Chapter XXVIII: Part 28

SCHACHT: I heard about that—one moment. I do not know exactly who was put into the concentration camps. I was informed about the confiscation of property because that was publicly announced; but, if I understand you correctly, I do not know what the meetings of industrialists had to do with it.

MR. JUSTICE JACKSON: Now, you also knew very early about the persecution of the Jews, didn’t you?

SCHACHT: I explained yesterday exactly what I knew about the persecution of the Jews, how I acted in connection with the persecution of the Jews, and I state that as long as I was a minister I did everything to prevent these things.

MR. JUSTICE JACKSON: I understood your generality, and I am trying to get at a little more detail about it, Dr. Schacht. Did you not testify as follows, on your interrogation on the 17th of October 1945:

“The National Socialists, as I understood from the program,
intended to have a smaller percentage of Jews in the
governmental and cultural positions of Germany, with which I
agreed.”

SCHACHT: Yes.

MR. JUSTICE JACKSON: “Question: ‘Well, now, you had read _Mein
Kampf_, had you not?’

“Answer: ‘Yes.’

“Question: ‘And you knew the views of Hitler on the Jewish
question. Did you not?’

“Answer: ‘Yes.’”

You so testified, did you not?

SCHACHT: Yes.

MR. JUSTICE JACKSON: “Question: ‘Well, now, during your time as
Reich Minister, statutes were passed, were they not, prohibiting
all Jewish lawyers, for example, from practicing in the courts?’

“Answer: ‘Yes, that is what I said.’

“Question: ‘Did you agree with that?’

“Answer: ‘Yes.’”

Did you say that?

SCHACHT: Yes.

MR. JUSTICE JACKSON: And you did agree with excluding...

SCHACHT: Yes, I always agreed with that principle.

MR. JUSTICE JACKSON: Yes. And you also agreed with the principle of excluding all Jews from civil service positions, did you not?

SCHACHT: No. I want to emphasize in this connection...

MR. JUSTICE JACKSON: Well...

SCHACHT: May I finish?

MR. JUSTICE JACKSON: Yes.

SCHACHT: With regard to the principle of the dominating Jewish influence in government, legal, and cultural questions I have always said that I did not consider this influence to be of advantage either to the German people and Germany, which was a Christian state and based on Christian conceptions, or to the Jews, since it increased the animosity against them. For these reasons I was always in favor of limiting Jewish participation in those fields, not actually according to the population, but nevertheless limiting them to a certain percentage.

MR. JUSTICE JACKSON: Well, let’s go on with the interrogation. The interrogations are always so much briefer than the answers made in court where the press is present, if I may say so.

Did you not give these answers:

“Question: ‘Now, with respect to civil service. There was this
Aryan clause that was put in. Did you agree with that
legislation?’

“Answer: ‘With the same limitation.’

“Question: ‘Now, did you ever express yourself in the Cabinet or
elsewhere to the point that you wanted these restrictions put
in, restrictions you have been talking about?’

“Answer: ‘I don’t think so; useless to do it.’

“Question: ‘You say “useless to do it?”’

“Answer: ‘Yes.’

“Question: ‘I thought you said at one time or another that the
reason you stayed in is because you thought you might have some
influence on policy.’

“Answer: ‘Yes.’

“Question: ‘You didn’t consider this as important enough a
matter to take a position on it?’

“Answer: ‘Not an important enough matter to risk a break.’”

SCHACHT: To break, that is right.

MR. JUSTICE JACKSON: Then, you were asked this:

“You certainly signed a law with respect to the prohibition of
Jews receiving licenses to deal in foreign currencies.”

Do you remember that?

SCHACHT: Yes.

MR. JUSTICE JACKSON: “Answer: ‘Yes, maybe.’

“Question: ‘You were in favor of that?’

“Answer: ‘I don’t remember the details of that question.’

“Question: ‘Well, it is not a matter of details. The question is
a matter of discrimination.’

“Answer: ‘Yes.’”

You said that?

SCHACHT: Yes, certainly.

MR. JUSTICE JACKSON: You were in favor of that legislation, or were you not?

SCHACHT: Is that the question now, or from the interrogation?

MR. JUSTICE JACKSON: I am asking you now.

