Chapter V: Front Matter (5)

From that time on—that is, after only 6 weeks activity as press chief of the Reich Government—my activities regarding the information and instruction of the press were at an end. From then on this was done by Goebbels himself, who generally drew a sharp line between the political and administrative tasks of the Ministry. He brought with him his old collaborators from the propaganda leadership of the Party to look after propaganda.

My services were not required for political propaganda. Goebbels took care of it through the Party organ, of which I was not a member. I had, for instance, as Chairman of the Supervisory Council, to be responsible for the finances of the German Broadcasting Corporation—a matter of a hundred million—but I never broadcasted propaganda speeches. Nor did I speak at any of the big State or Party rallies. Naturally, I fully appreciated the importance of propaganda for state leadership and admired the truly gifted manner in which Goebbels conducted his propaganda; but I myself played no part in active propaganda.

DR. SAUTER: Then, if I understood you correctly, your functions in the Propaganda Ministry, which was, of course, a state ministry, were of a purely administrative and organizational nature; and you left the actual propaganda to the Minister, Dr. Goebbels, and the people he brought into the Ministry from the Party propaganda instrument. Is that correct?

FUNK: Yes. Goebbels naturally claimed the exclusive right to dispose of all propaganda material. I did not appear beside him in the field of propaganda at all; and other considerable restrictions were imposed on my position as State Secretary by the fact that many assignments, looked after in other ministries by the State Secretary, were in this case taken care of by Goebbels’ expert, Hahnke, who was later made State Secretary and Gauleiter.

DR. SAUTER: Hahnke?

FUNK: Yes. I do not believe that during the entire period of my activity in the Propaganda Ministry I signed even three times as Goebbels’ deputy. One of these signatures has been nailed down by the Prosecution. It is a signature appended to an order for the execution of a directive and fixing the date on which it is to come into force.

DR. SAUTER: What kind of directive was that?

FUNK: The decree for the application of the law of the Reich Chamber of Culture. The Reich Cabinet decreed legislation in connection with the Reich Chamber of Culture. I was not a member of the Reich Cabinet; but as State Secretary to the Propaganda Ministry I was, of course, formally responsible, and naturally I promoted propaganda, as did everyone else who occupied a leading position in the official or the intellectual life of Germany. The entire cultural life of the nation was permeated with this propaganda in a measure appropriate to the overwhelming, fundamental significance which was rightly attached to propaganda in the National Socialist State.

DR. SAUTER: Dr. Funk, the Prosecution has held you responsible for laws decreed during your term of office as press chief of the Reichsregierung. I refer, for instance, to the laws submitted under Documents Number 2962-PS and 2963-PS. These are the laws well known to you and which concern the abolition of civil rights in Germany and the abolition of the parliamentary form of government. I ask you to explain, what did you have to do with these laws? Did you as press chief under the Reich Government have any influence on the contents and promulgation of these laws?

FUNK: No. This question has already been answered in the negative by both the Reich Marshal and Dr. Lammers. All I had to do was to pass on the contents of these laws to the press, in accordance with instructions given to me by the Führer.

DR. SAUTER: So you were surely present at the sessions of the Reich Cabinet...

FUNK: Yes.

DR. SAUTER: And you took note of the deliberations and resolutions of the Reich Cabinet...

FUNK: Yes.

DR. SAUTER: That was the reason of your presence there; but your sole duty—and please tell me if I am correct—was to inform the press, after the cabinet sessions, of the decisions made? Is that correct?

FUNK: Yes, that is correct.

DR. SAUTER: So you had no influence on the drafting or on the contents of the laws, nor on the voting? Is that right?

FUNK: Yes, that is right. I had neither a seat nor a vote in the Cabinet.

DR. SAUTER: Were you responsible for the press policy of the Reich Government—and I stress: the Reich Government and not the Party?

FUNK: I have already said that I received my instructions for the press from the Führer; that went on for 6 weeks. Then Dr. Goebbels took charge of press policy.

DR. SAUTER: You have already said that the press reports to Reich President Von Hindenburg ended with his death in August 1934?

FUNK: Yes.

DR. SAUTER: And also, from the same date, your press reports to Hitler, who was then Reich Chancellor, is it not so?

FUNK: Yes, that is correct. Reich President Hindenburg had died in the meantime.

DR. SAUTER: And afterwards the Reich press chief, that is the Party official, Dr. Dietrich, tended more and more to occupy your place?

FUNK: Yes, Dr. Dietrich was one of the Führer’s closest collaborators; and through him the Führer gave his instructions to the press.

DR. SAUTER: Dr. Funk, the book by Dr. Oestreich, 3505-PS, Exhibit USA-653, which we have already dealt with, contains the following quotation on your press policy; and I quote:

“Many of the journalists who worked in Berlin and the provinces
are grateful to Funk for the way in which he attended to their
wishes and their complaints, especially during the transition
period.

“Funk is responsible for the much-quoted saying that the press
must not be a ‘barrel-organ,’ with which he protested against
the uniformity”—to use a German word, the one-sided modeling
and leveling—“of the press and demanded individuality for it.
But he also protected the press from efforts made by various
offices to ‘grind their own ax....’”

Is that correct?

FUNK: Yes; I probably did write that; and that was my opinion. So far as it lay within my power, I tried to protect the press from standardization and arbitrary treatment, especially at the hands of the government offices.

