Chapter IV: Front Matter (4)

DR. DIX: Herr Vocke, in reply to the questions of Mr. Justice Jackson, you have explained the attitude and the statement of Herr Von Lumm about the incident in Brussels. You also told the Tribunal about the statement by Minister Severing, which he made about that incident not so long ago.

VOCKE: Yes.

DR. DIX: Did you not also speak to the President of the Supreme Court of the Reich, Simons, who was at that time in the Foreign Office and knew the case very well? Did you not speak to him about that case?

VOCKE: Yes, I spoke to him and Ministerial Director Lewald. At that time I was a young assistant judge.

DR. DIX: You will have to tell the Tribunal who Lewald was.

VOCKE: It is correct that I spoke to Simons, who later became President of the Supreme Court of the Reich, and to His Excellency Lewald, who later became Undersecretary of State in the Reich Office of the Interior, about these matters which came officially to my knowledge in my capacity as expert in the Reich Office of the Interior.

Both gentlemen smiled at the self-important attitude of Von Lumm who made mountains out of mole hills, and also at the misfortune of Herr Schacht. They smiled benevolently and saw the whole thing as a tremendous exaggeration.

DR. DIX: Thank you, that is enough. I have no further questions.

However, if the Tribunal will permit me, I should like to point out that Schacht mentioned here that on 2 January 1939 he spoke at great length to Hitler, in Berchtesgaden. I do not know whether I am confusing that with a statement made by a witness or with a statement made by him. I just wanted to point it out. If he were still sitting here as a witness, he could tell us about it.

Your Lordship, I bring that up because it was stated by Mr. Justice Jackson that Hitler did not receive Schacht in Berchtesgaden and that that was the cause of Schacht’s decision to forward that memorandum. I only mention, as this witness here cannot know it, that Schacht did speak to Hitler. If he did not say so this morning or yesterday, he will say it at any time.

I cannot remember now. Sometimes one confuses private information with what one has heard in the courtroom.

THE PRESIDENT: Put the microphone where the Defendant Schacht can speak from there and ask him the question.

[_The microphone was placed before the defendant._]

DR. DIX: Dr. Schacht, you have witnessed the cross-examination. Would you like to tell the Tribunal what happened?

SCHACHT: When I spoke here I said that I had a long conversation on 2 January 1939 with Hitler at Berchtesgaden on the Obersalzberg, and that after that conversation, in which the suggestion was put to me to create an inflation, I considered that the time had come to take that step which the Reichsbank afterwards took, to dissociate itself from Hitler and his methods.

[_The microphone was returned to the witness._]

THE PRESIDENT: There is one question I want to ask you, Witness. Did the Defendant Schacht ever tell you that he had been appointed Plenipotentiary General for War Economy?

VOCKE: Yes.

THE PRESIDENT: When?

VOCKE: Well, I believe he was appointed to that office in 1935. I believe that is the date. I could not say for certain.

THE PRESIDENT: I did not ask you when he was appointed. I asked you when he told you.

VOCKE: I cannot recall that because we had nothing to do with these things. I only know that either in 1935 or 1936—I believe it was 1935—he received such an appointment.

THE PRESIDENT: Yes. The question I asked you was: Did the Defendant Schacht ever tell you that he had been appointed?

VOCKE: Yes.

THE PRESIDENT: When did he tell you?

VOCKE: I think in 1935.

THE PRESIDENT: The witness can retire.

DR. DIX: May I put one last question to this witness?

Witness, did you have any idea of the importance of that office?

VOCKE: No. I never heard that Schacht had done anything in that function except that he had special letter headings for this. His activity in the Reichsbank continued in the same way as previously, without his selecting a staff for that office, and without—at least as far as my knowledge goes—his using the premises and facilities of the Reichsbank for this new office.

DR. DIX: Have you any knowledge as to whether he had a separate office or a separate staff for carrying on his activity as Plenipotentiary?

VOCKE: You mean commissioner general for armaments?

DR. DIX: Plenipotentiary for War Economy.

VOCKE: No, he had no separate office, and as I have said before, as far as I know he never had a staff.

THE PRESIDENT: The witness can retire.

[_The witness left the stand._]

DR. DIX: May I begin with my documents? I can make the presentation of documents very brief and I am sure that I will conclude it before the end of the session, because I had an opportunity to submit a large portion of my documents during the interrogation of witnesses. May I make the general request that judicial notice be taken of everything I have not read and everything I do not propose to read. In this connection, I should like to point out that the entire contents of my document book have, with one exception, either been submitted or will be submitted now as exhibits. The exception, the document which has not been submitted, is Exhibit Number 32. That is the frequently mentioned article of the _Basler Nachrichten_ of 14 January 1946, which, for the reasons mentioned yesterday, has not been and will not be submitted by me.

I come now to Volume I of my document book, to the exhibits which have not yet been submitted; that is, first Exhibit Number 5 (Document Schacht-5) Adolf Hitler’s Reichstag speech of 23 May 1933. That exhibit was read by Schacht in the course of his interrogation and is now being submitted.

I further submit Exhibit Number 23 (Document Schacht-23), the letter from Schacht to Hermann Göring, of 3 November 1942. Although that letter has been submitted by the Prosecution, we submit it again, and for the following reasons: In the copy which was submitted by the Prosecution, the date and the year were left out and, of course, as it has been translated literally, also in our copy. However, a confirmatory note by Professor Kraus based on the testimony given by Schacht has enabled us to make a note on it to the effect that it must be the letter of 3 November 1942, because it was that letter which caused the dismissal in January 1943. It is only submitted in order to make it easier for the Tribunal to ascertain the date. That was Exhibit Number 23.

