Chapter XX: Part 20

I was educated in Hamburg. I studied at universities in Germany and in Paris, and after receiving my doctor’s degree I was active for 2 years in economic organizations. Then I began my banking career, and for 13 years I was at the Dresdner Bank, one of the large so-called “D” banks. I then took over the management of a bank of my own, which was later merged with one of the “D” banks, and in 1923 I abandoned my private career and went into public service as Commissioner for German Currency (Reichswährungskommissar). Soon afterwards I became President of the Reichsbank, and I held that office until 1930, when I resigned.

DR. DIX: Why did you resign as President of the Reichsbank at that time?

SCHACHT: In two essential points there were differences of opinion between the Government and me; one was the internal finance policy of the Government. With the terrible catastrophe of the lost war and the Dictate of Versailles behind us, it was necessary in my opinion to use thrifty and modest methods in German politics. The democratic and socialist governments of that period could not see that point, but carried on an irresponsible financial policy, especially by incurring debts which in particular were contracted to a very large extent abroad. It was quite clear that Germany, already heavily burdened with reparation payments, was under no circumstances in a position to build up as much foreign currency as was necessary for the payment of these debts. We were not even able to pay the reparations from our own economy.

Therefore I objected to the contraction of these debts in which the various governments of that period indulged, and to which they also encouraged communities and private companies. I objected to this financial policy and continually, abroad and at home, warned against such a policy of incurring foreign debts. The foreign bankers did not listen nor did the German Government. It was during that period that if in Berlin one passed the Adlon Hotel, Unter Den Linden, one could not be sure that a financial agent would not emerge and ask whether one did not need a loan.

Later I was strongly opposed by these same people, when Germany was forced to discontinue making payments of her debts. But I wish to state here that I have always and on every occasion been against such a policy of debts. That was the one reason. The other reason was in the field of foreign policy. I had not only contributed my part toward the creation of the Young Plan but in 1929 I also assisted in the setting up of the Young Committee; the so-called Young Plan had resulted in a number of improvements for Germany, which the German Government was now sacrificing step by step during the subsequent negotiations at The Hague. Thus the financial and economic condition of the nation again deteriorated. I revolted against this, and for both these reasons I resigned my office as Reichsbankpräsident in protest, in March 1930.

DR. DIX: Gentlemen of the Tribunal, in this connection, may I call your attention to Exhibit Number Schacht-6 of my Document Book. If the Tribunal agrees, I should like, in order to shorten the presentation of documents during the examination of the witness, to call your attention to those documents which have a direct connection with the questions with which the witness is dealing. I believe that this arrangement will be agreeable to the Tribunal since it will shorten the presentation of documents. It is Document Number Schacht-6, on Page 12 of the German copy of my document book and on Page 8 of the English copy, Your Lordship, Exhibit Number Schacht-6. That is a record of the statements made by Dr. Schacht during the session of the subcommittee for monetary and credit matters on 21 October 1926. I believe it is not necessary for me to read these statements. They refer to the foreign debts which Dr. Schacht has just mentioned, and contain the same thoughts which Dr. Schacht has just expressed before the Tribunal, and are proof that these thoughts are not views _ex post facto_. Therefore, without reading it, I ask the Tribunal to take judicial notice of the whole of this document.

I shall return to my examination.

[_Turning to the witness._] You had resigned your office as President of the Reichsbank. What did you do then?

SCHACHT: I went to the small estate which I owned in the country and lived there as a private citizen. Then in 1930 I made a trip to the United States. I departed shortly or immediately after the Reichstag elections of September 1930 and went to New York via London. There I lectured for about two months on questions which were presented to me by American friends.

DR. DIX: When did you first get in touch with the National Socialist ideology, with the Party, and with Hitler personally, and when, in particular, did you read the Party program and Hitler’s _Mein Kampf_?

SCHACHT: With the exception of a single occasion I have never in my life concerned myself with Party politics. Even at the age of 26 I was offered a sure electoral district in the Reichstag, which I did not accept, since I have never been interested in Party politics. My interest always lay in the field of economics and financial policy but, of course, for public affairs I always had a general interest, arising from a concern for the future of my country and my people.

Therefore, in 1919, I participated in the foundation of the Democratic Party.

May I say a few words here about my background and spiritual upbringing? My father, throughout his life, adhered to democratic ideals. He was a Freemason. He was a cosmopolitan. I had, and I still have, numerous relatives on my mother’s side in Denmark and on my father’s side in the United States, and to this day I am on friendly terms with them. I grew up among these ideas and I have never departed from these basic conceptions of Freemasonry and democracy and humanitarian and cosmopolitan ideals. Later I always remained in very close contact with foreign countries. I traveled much, and with the exception of Ireland and Finland there is no country in Europe which I have not visited. I know Asia down to India, Ceylon, and Burma. I went to North America frequently, and just before the Second World War broke out I intended to travel to South America.