DR. SAUTER: You have already said, I believe, that you took no part in the political direction of the Propaganda Ministry—I stress, the political direction of the Propaganda Ministry—or in the actual work of propaganda. Is that correct?

FUNK: Yes, that is correct.

DR. SAUTER: Mr. President, I turn now to a new complex. Do you wish to have the recess now, Your Honor?

THE PRESIDENT: I think we will go straight on. We are going to adjourn at 12 o’clock.

DR. SAUTER: Witness, I come now to your attitude on the question of anti-Semitism. I do so because you are held more or less responsible, along with others, for the excesses committed against the Jews. Will you tell us on what principles your attitude was based?

FUNK: I was never anti-Semitic on the basis of racial principles. At first I thought that the anti-Semitic demands of the Party program were a matter of propaganda. At that time the Jews in many respects held a dominant position in widely different and important fields of German life; and I myself knew many very wise Jews who did not think that it was in the interest of the Jews that they should dominate cultural life, the legal profession, science, and commerce to the extent that they did at the time...

The people showed a tendency toward anti-Semitism at that time.

The Jews had a particularly strong influence on cultural life and their influence seemed to me particularly dangerous in this sphere because tendencies which I felt to be definitely un-German and inartistic appeared as a result of Jewish influence, especially in the domain of painting and music. The law concerning the Reich Chamber of Culture was created, radically excluding the Jews from German cultural life but with the possibility of making exceptions. I applied these exceptions whenever I was in a position to do so. The law, as I have stated, was decreed by the Reich Cabinet, which bears the responsibility for it. I was at that time not a member of the Cabinet. During the period of my activities in the Propaganda Ministry, I did what I could to help the Jews and other outsiders in cultural life.

Everyone who knows me from my activities during that period can and must testify to that.

DR. SAUTER: I have submitted two affidavits in my document book; Documents Number Funk-1 and 2. The first was made by the editor of the _Frankfurter Zeitung_, Albert Oeser; and the second by a lawyer, Dr. Roesen. I ask you to take judicial notice of both these documents. The first affidavit proves that the Defendant Funk took a great deal of trouble to protect the interests of the above-mentioned Albert Oeser, the editor of the _Frankfurter Zeitung_, and those of a number of the staff of this newspaper, although by doing so he was endangering his own position. In particular, he persisted in retaining members of the staff who were not of Aryan descent and who, therefore, in accordance with the intentions of the Party, should no longer have been employed.

FUNK: It was not in accordance with the intentions of the Party, but in accordance with the law passed for the Chamber of Culture that they were no longer to be employed.

DR. SAUTER: In accordance with the law passed for the Chamber of Culture, also.

Then Document Number 2 of the document book, an affidavit made by Dr. Roesen, who confirms that the Defendant Funk also intervened, for instance, on behalf of the family of the composer, Dr. Richard Strauss, and his non-Aryan grandchildren and by so doing incurred certain personal danger. These are just a few examples; but the defendant can probably tell you of other cases in which he looked after people’s interests.

THE PRESIDENT: What exhibit number are you offering those as?

DR. SAUTER: Numbers Funk-1 and 2 in the document book. I have submitted the originals.

THE PRESIDENT: 1 and 2?

DR. SAUTER: 1 and 2.

[_Turning to the defendant._] Dr. Funk, I have just said that perhaps you could—quite briefly—give us some more examples of cases where you used your official position to protect intellectuals and artists, whose views had got them into difficulties.

FUNK: Richard Strauss is a special case. That most remarkable living composer found himself in great difficulties on account of a libretto written by the Jew, Stefan Zweig.

I succeeded in having Richard Strauss again received by the Führer, and the whole affair was dismissed.

Dr. Wilhelm Furtwängler found himself in similar difficulties because he wrote an article praising the composer Hindemith; and composers with Jewish wives, such as Lehar, Künnecke, and others who were always in difficulties because of their efforts to evade the ban placed on the performance of their works. I always succeeded in getting permission for these composers to have their works performed.

THE PRESIDENT: The defendant can say that he helped hundreds of Jews, but that does not really destroy the fact that he may have acted hostilely by signing decrees against the Jewish race—his helping a few Jewish friends. Anyhow, I do not think that it need be gone into any detail.

DR. SAUTER: We are of the opinion, Mr. President, that in order to judge the character and personality of the defendant, it may be important to know whether he signed decrees which were in any way anti-Semitic because as an official he considered himself bound by his oath to carry out the law of the land, or whether he signed them because he himself was an anti-Semite who wished to persecute Jewish citizens and to deprive them of their rights, and for this reason only...

THE PRESIDENT: Dr. Sauter, the Tribunal thinks that you have made the point quite clearly that he helped Jewish friends, but it isn’t a question which need be gone into in detail.

DR. SAUTER: I come now, in any case, Mr. President, to another point. I want to ask the defendant how his activities in the Propaganda Ministry developed in later years.

FUNK: In exactly the same direction that I have described here. By degrees I came to be in charge of a large cultural economic concern—film companies, broadcasting corporations, theaters. I was director and chairman of the supervisory board of the Philharmonic Orchestra and on the Council of German Economy, which dealt collectively with the economic activities in the entire economic field at home and abroad with the active participation of the economy itself. Those were the main parts of my work.