SCHACHT: Yes. I agreed to it. Yes.

MR. JUSTICE JACKSON: You were in favor of it. Well, you were not when you were interrogated.

SCHACHT: You can see how difficult it is.

MR. JUSTICE JACKSON: The question then was, you were in favor of it, and you said:

“‘I wasn’t in favor, but I had to sign it.’

“Question: ‘Well, you were the only one who signed it. You were
the Reich Minister of Economics?’

“Answer: ‘Yes.’

“Question: ‘And, obviously, it was a bill which was put in by
your Ministry, was it not?’

“Answer: ‘Yes.’”

Is that correct?

SCHACHT: Yes, I assume so. You see, in these matters it was a question of degrees. I have just explained the principles of my policy. The extent to which these individual laws went is a question of politics. Today, you can say what you like about it.

MR. JUSTICE JACKSON: Now, you also favored the law, and signed the law, prohibiting all Jews from being admitted to examinations for public economic advisors, for co-operatives, for example.

SCHACHT: Yes, possibly. I do not remember but probably it is right.

MR. JUSTICE JACKSON: And you also approved a law imposing the death penalty on German subjects who transferred German property abroad, or left German property abroad.

SCHACHT: Yes.

MR. JUSTICE JACKSON: And of course you knew that that affected, chiefly and most seriously, the Jews who were moving abroad.

SCHACHT: I hope that the Jews did not cheat any more than the Christians.

MR. JUSTICE JACKSON: Well, the death penalty on German subjects for transferring German property abroad was your idea of a just law?

SCHACHT: I do not understand. My idea?

MR. JUSTICE JACKSON: Yes.

SCHACHT: It was an idea of the Minister of Finance, and I signed it.

MR. JUSTICE JACKSON: Now, the question was then asked you after these were recited:

“Well, now, was there a matter of conscience involved, or was
there not?”

And you answered:

“To some extent, yes, but not important enough to risk a break.”

SCHACHT: Yes.

MR. JUSTICE JACKSON: And the question:

“Yes. In other words, you had quite another objective which was
more important?”

SCHACHT: Yes.

MR. JUSTICE JACKSON: “Well what was that objective, Dr. Schacht?” I am still reading. It saves time.

SCHACHT: Oh, pardon me.

MR. JUSTICE JACKSON: “Answer: ‘Well, the objective was to stay
in power and to help carry this through in an ordinary and
reasonable way.’

“Question: ‘That is to say, the restoration of the German
economy?’

“Answer: ‘Quite.’

“Question: ‘And the completion of the armament program?’

“Answer: ‘The completion of the international equality, the
political equality of Germany.’

“Question: ‘By means of armament, as you yourself have said?’

“Answer: ‘Also by means of armament.’”

SCHACHT: All correct, and I stand by that today.

MR. JUSTICE JACKSON: Yes. So the armament question was so important that you didn’t want to risk any break about the Jews.

SCHACHT: Not the armament question, but the equality of Germany.

MR. JUSTICE JACKSON: Well, now, I just asked you “by means of armament, as you yourself have said.”

SCHACHT: And I say, also by means of armament. That is one of the means.

MR. JUSTICE JACKSON: And it is the only one that was used ultimately, wasn’t it?

SCHACHT: No, it was not. There were other ones.

MR. JUSTICE JACKSON: We will get to that in time.

Now, isn’t it a fact that you also approved the law dismissing all Jewish officials and notaries public?

SCHACHT: That is possible.

MR. JUSTICE JACKSON: And you wrote to Blomberg on the 24th of December 1935 giving your motives, did you not, saying this:

“The economic and illegal treatment of the Jews, the anti-Church
movement of certain Party organizations, and the lawlessness
which centers in the Gestapo are a detriment to our rearmament
task which could be considerably lessened through the
application of more respectable methods, without abandoning the
goals in the least.” (Exhibit Number Schacht-13).

You wrote that, did you not?

SCHACHT: Yes. I quoted it myself yesterday.

MR. JUSTICE JACKSON: Now, as to the rearmament program, you participated in that from three separate offices, did you not?

SCHACHT: I do not know which offices you mean, but please go ahead.

MR. JUSTICE JACKSON: I will help you to list them. In the first place, you were Plenipotentiary for War.

