 123) │ III │ 868
│ │ │
1409-PS │Order concerning utilization of Jewish│ │
│property, 3 December 1938. 1938 │ │
│Reichsgesetzblatt, Part I, p. 1709. │ IV │ 1
│ │ │
1662-PS │Order eliminating Jews from German │ │
│economic life, 12 November 1938. 1938 │ │
│Reichsgesetzblatt, Part I, p. 1580. │ IV │ 172
│ │ │
*1760-PS │Affidavit of George S. Messersmith, 28│ │
│August 1945. (USA 57) │ IV │ 305
│ │ │
*1816-PS │Stenographic report of the meeting on │ │
│The Jewish Question, under the │ │
│Chairmanship of Fieldmarshal Goering, │ │
│12 November 1938. (USA 261) │ IV │ 425
│ │ │
2029-PS │Decree establishing the Reich Ministry│ │
│of Public Enlightenment and │ │
│Propaganda, 13 March 1933. 1933 │ │
│Reichsgesetzblatt, Part I, p. 104. │ IV │ 652
│ │ │
2030-PS │Decree concerning the Duties of the │ │
│Reich Ministry for Public │ │
│Enlightenment and Propaganda, 30 June │ │
│1933. 1933 Reichsgesetzblatt, Part I, │ │
│p. 449. │ IV │ 653
│ │ │
2082-PS │Law relating to the Reich Chamber of │ │
│Culture of 22 September 1933. 1933 │ │
│Reichsgesetzblatt, Part I, p. 661. │ IV │ 708
│ │ │
2083-PS │Editorial control law, 4 October 1933.│ │
│1933 Reichsgesetzblatt, Part I, p. │ │
│713. │ IV │ 709
│ │ │
*2194-PS │Top secret letter from Ministry for │ │
│Economy and Labor, Saxony, to Reich │ │
│Protector in Bohemia and Moravia, │ │
│enclosing copy of 1938 Secret Defense │ │
│Law of 4 September 1938. (USA 36) │ IV │ 843
│ │ │
*2261-PS │Directive from Blomberg to Supreme │ │
│Commanders of Army, Navy and Air │ │
│Forces, 24 June 1935; accompanied by │ │
│copy of Reich Defense Law of 21 May │ │
│1935 and copy of Decision of Reich │ │
│Cabinet of 12 May 1935 on the Council │ │
│for defense of the Reich. (USA 24) │ IV │ 934
│ │ │
*2828-PS │Interrogations of Funk on 4 June 1945 │ │
│and 26 June 1945. (USA 654) │ V │ 478
│ │ │
2872-PS │Fourth decree relative to Reich │ │
│Citizen Law of 25 July 1938. 1938 │ │
│Reichsgesetzblatt, Part I, p. 969. │ V │ 533
│ │ │
*2962-PS │Minutes of meeting of Reich Cabinet, │ │
│15 March 1933. (USA 578) │ V │ 669
│ │ │
*2963-PS │Minutes of meeting of Reich Cabinet, │ │
│20 March 1933. (USA 656) │ V │ 670
│ │ │
*2977-PS │Affidavit of Funk, 14 November 1945, │ │
│concerning positions held. (USA 10) │ V │ 683
│ │ │
*3324-PS │Funk on the Organization of War │ │
│Economy, published in Germany in the │ │
│Fight. (USA 661) │ VI │ 42
│ │ │
*3501-PS │Affidavit signed by Max Amann, 19 │ │
│December 1945. (USA 657) │ VI │ 207
│ │ │
*3505-PS │Extract from “Walter Funk—A Life for │ │
│the Economy”, 1941, by Paul Oestreich.│ │
│(USA 653) │ VI │ 208
│ │ │
3533-PS │Statement of Funk concerning positions│ │
│held by him. (USA 651) │ VI │ 216
│ │ │
*3544-PS │Interrogation of Funk, 22 October │ │
│1945. (USA 660) │ VI │ 217
│ │ │
*3545-PS │Speech by Funk, from Frankfurter │ │
│Zeitung, 17 November 1938. (USA 659) │ VI │ 239
│ │ │
*3562-PS │Letter from Chief Plenipotentiary for │ │
│Economy, 1 June 1939, transmitting │ │
│minutes of meeting concerning │ │
│financing of war. (USA 662). │ VI │ 248
│ │ │
*3563-PS │Extracts from German publications │ │
│concerning Funk’s positions and │ │
│activities. (USA 652) │ VI │ 251
│ │ │
3566-PS │Notes for files, prepared by │ │
│SS-Scharfuehrer Sigismund, concerning │ │
│General Manager of German │ │
│Broadcasting, 1 March 1937. │ VI │ 254
│ │ │
*D-203 │Speech of Hitler to leading members of│ │
│industry before the election of March │ │
│1933. (USA 767) │ VI │ 1080
│ │ │
*Chart No. 1 │National Socialist German Workers’ │ │
│Party. (2903-PS; USA) │ VIII │ 770

12. HJALMAR SCHACHT

The prosecution concedes, at the outset, that although Schacht believed that the Jews of Germany should be stripped of their rights as citizens, he was not in complete sympathy with that aspect of the Nazi Party’s program which involved the wholesale extermination of the Jews, and that he was, for that reason, attacked from time to time by the more extreme elements of the Nazi Party. It further concedes that Schacht, on occasion, gave aid and comfort to individual Jews who sought to escape the indignities generally inflicted upon Jews in Nazi Germany. Schacht’s attitude towards the Jews is exemplified by his speech at the German Eastern Fair, Koenigsberg, on 18 August 1935, wherein he said:

“The Jew must realize that their influence is gone for all
times. We desire to keep our people and our culture pure and
distinctive, just as the Jews have always demanded this of
themselves since the time of the prophet Ezra. But the solution
of these problems must be brought about under state leadership,
and cannot be left to unregulated individual actions, which mean
a disturbing influence on the national

The foregoing concessions should render it unnecessary for Schacht to produce evidence upon these matters.