I want to emphasize this in order to show that I was never interested in Party politics. Nevertheless, when in the elections of September 1930 Hitler’s party suddenly and surprisingly obtained 108 seats, I began to take an interest in the phenomenon; and on board ship going to the United States I read _Mein Kampf_ and, of course, also the Party program. When I arrived on the other side the first question was what was my opinion about Hitler and the Party, because naturally everyone was talking about this event in Germany. In my first publication at that time—it was an interview—I uttered an unequivocal warning and said, “If you people abroad do not change your policy towards Germany, then you will soon have very many more adherents of Hitler in Germany than there are now.” Throughout that period of 2 months I spoke about 50 times in public meetings, and I always met with understanding in the question of reparations, the mistakes of the Versailles Treaty, and the economic difficulties of Germany, and I returned with the impression that the whole American attitude, the attitude of the American people toward us, was indeed rather friendly. Not on my initiative but by coincidence, I got in touch with the adherents of the National Socialist Party. A friend of mine, a bank director, invited me at the beginning of December 1930 to dine with him at his house and to meet Hermann Göring there. I did so and gained no really definite impression from Göring’s statements and conduct. He was in every respect reserved, modest, and well-mannered, and he invited me to his house in order to meet Hitler. At the beginning of January my wife and I dined with Göring and his wife one evening at their home, and on that occasion, Fritz Thyssen was also invited. It had been planned that Hitler should come also and talk with us. I say again now that Göring’s apartment was extremely modestly and simply styled. We had a plain pea soup and bacon and particularly Göring’s first wife made an excellent impression. After supper Hitler appeared, and the ensuing conversation was conducted in such a way that, let us say, 5 percent of it was contributed by us, and 95 percent by Hitler. What he said concerned national questions, in which he agreed absolutely with us. No extravagant demands were stated, but on the other hand the national necessities of Germany were definitely emphasized. In social questions Hitler expressed a number of good ideas; he was especially intent on avoiding class struggle and on eliminating strikes, lock-outs, and wage disputes by decisive intervention of the State in labor relations and the direction of economic affairs. There was no demand for abolishing private enterprise, but merely for influence in its conduct. It seemed to us these ideas were quite reasonable and acceptable. Aside from that, he revealed practically no knowledge in the field of economy and financial policy, though on that evening he did not claim to know anything about these subjects. He merely asked that we as representatives of economy should have understanding for his ideas and give him factual advice. That was the purpose of that evening.

DR. DIX: I shall refer to this first conversation with Adolf Hitler later, but I should like to return now to the question I have put before concerning your attitude to the Party program and the ideology developed in the book, _Mein Kampf_. I am stressing this because, as you have heard, the gentlemen of the Prosecution are of the opinion that certain parts of the Party program as such and also parts of the book, _Mein Kampf_, are of a criminal character, and that their criminal character was recognizable immediately upon their publication. Therefore I should like to ask you to explain in detail your attitude at the time, and possibly also your attitude today, toward the Party program and the ideology of National Socialism as it appears in the book _Mein Kampf_.

SCHACHT: From the proceedings in this Court so far I have not gained the impression that the opinion of the Prosecution concerning the criminal character of the Party program is a uniform one. I am unable to see in the Party program as such any sign of criminal intentions.

Federation of all Germans, which always plays a great role, is always claimed only on the basis of the right for self-determination. A position for Germany in foreign politics is demanded as constituting equality of the German nation with the other nations; that this involved the abolition of the discriminations which were imposed upon the German people by the Versailles Treaty is quite clear.

Land and soil was demanded for the nutrition of our people and the settlement of our excess population. I cannot see any crime in that, because after land and soil was expressly added in brackets the word “colonies.” I have always considered that as a demand for colonies, which I myself supported a long time before National Socialism came into existence. Rather strange and, in my opinion, going somewhat beyond the limits were the points concerning the exclusion of Jews from civil rights, but on the other hand it was reassuring that the Jews were to be under the protection of the Aliens’ Law, that is, subject to the same laws which applied to foreigners in Germany. I would have wished and always demanded that this legal protection should under all circumstances be given to the Jews. Unfortunately they were not given that protection. For the rest it was emphasized that all citizens should have equal rights and duties.

Promotion of popular education was stressed as being beneficial, and also gymnastics and sports were demanded for the improvement of public health. The fight against deliberate political lies was demanded, which Goebbels afterwards conducted very energetically. And, above all, demand was made for the freedom of all religious denominations and for the principle of positive Christianity.

That is, in essence, the content of the National Socialist Party program, and I cannot see anything criminal in it. It would, indeed, have been quite peculiar if, had this been a criminal Party program, the world had maintained continuous political and cultural contact with Germany for two decades, and with the National Socialists for one decade.

As far as the book, _Mein Kampf_, is concerned, my judgment has always been the same from the very beginning as it is today. It is a book written in the worst kind of German, propaganda of a man who was strongly interested in politics, not to say a fanatical, half educated man, which to me Hitler has always been. In the book _Mein Kampf_ and in part also in the Party program there was one point which worried me a great deal, and that was the absolute lack of understanding for all economic problems. The Party program contained a few slogans, such as “Community interests come before private interests,” and so on, and then the “breaking up of subjection to financial interests” and similar phrases which could not possibly signify anything sensible. The same held true for _Mein Kampf_, which is of no interest from the point of view of economic policy and consequently had no interest for me.