DR. SAUTER: Witness, the Prosecution has submitted under Document Number 3501-PS an affidavit by the former Reich chief of the press—I believe—Max Amann, in regard to your activities in the Propaganda Ministry. I want to refer to this now. In that affidavit, we find the statement that Dr. Funk—and I quote literally:

“...was to all intents and purposes Minister in the Propaganda
Ministry...”—And it says further on—and I quote again—“Funk
exercised complete control over all means of expression in
Germany: press, theater, radio, and music.”

Now, I ask you to comment on that; but you can do so quite briefly because I have already submitted an affidavit by Max Amann to the contrary to which I will refer later.

FUNK: Amann knew the Ministry only from the outside; and, therefore, he had no exact knowledge of its internal affairs. My work was done in the manner I have described. It is completely absurd to assert that under a Minister such as Dr. Goebbels the Ministry could have been led by someone else who was not the Minister.

Dr. Goebbels assumed such exclusive and all-embracing functions in the field of propaganda that he dwarfed everyone else.

DR. SAUTER: Mr. President, I have submitted an affidavit by that same former Reichsleiter Amann, dealing with the same subject, in the appendix to the Funk Document Book, under Document Number Funk-14—that will be Exhibit Number 3—and I ask you to take judicial notice of this affidavit. I do not think I have to read it. I administered that affidavit in the presence of and with the co-operation of a member of the Prosecution. The essential part of this affidavit of 17 April 1946 is that Reichsleiter Max Amann also admits that Funk had nothing to do with propaganda as such. That is to say, he did no broadcasting and indulged in no propaganda speeches but was mainly concerned with the organization and administration of the Ministry. Now, Mr. President, I come to the defendant’s position as Reich Minister of Economics.

[_Turning to the defendant._] Dr. Funk, you were State Secretary in the Propaganda Ministry until 1937. At the end of November 1937 you became Reich Minister of Economics, after your predecessor, Dr. Schacht, had left that post. Can you tell us with the necessary brevity—of course—how that change took place and why you were called to that post?

FUNK: That took me completely by surprise, too. During a performance at the opera, the Führer, who was present, took me aside in the vestibule during an interval and told me that the differences between Schacht and Göring could no longer be bridged and that he was therefore compelled to dismiss Schacht from his office as Minister of Economics and was asking me to take over the post of Minister of Economics, as he was very well acquainted with my knowledge and experience in the field of economics. He also asked me to contact Reich Marshal Göring who would explain everything else.

That was the only conversation which I had with the Führer on the subject.

DR. SAUTER: And then you spoke to Göring himself? Will you tell us about that?

FUNK: Then I went to the Reich Marshal who told me that he had really only intended to put a state secretary in charge of the Reich Ministry of Economics but that later he decided that the extensive machinery of the Four Year Plan should be merged with the machinery of the Ministry of Economics. However, the minister would have to work in accordance with his directives and in particular the plenipotentiaries for the individual decisive branches of economy would be maintained and would receive their directives directly from the Delegate for the Four Year Plan. In order to proceed with the necessary reorganization, the Reich Marshal himself took over the direction of the Reich Economic Ministry; and in February 1938 he transferred it to me.

DR. SAUTER: So Göring himself was to all intents and purposes the head of the Reich Ministry for Economics for a period of about 3 months.

FUNK: The reorganization was effected under his control. The control of economic policy was in his hands then as well as later.

The main control offices under the Four Year Plan were maintained; for instance, the Foreign Currency Control Office, which gave directives to the Reichsbank; there was the Food Control Office, which gave directives to the Food and Agriculture Ministry; the Allocation of Labor Control Office, which gave directives to the Labor Ministry; and also the plenipotentiaries for the separate branches of economics: coal, iron, chemicals, _et cetera_, which were under the direct control of the Delegate for the Four Year Plan. Some offices were also transferred in this way to the Ministry of Economics from the Four Year Plan, which continued to function quite independently. They included the Reich Office for Economic Development and Research, which was under the direction of Professor Strauch, and the Reich Office for Soil Research, directed by State Secretary Kempner, mentioned here in connection with Slovakia and Austria.

I tried to restore the independence of these offices. I am still in ignorance of what these offices did. In any case, they thought themselves responsible to the Four Year Plan rather than to the Minister of Economy.

DR. SAUTER: Dr. Funk, the essential point of what you have just said seems to me to be that you received the title of minister but that in reality you were not a minister, but might have had the position of a state secretary and that your so-called Ministry of Economics was completely subordinated to the directives of the Four Year Plan—your Codefendant Göring in other words—and was compelled to follow these directives.

Did I understand it correctly?

FUNK: The latter point is correct. The Reich Marshal has clearly expressed and confirmed that here. But the first statement is not correct because formally, at least, I held the position of minister, which involved a gigantic administrative domain to which the Reich Marshal, of course, could not pay attention. The very purpose of the reorganization was that the Reich Marshal reserved for himself the direction and control of economic policy in the most important and decisive matters and gave me corresponding directives, but the execution of these was naturally in the hands of the Ministry and its organizations. But it is true that the position of minister, in the usual meaning of the term, did not exist. There was, so to speak, a higher ministry. But that has happened to me all my life. I arrived at the threshold, so to speak; but I was never permitted to cross it.