The prosecution’s case against Schacht is that he planned and prepared for wars of aggression and wars in violation of international treaties, agreements and assurances, and that he knowingly and wilfully participated in the Nazi common plan or conspiracy to plan, prepare, initiate, and wage such wars. The evidence establishes that Schacht actively supported Hitler’s accession to power; that he was the chief architect of the financial plans and devices which made possible the huge program of rearmament in Germany; that he played a dominant role in the economic planning of, and preparation for, wars of aggression; and that he contributed his efforts willingly and with full knowledge of the fact that the leader of the conspiracy, Adolf Hitler, was determined upon attaining his objectives by launching aggressive wars.

A. _CHRONOLOGY OF SCHACHT’S OFFICIAL POSITIONS._

The chronology of Schacht’s official positions is as follows:

(1) Schacht was recalled by Hitler to the Presidency of the
Reichsbank on 17 March 1933 (_3021-PS_).

(2) Schacht was appointed acting Minister of Economics by Hitler
in August 1934 (_3021-PS_).

(3) By secret decree, Schacht was appointed General
Plenipotentiary for the War Economy in May 1935 (_2261-PS_).

(4) Schacht was awarded honorary membership in the Nazi Party
and the Golden Swastika on 30 January 1937, “the highest honor
the Third Reich has to offer” (_EC-500_).

(5) Schacht was re-appointed for one year as President of the
Reichsbank on 16 March 1937 (_3021-PS_).

(6) Schacht resigned as Minister of Economics and General
Plenipotentiary for the War Economy in November 1937 (_3021-PS_;
_EC-494_).

(7) Hitler appointed Schacht Minister Without Portfolio at the
same time (_3021-PS_).

(8) Schacht was re-appointed for a four year term as President
of the Reichsbank on 9 March 1938 (_3021-PS_).

(9) Schacht was dismissed as President of the Reichsbank on 20
January 1939. In connection therewith, Hitler expressed his deep
gratitude for Schacht’s past services and his gratification that
Schacht would remain to serve him as Minister Without Portfolio
(_EC-397_).

(10) Schacht remained as Minister Without Portfolio until
January 1943, when he was dismissed by Hitler. During the period
from the time of his dismissal as President of the Reichsbank
until the end of 1942, he continued to receive the full salary
he had been paid as the President of the Reichsbank, and
thereafter received a pension from the Reichsbank. As Minister
Without Portfolio, he received a large salary from the Nazi
Government and other emoluments of the office (_3724-PS_).

B. _PRIOR TO 1933, SCHACHT ACCEPTED THE NAZI PROGRAM AND HELPED HITLER
TO POWER._

Schacht met Goering for the first time in December 1930, and Hitler early in January 1931, at Goering’s house. He thought that Hitler was “full of will and spirit” and a man “with whom one could cooperate”. Thereafter, he actively supported Hitler’s accession to power (_3725-PS_; _3729-PS_).

Schacht’s belief in the Nazi program and his undivided loyalty to Hitler are revealed in his letter to Hitler dated 29 August 1932, wherein he pledged continued support to Hitler after the latter’s poor showing in the July 1932 elections and proferred advice concerning electioneering tactics. The letter includes the following statements, _inter alia_:

“But what you could perhaps do with in these days is a word of
most sincere sympathy. Your movement is carried internally by so
strong a truth and necessity that victory in one form or another
cannot elude you for long. * * *”

* * * * * *

“Wherever my work may take me in the near future even if you
should see me one day within the fortress—you can always count
on me as your reliable assistant.” (_EC-457_).

Subsequently, on 12 November 1932, he again wrote to Hitler, congratulating him upon his firm attitude and stating:

“I have no doubt that the present development of things can only
lead to your becoming chancellor. * * * I am quite confident
that the present system is certainly doomed to disintegration.”
(_EC-456_).

The fact that Schacht was in complete accord with Hitler’s program is further shown by the following entry of 21 November 1932, in Goebbels’ diary:

“In a conversation with Dr. Schacht, I assured myself that he
absolutely represents our point of view. He is one of the few
who accepts the Fuehrer’s position entirely.” (_2409-PS_).

Schacht has himself confirmed the correctness of Goebbels’ statement (_3729-PS_).

But Schacht’s contribution to Hitler before his accession to power did not consist merely of comforting him, giving advice, and expressing agreement with the Nazi program. He was an active participant in Hitler’s vigorous campaign to take over the German state. Thus, he openly lent the prestige of his name, which was widely known in banking, financial, and business circles, to Hitler’s cause (_3729-PS_). He actively undertook to induce business leaders to support Hitler. In his letter to Hitler of 12 November 1932, he wrote that:

“It seems as if our attempt to collect a number of signatures
from business circles for this purpose (your becoming
Chancellor) was not altogether in vain * * *.” (_EC-456_)

He organized the financial means for the decisive March 1933 election, at a meeting of Hitler with a group of German industrialists in Berlin. At this meeting, Hitler bluntly announced his plans to destroy the parliamentary system in Germany, to crush all internal opposition by force, to restore the power of the Wehrmacht, and to gain his objectives outside of Germany by the use of force. On this occasion, Schacht collected a campaign fund of several million Marks for Hitler’s use (_D-203_; _EC-439_).