Then I wish to submit Exhibit Number 27 (Document Schacht-27). I am not going to read it; I only ask that judicial notice be taken of it. That is the address given by Dr. Schacht at the celebration meeting of the Reich Economic Chamber in January 1937.

Then I submit Exhibit Number 29 (Document Schacht-29), excerpts from the book by Gisevius, which we want to put into evidence, and I ask you to take judicial notice. I will not read anything.

Exhibit Number 33 (Document Number Schacht-33) in my document book is a letter from a certain Morton, a former citizen of Frankfurt-on-Main, who emigrated to England, a man who was highly respected in Frankfurt. The letter is directed to the Treasury Solicitor in England and we have received it here from the Prosecution. I also ask that judicial notice be taken of its contents and want to read only one sentence on the last page. I quote:

“I last heard from Schacht indirectly. Lord Norman who was then
Mr. Montague Norman, Governor of the Bank of England, told me
confidentially in 1939 shortly before the outbreak of the war,
that he had just come back from Basel where he had seen Schacht
who sent me his greetings. Lord Norman also told me that
Schacht, who had returned to Germany from Basel, was in great
personal danger as he was very much in disgrace with the Nazis.”

That concludes Volume I of my document book and I pass on to Volume II, which begins with the affidavits. I must go through the individual affidavits, but I shall not read any.

The first is Exhibit Number 34 (Document Schacht-34), which has frequently been quoted, the affidavit of the banker and Swedish Consul General, Dr. Otto Schniewind, who is at present in Munich. It is a very instructive and very exhaustive affidavit and in order to save time—there are 18 pages which would take up a lot of time—I will confine myself to what I have read from this affidavit; I ask the Tribunal to take judicial notice of the remainder. It has already been submitted.

However, I still have to submit Exhibit Number 35 (Document Schacht-35), which has not yet been submitted. I beg your pardon, but it has been submitted before. It is the affidavit of Dr. Franz Reuter. I submitted it when I spoke here about the biased nature of this biography. I ask you to take judicial notice of the rest of this affidavit.

The next Exhibit Number 36 (Document Schacht-36) is an affidavit by Oberregierungsrat Dr. Von Scherpenberg, formerly Embassy Counsellor at the Embassy in London, afterwards departmental chief at the Foreign Office and now at the Ministry of Justice in Munich, the son-in-law of Dr. Schacht. I have read a passage and I ask that judicial notice be taken of the unread portion.

The next is Exhibit Number-37(a) (Document Schacht-37(a)). It has been submitted. Here also a passage on Page 154 of the German text has been read, about the warning signal given abroad when Schacht resigned as Reichsbank President. I ask that judicial notice be taken of the remainder.

The next affidavit is by the same gentleman, who was also a colleague of Dr. Schacht in the Reichsbank Directorate at the same time as the witness Vocke, whom we have just heard. I submit it. There is no need to read anything. I only ask you to take judicial notice of its contents.

The next affidavit, Exhibit Number-37(c) (Document Schacht-37(c)) is by the same gentleman and has already been submitted. I ask you to take judicial notice of its contents. There is no need to read anything.

The next is Exhibit Number 38 (Document Schacht-38), an affidavit by General Thomas. It has not been submitted yet, and I submit it now and ask to be permitted to read one passage, beginning on the first page; that is Page 172 of the English text and Page 164 of the German text:

“Question: Schacht claims to have influenced Blomberg to delay
rearmament. Can you give any information on this matter? When
was it?

“Answer: I was Chief of the Army Economic Staff, that is the
Army Economic and Armament Office at the High Command of the
Wehrmacht (OKW) from 1934 to the time of my dismissal in January
1943. In this capacity I had connection with the Reich Minister
of Economics and Reich Bank President Hjalmar Schacht. Up till
1936 Schacht undoubtedly promoted rearmament by making available
the necessary means. From 1936 on he used every opportunity to
influence Blomberg to reduce the tempo and extent of rearmament.
His reasons were as follows:

“1. Risk to the currency.

“2. Insufficient production of consumer goods.

“3. The danger to the foreign policy, which Schacht saw in
excessive armament of Germany.

“Concerning the last point he frequently spoke to Blomberg and
me and said that on no account must rearmament be allowed to
lead to a new war. These were also the reasons which led him to
hold out to Blomberg in 1936 and again in 1937 the threat that
he would resign. On both of these occasions I was delegated by
Blomberg to dissuade Schacht from carrying out his threat to
resign. I was present during the conference between Blomberg and
Schacht in 1937.”

I ask you to take judicial notice of the remainder of that affidavit by General Thomas.

The next Exhibit is Number 39 (Document Schacht-39); parts of it have been read, that is to say, the part Schacht played in the incident of the 20th of July together with General Lindemann; it is the affidavit by Colonel Gronau. I ask the Tribunal to take judicial notice of the remainder.

The same applies to the next Exhibit Number 40 (Document Schacht-40). That is a sworn statement, also by a colleague of Schacht in the Ministry of Economics, Kammerdirektor Asmus, now in retirement. I have also read parts of this already, namely, the passages concerning the happenings at the time of the dismissal as Minister of Economics; and I ask you to take judicial notice of the remainder.