On the other hand, as regards foreign policy _Mein Kampf_ contained, in my opinion, a great many mistakes, because it always toyed with the idea that within the continent of Europe the living space for Germany ought to be extended. And if nevertheless I did co-operate later on with a National Socialist Reich Chancellor, then it was for the very simple reason that expansion of the German space toward the East was in the book made specifically dependent upon the approval of the British Government. Therefore, to me, believing that I knew British policy very well, this seemed Utopian and there was no danger of my taking these theoretical extravagances of Hitler any more seriously than I did. It was clear to me that every territorial change on European territory attempted by force would be impossible for Germany, and would not be approved by the other nations.

Besides that, _Mein Kampf_ had a number of very silly and verbose statements but, on the other hand, it had many a reasonable idea, too; I want to point out that I liked two things especially: first, that anyone who differs with the government in political matters is obliged to state his opinion to the government; and secondly, that, though the democratic or rather parliamentary government ought to be replaced by a Führer government, nevertheless the Führer could only remain if he was sure of the approval of the entire people, in other words, that a Führer also depended on plebiscites of a democratic nature.

DR. DIX: Dr. Schacht, you have now described the impression which you gained from your first conversation with Adolf Hitler, as well as from a study of the Party program and _Mein Kampf_. Did you believe that you would be able to work with Adolf Hitler and what practical conclusions did you derive from that first conversation with Hitler?

SCHACHT: To work with Adolf Hitler was out of the question for me personally, since I was a private citizen and not interested in Party politics and consequently after that conversation I did nothing at all to create for myself any personal relations with the Hitler circles. I simply went back to my farm and I continued to live there as a private citizen. So personally, for myself I did not draw any conclusions but I drew another conclusion. I have already said that naturally I had the future of my country at heart. After that conversation I repeatedly emphasized to Reich Chancellor Brüning and implored him when forming and heading the Cabinet to include the National Socialists in it, because I believed that only in this way the tremendous impetus, the tremendous propagandistic fervor which I had noticed in Hitler, could be caught and harnessed—by putting the National Socialists to practical government work. One should not leave them in the opposition where they could only become more dangerous, but one should take them into the government and see what they could achieve and whether they would not acquire polish within the government. That was the suggestion and the very urgent request I made to Brüning, and I might say that according to my impression Hitler would at that time have been quite ready to do that. Brüning could under no circumstances be won over to such a policy and in consequence was later crushed.

DR. DIX: Let us stop for a moment and deal with the Party. The Indictment states that you were a Party member. Now, Göring has already said that Hitler conferred the Golden Party Emblem only as a sort of decoration. Do you have anything new to add to that statement made by Göring?

SCHACHT: I do not know whether it has been mentioned here; the Golden Party Emblem was in January 1937 given to all Ministers and also to all military personalities in the Cabinet. The latter could not become Party members at all; therefore the award of the Party emblem did not entail membership. As to the rest I think Göring has testified from the witness stand. I might mention one more thing. If I had been a Party member, then doubtlessly when I was ousted from my position as Minister without Portfolio in January 1943, the Party Court would have gone into action, since a case of insubordination to Hitler would have been evident. I was never before the Party Court and even when on the occasion of my dismissal the return of the Golden Party Emblem was demanded from me, I was not told that I was being dismissed from the Party, since I was not in the Party. I was only told “return the Golden Emblem of the Party which was conferred upon you,” and I promptly complied.

I believe I could not add anything else to the statements already made.

DR. DIX: Then the Indictment is wrong in this point?

SCHACHT: Yes; in this point it is absolutely wrong.

DR. DIX: Why did you not become a Party member?

SCHACHT: Excuse me, but I was opposed to quite a number of points of the National Socialist ideology. I do not believe that it would have been compatible with my entirely democratic attitude to change over to a different Party program, and one which, not in its wording but through its execution by the Party had certainly not—in the course of time—gained any more favor with me.

DR. DIX: Therefore, you did not become a Party member for reasons of principle?

SCHACHT: Yes, for reasons of principle.

DR. DIX: Now, a biography of you was published by one Dr. Reuther in 1937. There, also, it is correctly stated that you were not a Party member; but the biographer gives different, more tactical reasons for your refusing to join the Party; and he mentions the possibility of being more influential from outside the Party and so on. Maybe it is advisable, since the biography has been referred to in the course of the proceedings, that you shortly state your views on this point?

SCHACHT: I believe that at the time Hitler had the impression that I could be useful to him outside of the Party and it may be that Dr. Reuther got knowledge of this. But I would rather not be made responsible for the writings of Dr. Reuther, and in particular I should like to object to the fact that the Prosecutor who presented the brief against me described this book by Dr. Reuther as an official publication. Of course this book is the private work of a journalist for whom I have respect but who certainly states his own opinions and ideas.

DR. DIX: Did you speak in public on behalf of Hitler before the July elections in 1932?