In an eulogy of Schacht on the occasion of his sixtieth birthday, the _Voelkischer Beobachter_, Hitler’s official organ, aptly described Schacht’s activity in the period before the 1933 election as follows:

“In this critical period, Schacht never failed to point at Adolf
Hitler as the only possible leader of the Reich.”

* * * * * *

“The name of Dr. Schacht will remain linked with the transition
of the German economy to the new National Socialist methods”
(_EC-499_).

C. _SCHACHT PLAYED A DOMINANT ROLE IN THE CONSPIRATORS’ PROGRAM OF
REARMAMENT AND ECONOMIC PLANNING AND PREPARATION FOR WAR._

Germany was virtually prostrate in the early part of 1933; she was faced with dwindling revenues from taxation and seemingly unable to raise money either through external or internal loans. Hitler entrusted to Schacht the task of wringing from the depressed German economy the tremendous material requirements of armed aggression, and endowed him with vast powers over every sector of German industry, commerce, and finance to carry out that task. Some of the devices which Schacht employed to fulfill his mission will now be examined.

Schacht’s program, as hereinafter outlined, was, by his own admissions, dedicated to the accomplishment of Hitler’s armament program. In a memorandum to Hitler dated 3 May 1935 concerning the financing of armament, Schacht wrote:

“The following comments are based on the assumption that the
accomplishment of the armament program in regard to speed and
extent, is _the_ task of German policy, and that therefore
everything else must be subordinated to this aim, although the
reaching of this main goal must not be imperiled by neglecting
other questions. * * *”

* * * * * *

“* * * all expenditures which are not urgently needed in other
matters, must stop and the entire, in itself small, financial
power of Germany must be concentrated toward the one goal: to
arm.” (_1168-PS_).

In a letter to General Thomas dated 29 December 1937, Schacht stated:

“I have always considered a rearmament of the German people as
_conditio sine qua non_ of the establishment of a new German
nation.” (_EC-257_).

Schacht’s vast achievements in furtherance of the conspirators’ program may conveniently be considered under four headings: (a) armament financing; (b) the “New Plan”; (c) control of production; and (d) plans and preparations for economic controls during war.

(1) _Armament Financing._

(_a_) _Mefo bills._ The financing of the conspirators’ huge rearmament program presented a twofold problem to Schacht. First, was the need of obtaining funds over and above the amount which could be obtained through taxation and public loans. Second, was the conspirators’ desire, in the early stages of rearmament, to conceal the extent of their feverish armament activities. Schacht’s answer to the problem was the “mefo” bills, a scheme which he devised for the exclusive use of armament financing (_EC-436_).

Transactions in “mefo” bills worked as follows: “mefo” bills were drawn by armament contractors and accepted by a limited liability company called the _Metallurgische Forschungsgesellschaft_, m.b.H.(MEFO). This company was merely a dummy organization; it had a nominal capital of only one million Reichsmarks. “Mefo” bills ran for six months, but provision was made for extensions running consecutively for three months each. The drawer could present his “mefo” bills to any German bank for discount at any time, and these banks, in turn, could rediscount the bills at the Reichsbank at any time within the last three months of their earliest maturity. The amount of “mefo” bills outstanding was a guarded state secret (_EC-436_). The “mefo” bill system continued to be used until 1 April 1938, when 12 billion Reichsmarks of “mefo” bills were outstanding (_EC-436_). This method of financing enabled the Reich to obtain credit from the Reichsbank which, under existing statutes, it could not directly have obtained. Direct lending to the Government by the Reichsbank had been limited by statute to 100 million Reichsmarks (_Reichsgesetzblatt_, 1924, II, p. 241). Schacht has conceded that his “mefo” bill device “enabled the Reichsbank to lend by a subterfuge to the Government what it normally or legally could not do” (_3728-PS_).

In a speech delivered on 29 November 1938, Schacht glowingly described the credit policy of the Reichsbank of which he was the author as follows:

“It is possible that no bank of issue in peacetimes carried on
such a daring credit policy at the Reichsbank since the seizure
of power by National Socialism. With the aid of this credit
policy, however, Germany created an armament second to none, and
this armament in turn made possible the results of our policy.”
(_EC-611_).

The “daring credit policy,” which made possible the creation of “an armament second to none,” obviously embraced the “mefo” bill financing which he had contrived.

(_b_) _Use of funds of opponents of Nazi regime._ In his efforts to draw upon every possible source of funds for the conspirators’ rearmament program, Schacht even used the blocked funds of foreigners’ deposits in the Reichsbank. In his memorandum to Hitler of 3 May 1935, Schacht boasted:

“The Reichsbank invested the major part of Reichsbank accounts
owned by foreigners, and which were accessible to the
Reichsbank, in armament drafts. Our armaments are, therefore,
being financed partially with the assets of our political
opponents.” (_1168-PS_).

(_c_) _Taxation and long term indebtedness._ “Mefo” bills and the funds of political opponents of the conspirators were, of course, not the only sources from which Schacht drew to finance the armament program. Funds for rearmament were likewise derived from taxation and an increase in public debt—channels through which part of national income is ordinarily diverted to public authorities. But what distinguished the conspirators’ program of public indebtedness was the fact that the German capital market was completely harnessed to the expanding needs of the Nazi war machine. By a series of controls, they reduced to the minimum consistent with their rearmament program, all private issues which might have competed with Government issues for the limited funds in the capital market. Thus, the capital market was, in effect, pre-empted for Government issues (_EC-497_; _EC-611_).