SCHACHT: Yes.

MR. JUSTICE JACKSON: That was the secret office at first.

SCHACHT: Yes.

MR. JUSTICE JACKSON: You were President of the Reichsbank. That was the financial office.

SCHACHT: Yes.

MR. JUSTICE JACKSON: And you were Minister of Economics, in which position you had control with the minister for the general economic situation.

SCHACHT: Yes. This word “control” is such a general term that I cannot confirm your statement without question, but I was Minister of Economics.

MR. JUSTICE JACKSON: Now, let us take up first this position of Plenipotentiary for War. You have testified that this position was created for two purposes: (a) Preparation for war; (b) Control of the economy in event of war.

Is that correct?

SCHACHT: That means preliminary planning in case war should come, and the direction of economy when war had broken out. In other words, a preparatory period and a later period in the event of war.

MR. JUSTICE JACKSON: And, you were asked about your functions and gave these answers, did you not, “As the Chief of Staff provides for mobilization from a military point of view... so you were concerned with it from the economic point of view.”

SCHACHT: Yes.

MR. JUSTICE JACKSON: You answered, “certainly.” And your position as Plenipotentiary for War was of equal rank with the War Ministry, was it not?

SCHACHT: Yes.

MR. JUSTICE JACKSON: And, as you told us, those charged with responsibility in event of war were: First, the Minister of War and the Chief of the General Staff of the Wehrmacht; and, secondly, on an equal footing, Dr. Schacht, as Plenipotentiary for Economics. Is that correct?

SCHACHT: I assume so, yes.

MR. JUSTICE JACKSON: And in January of 1937 you wrote this, did you not?

“I am entrusted with the preparation of the war economy
according to the principle that our economic war organization
must be so organized in time of peace that the war economy can
be directly converted in case of emergency from this peacetime
organization and need not be created at the outbreak of war.”

SCHACHT: I assume that that is correct.

MR. JUSTICE JACKSON: And who was your Deputy in that office? Wohlthat?

SCHACHT: I think Wohlthat.

MR. JUSTICE JACKSON: Now, those being your functions as Plenipotentiary for the War Economy, let’s turn to your functions as President of the Reichsbank.

You said that the carrying out of the armament program was the principal task of the German policy in 1935, did you not?

SCHACHT: Undoubtedly.

MR. JUSTICE JACKSON: There is no doubt that you voluntarily assumed the responsibility for finding financial and economic means for doing that thing.

SCHACHT: No doubt.

MR. JUSTICE JACKSON: And you were the financial and economic administrator in charge of developing the armament industry of Germany.

SCHACHT: No.

MR. JUSTICE JACKSON: You were not?

SCHACHT: No, in no way.

MR. JUSTICE JACKSON: Well, I may have misunderstood you.

“Question: ‘Now, in connection with this development’”—I am
referring to your interrogation of the 16th of October 1945,
Exhibit USA-636 (Document Number 3728-PS), Page 44—“‘Now in
connection with this development of the armament industry, you
charged yourself as the financial and economic administrator of
it.’

“Nodding your head.”

SCHACHT: I beg your pardon?

MR. JUSTICE JACKSON: Nodding your head.

SCHACHT: Yes.

MR. JUSTICE JACKSON: “You charged yourself”—I will ask the whole question so you will get it.

SCHACHT: Yes.

MR. JUSTICE JACKSON: “Now, in connection with this development of the armament industry, you charged yourself as the financial and economic administrator of it.”

The record says that you nodded your head. The next question was:

“And in that connection you took various steps. Would you be
good enough to describe for us the larger steps which you took
with reference to this goal of rearmament, first, internally,
and, second, with respect to foreign nations?

“Answer: ‘Internally, I tried to collect all money available for
financing the mefo bills. Externally, I tried to maintain
foreign commerce as much as possible.’”

Did you make those answers, and are they correct?

SCHACHT: I am sure that you are correct.

MR. JUSTICE JACKSON: And your purpose in maintaining foreign trade was to obtain enough foreign exchange to permit the imports of raw materials, not manufactured, which were required for the rearmament program. Is that not correct?

SCHACHT: That is the question that is put to me. Now comes the answer. Please, will you read the answer?