DR. SAUTER: That is not the case as far as this Trial is concerned.

Dr. Funk, the Prosecution asserts that, although you were not really a minister with the usual responsibility and independence of a minister, you, as Dr. Funk, Reich Economic Minister, still exercised supervision over those parts of the German economy which were grouped under war and armaments industry, that is, in particular, raw materials and manufactured materials as well as mining, the iron industry, power stations, handicrafts, finance and credit, foreign trade and foreign currency. I refer you, Dr. Funk, to the statements on Page 22 of the German translation of the trial brief, which I discussed with you several days ago.

FUNK: That is formally correct. But I have already explained how matters really were. I had nothing to do with the armament industry. The armament industry was at first under the High Command of the Armed Forces, under the Chief of the Armament Office, General Thomas, who was a member of Schacht’s conspiracy, of which we have heard here. The Armament Minister Todt, who was appointed in 1940, at once took over from me the entire power economy; and later on I turned over all the civilian production to Armament Minister Speer.

DR. SAUTER: What do you mean by civilian production?

FUNK: Coal, chemicals, consumer, and other goods. The main production branches in that field already mentioned here were, as I said before, under the Delegate for the Four Year Plan. Thus it came about that the Ministry of Economics gradually became a new Ministry of Commerce, which dealt only with the distribution of consumer goods.

DR. SAUTER: Mr. President, perhaps we might let him go on for a few seconds longer; because I would then come in a second to the subject of the Reichsbank President.

THE PRESIDENT: Certainly.

DR. SAUTER: Will you please continue briefly? You stopped. I believe you wanted to say more about manpower, gold, and foreign currency—about the competent authorities there.

FUNK: The Foreign Currency Control Office under the Four Year Plan was the competent authority for that; and the Reichsbank had to act in accordance with its directives—in my time, at least.

DR. SAUTER: And the direction of foreign trade?

FUNK: That was in the hands of the Foreign Office. The Minister for Foreign Affairs obstinately laid claim to that.

DR. SAUTER: And what did the Ministry of Economics do?

FUNK: The Ministry of Economics and the Reichsbank attended to the technical execution in this sphere, that is, the technical execution of clearing agreements, balances, _et cetera_.

DR. SAUTER: Mr. President, I come now to a separate theme. I should like now to discuss his position as President of the Reichsbank. I believe it might be a good moment to adjourn.

THE PRESIDENT: The Court will adjourn.

[_The Tribunal adjourned until 6 May 1946 at 1000 hours._]

ONE HUNDRED
AND TWENTY-SECOND DAY
Monday, 6 May 1946

_Morning Session_

[_The Defendant Funk resumed the stand._]

DR. SAUTER: Mr. President, I will continue my questioning of the Defendant Dr. Funk. On Saturday we were discussing the appointment of Dr. Funk as Reich Minister of Economics and now I turn to his appointment as President of the Reichsbank.

Witness, I believe it was in January 1939 when you also became President of the Reichsbank as successor to Dr. Schacht. How did that appointment come about?

FUNK: I had just returned from a journey about the middle of January 1939. I was called to the Führer and found him in a state of great agitation. He told me that the Reich Minister of Finance had informed him that Schacht had refused the necessary financial credits and that consequently the Reich was in financial straits. The Führer told me, in great excitement, that Schacht was sabotaging his policies, that he would not tolerate the Reichsbank’s interference with his policies any longer and the gentlemen in the Reichsbank Directorate were utter fools if they believed that he would tolerate it. No government and no chief of state in the world could possibly make policy dependent on co-operation or non-co-operation of the issuing bank.

The Führer further declared that from now on he himself, on the suggestions and demands of the Reich Minister of Finance, would fix all credits to be given by the Reichsbank to the Reich. He had given Lammers instructions to formulate a decree, together with the Reich Minister of Finance, by which the status of the Reichsbank, as established by the provisions of the Treaty of Versailles, would be changed, and whereby the terms for the granting of credits to the Reich would be determined by himself alone in the future.

The Führer further said that he was asking me to take over the direction of the Reichsbank, whereupon I replied that I would be glad to comply with his wish, but that first of all I had to have confirmation from him that the conditions for stabilization of currency would be maintained.

The opinion, which was voiced here by a witness, that inflation would be brought about through a further grant of credits at that time is wrong and totally untenable. Although 12,000 millions of credit can have an inflationary effect, 20,000 millions of credit will not necessarily tend toward inflation if the state has the necessary authority to stabilize prices and wages and to carry out the regulation and administration of prices, and if the people maintain the proper discipline in this respect, and if, finally, the money which as a result of increased credits represents excess purchasing power is diverted through taxes or taken up through loans; then, as far as the currency is concerned, there is absolutely no danger.

It is a fact that the Reichsmark, up to the final collapse, was kept on a stable basis. As far as the essentials of life are concerned, the purchasing power of money in Germany was secure. Of course, its value was limited insofar as consumers’ goods were produced only on a very limited scale, for almost all production was turned over to armaments.

DR. SAUTER: Dr. Funk, have you concluded?

FUNK: Just one moment, please. I believe this is a very important question.