During the period from 31 December 1932 to 30 June 1938, the funded debt of the Reich rose from 10.4 billion Marks to 19 billion Marks (_EC-419_).

This large increase in funded debt was dedicated “as far as possible” to “the financing of armament and the Four-Year Plan” (_EC-611_).

(2) _The New Plan._ The conspirators’ grandiose armament plans obviously required huge quantities of raw materials. Schacht was a proponent of the view that as much of the requisite raw materials as possible should be produced within Germany. At the same time, however, he recognized that large imports of raw materials were indispensable to the success of the conspirators’ gigantic armament program. To that end, he fashioned an intricate system of controls and devices which he called the “New Plan” (_Reichsgesetzblatt_, 1934, I, pp. 816, 829, 864; _Reichsgesetzblatt_, 1935, I, p. 105).

There were three main features of the “New Plan” as devised by Schacht: (1) restriction of the demand for such foreign exchange as would be used for purposes unrelated to the conspirators’ rearmament program; (2) increase of the supply of foreign exchange, as a means of paying for essential imports which could not otherwise be acquired; and (3) clearing agreements and other devices obviating the need for foreign exchange. Under the “New Plan”, economic transactions between Germany and the outside world were no longer governed by the autonomous price mechanism; they were determined by a number of Government agencies whose primary aim was to satisfy the needs of the conspirators’ military economy (_EC-437_).

Schacht accomplished the negative task of restricting the demand for foreign exchange

“by various measures suspending the service on Germany’s foreign
indebtedness, by freezing other claims of foreigners on Germany,
by a stringent system of export controls and by eliminating
foreign travel and other unessential foreign expenditures.”
(_EC-437_).

In order to increase the available supply of foreign exchange

“Schacht repeatedly requisitioned all existing foreign exchange
reserves of German residents, required all foreign exchange
arising out of current exports and other transactions to be sold
to the Reichsbank, and by developing new export markets. Exports
were encouraged by direct subsidies and by accepting partial
payment in German foreign bonds or in restricted Marks which
could be acquired by foreign importers at a substantial
discount.” (_EC-437_).

A vast network of organizations was erected to effectuate these various measures. Suffice it for the present purposes to mention merely one of these organizations: the supervisory agencies (_Ueberwachungsstellen_). These agencies, which were under Schacht’s control as Minister of Economics, decided whether given imports and exports were desirable; whether the quantities, prices, credit terms, and countries involved were satisfactory; and, in short, whether any particular transaction advanced the conspirators’ armament program. The overriding military purpose of the series of controls instituted under the “New Plan” is plainly shown in Schacht’s letter of 5 August 1937 to Goering, wherein he said:

“* * * The very necessity of bringing our armament up to a
certain level as rapidly as possible must place in the
foreground the idea of as large returns as possible in foreign
exchange and therewith the greatest possible assurance of raw
material supplies, through exporting.” (_EC-497_)

There remains for consideration that aspect of the “New Plan” which involved extensive use of clearing agreements and other arrangements made by Schacht to obtain materials from abroad without the expenditure of foreign exchange. The principle of the clearing system is as follows: The importer makes a deposit of the purchase price in his own currency at the national clearing agency of his country, which places the same amount to the credit of the clearing agency of the exporting country. The latter institution then pays the exporter in his own currency. Thus, if trade between two countries is unequal, the clearing agency of one acquires a claim against the agency of the other. That claim, however, is satisfied only when a shift in the balance of trade gives rise to an offsetting claim.

This device was used by Schacht as a means of exploiting Germany’s position as Europe’s largest consumer in order to acquire essential raw materials from countries which, because of the world wide economic depression, were dependent upon the German market as an outlet for their surplus products. Speaking of his system of obtaining materials abroad without the use of foreign exchange, Schacht has stated:

“It has been shown that, in contrast to everything which
classical national economy has hitherto taught, not the producer
but the consumer is the ruling factor in economic life. And this
thesis is somewhat connected with general social and political
observations, because it establishes the fact that the number of
consumers is considerably larger than the number of producers, a
fact which exercises a not inconsiderable social and political
pressure.” (_EC-611_)

Schacht’s clearing agreements were particularly effective in Southeastern Europe, where agricultural exports had been considerably curtailed by competition from the more extensive and efficient overseas agriculture. The success of Schacht’s ruthless use of Germany’s bargaining position is indicated by the fact that by August 1937, there had been imported into Germany approximately one half billion Reichsmarks of goods in excess of the amount delivered under the clearing arrangements. In his letter to Goering dated 5 August 1937, Schacht stated:

“* * * in clearing transactions with countries furnishing raw
materials and food products we have bought in excess of the
goods we were able to deliver to these countries (namely,
Southeastern Europe and Turkey) roughly one half billion RM * *
*.” (_EC-497_)

Thus, through this device, Schacht was able to extract huge loans from foreign countries which Germany could not have obtained through ordinary channels. The device as developed by Schacht was subsequently used during the war as a means of systematically exploiting the occupied countries of Western Europe.