SCHACHT: Before the July elections of 1932, which brought that tremendous success for Hitler, I was never active either publicly or privately on behalf of Hitler, except once, perhaps, or twice—I remember now, it happened once—Hitler sent a Party member to me who had plans on economic, financial, or currency policies; Hitler may have told him that he should consult me as to whether or not these plans could be put into practice. I might tell the story briefly: It was Gauleiter Röwer of Oldenburg. In Oldenburg the Nazis had already come to power before 1932 and he was the Minister President there. He wanted to introduce an Oldenburg currency of its own, a consequence of which would have been that Saxony would have introduced its own Saxon currency, Württemberg would have introduced its own currency, and Baden would have had its own currency, and so on. I ridiculed the whole thing at the time and sent a telegram to Hitler, saying that the economic needs of the German Reich could not be cured by such miracles. If I disregard this case, which might have constituted some sort of private connection, then I may say that neither privately nor publicly, neither in speeches nor in writing, have I at all been concerned with Hitler or his Party and in no way have I recommended the Party.

DR. DIX: Did you vote National Socialist in July 1932?

SCHACHT: No, I would not think of it.

DR. DIX: The Prosecution now lists a number of points by which it wants to prove that you were an adherent of the National Socialist ideology. I am going to name them one by one, and I ask you to state your view on each of them. First, that you were an opponent of the Treaty of Versailles. Would you like to say something about that?

SCHACHT: It surprised me indeed to hear that reproach from an American Prosecutor. The lieutenant who spoke is perhaps too young to have experienced it himself, but he should know it from his education; at any rate, for all of us who have lived through that time, it was one of the outstanding events that the Treaty of Versailles was rejected by the United States, and, if I am not wrong, rejected with the resounding approval of the entire American people.

The reasons prompting that action were also my reasons for rejecting the Treaty: it stood in contradiction to the Fourteen Points of Wilson, which had been solemnly agreed upon, and in the field of economics it contained absurdities which certainly could not work out to the advantage of world economy. But I certainly would not accuse the American people of having been adherents of the Nazi ideology, because they rejected the Treaty.

DR. DIX: The Prosecution also assert that you had already been for a long time a German National Socialist, not merely a German patriot, but a German nationalist and expansionist. Would you like to state your position in that respect?

SCHACHT: You, yourself, by emphasizing the word “patriot” have recognized that one must be clear on just what a nationalist is. I have always been proud to belong to a nation which for more than a thousand years has been one of the leading civilized nations of the world. I was proud to belong to a nation which has given to the world men like Luther, Kant, Goethe, Beethoven, to mention only a few. I have always interpreted nationalism as the desire of a nation to be an example to other nations, and to maintain a leading position in the field of spiritual and cultural achievement through high moral standards and intellectual attainment.

MR. JUSTICE JACKSON: If it please the Tribunal, it seems to me that we are getting very far from the relevant charges in this case, and particularly if they are going to be preceded by a statement of the Prosecution’s position.

We have no charge against Dr. Schacht because he opposed the Treaty of Versailles; we concede it was the right of any German citizen to do that by any means short of war. Nor do we object to his being a patriotic German by any means short of war. The only purpose has been to find out what his attitude in those matters was in connection with the charge that he prepared and precipitated war.

To deal with philosophical matters separately from the war charge seems to me entirely irrelevant, and I assure the Tribunal we have no purpose in charging that it is a crime to oppose the Treaty of Versailles. Many Americans did that. It is no crime to be a German patriot. The crime is the one defined in the Indictment, and it seems to me we are a long way off from that here, and wasting time.

THE PRESIDENT: What do you say to that, Dr. Dix?

DR. DIX: I was eager and glad to hear what Justice Jackson just said, but I must quote from Wallenstein, “Before dinner we heard another version.” There was no doubt—and once, because I thought I had misunderstood, I even asked again—that the criminal character of the Party program, the criminal character of the contents of _Mein Kampf_—reproachable in itself and, to say the least, indicative of crimes committed later—the willful opposition to the Treaty of Versailles—and further the accusation of having been an expansionist and nationalist, all these things have repeatedly in the course of the proceedings here been held against Dr. Schacht in order to strengthen the foundation of the charges made against him.

If Mr. Justice Jackson now with gratifying frankness states, “We do not at all blame Schacht for opposing the Treaty of Versailles; we do not assert that he was more than a patriot, that is to say, a nationalist in the sense described before, and we do not maintain either that these our statements are circumstantial evidence for his later co-operation, his financial co-operation, in the rearmament program, which in turn is proof indicative of his intent to assist in waging a war of aggression”—if that is now stated unequivocally by the Prosecution, then we can dispense with a great many questions which I intended to put in the course of my examination of the witness; I would then gladly leave the whole subject of Schacht’s expansionism and nationalism. We have not yet mentioned expansionism; Mr. Justice Jackson has not mentioned it either. I do not believe, however, that the Prosecution will withdraw the accusation of expansionism, that is the expansion of German living space in Europe. I am not sure of this but we shall certainly hear about it. As I said, if these accusations which have been made are withdrawn, then I can dispense with these questions and my client need not answer them.