Then we come to Exhibit Number 41 (Document Schacht-41), which is the affidavit by State Secretary Carl Christian Schmid, also in retirement. I have not yet read anything and I ask to be permitted to read two passages.

The first one is on Page 182 of the German text; Page 190 of the English text:

“When the Brüning Cabinet, which had been arranged by General
Von Schleicher...”—That is not legible. I think that should be
different, but it is not legible.—“When that was torpedoed by
Schleicher himself, Schacht considered the early appointment of
Hitler as head of the Government to be unavoidable. He pointed
out that the great mass of the German people said ‘Yes’ to
National Socialism, and that the Left as well as the Center had
come to a state of complete passive resignation. The short life
of the transition cabinets of Papen and Schleicher was clear to
him from the very beginning.

“Schacht decisively advocated the co-operation in National
Socialism of men experienced in their respective fields, without
acceptance of its program as a whole, which he always referred
to ironically, later frequently calling it ‘a really bestial
ideology’ in conversation with me; but he held that the
influencing of developments from important inner power positions
was an absolute patriotic duty, and he strongly condemned
emigration and the resort to easy armchair criticism.”

And then on Page 184 of the German text, 192 of the English text, two very short passages:

“I recall numerous talks with Dr. Schacht in which he stated
that war was an economic impossibility and simply a crazy idea,
as, for instance, when he was in Mülheim at the house of Dr.
Fritz Thyssen, who was closely associated with Göring and Hitler
before 1933 but was in strong opposition from 1934 on and also
opposed any idea of war as madness.”

And, then, further down on the same page, only one sentence:

“When Schacht spoke to me he used to refer ironically to the
Himmler-Rosenberg Lebensraum plans against Russia as an example
of the mad presumption of extremist Party circles. Schacht’s
special fad was an understanding with England,”

and so on; and I ask you to take judicial notice of the remainder of the document.

The same applies to the whole of Exhibit Number 42 (Document Schacht-42), an affidavit by the director of the Upper Silesian Coke Works, Berckemeyer.

I come now to Exhibit Number 43 (Document Schacht-43). That has already been submitted and read in part. It is the correspondence between the publisher of Ambassador Dodd’s Diary and Sir Nevile Henderson. I ask you to take judicial notice of the part not yet read, and whatever comes after Exhibit 43 has been submitted. I ask you to take judicial notice of its contents, and I forego the reading of it.

That brings me to the end of my presentation in the case of Schacht.

THE PRESIDENT: Now the Tribunal will continue the case against the Defendant Funk.

DR. FRITZ SAUTER (Counsel for Defendant Funk): Mr. President, with your permission I call first the Defendant Dr. Funk himself to the witness box.

[_The Defendant Funk took the stand._]

THE PRESIDENT: Will you state your full name, please?

WALTER FUNK (Defendant): Walter Emanuel Funk.

THE PRESIDENT: Will you repeat this oath after me: I swear by God—the Almighty and Omniscient—that I will speak the pure truth—and will withhold and add nothing.

[_The defendant repeated the oath in German._]

THE PRESIDENT: You may sit down.

DR. SAUTER: Mr. President, may I begin with one observation: The Defendant Funk has been a sick man for many years now, and before he came into the prison he had been in hospital for some time. He was supposed to undergo an operation, which, however, due to conditions at the time, could not be carried out. He still is under medical treatment. In consideration of that fact, and because the defendant is extremely anxious to conclude his own interrogation as soon as possible, I shall put only those questions to the defendant which are absolutely necessary to give you a clear picture about his person and his activities.

[_Turning to the defendant._] Witness, when were you born?

FUNK: On 18 August 1890.

DR. SAUTER: So you are now 56?

FUNK: Yes.

DR. SAUTER: First, I want to put to you the most important particulars of your life, and to simplify matters you may answer only with “yes” or “no.”

You are 56 years old. You were born in East Prussia?

FUNK: Yes.

DR. SAUTER: You come from a merchant’s family in Königsberg?

FUNK: Yes.

DR. SAUTER: Then you studied in Berlin at the university, law and political science, literature and music. You also come from a family which has produced a number of artists.

FUNK; Yes.

DR. SAUTER: During the World War you were first in the Infantry, and in 1916, because of a bladder ailment, you became unfit for service?

FUNK: Yes.

DR. SAUTER: Then you became an editor with several large newspapers, and you told me that for a long time you could not make up your mind whether to become a musician or a journalist. Then you decided for the latter, and in 1922, I believe, you became editor in chief of the _Berliner Börsenzeitung_. Is all that correct?

FUNK: Yes.

DR. SAUTER: Now perhaps you will tell us what were the political tendencies of that paper on which you worked for about ten years as editor in chief?

FUNK: The tendency of the paper was somewhere between the Center and the Right. The newspaper was not tied to any party. It was owned by an old Berlin family of publishers.

DR. SAUTER: What was the attitude of that paper to the Jewish question before you took on the editorship and during the time when you were editor in chief?

FUNK: Absolutely neutral. It did not deal in any way with the Jewish question.

DR. SAUTER: From an affidavit by Dr. Schacht, I have seen that at that time—that is to say, during the twenties—you moved in circles which were also frequented by Jews, and where economic and political matters, such as gold currency, _et cetera_, were often discussed. Is that correct?

FUNK: I do not know anything about that.

DR. SAUTER: Dr. Schacht has asserted that in an affidavit of 7 July 1945 (Document Number 3936-PS).

FUNK: I had a lot to do with Jews. That was in the nature of my profession. Every day at the stock exchange I was together with 4,000 Jews.