In addition to the clearing agreements, Schacht devised the system which came to be known as the “aski” accounts. This scheme likewise obviated the need for free currency (i.e. Reichsmarks freely convertible into foreign currency at the official rate—U. S. dollars, pounds sterling, etc). The system worked as follows: The German foreign exchange control administration would authorize imports of goods in specified quantities and categories on the condition that the foreign sellers agreed to accept payment in the form of Mark credits to accounts of a special type held in German banks. These accounts were called “aski”, an abbreviation of _Auslander Sonderkonten fuer Inlandszahlungen_ (foreigners’ special accounts for inland payments). The so-called “aski” Marks in such an account could be used to purchase German goods only for export to the country of the holder of the account; they could not be converted into foreign currency at the official rates of exchange. Each group of “aski” accounts formed a separate “island of exchange” in which the German authorities, under Schacht’s leadership, could apply their control as the country’s bargaining position in each case seemed to warrant.

Schacht’s ingenious devices were eminently successful. They admirably served the conspirators’ need of obtaining materials which were necessary to create and maintain their war machine. On this point, Schacht has stated:

“The success of the New Plan can be proved by means of a few
figures. Calculated according to quantity, the import of
finished products was throttled by 63 percent between 1934 and
1937. On the other hand, the import of ores was increased by 132
percent, of petroleum by 116, of grain by 102 and of rubber by
71 percent.”

* * * * * *

“These figures show how much the New Plan contributed to the
execution of the armament program as well as to the securing of
our food.” (_EC-611_)

(3) _Production Control._ As an additional means of assuring that the conspirators’ military needs would be met, Schacht adopted a host of controls over the productive mechanism of Germany, extending, _inter alia_, to the allocation of raw materials, regulation of productive capacity, use of abundant or synthetic substitutes in place of declining stocks of urgently needed materials, and the erection of new capacity for the production of essential commodities. The structure of regulation was built up out of thousands of decrees in which governmental agencies under Schacht’s control issued permits, prohibitions, and instructions. These decrees were the outgrowth of carefully laid plans of the Ministry of Economics, of which Schacht was the head, concerning “economic preparation for the conduct of war”, and in accordance with its view that “genuine positive economic mobilization” demanded that “exact instructions for every individual commercial undertaking are laid down by a central authority” (_EC-128_).

The plan to allocate raw materials was carried out through myriad “orders to produce” specifying that certain commodities must or must not be produced; “orders to process or use” prescribing the type and quantity of raw material which could or could not be used in the production of a given commodity; orders specifying that scarce raw materials could be used only as admixtures with more plentiful but inferior products; and other like measures. The precise details of these orders are unimportant for present purposes. Their significance lies in the fact that they were governed by a central purpose: preparation for war. In the above mentioned secret report issued in September 1934 by the Ministry of Economics it was said:

“Rules are to be initiated for the allotment of scarce raw
materials etc.; and their use and processing for other than war,
or otherwise absolutely vital, goods is prohibited.” (_EC-128_)

The military aspects of Schacht’s plans to increase the production of scarce raw materials within Germany, and thereby reduce Germany’s dependence upon foreign countries for materials needed in the rearmament program, are likewise revealed in the aforementioned report of the Ministry of Economics of September 1934:

“The investigations initiated by the Raw Materials Commission
and the measures introduced for enlarging our raw materials
basis through home production as well as for furthering the
production of substitute materials will directly benefit war
economy preparations.” (_EC-128_)

(4) _Plans and Preparations for Economic Controls During War._ Pursuant to the unpublished Reich Defense Law secretly enacted on 21 May 1935, Schacht was appointed General Plenipotentiary for War Economy by Hitler. Under this law, Schacht was placed in complete charge of economic planning and preparation for war in peacetime, except for the direct production of armaments which was entrusted to the Ministry of War; and upon the outbreak of war, Schacht was to be the virtual economic dictator of Germany. His task was “to put all economic forces in the service of carrying on the war and to secure the life of the German people economically”. In order to facilitate his task, the Ministers of Economy, Food and Agriculture, Labor, and Forestry were subordinated to him, and he was authorized “within his realm of responsibility, to issue legal regulations which may deviate from existing regulations”. The necessity for absolute secrecy was stressed (_2261-PS_).

Schacht appointed Wohlthat as his deputy General Plenipotentiary for War Economy and organized a staff to carry out his directives. Schacht has admitted that he must accept full responsibility for the actions of these subordinates (_3729-PS_).

Before his resignation in late 1937, Schacht had worked out in amazing detail his plans and preparations for the German economy in the forthcoming war. Recognizing that wartime controls, to be effective, must be based on adequate information, Schacht had directed the completion of comprehensive surveys of 180,000 industrial plants in Germany and had compiled statistics concerning

“* * * the composition of the labor force as to sex, age, and
training, the consumption of raw and auxiliary material, fuels,
power, the productive capacity, the domestic and foreign trade
as well as the supply of material and products in the beginning
and at the end of the year.” (_EC-258_)

On the basis of the statistical data thus collected, plans had been formulated by the end of 1937 wherein

“* * * the needs of the Armed Forces and the civilian minimum
needs in wartime are compared with the covering thereof by
supplies and production.” (_EC-258_)

The supervisory boards, which were briefly described above in connection with the import and export controls, were charged with “preparing their orders for the regulation of war contracts and fees”, and were instructed to coordinate with various Reich manpower authorities to secure “their indispensable personnel” (_EC-258_).

Special measures were taken under Schacht’s direction, to maintain “mobilization stocks” of coal and to assure their distribution in accordance with the wartime needs of armament factories and large consumers. Large “gasoline storage places” were constructed for use of the Wehrmacht and “gasoline stations and gasoline stores” were designated “for the first equipment of the troops in case of mobilization”. Careful plans were also made for the allocation of power during war, and practice manoeuvers were held in order to determine “what measures have to be taken in case places of power generation should be eliminated” (_EC-258_).