MR. JUSTICE JACKSON: Of course, I made no such statement as Dr. Dix has assumed. My statement was clearly made in the opening and clearly is now, that he had a perfect right to be against the Treaty of Versailles and to be a German nationalist and to follow those aims by all means short of war. I do not want to have put in my mouth the very extensive statements made by Dr. Dix.

My statement was made clear in the opening, and these matters as to the Versailles Treaty and nationalism and Lebensraum, as political and philosophical matters, are not for the Court to determine. We are not going to ask you to say whether the Treaty of Versailles was a just document or not. It was a document. They had a right to do what they could to get away from it by all means short of war.

The charge against Dr. Schacht is that he prepared, knowingly, to accomplish those things by means of aggressive warfare. That is the nub of the case against him.

DR. DIX: Then on this point there is...

THE PRESIDENT: Dr. Dix, I think the case for the Prosecution has been clear from the outset, that all these matters are only relied upon when they were entered into with the intention of making war.

DR. DIX: Very true. I need not put these questions if the Prosecution no longer uses these accusations as circumstantial evidence for his intent to wage a war of aggression, but Mr. Justice Jackson has not yet made a statement to that effect. But there seems to be no doubt—and I do not believe that I misunderstood the Prosecution—that in order to prove Dr. Schacht’s intention to wage a war of aggression, the Prosecution did refer to Schacht’s opposition to the Treaty of Versailles, to his nationalism and expansionism that is, extension of Lebensraum. We do not want to make academic or theoretical statements about the ideas of Lebensraum and nationalism, but as long as these ideas, which the Prosecution concedes he is justified in holding, as long as these characteristics are considered to be in part proof of his intent, my client must have the opportunity of telling the Tribunal just what he meant by Lebensraum if he ever spoke of it, which I do not yet know. But I think, nevertheless, that there is still a matter not quite clear between Mr. Justice Jackson and me, and that I do not quite agree either with what was said by Your Lordship...

THE PRESIDENT: What you were asking him about was his views on nationalism. That is what you were asking him about, his views upon nationalism, and that seems to be a waste of time.

DR. DIX: I put to him that he was accused of being a nationalist and an expansionist, and that the Prosecution therefrom drew the conclusion that he planned an aggressive war by financing armament; now he has to show, of course, that...

THE PRESIDENT: What Mr. Justice Jackson has pointed out is that the Prosecution have never said that he simply held the views of a nationalist and of an expansionist, but that he held those views and intended to go to war in order to enforce them.

DR. DIX: Yes, Your Lordship, but it is held that these opinions were proof—one proof among others—that he had the intention of waging aggressive war; that they therefore constitute what we jurists should call circumstantial evidence for his intent, to wage war, and as long as this argument—it is no longer a charge maintained by Justice Jackson but it is an argument of the Prosecution...

THE PRESIDENT: There is no issue about it. He agrees that he did hold these views. Therefore it is quite unnecessary to go into the fact. The Prosecution say he held the views; he agrees that he held the views. The only question is whether he held them with the innocent intention of achieving them by peaceful methods, or whether he had the alleged criminal intention of achieving them by war.

DR. DIX: I only wish to say one more thing to that. Expansionism has not yet been discussed. Should Dr. Schacht have had expansionist tendencies, then Mr. Justice Jackson certainly would not say that he has no objection. Therefore...

THE PRESIDENT: Dr. Dix, I think that you may ask him questions about the expansionists, his ideas of what expansionists were, what he meant by expansion, but for the rest it seems to me you are simply proving exactly the same as the Prosecution have proved.

DR. DIX: I fully agree. Dr. Schacht, were you...

THE PRESIDENT: We will adjourn now.

[_A recess was taken until 1400 hours._]

_Afternoon Session_

DR. DIX: I believe, Dr. Schacht, that both of us will have to speak a little more slowly and pause between question and answer.

Now, please reply to the accusation by the Prosecution that you were an expansionist. Please define your position.

SCHACHT: Never in my life have I demanded even a foot of space that did not belong to Germany, nor would I ever entertain such an idea.

I am of the opinion that neither is it national to try to dominate and govern foreign peoples, nor is appropriation of foreign territory a politically just action.

These are two questions with which we are much concerned at present.

I might perhaps add, in order to clarify my position, just what I understand by nationalism, and just why I was against each and every form of expansionism. Just one sentence will suffice, a sentence from a speech which I made in August of 1935. On that occasion I said, and I quote:

“We want to express the belief that self-respect requires
respect for others, and the upholding of our national
individuality must not mean disparagement of the individuality
of others; by respecting the acts of others we respect our own
action; and a battle of economic competition can be won in the
end only through example and achievement and not through methods
of violence or craft.”

DR. DIX: According to the opinion of the Prosecution, in the year 1936 you made a public threat of war, on which occasion you are alleged to have said that the spirit of Versailles was instrumental in keeping alive war mania. I am referring to Document EC-415, a document to which the Prosecution has referred.