MR. JUSTICE JACKSON: What is your answer now?

SCHACHT: My answer today is that that was not the only aim.

MR. JUSTICE JACKSON: Not the only aim?

SCHACHT: Right.

MR. JUSTICE JACKSON: But that was the primary aim, was it not?

SCHACHT: No, not at all.

MR. JUSTICE JACKSON: All right, what was the other aim?

SCHACHT: To keep Germany alive, to assure employment for Germany, to obtain sufficient food for Germany.

MR. JUSTICE JACKSON: Which was your dominant aim?

SCHACHT: The food supply in Germany and work for the export industry.

MR. JUSTICE JACKSON: Well, I should like to go over one or two of these documents with you as to your aim. I refer to Document 1168-PS of May 3, 1935.

SCHACHT: Yes.

MR. JUSTICE JACKSON: Title, “Financing of Armament,” Exhibit Number USA-37.

“The following comments are based on the assumption that the
completion of the armament program in regard to speed and extent
is the task of German policy and that accordingly everything
else must be subordinated to this aim, insofar as this main goal
is not endangered, by neglecting other questions.”

Did you write that?

SCHACHT: Not only did I write it, but I handed it to Hitler personally. It is one of twin documents, one of which has already been submitted in evidence and discussed in detail by the Prosecution. I did not receive the second document.

When my defense counsel examined me I stated here that I was intent on stopping the Party collections and Party moneys, which were extracted everywhere from the German people, because it was extremely difficult for me to get the money to finance the armament program and the mefo bills.

I could only get that point across to Hitler if I told him that of course this was being done in the interests of armament. If I had told him that this was done...

MR. JUSTICE JACKSON: Yes, but...

SCHACHT: No, please let me finish. If I had told him that this was done for the building of theaters, or something similar, it would have made no impression on him. However, if I said it must be done because otherwise we could not arm, that was a point which influenced Hitler and that is why I said it. I admitted that and explained it during the examination by my attorney.

MR. JUSTICE JACKSON: And you didn’t call that misleading him?

SCHACHT: I would not call it “misleading”; I would call it “leading.”

MR. JUSTICE JACKSON: But leading without telling him the true motives which actuated you, at least.

SCHACHT: I think you can be much more successful in leading a person if you do not tell him the truth than if you do tell him the truth.

MR. JUSTICE JACKSON: I am very glad to have that frank statement of your philosophy, Dr. Schacht. I am greatly indebted to you. Well, you devised all kinds of plans, one for the control of foreign exchange, blocked foreign accounts; and mefo bills was one of the principal ones of your devices for financing was it not?

SCHACHT: Yes.

MR. JUSTICE JACKSON: Now, I don’t care about the details of mefo bills, but I would like to ask you this. Isn’t it correct, as you testified in the inquiry of the 16th of October 1945—Exhibit Number USA-636—as follows:

“Question: ‘Actually, as a matter of fact, let me ask you this.
At the time when you started the mefo bills, for example, there
were no ready means available for financing the rearmament?’

“Answer: ‘Quite.’

“Question: ‘That is to say, through normal budget finance
methods?’

“Answer: ‘Not enough.’

“Question: ‘Also, you were limited at that time by the statute
of the Reichsbank which did not permit you to give anything near
the sufficient credit which was required by the armament
program.’

“Answer: ‘Quite.’

“Question: ‘And you found a way?’

“Answer: ‘Yes.’

“Question: ‘And the way you found was by creating a device in
effect which enabled the Reichsbank to lend, by a subterfuge, to
the Government what it normally or legally could not do?’

“Answer: ‘Right.’”

Is that true?

SCHACHT: That was my answer.

MR. JUSTICE JACKSON: The following questions were then asked:

“I understand that basically what was built up in Germany in the
way of an armament industry, a domestic economy that was sound,
and a Wehrmacht, the efforts that you put in from 1934 to the
spring of 1938, when mefo financing stopped, were responsible in
large part for the success of the whole program.

“Answer: ‘I don’t know whether they were responsible for it, but
I helped a great deal to achieve that.’”

SCHACHT: Yes.

MR. JUSTICE JACKSON: And you were asked as follows, on the 17th of October 1945:

“In other words, in effect you are not taking the position that
you are not largely responsible for the rearming of the German
Army?