Evacuation plans for the removal of war materials, agricultural products, skilled workers, and animals from military zones were worked out by the Office of the Plenipotentiary for War Economy with characteristic thoroughness. Thus, “the supplies and skilled workers in the evacuation zones” were “registered, earmarked for transportation into certain salvage areas and registered with the _Wehrkreiskommandos_ by the field offices of evacuation and salvaging plans” (_EC-258_).

Detailed plans for a system of rationing to become effective immediately upon mobilization had already been made by the end of 1937:

“The 80 million ration cards necessary for this purpose have
already been printed and deposited with the Landrats, Chief
Mayors, and corresponding authorities. The further distribution
of the ration cards to the individual households is prepared by
these authorities to take place within 24 hours after
mobilization has been ordered.” (_EC-258_).

Trusted persons whose reliability had been attested to by the Secret State Police were installed in important enterprises and charged with the execution of “measures which guarantee the maintenance of production of their enterprises in the event of mobilization”. Their functions likewise extended, among other matters, to applying “for exemptions from military service” of “employees who are indispensable to their enterprise”, and seeking immunity from requisition by the Wehrmacht of all motor trucks which were needed in the enterprises to which they were assigned (_EC-258_).

Pursuant to directives issued by Schacht as Plenipotentiary, labor authorities of the Government ascertained “the available amount of manpower, the wartime requirements of manpower and measures for the covering of the wartime needs”. The wartime needs were to be met in part “by using reserve manpower (manpower theretofore used in non-essential enterprises, women, etc.)”, and by making “every change of working place and every hiring of workers dependent upon the consent of the Labor Office” (_EC-258_).

The foregoing measures, it should be noted, are merely representative; they are not exhaustive. But enough appears to make it abundantly clear that Schacht’s contribution, by any standard was an extraordinarily important one. Enough appears, moreover, to give particular emphasis to the following observations of the Honorable George S. Messersmith, United States Consul General in Berlin from 1930 to 1934:

“It was his [Schacht’s] financial ability that enabled the Nazi
regime in the early days to find the financial basis for the
tremendous armament program and which made it possible to carry
it through. If it had not been for his efforts, and this is not
a personal observation of mine only but I believe was shared and
is shared by every observer at the time, the Nazi regime would
have been unable to maintain itself in power and to establish
its control over Germany, much less to create the enormous war
machine which was necessary for its objectives in Europe and
later throughout the world.

“The increased industrial activity in Germany incident to
rearmament made great imports of raw materials necessary while
at the same time exports were decreasing. Yet by Schacht’s
resourcefulness, his complete financial ruthlessness, and his
absolute cynicism, Schacht was able to maintain and to establish
the situation for the Nazis. Unquestionably without this
complete lending of his capacities to the Nazi Government and
all of its ambitions, it would have been impossible for Hitler
and the Nazis to develop an Armed Force sufficient to permit
Germany to launch an aggressive war.” (_EC-451_).

D. _SCHACHT PARTICIPATED IN THE NAZI CONSPIRACY PURPOSELY, WILLINGLY,
AND WITH KNOWLEDGE OF ITS ILLEGAL AIMS AND METHODS._

(1) _He was a faithful adherent of Hitler._ It has already been demonstrated that even before Hitler’s accession to power, Schacht aligned himself with Hitler and accepted his program. Schacht’s utterances after Hitler had entrenched himself in power clearly show that he remained a faithful servant of Hitler despite the series of outrages committed under Hitler’s direction.

At the opening of the Leipzig Fair on 4 March 1935, Schacht said:

“My so-called foreign friends don’t render any services to me or
the cause, which they don’t want anyway, of course, but not even
to themselves, if they try to construe a contrast between me and
the allegedly impossible economic theories of National Socialism
and represent me as a sort of guardian of economic reason. I
assure you that all that I am doing and saying enjoys the
absolute approval of the Fuehrer and that I would never do or
say anything that does not have his approval. Not I but the
Fuehrer is the guardian of economic reason.” (_EC-503_)

On the occasion of the unveiling of Hitler’s bust in the vestibule of the Reichsbank on 31 July 1935, Schacht said:

“Germany stays and falls with the success of the policy of
Hitler.” (_EC-415_)

At a ceremony in connection with the creation of the Economic Chamber for Pomerania in Stettin on 19 January 1936, Schacht denied that there was any disagreement between Hitler and his collaborators, and went on to say:

“In Germany there is fortunately only one policy and one
economic policy, namely that of Adolf Hitler; to work with him
and for his goals is the highest satisfaction for every member
of the people’s community.” (_EC-502_)

In May 1936, Schacht was attacked by some of the more radical elements of the Nazi Party because he had rejected their “partially irrational ideas” concerning armament financing. In repelling these attacks, Schacht emphasized at a secret meeting of the Ministers on 12 May 1936, that his program of financing armaments had meant “the commitment of the last reserve from the very beginning”; and he announced that despite the attacks, he would continue to work because he

“* * * stands with unswerving loyalty to the Fuehrer, because he
fully recognizes the basic idea of National Socialism and
because at the end, the disturbances, compared to the great
task, can be considered irrelevant.” (_1301-PS_).