In other countries as well, large credits were issued during the war which did not in any way cause an inflation. The national debt in the United States as well as in England was relatively, and in part even absolutely, higher than that in Germany. And in these countries, too, a correct financial policy overthrew the old thesis that a war would, of necessity, bring about the destruction of the monetary value.

The German people, up to the very end, until the terrible collapse, maintained admirable discipline. Money as a function of the state will have its value and currency will function so long as the state has authority to maintain it on a stable basis, to keep the economy under control, and as long as the people themselves maintain the necessary discipline.

Thus I took over this office not with the knowledge that Germany was now entering an inflation period but, on the contrary, I knew well that through maintenance of a suitable governmental policy the currency could be protected, and it was protected. However, the basic difference between Schacht’s position and my position lay in the fact that during Schacht’s time the Reichsbank could determine the granting of credits to the Reich, whereas this authority was taken from me, and the responsibility for domestic finances, therefore, was turned over to the Minister of Finance or of course to the Führer himself.

DR. SAUTER: Dr. Funk, I have another question. Perhaps, despite your poor state of health today, you might be able to speak a little more loudly so that the stenographers might understand you more easily. Please try, and we will make this as brief as possible.

Witness, then in addition to these offices of yours which we have discussed up to now, you finally had a further office as successor of Dr. Schacht, namely, that of Plenipotentiary General for Economy. Can you give us some details of your view in this connection in order to clarify your situation, your activity, and your achievements?

FUNK: This of all the positions I had was the least impressive. As the Reich Marshal correctly stated, and as Dr. Lammers confirmed, it existed merely on paper. That, too, was an essential difference between the position which Schacht had and the one which I had.

Schacht had been appointed Plenipotentiary General for War Economy. I, on the other hand, was the Plenipotentiary General for Economy. According to the Reich Defense Law of 1938, the Plenipotentiary General for Economy was to co-ordinate the civil economics departments in preparing for a war. But, in the meantime, these economic departments had been subordinated to the Delegate for the Four Year Plan, and I, as Plenipotentiary General for Economy, was also subordinate to the Delegate for the Four Year Plan.

Consequently, there was confusion and overlapping in matters of competence and authority as they had been laid down formally. The result was a directive of the Führer just a few months after the beginning of the war which _de jure_ and formally transferred the authority of the Plenipotentiary General for Economy, as far as the civil economic departments were concerned, to the Delegate for the Four Year Plan.

DR. SAUTER: When was that?

FUNK: That was in December of 1939. There remained only a formal authority to issue directives, that is, I could sign directives on behalf of the five civil economic departments, which, according to the Reich Defense Law, were subordinate to the Plenipotentiary. I retained authority over the Ministry of Economics and the Reichsbank, which I had in any case.

DR. SAUTER: But you were subordinate even in these functions to the Delegate for the Four Year Plan; is that correct?

FUNK: Yes, like all civil economic departments. Only with the Ministry of Economics itself did I have a closer connection.

DR. SAUTER: Witness, in August 1939, that is, immediately before the beginning of the Polish campaign, you in your capacity as Plenipotentiary General for Economy summoned the civil economic offices to a meeting for discussions, and Document 3324-PS refers to this meeting. It seems to me important that you define your attitude on this point also, and especially with reference to the fact that apparently your letter to Hitler, dated 25 August, was a result of this meeting. This matter is mentioned in your trial brief on Page 24. Will you comment on it?

FUNK: In Schacht’s time there existed an office for the Plenipotentiary General for Economy, and a working committee was set up which consisted of the representatives of the various economic departments, as well as of the Ministry of the Interior, the Plenipotentiary for Administration, the OKW, and above all, of the Four Year Plan.

When Schacht resigned, the direction of this committee and of the office of the Plenipotentiary for Economy was transferred to Dr. Posse, his former State Secretary, whereas under Schacht State Counsellor Wohlthat had headed the office and the committee. These people, of course, had constant consultations, in which they discussed measures necessary in the economic sphere for waging war. And this was the organization of the Plenipotentiary for Economy which I dealt with in my speech in Vienna which had been mentioned here. It existed alongside the Four Year Plan, and in the main was charged with a smooth conversion of the civilian economy into a war economy in the case of war, and with the preparation of a war economy administration.

When, in August of 1939, there was a threat of war with Poland, I called together the chiefs of the civil economic departments, as well as the representatives of the Four Year Plan, and, in joint consultation, we worked out measures necessary for converting the civilian economy into a war economy in the case of a war with as little disturbance as possible.

These were the proposals which I mentioned in my letter to the Führer dated 25 August 1939, at a time when the German and Polish Armies already faced each other in a state of complete mobilization.

It was, of course, my duty to do everything to prevent dislocations of the civilian economy in the case of a war, and it was my duty as President of the Reichsbank to augment gold and foreign exchange assets of the Reichsbank as much as possible.

This was necessary first of all because of the general political tension which existed at the time. It would also have been necessary if war had not broken out at all, but even if only economic sanctions had been imposed, as was to be expected from the general foreign political tension which existed at the time. And it was equally my duty, as Minister of Economics, to do everything to increase production.

But I did not concern myself with the financial demands of the Wehrmacht, and I had nothing to do with armament problems, since, as I have already said, the direction of peacetime as well as war economy had been turned over to the Delegate for the Four Year Plan.