DR. SAUTER: Then in 1931 you resigned your post as editor in chief?

FUNK: Yes.

DR. SAUTER: What were the reasons for that?

FUNK: I was convinced that the National Socialist Party would come to power in the Government, and I felt called upon to make my own political and economic opinions heard in the Party.

DR. SAUTER: Would you like to explain a little more in detail what kind of opinions you had, Dr. Funk, especially concerning the clashes between parties, between classes at that time?

FUNK: The German nation at that time was in sore distress, spiritually as well as materially. The people were torn by Party and class struggle. The Government, or rather the governments, had no authority. The parliamentary system was played out, and I myself, for 10 or 12 years before that, had protested and fought publicly against the burden of the Versailles reparations, because I was convinced that those reparations were the chief cause of the economic bankruptcy of Germany. I, myself, have fought all my life for private enterprise, because I was convinced that the idea of private enterprise is indissolubly bound up with the idea of the efficiency and worth of individual human beings. I have fought for the free initiative of the entrepreneur, free competition, and, at that time in particular, for putting an end to the mad class struggle, and for the establishment of a social community on the basis of the industrial community.

All those were ideas to which I found a ready response in my conversations, particularly, with Gregor Strasser.

DR. SAUTER: Who was Gregor Strasser, would you tell the Tribunal briefly?

FUNK: Gregor Strasser at that time was leader of the Reich Organization Office of the National Socialist Party and was generally considered to be the second man after Adolf Hitler. I have...

THE PRESIDENT: This is the time to break off.

[_The Tribunal adjourned until 4 May 1946 at 1000 hours._]

ONE HUNDRED
AND TWENTY-FIRST DAY
Saturday, 4 May 1946

_Morning Session_

[_The defendant resumed the stand._]

DR. SAUTER: Mr. President, may I continue the examination of the Defendant Funk?

Dr. Funk, yesterday you gave us a brief account of your life, told us that you are 56 years of age, that you have been married for 25 years, that you were editor of the _Berliner Börsenzeitung_ for 10 years; and in conclusion you told us yesterday what your convictions were regarding the future development of Germany.

Perhaps you can again tell us something of your viewpoint, since you were interrupted by the recess yesterday and since your health was in such a poor state yesterday evening that you could scarcely remember what you had told the Court. Well, what were your views on Germany’s economic prospects at the time when you entered the Party? Perhaps you can go over it briefly again.

FUNK: At that time Germany was in the midst of a very difficult economic crisis. This crisis was caused chiefly by the reparations, the way in which these reparations had to be paid, and by the inability of the governments then in office to master the economic problems. The most disastrous feature of the reparations policy was that German mark credits in immense sums were transferred to foreign countries without receiving any equivalent in return. As a result there was a tremendous surplus and over-pressure of Reichsmark abroad. It led to inflation in Germany and the countries with stable currencies bought Germany out. German industry incurred heavy debts and consequently came temporarily under foreign control; German agriculture became indebted. The middle classes, who were the chief representatives of German culture, were impoverished. Every third German family was unemployed, and the Government itself had neither the power nor the courage to master these economic problems. And these problems could not be solved by means of economic measures alone. The first essential was the presence of a government possessing full authority and responsibility; and then the development of a unified political will among the people.

The National Socialists at that time captured 40 percent of the seats in the Reichstag; the people streamed to this Party in ever-increasing millions, especially the young people who were animated by idealism. The fascinating personality of the Führer acted as a giant magnet. The economic program of the Party itself was vague; and in my opinion it was drawn up mainly with an eye for propaganda purposes. There were lively arguments about it in Party circles with which I came in contact in 1931.

At that time, therefore, I decided to give up my position as editor of a paper with a large circulation among the middle classes and to start on my own by editing an economic and political news service which went to the most diverse sections of economy, to leading Party circles as well as to economically interested parties siding with the German National Party, the People’s Party, and even the Democrats.

DR. SAUTER: Dr. Funk, you said before, approximately, that according to the opinion you expressed in 1931, only a government with full authority and full responsibility, that is, only a strong state and a unified political will, could lead Germany out of the crisis of that time, which was, of course, merely a part of the world crisis. Did you at that time ever reflect as to whether the Leadership Principle which was later developed to an increasing extent—whether this Leadership Principle could be made to harmonize with your ideas of economic policy? Or, putting it negatively, did you at that time anticipate great wrongs as a result of this Leadership Principle?

What can you say on this point?

FUNK: As to a principle of government, well, that is, a Leadership Principle, one can never say _a priori_ whether it is good or bad. It depends on existing circumstances and, above all, on those who do the governing. The democratic-parliamentary principle had not been successful in Germany. Germany had no parliamentary and democratic tradition, such as other countries had. Conditions, finally, were such that when the government made decisions, the few votes of the economic party were decisive; and these were mostly bought. Therefore, another principle had to be made the dominant one; and in an authoritarian government, if those who bear the authority and the responsibility are good, then the government also is good. The Leadership Principle meant, in my opinion, that the best men and the best man should rule and that authority would then be exercised from above downwards and responsibility from below upwards. And in conversations with Hitler and other leading personalities of the Party in 1931 and, as I said, from the faith and enthusiasm which the German people brought to this political movement, I formed the opinion that this Party would have to come into power and that through it alone salvation could come. I, myself, wanted to put my own economic ideas into practice in this Party.