So far as appears, Schacht did not become a member of the Nazi Party until January 1937. Franz Reuter, whose biography of Schacht was officially published in Germany in 1937, has stated that Schacht’s becoming a regular Party member was only a question of secondary importance, and even part of a carefully planned policy, for,

“By not doing so—at least until the final assertion, and
victory of the Party—he [Schacht] was able to assist it [the
Party] much better than he would have been able to do had he
become an official Party member.” (_EC-460_)

On 30 January 1937, Hitler bestowed the Golden Party Badge upon Schacht, in recognition of his “special services to Party and State.” Schacht accepted this hallmark of approval by the Fuehrer with effusive thanks and a pledge of continued support. In his speech of acceptance, Schacht stated:

“The presentation of the Golden Badge of the Movement is the
highest honor the Third Reich has to offer. In honoring me as
the head of the Reichsbank and the Reich and Prussian Ministry
of Economics, it honors at the same time the two agencies which
I am directing as well as the work of all those officials,
employees and workers functioning in these two agencies.”

* * * * * *

“I thank all my colleagues among the ranks of officials,
employees, and workers for their faithfulness in the performance
of their work, and appeal to all of them further to devote, with
all their hearts, their entire strength to the Fuehrer and the
Reich. The German future lies in the hands of our Fuehrer.”
(_EC-500_)

The depths of adulation were reached in a speech which Schacht delivered on the occasion of Hitler’s 48th birthday in April 1937. Schacht spoke as one of Hitler’s “closest collaborators,” who had seen at first hand the difficulties which beset the Fuehrer in the relentless march toward his goals. In his speech, Schacht stated:

“With the limitless passion of a burning heart and the
infallible instinct of the born statesman, Adolf Hitler has won
for himself the soul of the German people in a battle fought for
14 years with unswerving consequence.”

* * * * * *

“Only the closest collaborators of the Fuehrer know how
difficult is the burden of this responsibility; how sorrowful
are the hours during which decisions must be made which bear
upon the well being and the fate of all of Germany.” (EC-501)

In November 1938, at a time Schacht now asserts he was plotting against Hitler, he stated in a speech:

“Instead of a weak and vacillating Government, a single,
purposeful, energetic personality is ruling today. That is the
great miracle which has actually happened in Germany and which
has had its effects in all fields of life and not least in that
of economy and finance. There is no German financial miracle.
There is only the miracle of the reawakening of German national
consciousness and German discipline, and we owe this miracle to
our Fuehrer Adolf Hitler.” (_EC-611_)

(2) _Schacht favored the acquisition of additional territory for Germany—peacefully if possible, but by aggressive war, if necessary._ Schacht had long been a German nationalist and expansionist. As early as 1927, he spoke against the Versailles Treaty:

“The Versailles Dictate cannot be an eternal document, because
not only its economic, but also its spiritual and moral premises
are wrong.” (_EC-415_)

He strongly favored the acquisition by Germany of both colonial territory and contiguous territory in Europe. At the Paris conference on 16 April 1929, he said:

“Germany can generally only pay if the Corridor and Upper
Silesia will be handed back to Germany from Polish possession,
and if besides somewhere on the earth colonial territory will be
made available to Germany.” (_3726-PS_)

In a speech in Danzig in June 1935, Schacht ascribed the economic difficulties which confronted Danzig to “historical errors of the greatest extent which were beyond the control of the German people”. He sought to comfort his listeners with the assurance that

“We Germans in the Reich today are looking with fullest
confidence upon our comrades in the Danzig Free State, and
maintain our people’s fellowship with the interests, wishes and
hopes of this territory which has unfortunately been separated
from us.” (_EC-498_)

In January 1936, Schacht again publicly spoke against the Versailles Treaty, and impliedly threatened war unless its terms were revised in Germany’s favor. At that time, he stated:

“But the memory of war weighs undiminished upon the people’s
minds. That is because deeper than material wounds, moral wounds
are smarting, inflicted by the so-called peace treaties.
Material loss can be made up through renewed labor, but the
moral wrong which has been inflicted upon the conquered peoples,
in the peace dictates, leaves a burning scar on the people’s
conscience. The spirit of the Versailles has perpetuated the
fury of war, and there will not be a true peace, progress or
reconstruction until the world desists from this spirit. The
German people will not tire of pronouncing this warning.”
(_EC-415_)

Later in the same year, Schacht again publicly advocated “_Lebensraum_” for the German people in terms not unlike those employed by Hitler. In his speech at Frankfurt on 9 December 1936, Schacht said:

“Germany has too little living space for her population. She has
made every effort, and certainly greater efforts than any other
nation, to extract from her own existing small space, whatever
is necessary for the securing of her livelihood. However, in
spite of all these efforts the space does not suffice.”
(_EC-415_)

Schacht had hoped, it is believed, that his desire for additional space for Germany would be realized without resort to war. In Austria, for example, he had authorized 200,000 Marks a month to be set aside for the National Socialists in Austria, hoping thereby to facilitate the absorption of Austria into Germany without war. But if Germany’s neighbors would not accede to the conspirators’ demands for additional space, Schacht was willing to go to war to fulfill those demands.