“Answer: ‘Oh no, I never did that.’

“Question: ‘You have always been proud of that fact, I take it.’

“Answer: ‘I wouldn’t say proud, but satisfied.’”

Is that still your position?

SCHACHT: In reply to that I should like to say: The question of mefo bills was quite certainly a system of finance which normally would never have been attempted. I made a detailed statement on this subject when I was questioned by my attorney. On the other hand, however, I can say that this question was examined by all legal experts in the Reichsbank and by means of this subterfuge, as you put it, a way was found which was legally possible.

MR. JUSTICE JACKSON: No, I didn’t put it that way; you said so.

SCHACHT: No, no. I mean the sentence you have just quoted as being my answer. I beg your pardon. The matter was investigated from a legal viewpoint, and we assured ourselves that it could be done in this way. Moreover, I am still satisfied today that I contributed to the rearmament, but I wish that Hitler had made different use of it.

MR. JUSTICE JACKSON: Well, on your 60th birthday Minister of War Blomberg said that, “Without your help, my dear Mr. Schacht, there could have been no rearmament,” did he not?

SCHACHT: Yes, those are the sort of pleasantries which one exchanges on such occasions. But there is quite a bit of truth in it. I have never denied it.

MR. JUSTICE JACKSON: That is the way it looks to me.

Now, when you finally made some suggestion that the armament should stop or slow up, as I understand, you made that suggestion without knowing what the armament was.

SCHACHT: Yes.

MR. JUSTICE JACKSON: The only thing you were judging by was financial conditions, was it not?

SCHACHT: Oh, no.

MR. JUSTICE JACKSON: Well, what was it?

SCHACHT: I did, of course, have a general impression of these matters because General Thomas always discussed them with me. However, I do not remember that General Von Blomberg gave me detailed information about what he thought. Of course, I was informed in a general way regarding the progress made by the armament program, and that is why I said “more slowly.” My opinion was strengthened because of the general conditions.

MR. JUSTICE JACKSON: Well now, let’s see what reasons you gave in Document Number EC-286. That is Exhibit Number USA-833:

“I am therefore of the opinion that we should promote our export
with all resources by a temporary”—and I emphasize the word
“temporary”—“decrease of armament.”

SCHACHT: Decrease?

MR. JUSTICE JACKSON: Decrease, yes, temporary.

SCHACHT: Yes.

MR. JUSTICE JACKSON: I emphasize “temporary,” and you emphasize “decrease.”

SCHACHT: Oh no, no; I agree with you.

MR. JUSTICE JACKSON: “And that further, with reference to the
Four Year Plan, we should solve only those problems which appear
most pressing. Among these I include the oil-fuel program, the
buna program, and the program of developing ore resources,
insofar as this development does not of itself require large
amounts of raw materials which must be withheld from export.

“On the other hand, all other measures of the Four Year Plan
should be postponed for the time being. I am convinced that by
such a policy our export could be increased so greatly that
there would be a certain improvement in our exhausted stocks,
and that the resumption of the strengthened armament would again
be possible in the not too distant future, from the point of
view of raw materials. I am unable to judge to what extent a
temporary postponement of armament would have military
advantages. However, I presume that such a pause in armament
would not only have advantages for the training of officers and
men, which has yet to be done, but that this pause would also
afford an opportunity to survey the technical results of
previous armament and to perfect the technical aspect of
armament.”

Now that you addressed to Göring, did you not?

SCHACHT: That is perfectly possible. I cannot remember the letter, but it looks quite like one of mine.

MR. JUSTICE JACKSON: Yes; and you were correctly giving to Göring your true views; were you not?

SCHACHT: No; I believe that this was merely a tactical letter. I think that I was mainly trying to limit armament. If I had told him that we wanted to stop arming, Göring would probably have denounced me to the Führer accordingly. Therefore I told him, “Let’s stop for the time being”—temporary. I also emphasize “temporary.” It was a tactical measure to convince Göring that for the time being it should be temporary.

MR. JUSTICE JACKSON: Then, with your fellow officers in the Government you were also using tactical statements which did not represent your true views?

SCHACHT: That was absolutely necessary.