SCHACHT: I never understood, in the course of this proceeding, how there could be a threat of war in this quotation. The quotation concludes with the words—and I must quote in English because I just have the English words before me:

“The spirit of Versailles is perpetuated in 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.”

The conclusion says that the German people will not tire of pronouncing this warning. It seems to be a matter of course that hereby expression is given to the fact that I am warning others from persisting in war mania. I am not warning ourselves, but the entire world, to avoid perpetuating the spirit of Versailles.

DR. DIX: The Prosecution further accuses you in this connection that you publicly approved the idea of Lebensraum, for the German people. In this special connection reference was made to the speech you made at Frankfurt on 9 December 1936, in which you said: “Germany has too limited Lebensraum for her population.”

SCHACHT: This speech of 9 December 1936 was a speech which was solely concerned with a restoration of the colonial rights of Germany. I have never demanded any Lebensraum for Germany other than colonial space. And in this instance, again, I am surprised that just the American Prosecutor should accuse me on my efforts in this direction, because in the Fourteen Points of Wilson, which regrettably were not adhered to later on, the colonial interests of the Germans are taken into consideration. In consequence, I said, again and again: “If you want peace in Europe, give Germany an economic outlet into which Germany can develop and from which she can satisfy her needs. Otherwise Germany will be a center of unrest and a problem for Europe.”

I would like to quote one sentence only from the speech I made:

“Peace in Europe, together with the peace of the entire world,
is dependent upon whether or not the densely populated areas of
Central Europe will have the means of existence.”

I emphasized this viewpoint again and again, but at no time did I connect these views with the idea of an armed conflict.

I would like to quote another sentence from this same speech:

“I did not mention this consideration as to the parts of Germany
which were separated from her”—and I am speaking of the losses
suffered by Germany—“in order that we might draw the conclusion
of warlike intentions; my entire position and my work are
marshaled to the objective of bringing about peace in Europe
through peaceful and sensible considerations and measures.”

THE PRESIDENT: Will you please give me the PS numbers and the exhibit numbers of those two speeches?

DR. DIX: I cannot at this moment, Your Lordship, I am sorry, but I will try to get them and submit them in writing. The last is the speech at Frankfurt, and the others...

THE PRESIDENT: That is quite all right. You will let us know in writing, will you?

DR. DIX: Yes, indeed.

SCHACHT: Perhaps if it is permitted I might refer to two other sentences from my article which was published in _Foreign Affairs_, the well-known American magazine, in the year 1937. I have the German translation before me, which says, in the introduction, and I quote:

“I am making these introductory remarks in order to clarify the
situation. The colonial problem today, as in the past, is for
Germany not a question of imperialism or militarism, but still
surely and simply a question of economic existence.”

Perhaps I might refer to the point that very influential Americans were in constant accord with this view. I have a statement made by the collaborator of President Wilson, Colonel House, who made the well-known distinction between the “haves” and “have nots,” and who was especially influential in advocating consideration for German colonial interests. Perhaps I can dispense with the quotation.

DR. DIX: In this connection I should like to point to the document submitted by the Prosecution, Document L-111, Exhibit USA-630. This document is concerned with the conversation which you had with the American Ambassador Davies, and in which you are accused of having indirectly threatened a breach of peace.

SCHACHT: I have already set forth just now that I constantly said that Europe cannot have peaceful development if there are no means of livelihood for the completely overpopulated Central Europe, and I believe conditions at present show how absolutely right I was—just what an impossibility it is to feed these masses of people within Europe. And beyond that I had a keen interest in diverting Hitler’s quite misguided ideas from Eastern Europe and therefore was constantly at pains to direct his attention to the colonial problem so that I could turn his thought from the mad ideas of expansionism in the East. I recall that in 1932, shortly before he assumed office, I had a conversation with him in which for the first time I approached him on these facts and particularly told him what utter nonsense it would be to think of an expansion in the East.

Then, constantly, in the subsequent years, again and again, I spoke about the colonial problem, until at the last in the summer of 1936 I had the possibility of pursuing my ideas and Hitler gave me the mission, which I had suggested to him, of going to Paris to discuss with the French Government the possibility of a satisfactory solution of the question of colonies for Germany. This actually happened in the summer of 1936. And for the satisfaction of myself and all other friends of peace, I might say that the Government of Léon Blum, which was in office at the time, showed gratifying appreciation of this solution for Europe’s food and economic problems, and for their part stated that they were ready to deal with the colonial problem with the aim of perhaps returning one or two colonies to Germany. Léon Blum then undertook, in agreement with me, to inform the British Government about these conversations in order to secure their consent or to bring up a discussion of this problem within the British Government. That actually did take place, but the British Government hesitated for months before they finally could decide on any position in this matter and so the discussion dragged on up to the initial months of the Spanish civil war and was eclipsed and supplanted by the problems of the Spanish civil war, so that a continuation of the discussion on this colonial problem never came about.