DR. SAUTER: Dr. Funk, you have just been speaking of the personality of Hitler. Through whom did you meet Hitler?—that is, who were persons in the Party by whom you were first won over to the Party?

FUNK: Chiefly, Gregor Strasser, as I said yesterday, who arranged my first meeting with Hitler. Not until much later, in Berlin, did I meet Hermann Göring. Apart from them I had very few acquaintances in the Party at that time and played no role in it myself.

DR. SAUTER: When you met Hitler what impression did he make on you at that time? I should like to say beforehand, you were at that time—1931, I think—a mature man of over forty. What impression did you have at that time of Hitler’s personality and aims, _et cetera_?

FUNK: My first conversation with Adolf Hitler was very reserved. That was not surprising as I came from a world which was entirely strange to him. I immediately received the impression of an exceptional personality. He grasped all problems with lightning speed and knew how to present them very impressively, with great fluency and highly expressive gestures. He had the habit of then becoming absorbed in the problems, in long monologues, so to speak, in this way lifting the problems to a higher sphere. At that time I explained to him my economic ideas and told him especially that I upheld the idea of private property, which for me was the fundamental tenet of my economic policy and which was inseparable from the concept of the varying potentialities of human beings. He, himself, heartily concurred with me and said that his theory of economics was also based on selectivity, that is, the principle of individual productivity and the creative personality; and he was very glad that I wanted to work on those lines in the Party and to arrange contacts and support for him in the economic field—which I actually did. In the meantime, however, my relations with the Führer became no closer then, because he said to me himself, “I cannot, at present, commit myself to an economic policy; and the views expressed by my economic theorists, such as Herr Gottfried Feder, are not necessarily my own.”

The economic policy section which existed at that time was directed by a Dr. Wagner.

DR. SAUTER: The economic policy section of what? Of the Reich Party Directorate?

FUNK: The economic policy section of the Reich Party Directorate was directed by a certain Dr. Wagner. I was not invited to political talks. A close connection with the Führer—or a closer connection with the Führer—I really had only in the year 1933 and the first half of 1934, when, as press chief of the Reich Government, I reported to him regularly. At that time it once even happened that he suddenly interrupted the press conference, went into the music room with me, and made me play the piano for him.

Then our relations became a little cooler again, and when I became Minister of Economics the Führer kept me more and more at a distance—whether he had special reasons for this, as Lammers testified here, I do not know. During my office as Minister, I was called in by the Führer for consultations perhaps four times—five at the most. But he really did not need me because his economic directives were given to the Reich Marshal, the responsible head of economic affairs, and later, from 1942 on, to Speer, since armament dominated the entire economy; and, as I said, I had close connections with him only in 1933 and in the first half of 1934 until the death of Reich President Von Hindenburg.

DR. SAUTER: Dr. Funk, you have got a long way ahead. We would like to return now to 1931 or 1932, to the time when you entered the Party. When was that?

FUNK: In the summer of 1931.

DR. SAUTER: The summer of 1931. You have already told the Court that you did not object to the Leadership Principle for the reasons you have stated.

FUNK: No, on the contrary, the Leadership Principle was absolutely necessary.

DR. SAUTER: On the contrary, you considered the Leadership Principle necessary for the period of emergency that then obtained. Now, I would be interested in knowing: There were other points of view, of course, also represented in the Party program which worked out unfavorably later on and have, in the course of this Trial, been used extensively against the defendants. I point out one example, for instance, the slogan of “Lebensraum”; you have heard it again and again during this Trial. The Defendant Dr. Schacht dealt with this problem also. Perhaps you can give us briefly your own position on this problem and on this question?

FUNK: The problem of living (Lebensproblem) is no slogan; and the problem of living was really a problem for the German people at that time. By “Lebensproblem”...

DR. SAUTER: You mean “Lebensraum”?

FUNK: ...or “Lebensraum”—I did not mean the conquest of foreign countries at that time; the thought of war was just as strange to me as it was probably to most other Germans. By “Lebensraum” I meant the opening up of the world for the vital interests of Germany, that is, the participation of the German people in the profitable utilization of the world’s goods of which there was a superabundance.

Whether that was to be done by colonies, or concessions, or international trade agreements, I did not trouble to find out at that time.

The expansion of Germany in the world economy before the first World War was the decisive factor which determined me to become an economic journalist. The participation of Germany in the Rumanian petroleum industry, the concession of the Bagdad Railway, the growing German influence in South America, in China, generally in the Far East—all this inspired me very much. At that time already I became acquainted with such men as Franz Günther of the Discount Bank, Arthur Von Gwinner of the Deutsche Bank, Karl Helferich, the big Hamburg importer, Witthöft, and many other German economic pioneers, and started on my profession with all the enthusiasm of the young journalist.

“Lebensraum” was thus for me at that time the fulfilling of these economic claims, that is, Germany’s participation in the world’s goods and the abolition of the restraints which hemmed us in on all sides. It was sheer nonsense that Germany on her part should have to pay reparations and debts while the creditor nations on their part refused to accept payment in the only form possible, that is, payment in goods and products.

That period marked the beginning of a great wave of protective tariffs in the world. I recall the American economic policy at that time; I recall the Ottawa agreements, and this mistaken economic policy led to a world economic crisis in 1929 and 1930 by which Germany also was badly hit.

DR. SAUTER: Dr. Funk, have you finished? [_The defendant nodded assent._]

Dr. Funk, the Prosecution in their trial brief have contended that you participated in the formulation of the Nazi program. What can you tell us about that?