MR. JUSTICE JACKSON: When did it cease to be necessary, Dr. Schacht?

SCHACHT: Cease?

MR. JUSTICE JACKSON: Yes; when did it cease to be necessary?

SCHACHT: I think it more important to ask when it commenced; when it started.

MR. JUSTICE JACKSON: Well?

SCHACHT: During the first years I did not do it, of course, but later on I did to a considerable extent. I could say always; it never stopped.

MR. JUSTICE JACKSON: Has it stopped now?

SCHACHT: I have no more colleagues, and here before this Tribunal I have nothing to tell but the truth.

MR. JUSTICE JACKSON: Well, on the 24th of September, 1935—December—you wrote EC-293, which is Exhibit Number USA-834, and used this language, did you not:

“If there is now a demand for greater armament, it is, of
course, not my intention to deny or change my attitude, which is
in favor of the greatest possible armament and which I have
expressed for years both before and since the seizure of power;
but it is my duty to point out the economic limitations of this
policy.”

SCHACHT: That is very good.

MR. JUSTICE JACKSON: And that is true?

SCHACHT: Certainly.

MR. JUSTICE JACKSON: Now, there came in the Four Year Plan in 1936?

SCHACHT: Yes.

MR. JUSTICE JACKSON: You did not like the appointment of Göring to that position?

SCHACHT: I thought he was unsuited and, of course, it made an opening for a policy which was opposed to mine. I knew perfectly well that this was the start of exaggerated armament, whereas I was in favor of restricted rearmament.

MR. JUSTICE JACKSON: Why do you say that Göring’s appointment meant exaggeration of armament? Can you point to anything that Göring has said in favor of rearmament that is any more extreme than the things you have said?

SCHACHT: Oh yes.

MR. JUSTICE JACKSON: Well, will you do it?

SCHACHT: Yes, I think if you read the record of the so-called “small Ministerial Council,” of the year 1936, and in particular 1938, which you yourself introduced, you will see at once that here the necessity of increased armament was emphasized. For instance, those of November or October 1936, I think.

MR. JUSTICE JACKSON: Well, it was also emphasized in your documents, was it not, throughout?

SCHACHT: No.

MR. JUSTICE JACKSON: You say that your statements of that sort were merely tactical.

SCHACHT: No, I beg your pardon. I said arm within the limits of what is economically possible and reasonable. Göring, if I may say it again, wanted to go beyond those limits.

MR. JUSTICE JACKSON: That is exactly the point I want to make. Your difference with Göring over rearmament was entirely a question of what the economy of Germany would stand, was it not?

SCHACHT: No. I said that the most important thing was that Germany should live and have foreign trade, and within those limits we could arm. However, it is out of the question that Germany should arm for the sake of arming, and thus ruin her economy.

MR. JUSTICE JACKSON: Well that’s the difference between you and Göring; it was over what the economy would stand, was it not?

SCHACHT: No, it was a question of the extent of rearmament. The point is, Mr. Justice Jackson, that German economy paid the price for Göring’s action. The only question is, was it reasonable or unreasonable? If I may state it pointedly, I would say that I considered Göring’s economic policy to be unreasonable and a burden to the German nation; while I considered it most important that rearmament should not be extended and that the German nation should have a normal, peacetime standard.

THE PRESIDENT: The Tribunal will adjourn.

[_The Tribunal adjourned until 3 May 1946 at 1000 hours._]

TRANSCRIBER NOTES

Punctuation and spelling have been maintained except where obvious printer errors have occurred such as missing periods or commas for periods. English and American spellings occur throughout the document; however, American spellings are the rule, hence, “Defense” versus “Defence”. Unlike Blue Series volumes I and II, this volume includes French, German, Polish and Russian names and terms with diacriticals: hence Führer, Göring, Kraków, and Ljoteč etc. throughout.

Although some sentences may appear to have incorrect spellings or verb tenses, the original text has been maintained as it represents what the tribunal read into the record and reflects the actual translations between the German, English, French, and, most specifically with this volume, Russian documents presented in the trial.

An attempt has been made to produce this eBook in a format as close as possible to the original document presentation and layout.

[The end of _Trial of the Major War Criminals Before the International Military Tribunal Vol. 12_, by Various.]