At that time, in January of 1937, when the American Ambassador to Moscow, Ambassador Joseph Davies, visited me at Berlin, I was rather irritated by the slowness with which the British Government was meeting these suggestions, and consequently I came forth with a request for understanding and support and told Ambassador Davies about this whole matter. I tried constantly and repeatedly to gain the understanding support of representatives of the American Government. I tried again and again to advise these gentlemen about domestic conditions and developments within Germany, to tell them as much as was possible and compatible with German interests and to keep them informed. That applies to Ambassador Davies, Ambassador Dodd, Ambassador Bullitt when he was in Berlin, and so on.

This conversation with Ambassador Davies is referred to in the document which the Prosecution has submitted, Document L-111, and which is taken from the book which Ambassador Davies wrote about his mission in Moscow, and we will perhaps come back to this book later.

As the gist of my conversation with Davies I would like to quote just one sentence again, which I must again quote in English, since I have only the English book at my disposal.

“Schacht earnestly urged that some such feasible plan could be
developed if discussions could be opened; and that, if
successful, would relieve the European war menace, relieve
peoples of enormous expenditures for armaments, restore free
flow of international commerce, give outlet to thrift and
natural abilities of his countrymen and change their present
desperation into future hope.”

DR. DIX: In this connection the affidavit of Fuller plays an important part, that is Exhibit USA-629, and Document EC-450. According to this affidavit, you allegedly declared to Fuller that if Germany could not get colonies through negotiations she would take them. Please define your position as to this statement.

SCHACHT: In a German drama an intriguer is being instructed by a tyrant to bring a man of honor to ruin, and he says in reply, “Just give me one word said by this man, and I will hang him thereby.” I believe, My Lord Justices, that in this courtroom there is not a single person who at one time or another in his life has not said a rather unfortunate word. And how much easier is it when he is speaking in a foreign language of which he is not completely master.

Mr. Fuller is known to me as a respectable business man, and this discussion which he has here reproduced is indubitably done according to the best of his knowledge. He himself rightly says that even had he tried to put down the exact words he could not guarantee that each and every word has been said. But if I did say these words, then it seems only that I said we Germans must have colonies and we shall have them. Whether I said, “We shall take them,” or “We shall get them,” that, of course, it is impossible for me to say with certainty today after a period of 10 years.

The representative of the Prosecution also thought the expression, “We will take them,” a little colorless in effect and therefore I believe he just added a trifle, for he said twice in his presentation of the charges that I had said, “We will take these colonies by force,” and on a second occasion he even said, “We will take these colonies by force of arms.” But “force” or “force of arms” are not mentioned in the whole of Fuller’s affidavit. And if I had used that word or even used it only by implication, Mr. Fuller would have had to say with reason: “So you want to take colonies by force; how do you expect to do that?” It would have been utter nonsense to assert that Germany would ever have been able to take overseas colonies by force. She lacked—and always will lack—domination of the seas, which is necessary for this.

Fuller did not take exception to my manner of expression and in his conversation he immediately continued—and I quote:

“You mentioned a little while ago that necessary raw materials
could not be obtained, owing to German lack of foreign exchange.
Would stabilization help you?”

Therefore, rather than to become excited about the fact that I wanted to take colonies by force—something which I never said and which is contrary to my views, as I have already stated—he immediately goes on to foreign exchange and to stabilization.

DR. DIX: The prosecutor asserts further that you were interested in the conquest of neighboring territory in Europe.

SCHACHT: This matter is not quite so harmless as the previous mistake of the Prosecution. In a previous interrogation, I was accused as follows, and the prosecutor, in presenting his charges here, referred to the fact—I quote the prosecutor:

“On 16 April, on the occasion of the Paris conference on
reparation payments, Schacht said, ‘Germany in general can pay
only if the Corridor and Upper Silesia are returned to
Germany.’”

This is the interrogation of 24 August 1945. According to the verbatim record of the interrogation, I answered:

“It may be that I said such a thing.”

Of course, as far as the wording of a statement, which I had made 10 to 15 years before, I did not recall it. But I did remember that in connection with the Corridor and Upper Silesia I had made a remark, and since I had to assume that if the Prosecution submitted this record to me it would be an accurate stenographic record, for that reason I did not dispute this remark which I had allegedly made and said that it might be that I said something to that effect. The Prosecution takes a “maybe” and out of that reconstructed the following sentence:

“This quotation was read to Schacht, and he said it was
correct.”

This assertion by the Prosecution is therefore wrong. I said, “It may be that I said something to that effect,” but I did not say that this statement that was submitted to me was correct.

Then, fortunately, in my imprisonment here, I succeeded in getting hold of my book, a book which I wrote about the termination of reparation payments, which was published in 1931 and in which I luckily put down the text of my statement about the matter we are dealing with now. I have the exact text, and I would like to say that this book has been submitted in evidence, and from this text appears what I said verbatim:

“Regarding the problem of German food and food supplies, it is
especially important that import of foodstuffs has been
decreased”—I beg your pardon—“that import will be
decreased.”—I am sorry again. I cannot read this—“that the
import of foodstuffs will be decreased and partially made up
through home production. Therefore, we cannot let the fact be
overlooked that important agricultural surplus territories in
the eastern part of Germany have been lost by cession and that a
large territory which was almost exclusively agrarian has been
separated from the Reich. Therefore the economic welfare of this
territory, East Prussia, is decreasing steadily and the Reich
Government must support and subsidize it. Constantly, therefore,
suitable measures should be taken to eliminate these injurious
conditions, which are hindering considerably Germany’s ability
to pay.”