FUNK: I do not know what the Prosecution understands by Nazi program.

DR. SAUTER: I think—the Party program.

FUNK: That is quite impossible. The Party program, as far as I know, was formulated in 1921. At that time I did not know anything about National Socialism or of Adolf Hitler.

DR. SAUTER: Witness, the Prosecution has further accused you of setting up the so-called reconstruction program, the economic reconstruction program of 1932, that is, a program for the rehabilitation of German economic life. Is it correct that you established this economic reconstruction program?

FUNK: In 1932 I compiled for a speech by Gregor Strasser some points for an economic program which Strasser himself marked as originating from me. He passed these on to the various Party offices as instructions and propaganda matter.

This economic reconstruction program, which in the words of the Prosecution was to become the economic bible for the Party organizers, is, I believe, in no way revolutionary or even sensational; and it could, I believe, be adopted and accepted by every democratic government. I believe it is pointed out in a book from which the Prosecution has taken various bits of information.

DR. SAUTER: Perhaps it is printed, Witness, in the book by Dr. Paul Oestreich which has been repeatedly quoted. This book contains your biography under the title, _Walter Funk, A Life for Economy_, and has been used by the Prosecution under Document 3505-PS, Exhibit USA-653.

Dr. Funk, I have the text of this program before me.

FUNK: Please read it.

DR. SAUTER: The whole program covers half a page only and in the main sets forth really nothing which might be considered as characteristic of National Socialist trends of thought?

FUNK: Well, at that time I was not yet a National Socialist or, at least, but quite a young member of the Party.

DR. SAUTER: This economic reconstruction program must be actually read in order to convince oneself how little it contains of the characteristic National Socialist demands. This is a program which Funk says might be accepted by almost any liberal or democratic or other bourgeois party. The program is called, “Direct creation of employment through new State and private investments.” That is the first demand. Then productive providing of credit by the Reichsbank but no inflation, rather the re-establishment of a sound currency and a sound financial and credit economy to promote production.

General lowering of rates of interests paying attention to individual conditions of the economy. Creation of a foreign trade office and a central foreign exchange office. Reorganization of economic relations with foreign countries, giving preference to the vital necessities of the domestic market but with special attention to the export trade absolutely necessary for Germany. Restoration of sound public finances, including public insurances. Abolishment of the untenable methods of balancing the budget. State protection for agriculture. Reorganization of the system of house and land ownership in accordance with the principles of productivity and national health. Expansion of the German raw material basis, the establishment of new national industries and trades, organization of manufactories on the basis of technical innovations. That is all, which is comprised in this so-called economic reconstruction program.

FUNK: This program was to be, as the Prosecution has said, the official Party dogma on economic matters. I would have been glad if the Party had professed these principles. In later years I had great difficulties with these various Party offices in connection with my basic attitude on economic policy. I was always considered, even in Party circles, as a liberal and an outsider...

DR. SAUTER: A liberal?

FUNK: Yes. I combated all tendencies towards collectivism; and, for this reason, I constantly came into conflict with the Labor Front. I was supported, especially in my views regarding private property, by Reich Marshal Hermann Göring. Even during the war, he had parts of the Hermann Göring Works denationalized at my suggestion. I was an opponent of a nationalized economy because a nationalized economy will always produce only average results. Nationalized economy means sterile economy. An economy which is without keen competition and individual rivalry will remain stagnant and will achieve but average results. The Führer had, formerly, always agreed enthusiastically with these principles of mine. And it was a great disappointment to me when finally, in the last years, the Führer turned so sharply against the bourgeois world for that meant practically that the whole of my life’s work had failed.

THE PRESIDENT: Dr. Sauter, the Tribunal thinks he might get on to something more important than his view on state economy and private enterprise.

DR. SAUTER: Yes, Mr. President.

[_Turning to the defendant._] Dr. Funk, you know that it was precisely on account of the big problem of unemployment at the time that Hitler was able to grasp power. What plans did you have for the elimination of unemployment, since you knew that just that very promise...

THE PRESIDENT: Dr. Sauter, we have heard nearly all the defendants on the conditions which obtained in Germany at that time. And there is no charge against these defendants for German economy between the years 1933 and 1939.

DR. SAUTER: Mr. President, I wanted to ask the Defendant Dr. Funk just how he thought that unemployment could be abolished; for from the testimony of other defendants, I gathered that they planned to eliminate it by other means, such as rearmament, and so forth. As far as I know, this was not so in his case; and I think that in judging the Defendant Funk, the question of how he proposed to handle the elimination of unemployment, whether by rearmament or by some other means, is of some importance. I do not think it will take much time, Mr. President. The Defendant Funk, I am sure, will be very brief.

Perhaps he can...

THE PRESIDENT: He can answer that in a sentence, I should think.

DR. SAUTER: Herr Funk, be as brief as possible.

FUNK: If I am to answer this in one sentence, I can say only that at that time I envisioned the elimination of unemployment by a very precise plan, but at any rate without rearmament, without armament...

DR. SAUTER: But, instead?

FUNK: By methods which I would have to explain. But in any event, armament never came into question then...

DR. SAUTER: But—can you perhaps tell us in a few telling words?

FUNK: First of all, opportunities to work were offered everywhere so to speak. It was imperative to set up a large-scale road-building program in Germany; it was necessary to revitalize the engine industry, especially the automobile industry, which, of course, had to be appropriately protected. An extensive house building program was needed; hundreds of thousands of houses were required...