The explanation for the fact that at that time I kept aloof from the work of that committee is the following:

I personally did not believe that there would be war, and everyone who discussed this subject with me at that time will confirm this. In the months before the beginning of the war I concentrated my entire activity on international negotiations for bringing about a better international economic order, and for improving commercial relations between Germany and her foreign partners.

At that time it was arranged that the British Ministers Hudson and Stanley were to visit me in Berlin. I myself was to go for negotiations to Paris where, in the year 1937, I had come to know some members of the Cabinet when I organized a great German cultural fête there.

The subject of short-term foreign debts had again to be discussed and settled—the so-called moratorium. I had worked out new proposals for this, which were hailed with enthusiasm, especially in England. In June of 1939, an international financial discussion took place in my offices in Berlin, and leading representatives of the banking world from the United States, from England, from Holland, France, Belgium, Switzerland, and Sweden, took part in it.

These discussions led to results which satisfied all parties. At the same time I carried out the exchange or transfer of Reichsbank assets in foreign countries. This exchange of gold shares also was considered very fair and satisfactory in foreign banking circles and the foreign press.

In June of that year I went to Holland to negotiate trade agreements. I also participated in the customary monthly discussions of the International Clearing Bank at Basel as late as the beginning of July 1939, and despite the strong political tension which existed at the time I was convinced that a war would be avoided and I voiced this conviction in all my discussions, at home and abroad. And this is why during those months I was barely interested in the discussions and consultations on the financing of the war and the shape of war economy.

I had, of course, given instructions to the Reichsbank to use its available economic assets abroad as far as possible to obtain gold and generally to increase our foreign assets. But in the few months of my activity in this sphere before the war, the success of this endeavor of mine was slight. Our gold assets and foreign assets, as they were turned over to me by Schacht, remained on the whole unchanged until the war.

In my questionnaire to the Reichsbank Vice President, Puhl, I requested enlightenment on these transactions, since the Directorate of the Reichsbank and its managing director who, at that time, was Puhl, are bound to have information on this matter. The answer to this questionnaire, I am sorry to say, has not as yet arrived.

DR. SAUTER: Witness, you gave these details obviously to show that despite the political tension at the time you did not even think seriously of war.

FUNK: Not until August 1939.

DR. SAUTER: Now, in the course of these proceedings, we have heard about a series of discussions which Hitler had with generals and other personalities, and which concerned military and political matters. All these were discussions which we must say today stood in closest connection with preparations for war.

At which of these discussions were you present, and what did you gather from them?

FUNK: I was never called into political and military discussions, and I did not participate in any of these discussions which were mentioned here in connection with the charge of planning an aggressive war, so far as discussions with the Führer are concerned. I was also not informed about the contents of these discussions. And as far as I can remember, I was hardly ever present at the discussions with the Reich Marshal, when they dealt with this topic.

I have been confronted here with a meeting which took place in October of 1938.

DR. SAUTER: 14 October 1938? I can tell you the document number. It is 1301-PS.

FUNK: Yes.

DR. SAUTER: Were you present at that meeting?

FUNK: No.

DR. SAUTER: That was the meeting...

FUNK: Yes, that was the meeting in which, according to the indictment against me, Göring pointed out that he had been instructed by the Führer to increase armament to an abnormal extent. The Luftwaffe was to be increased fivefold, as speedily as possible.

The Prosecutor, according to the official record (Volume V, Pages 163, 164), asserts that, in this discussion, Göring addressed me in the words of a man who was already at war. I was not even in Germany those days but in Bulgaria, and consequently I could not participate in this meeting.

DR. SAUTER: Mr. President, as proof of the fact that the Defendant Funk was not in Germany at the time of this discussion with Göring on 14 October 1938 I have submitted several documents in the Document Book Funk; they are extracts from the _Völkischer Beobachter_, Numbers 5, 6, 7, and 8 of the Funk Document Book. These documents are submitted chiefly because they show that in fact from 13 October 1938 until 15 October 1938 Funk was at Sofia in Bulgaria, and therefore could not have been present at the Göring meeting on 14 October 1938.

What Funk said in Bulgaria about economic relations I need not read in detail. But I would like to refer especially to his speech of 15 October 1938, Funk Document Book Number 7, in which the Defendant Funk, particularly in the first paragraph, declared publicly that the thought of an economic union between the German economy and the Southeastern European economy was in his mind, and in which Funk quite definitely rejected a one-sided dependence of the economy of the southeastern states on the economic system of Germany.

Therefore I beg the Tribunal to take judicial notice of these documents as evidence and in order to save time I will not go into them further.

Witness, under Document Number PS-3562 the Prosecution has submitted a document dealing with a conference on 1 June 1939. You yourself did not attend this meeting, but according to the list of those present several representatives of your Ministry were there, as well as the representative of the Reichsbank. At this meeting the probable financial needs of the Reich in case of a war, the productive capacity of the Germany economy, and that of the Protectorate in case of a war were discussed. There is a marginal note in this record which says that the record was to be submitted to you. Can you state very briefly whether this was actually done?