DR. DIX: Your Lordship, this is from our document book, Document Schacht-16, German Page 38, English Page 44.

SCHACHT: This quotation absolutely does not agree with the statement submitted to me in the interrogation, and in no way can we draw the conclusion in consequence that I was in favor of a return of these areas. What I demanded was that the separation of these areas be taken into consideration when Germany’s ability to pay and the payments were determined. When the prosecutor in his speech added: “I would like to point out that this is the same area over which the war started in September 1939,” I believe it is an insinuation which characterizes the prosecutor, rather than me, against whom it was intended.

DR. DIX: As part of the circumstantial evidence, that is, the indirect evidence for the will to aggression, with which you are charged, the Prosecution includes your wish—your alleged wish—for the Anschluss of Austria. Will you please take your position as to this accusation?

SCHACHT: From 1919 I considered the Anschluss of Austria inevitable and, in the national sense, that is, spiritually and culturally, it was welcome. But that economically the Anschluss of Austria would not be for Germany so much an aggrandizement as a liability. I always knew. But the wish of the Austrian people to belong, to be incorporated into Germany—I took that wish as my own and said that if here there are six and a half million people who spontaneously in 1919 and later in innumerable demonstrations expressed their wish of being incorporated into the brotherhood of Greater Germany, that was an event to which no German could be opposed, but in the interest of Austria must hail with gladness. In that sense I always favored and respected the wish of Austria to belong to the Reich and wanted it carried through as soon as external political conditions permitted it.

DR. DIX: My attention has just been called to the fact that you are still speaking too fast and that the interpretation is lagging behind a little bit. Will you please speak a little more slowly.

What was your opinion as to the incorporation of the Sudetenland into Germany?

SCHACHT: Concerning the incorporation of the Sudetenland, I never thought of any such thing. Of course, Czechoslovakia was a European problem, and it was regrettable that in that state, which had five and a half million Czechs, two and a half million Slovaks and about three and a half million Germans, the German element had no means of expression. But just because the Czechoslovakian problem was not a purely German-Czech but also a Slovak-Czech problem, I sought a solution of this problem in such a way and wished it to be in such a way that Czechoslovakia should constitute a federated state, similar perhaps to Switzerland, divided into three different, culturally separate, but politically unified areas, which would be a guarantee for the unity of a German-Czech-Slovak state.

DR. DIX: What was your opinion and attitude to the problem of war; by that I mean, as far as philosophical, ideological, and practical considerations are concerned?

SCHACHT: I always considered war as one of the most devastating things to which mankind is exposed and on basic principles throughout my entire life I was a pacifist.

DR. DIX: Dr. Schacht, during your meditative and thoughtful life you have certainly considered the fundamental and profound differences between legitimate and ethically based soldiership and militarism in its various degenerate forms. What did you mean by the latter and what was your attitude toward it, that is, militarism?

SCHACHT: Of course I saw the necessity of a country’s defense in case of war or threats, and I stood for that theory. In that sense I was always in favor of a Wehrmacht, but the profession of a soldier I consider to be full of deprivations and characterized by willingness and readiness to sacrifice, not because perhaps during a war the soldier has to give up his life—that is the duty of every citizen of military age—but because his whole aim and aspiration must be directed to the end that never must the craft which he has learned be exercised. A soldier, a career officer, who is not intrinsically a pacifist, has really in my opinion missed his calling. Consequently, I was always an opponent of every military digression and excess. I was always against militarism, but I consider that soldiership conscious of its responsibility is the highest calling which a citizen can pursue.

DR. DIX: Now, George Messersmith, as you know, the Consul General of the United States at Berlin at one time, says in one of his various affidavits produced by the Prosecution that you had told him, and repeatedly told him, about Nazi intents of aggression. Will you please state your position in that regard?

SCHACHT: First of all, I would like to remark that of course I never made a statement of that sort, neither to Mr. George Messersmith nor to anyone else. As far as these three affidavits of Mr. Messersmith, which were submitted by the Prosecution, are concerned, I would like to make a further statement.

Mr. Messersmith asserts that he had frequent contact and numerous private conversations with me, and I would like to state here now that, according to my exact memory, I saw Mr. George Messersmith perhaps two or three times in my entire life. Mr. George Messersmith represents himself as having had numerous contacts and many private conversations with me, and he asserts further that his official capacity brought him in contact with me as President of the Reichsbank and as Minister of Economics.

I do not recall once having received Mr. Messersmith in my office. Mr. George Messersmith takes these two or three discussions and proceeds to characterize me. He calls me cynical, ambitious, egotistic, vain, two-faced. I am, unfortunately, not in a position to give an equally comprehensive picture of the character of Mr. Messersmith. But I must definitely dispute his trustworthiness.