DR. SAUTER: In short...

FUNK: Agriculture lacked mechanization and motorization.

I should like to give here, however, only two figures, two ratios, which throw light on the whole situation. Up to the war two-thirds of Germany’s total production went to private consumption and only one-third for public needs. Up to that point, therefore, the armament industry did not play a decisive role.

DR. SAUTER: Dr. Funk, now we will turn to another chapter.

You will remember that the Prosecution contended in their trial brief that the evidence against you was largely circumstantial. I assume, therefore, that it was based upon your offices rather than your actions. For this reason I should be interested to know which Party offices you held during the period which followed.

FUNK: Only once, in the year 1932...

DR. SAUTER: That is to say in the Party—not government offices.

FUNK: I understand. Only in the year 1932, and then for only a few months, did I receive Party assignments, because Gregor Strasser wanted to set up for me an office of my own, for private economy. This office, however, was dissolved a few months later when he himself resigned from the Party and from his offices. Then in December 1932 I was instructed to take charge of a committee for economic policy.

DR. SAUTER: In December 1932?

FUNK: Yes. And in February 1933, that is, 2 months afterwards, I gave up this office again. Both assignments were unimportant and never really got going in the short time they lasted. All the gentlemen in the dock who were in leading positions in the Party at that time can confirm this. I never had any other Party office; so that after 1933 I received no further assignments from the Party and no Party office either.

DR. SAUTER: Then this so-called Office for Private Economy (Amt für Privatwirtschaft), if I understood you correctly, existed for just a few months in the year 1932 but did not actually function. And in December 1932 you were made head of the other office, the Committee for Economic Policy as it was called. Then a month later, in January 1933...

FUNK: February 1933.

DR. SAUTER: February 1933, shortly after the seizure of power, you gave up this so-called office. Is that correct?

FUNK: Yes.

DR. SAUTER: Now for your connection with the Party. Were you a member of any organization of the Party—SA, SS, or any other section of the Party?

FUNK: I never belonged to any organization of the Party, neither SA nor SS, nor any other organization; and as I have already said, I did not belong to the Leadership Corps.

DR. SAUTER: You did not belong to the Leadership Corps?

FUNK: No.

DR. SAUTER: You know, Dr. Funk, that the Party functionaries, that is, the Party veterans, and so forth, met annually in November at Munich. You have yourself seen a film showing this anniversary meeting.

Were you ever invited to these gatherings on 8 and 9 November?

FUNK: I do not know whether I received invitations; it is possible. But I have never been at such a gathering, for these meetings were specially intended for old Party members and the Party veterans, in commemoration of the March on the Feldherrnhalle. I never participated in these gatherings, as I was averse to attending large gatherings. During all this time I attended a Party rally only once, just visiting one or two functions. Mass gatherings always caused me physical pain.

DR. SAUTER: Witness, did you receive the Golden Party Badge, after you became Minister for Economics?

FUNK: No; I received that when I was still press chief of the Reich government.

DR. SAUTER: You did not get it as Minister?

FUNK: No.

DR. SAUTER: How long were you a National Socialist deputy of the Reichstag?

FUNK: For just a few months.

DR. SAUTER: From when to when?

FUNK: From July 1932 to February 1933. I did not get another seat, because the Chairman of the Party, the chairman of the parliamentary group, Dr. Frick, informed me that, by a directive of the Führer, only the old Party members would receive mandates; and I had received a state position in the meantime.

DR. SAUTER: Witness, in regard to the laws which are of particular importance in this Trial, such as the Enabling Act, which practically eliminated the Reichstag; the law forbidding political parties; or the law for the unity of Party and State—in respect to all these laws, which were in preparation for later developments, were you still a member of the Reichstag at that time or had you already ceased to be one?

FUNK: I was no longer a Reichstag deputy. But even so, I considered these laws necessary.

DR. SAUTER: That is another question. But you were no longer a Reichstag deputy?

FUNK: No; and I was not a member of the Cabinet, either.

DR. SAUTER: Dr. Funk, we have frequently seen and heard of an affidavit by the American Consul General, Messersmith, dated 28 August 1945, Document 1760-PS. He says in the passage which concerns you:

“He had been the editor of one of the leading financial journals
in Berlin before the Nazis came in and had very little open Nazi
sympathy when they did come in.”

He goes on to say:

“...later he became an ardent Nazi and one of their most
effective instruments because of his undoubted capacities in
various fields.”

That is what the American Consul General, Messersmith, says about you. I should like to remind you of another passage from the book by Dr. Oestreich, which I have already mentioned and which has the title _Walter Funk, A Life for Economy_. That is 3505-PS, which has already been used and submitted in these proceedings.

In this book the author says that the assignments given to you by the Party, even if they covered a period of a few months only, might be regarded as particularly important.

What can you tell us about these two quotations?

FUNK: I have already stated that I declared myself for the Party and took up my Party work with enthusiasm. I was never attached to the propaganda organization, as has been asserted by Mr. Messersmith. I cannot remember that I ever knew Mr. Messersmith at all; nor do I remember discussing Austria with him, which he also asserts.

DR. SAUTER: Nor the Anschluss of Austria to Germany?

FUNK: I cannot remember that, although of course I considered the union of Germany and Austria necessary; but I do not recall discussing it with Mr. Messersmith.

As far as Dr. Paul Oestreich’s book is concerned, I am sorry that the Prosecution has used this book as a source of information. Mistakes have arisen which could have been avoided and which I would not have to refute here now. Oestreich was a man who was quite outside the Party.