FUNK: No, it was not done. I have the document here. If this record had been submitted to me I would have affixed my initials “W. F.” to it. Besides, this document deals with the continuous discussions, which I have already mentioned, about the financing of the war, and the measures to be taken in the field of civilian economy in case of a war. The decisive measures for the financing were naturally prepared by the Reich Minister of Finance, and these measures were discussed at length in this conference at which the question of meeting the expenses through taxes was one of the chief topics. In any event, a variety of such discussions was carried on continuously at that time among the representatives of the various departments, and they took place in the office of the leading staff of the Plenipotentiary for Economy. By chance I have now found this name which earlier I could not remember: this was the institution—the committee—which was founded in the days of Schacht and was later continued.

DR. SAUTER: Dr. Funk, on 30 March 1939 you made a statement of your program in a speech before the Central Committee of the Reichsbank.

I have included these excerpts from the speech which have a bearing on this Trial in the Funk Document Book under Number 9. I am coming back to this speech because it was delivered before the Central Committee shortly after the defendant assumed his office as President of the Reichsbank, and represents his program as President of the Reichsbank in connection with various matters which have played a part here.

Dr. Funk, perhaps with just a few brief words you might give us the essential relevant points of your speech, insofar as the Prosecution is interested in them.

FUNK: I do not believe I need do that. I briefly mentioned a while ago that in these months I carried on international discussions about the necessity for a new order in international economic relations, and that I also pointed out Germany’s readiness to play a positive part. Therefore, I do not think I need read anything more from this speech; it is only meant to show that at that time I did not work on preparations for war but endeavored to bring about international economic understanding, and that these, my efforts were recognized publicly in foreign countries, especially in England.

DR. SAUTER: This intention to establish favorable and confident relations with foreign countries, that is, with their financial and economic circles, was, I am sure, a deciding factor in a later measure to which you already referred a little while ago, namely that compensation to foreign shareholders in the Reichsbank, who, I believe, existed chiefly in England, Holland, and Switzerland, was assessed and paid in a particularly loyal manner.

FUNK: Yes, I have stated that already.

DR. SAUTER: Dr. Funk, you mentioned earlier a letter which you wrote to Hitler. This letter would be interesting to me insofar as I would like to know just why you wrote it, and why in it you spoke of “your proposals,” even though in the main they were concerned with things which did not actually originate with you. Perhaps you will say a few words about this letter.

FUNK: The tone and contents of this letter can be explained from the general mood which existed everywhere in Germany at that time. Beyond that it is a purely personal letter to the Führer: In it I thanked him for his congratulations on my birthday. For this reason the letter is a little emphatic in its style. When I spoke of “my proposals,” this may be traced back to the fact that I had personally some time before explained to the Führer what measures would be necessary if a war broke out. And in the main, those were the measures which were adopted later as a result of conferences with the other economic offices, and to which I referred in this letter. Thus it was not quite correct for me to say “my proposals.” I should really have said, “The proposals worked out together with the other economic offices.”

DR. SAUTER: Dr. Funk, have you concluded?

FUNK: No. I would like to explain this whole letter with just a few words, since it is apparently one of the pillars of the Prosecution’s case against me.

As I have said, it was the time when the two mobilized armies faced each other. It was the time when the entire German people were in a state of great excitement because of the constant provocations and the ill-treatment of the German population in Poland. I personally did not believe that we would actually have war, for I was of the opinion that diplomatic negotiations could again be successful in preventing the threat of war and indeed in avoiding war itself. After the Führer’s almost miraculous successes in foreign policy, the heart of every true German had to beat faster in the expectation that in the East also Germany’s wishes would be fulfilled; that is, that my separated home province of East Prussia would be reunited with the Reich, that the old German city of Danzig would again belong to the Reich, and that the problem of the Corridor would be solved.

The overwhelming majority of the German people, including myself, did not believe that this question would end in war. We were rather convinced that England would be successful in exerting pressure on Poland so that Poland would acquiesce in the German demands on Danzig and the Corridor and would not bring on a war. The testimony of the witness Gisevius must have made clear to everyone in the world that England did nothing at that time to exert a soothing and conciliatory influence on Poland. For if the British Government knew that a conspiracy existed in Germany in which the Chief of the General Staff, the Chief of the OKW, the Chief of German Armament and other leading military personalities and generals were involved, and that an overthrow had been prepared for the event of war, then the British Government would have been foolish indeed if they had done anything to assuage and conciliate Poland. The British Government must have been convinced that if Hitler should go to war, a _coup d’état_, a revolution, an overthrow would take place, and that, in the first place, there would be no war and, secondly, that the hateful Hitler regime would be removed. Nobody could hope for more.

DR. SAUTER: Dr. Funk, we do not want to talk politics, but rather return to this letter of 25 August 1939. May I repeat the number, 699-PS. Let us at present deal only with this letter. If I understood you correctly, I can summarize your testimony as follows: This rather enthusiastic letter to Hitler was written because you were hopeful that Hitler would succeed in reuniting your home province of East Prussia with the Reich, and would now finally settle the Corridor problem without a war. Did I understand you correctly?

FUNK: Yes, but at the same time I feel I must state that I on my part did everything to ensure that in the event of war, peacetime economy would without disturbance be converted into a war economy. But this was the only time at which, as Plenipotentiary for Economy, I was active at all with regard to the other economic departments and the fact that I referred to my position in this letter may be explained quite naturally, because I was proud that I had for once done something in this official position—for every man likes to be successful.