Thus, on 23 September 1935, Schacht told S. R. Fuller, Jr. at the American Embassy in Berlin:

“Colonies are necessary to Germany. We shall get them through
negotiation if possible; but if not, we shall take them.”
(_EC-450_)

In January 1937, Schacht, in a conversation with Ambassador Davies, impliedly threatened a breach of the peace unless Germany’s demands for colonies were met. The conversation is related as follows in a report under date of 20 January 1937, by Ambassador Davies to the Secretary of State:

“He [Schacht] stated the following: that the present condition
of the Germany people was intolerable, desperate and
unendurable; that he had been authorized by his Government to
submit proposals to France and England which would (1) guarantee
European peace; (2) secure present European international
boundaries; (3) reduce armaments; (4) establish a new form of a
workable League of Nations; (5) abolish sanctions with new
machinery for joint administration; all based upon a colonial
cession that would provide for Germany an outlet for population,
source for food stuffs, fats and raw material. * * *” (_L-111_)

The inference was clear: without a colonial cession, peace could not be guaranteed. Equally clear was the inference that it would be Germany in its search for “_Lebensraum_” that would disturb the peace.

On 21 December 1937, Schacht indicated to Ambassador Dodd that he desired the annexation of neighboring countries, without war if possible, but with war, if necessary. The pertinent portion of Ambassador Dodd’s notes on this conversation are as follows:

“Schacht meant what the Army chiefs of 1914 meant when they
invaded Belgium, expecting to conquer France in six weeks; i.e.,
domination and annexation of neighboring little countries,
especially north and east. Much as he dislikes Hitler’s
dictatorship, he, as most other eminent Germans, wishes
annexation—without war if possible, with war, if the United
States will keep hands off.” (_EC-461_)

(3) _Schacht knew of Hitler’s plans to wage aggressive war and wilfully provided the means whereby such a war might successfully be waged._ Whether or not Schacht personally favored war, it is clear that he at least knew that Hitler planned military aggression and that he was providing Hitler with the instrument by which those plans could be executed. Even before Hitler’s accession to power, Schacht knew from a reading of _Mein Kampf_ that Hitler was bent upon expansion to the East by force of arms (_3727-PS_).

In the course of his frequent contacts with Mr. Messersmith, United States Consul General in Berlin from 1930 to 1934, Schacht emphasized that the “Nazis were inevitably going to plunge Europe into war” (_EC-451_).

In September of 1934, Ambassador Dodd recorded in his diary a conversation with Sir Eric Phipps at the British Embassy in Berlin, wherein he stated that “Schacht had acknowledged to me the war purposes of the Nazi Party” (_EC-461_).

Schacht has admitted that in the course of his numerous talks with Hitler from 1933 to 1937, he formed the impression that “in order to make his hold on the Government secure, the Fuehrer felt that he must present the German people with a military victory” (_EC-458_).

These admissions by Schacht are fortified by other evidence which shows that Schacht knew that Hitler planned military aggression. After his appointment as Minister of Economics, Schacht became a permanent member of the secret Reich Defense Council. The function of that Council, as shown in other connections, was secretly to mobilize all of the human and material resources of Germany for war (_EC-177_).

Shortly after his appointment as the Plenipotentiary General for the War Economy in May 1935, Schacht was entrusted by the Reich Defense Council with the “preparation of economic mobilization” in connection with the proposed re-occupation of the Rhineland. Schacht and those officials who were charged with the purely military aspects of the re-occupation were enjoined to proceed with the utmost secrecy because of assurances given by Hitler to the French that no military action was contemplated in the de-militarized zone of the Rhineland (_EC-405_).

At the 11th meeting of the Reich Defense Council, on 6 December 1935, which was attended by a number of representatives from Schacht’s office of Plenipotentiary of the War Economy, Keitel pointed out that

“According to the will of the Fuehrer, the economic leadership
puts the increase of our armed might knowingly ahead of other
requirements of the state. It is the task of all members of the
Reich Defense Council to utilize the national property, made
available, primarily for this purpose and economically in the
framework of the entire situation, and request only such funds
and raw materials which serve absolutely and exclusively the
Reich Defense. * * *”

The singleness of purpose with which Schacht and the other conspirators were gearing the German economy for war is strikingly shown by the Top Secret minutes of the meeting of ministers dated 30 May 1936. This, it will be recalled, was little more than 10 weeks after German troops had occupied the Rhineland. At this meeting, Schacht pointed out that “it must be attempted to produce those raw materials within Germany which are economically favorable; for other raw materials ready reserves for the case of mobilization”; and also that “certain raw materials for war must be stocked.” Continuing the discussion, Goering emphasized that “all measures are to be considered from the standpoint of an assured waging of war.” Thereafter, Schacht advocated the introduction of price supervision and agreed that first priority should be given to the “specially urgent petroleum question” (_1301-PS_).

By Top Secret letter dated 31 August 1936, Schacht was advised by General von Blomberg that Hitler had ordered that “the setting up of all air force units has to be completed on 1 April 1937”. This accelerated program entailed the expenditure of large additional funds which Schacht and the Minister of Finance were called upon to supply. The sense of urgency with which Hitler pressed the completion of the German air force patently signified that the waging of war was a certainty (_1301-PS_).

Shortly after the receipt of this letter, and on 4 September 1936, Schacht attended a secret cabinet meeting where Goering stated:

“The Fuehrer and Reichskanzler has given a memorandum to the
Col. General and the Reich War Minister which represents a
general instruction for the execution thereof.

“It starts from the basic thought that the showdown with Russia
is inevitable.”

* * * * * *

“The Colonel General reads the memorandum of the Fuehrer.”

* * * * * *

“If war should break out tomorrow we would be forced to take
measures from which we might possibly still shy away at the
present moment. They are, therefore, to be taken.”

* * * * * *

“All measures have to be taken just as if we were actually in
the stage of imminent danger of war.” (_EC-416_).