DR. SAUTER: What was he?

FUNK: He owned a German newspaper in Chile, and for some years he was political editor of the _Berliner Börsenzeitung_.

DR. SAUTER: Political editor?

FUNK: First of all, he naturally wanted to secure a market for his book; and for that reason he exaggerated the importance of my position in the Party. He may have thought that in this way he would do me a particular favor. In any case, as things have been described there, they are not correctly stated.

DR. SAUTER: Witness, in Document Number 3563-PS, submitted by the Prosecution, there is a statement to the effect that you, Dr. Funk, were described in several publications as Hitler’s adviser on economic policy; and in another passage you are said to be Hitler’s “Wirtschaftsbeauftragter” (Economic Plenipotentiary). Was this a Party office, or what precisely was meant by this term? What functions is it supposed to indicate?

FUNK: It was neither a Party office nor a Party title. The press frequently called me so on account of my activity on behalf of the Party in 1932, and it was obviously adopted by writers from the newspapers. But it was neither an office nor a title. It is really nonsense to consider my activities at that time so important; for if they had actually been of importance, I should certainly have retained these offices when the Party came to power.

The Reich Minister for Food and Agriculture was also a Reichsleiter; State Secretary Reinhardt, of the Finance Ministry, was the head of the Department for Financial Policy in the Reich Party Directorate (Reichsleitung), _et cetera_. But there never was a “Reichsleiter für die Wirtschaft.” When the Party came to power I left the Reichstag and all Party organizations.

DR. SAUTER: Dr. Funk, a Reich Economic Council of the Party—I repeat the term: Reich Economic Council of the Party—has been mentioned once or twice in the course of this Trial. What do you know about your part in this Party organization and about the duties and domain of this Party organization?

FUNK: I had to think for a long time before I could remember this group at all, especially as neither Hess, Rosenberg, nor Frank remembered anything of the kind. But I remember dimly that Gottfried Feder had a Circle of people whom he used to call in for consultation and to which he gave the rather pompous name of “Reich Economic Council of the Party.” After the seizure of power this group ceased to exist. I never attended any of its sessions, and I was very much surprised to learn from the Indictment that I was supposed to have been the deputy chairman of this group. This group was of no importance whatsoever.

DR. SAUTER: You mentioned Gottfried Feder.

FUNK: He was responsible for the economic program and tenets of the Party from its establishment until it came to power.

DR. SAUTER: So he was the economic theorist of the Party from its foundation until it came to power?

FUNK: Yes. Dr. Wagner and Keppler overshadowed him later on. Keppler was always given the title of Economic Adviser to the Führer in public.

DR. SAUTER: Dr. Funk, if I understood you correctly, the persons whom you mentioned just now are those whom you consider as the economic advisers of Hitler?

FUNK: No, that is wrong.

DR. SAUTER: Well?

FUNK: Hitler did not allow anyone to advise him, especially on economic matters. These were merely the men who dealt with problems of economic policy in the Party leadership, both before and after my time.

DR. SAUTER: Also from the publicity angle, like Gottfried Feder?

FUNK: He did a good deal of writing; he treated the problem of the lowering of the rate of interest, for example, in great detail.

DR. SAUTER: Dr. Funk, those were your real or supposed Party offices. Now I turn to your State offices. After the seizure of power—that is, at the end of January 1933—you became press chief under the Reich Government. In March 1933, when the Propaganda Ministry was created, that being a State Ministry, you became State Secretary in this Propaganda Ministry under Minister Goebbels. How did that come about?

FUNK: May I give a short summary of these matters?

DR. SAUTER: One moment...

FUNK: It would go much faster than asking each question separately.

DR. SAUTER: Then I would ask you to consider at the same time the question of why you entered the Propaganda Ministry and were made press chief of the Reich Government, although you were usually always occupied with economic questions.

FUNK: The Reich Marshal has already stated in his testimony; firstly, that he never knew that I had been active in the Party at all before 1933, and secondly, that, as he himself rightly believed, my appointment as press chief of the Reich Government came as a complete surprise. On 29 January 1933 the Führer told me that he had no one among the old Party members who was intimately acquainted with the press and that he, therefore, wanted to ask me to take over the position of press chief, especially as this appointment involved regular reports to the Reich President. The Reich President knew me and, as I may mention again later on, very much liked me. I was often a guest at his home and was on friendly terms with his family.

DR. SAUTER: That is, Hindenburg?

FUNK: Yes, Hindenburg.

These were the reasons which prompted Hitler to make me press chief of the Reich Government. The press chief of the Reich Government was also a ministerial director in the Reich Chancellery, and I did not like the idea of suddenly becoming a civil servant, for I never had any ambitions in that direction. But I accepted the appointment, influenced by the general enthusiasm of that period and in obedience to the Führer’s summons.

I gave regular press reports to him, in the presence of Lammers. These conferences went on for a year and a half only, until the death of the Reich President, after which they stopped. The Führer issued instructions to the press through the Reich press chief of the Party, Dr. Dietrich, who was later also made a State Secretary in the Propaganda Ministry.

When the Propaganda Ministry was founded the Führer asked me to organize this ministry, so that Goebbels would not have to deal with problems of administration, organization, and finance. Then the Press Department of the Reich Government, of which I had so far been in charge, was incorporated in the Propaganda Ministry and placed under the direct control of Goebbels. It also had its own special chief.