DR. SAUTER: Dr. Funk, we are still concerned with the question of whether you knew of Hitler’s intent to bring about a war, especially to wage aggressive war and to make conquests through aggressive wars. I would like to put to you a few questions which, for the sake of simplicity, you can answer with “yes” or “no”; I would like to know only whether your knowledge and your presentiment agree with the statements made by a few witnesses and some codefendants.

For example, Reich Minister Lammers testified that you found it especially difficult to see Hitler at all, that an audience was granted you only once in a long while, and that even on one occasion I believe you waited for days with Lammers at headquarters for the promised audience, and that you had to leave again without having gained admittance. Is that correct?

FUNK: Yes, I am sorry to say.

DR. SAUTER: Now a further question: We have been confronted with several documents which say explicitly—I believe they are records of Lammers—that the Reich Minister of Economics, and at one time also the Reich Foreign Minister, had requested to be called in to these discussions, that Minister Lammers did his best to bring this about, but that Hitler did not allow it, that he expressly barred you and the Reich Foreign Minister from attending these discussions even though you pointed out that important matters of your department were being dealt with. Is that correct? Perhaps you can answer with just “yes” or “no.”

FUNK: The meeting which you mention is concerned with the deployment of labor. I myself had no direct connection with that, and the Foreign Minister probably did not have any marked interest in it either. So I assume that for these reasons the Führer did not need me, for as I said yesterday his directives for the conduct of economy were given, up to the year 1942, to the Reich Marshal as the man responsible for that field, and after 1942 the directives were given to Speer, because from that date on armaments dominated the entire economic life, and all economic decisions, by express order of the Führer, had to give way to armament needs.

DR. SAUTER: Dr. Lammers, in his testimony on 8 April, stated—I quote:

“The Führer objected many times, namely against Funk. There were
various reasons for objecting to Funk. Hitler was skeptically
inclined toward Funk and did not want him.”

Thus for the testimony of the witness Dr. Lammers. Can you explain why Hitler was disinclined toward you?

FUNK: No, only by the objective explanation that he did not need me.

DR. SAUTER: In other words, he considered any discussions with you superfluous.

FUNK: Yes.

DR. SAUTER: Witness, in connection with the topic of aggressive wars, I would be interested in the following: In the Indictment, on Page 30 of the German trial brief, it is set forth that you personally and through your official representatives, that is you personally as well as through the representatives who were appointed by you, participated in the preparation for the aggressive war against Russia, and as the sole proof for this Document Number 1039-PS, Exhibit USA-146, is submitted. From this document it appears that you, Defendant, at the end of April 1941, allegedly had a discussion with Rosenberg—who was responsible for the Eastern Territories—about the economic questions which would arise if the plans for attack in the East were to be carried through. I ask you, Dr. Funk, to note the date of this discussion: the end of April 1941, just a short time before the beginning of the war against Russia. In order to refresh your memory I want to point out that at that time, that is, before the war against Russia, Rosenberg had already been nominated as Hitler’s plenipotentiary for the uniform handling of problems in the Eastern Territories. I am asking you now to define your position and to say whether it can be derived from this discussion that you participated in an aggressive war against Russia or its planning and preparation, and if you did participate, how?

FUNK: I knew nothing about an aggressive war against Russia. I was very much surprised when I learned from Lammers that the Führer had made Rosenberg plenipotentiary for Eastern European problems. Lammers stated here that he had me advised of this nomination for personal reasons, because he knew that I was very much interested in economic relations with Russia. Indeed, our mutual efforts, Russia’s as well as Germany’s, had succeeded in considerably expanding our trade relations; for in earlier times, that is, before the first World War, German trade with Russia had been the decisive factor in the balance of German trade and had amounted to several thousand million gold marks.

The Russians—I must say this here—furnished us grain, manganese ore, and oil very promptly, while our deliveries of machines lagged behind for the natural reason that the machines had first to be produced since the Russian orders were mainly for specialized machines. To what extent army supplies were sent to Russia, I do not know, as I did not deal with these.

And so I was surprised by the appointment of Rosenberg. He called on me for a short discussion in which he told me that the task given to him by the Führer also included handling of economic problems. Thereupon I placed a ministerial director in my ministry, Dr. Schlotterer, at Rosenberg’s disposal to work on these problems. And when the Ministry for Eastern Affairs was founded, as far as I know, in July, Dr. Schlotterer, with some of his colleagues, took over the direction of the economic department in Rosenberg’s Ministry. And simultaneously, as far as I remember, Dr. Schlotterer became a member of Economic Operational Staff East. This was the institution of the Four Year Plan which has been mentioned repeatedly here during the proceedings and which dealt with all economic problems in the Occupied Eastern Territories.

Beyond that, I had nothing to do with these matters. Naturally I asked Lammers as well as Rosenberg just what this signified, and both of them told me that the Führer was of the opinion that a war with Russia would become unavoidable, that along the entire Eastern Front the Russians had concentrated large reinforcements, that the discussions with Molotov, in which I had no part at all, had been unsatisfactory, that the Russians were making demands regarding the Baltic, the Balkan regions, and the Dardanelles, which could not be accepted by Germany, by the Führer. At any rate, this affair was as complete a surprise to me as to the German people, and I am convinced that this war was a great shock to the German people.

THE PRESIDENT: The witness spoke of July. Did he mean July 1940?