I replied immediately, "Of course, it is too late for that now." And that was the only remark of a political nature which took place. The other conversation was concerned purely with my marriage, and since then I have not seen Hitler.
Q And now your relationship with Goering? been stressed by the Prosecution, the propaganda value of your participation at Party rallies, and I would like to remind you of that which Justice Jackson has already mentioned in his opening speech, and I am quoting from the English:
"Does anyone believe that Hjalmar Schacht, sitting in the first row of the Party rally, beginning with 1935, wearing the Party ring, the Party emblem was included in this Nazi propaganda film only for the purpose of asthetic results, in which this large banker would give only his name to this rather threadbare affair, but it really gave the prestige to any German who was hesitating?"
Will you please give me your statement?
A First of all, I'd like to make a few minor corrections. In the year 1935, I did not have a Party emblem. Then Germans, who were hesitating, were of no importance any longer in the year 1935, for the regime of Hitler had been established completely and firmly by 1935. There were only those people who would turn away from Hitler but none who were still coming to him. And then, I must really consider it as a compliment that I an called a figure of importance, and so forth. But I believe that the reasons for my being and working in the Hitler cabinet have been set forth by me in great detail and in great sufficiency, so that I need not state them once more. self from the Party rallies. It is understandable for me with the point of all ostentation and of the representative system of Hitler's, to the outside at least, and not only did ministers participate in the Party rallies but many other representatives.
May I just say one more sentence in this connection?
The later Party Rallies were not attended by me. Let us refer to the Party Rally which is mentioned by the Chief Prosecutor, the one in 1935. I did not even attend that, for that was the Party Rally--and I recall this especially--at which the Nurnberg Laws against the Jews were proclaimed. At that time I wasn't in Nurnberg.
I attended the Party Rally in 1933 and 1934. I am not certain about the year 1936 or 1937, whether I attended or not, but I rather believe that I attended in 1936. The ones after that I was absent, and the last visit that I made at the Party Rally I attended only on the day of the Wehrmacht. prominent foreigners. Was the Diplomatic Corps represented? the American Ambassador, in the course of time all other leading diplomats attended the Party Rally, and I must say, in largo numbers, with must ostentation and in the first rows. to functions of State and this was a purely Party matter? How can you explain their participating?
MR. JUSTICE JACKSON: If it please the Tribunal, I am in a position to objection, because I am not embarrassed by it if there is any embarrassment, but for this witness to explain the conduct of the ambassadors of other ambassadors were doing. Why they attended a Party Rally which he was lending his name to doesn't seem to me has any probative value. The fact that they attended I don't object to, but it seems to me for him to probe, unless he has some fact--and I want to make clear I don't object to any facts this witness knows, and I haven't objected to most of his opinions which we have been getting at great length. But I think for him to characterize the action: of foreign representatives is going beyond the pale of relevant and material evidence.
THE WITNESS: Mr. Attorney, may I make just one remark in reply?
THE PRESIDENT: I think we had better pass on, Dr. Dix.
DR. DIX: Yes, of course. However, I would ask tobe given the permissi on to answer Justice Jackson briefly, not because I want to be stubborn, but I believe that if I answer now I can avoid later discussions and can save time thereby.
I did not ask the witness for his opinion. Of course Justice Jackson is correct that he is not here to give opinions about the reasons of the Diplomatic Corps; But I asked him about a fact: How this participation on the part of the Diplomatic Corps, which was significant, was explained. I consider this participation relevant, as will be seen by my questioning in the course of time, and that is why I am saying it now. carried through, it is of tremendous importance to know from whom they were supported morally, spiritually or in any other manner, and who did not support them. In this connection the outward demeanor of the official representatives of foreign countries is of tremendous importance, and the manner in which this oppositional group acted is of tremendous importance. Ono can support such a group; one can be neutral to it, or one can combat it. All of those steps can be taken by foreign countries, and that is the only reason why I put my question, and I consider myself obligated to continue with this point of view.
THE PRESIDENT: Dr. Dix, I don't think Mr. Justice Jackson's objection was to the fact that the diplomatic representatives were there but to comment upon the reasons why they were there. If all you want to prove is the fact that they were there, then I don't think Mr. Justice Jackson was objecting to that. What the defendant was going on to give was his opinion of why the diplomatic representatives were there.
DR. DIX: I believe I do not need to make a further reply, your Honor.
He has already said that he does not wish to give a further explanation, but if your Lordship will permit me, I shall continue. BY DR. DIX: official capacity and privately you came in contact with prominent foreigners. What position did they take at the time when power was established by the National Socialists, and what attitude did they take, and how did their attitude influence your attitude and your activity?
MR. JUSTICE JACKSON: I dislike to interrupt with objections, but I can't see how it exonerates or aids this defendant that prominent foreigners may have been deceived by a regime for which he was furnishing the window dressings with his own name and prestige. Undoubtedly there were foreigners, I am willing to stipulate there were foreigners, like Dahlerus, who were deceived by this set-up of which he was a prominent and slightly respectable part. But it does seem to me if we are going to go into the attitude of foreigners who are not indicted here or accused that we approach endless questions.
The question is here, as I have tried to point out to Dr. Dix, the sole thing that is charged against this witness is that he participated in the conspiracy to put this nation into war and to carry out the war crimes and crimes against humanity incidental to it.
Now, I can't see how the attitude of foreigners either exonerates or helps the Court to decide that question. If it does, of course I don't object to it, but I can't see the importance of it at this stage.
DR. DIX: I do believe -
THE PRESIDENT: Wait a minute. Dr. Dix, what exactly was the question you were asking at that moment? What had it reference to?
DR. DIX: I asked the witness what the attitude was that was taken by prominent foreigners with whom he came in contact, officials and private contact, what the attitude was in the period while power was being established by the regime, whether they rejected the regime, whether they were sympathetic to it -- in other words, just how they influenced him and his thoughts. And may I say one more thing?
THE PRESIDENT: I think you know, Dr. Dix, that to ask one witness what the attitude of other people is a very much too general form of question. Attitude -- what does the word mean? It is far too general, and I don't understand exactly what you are trying to prove.
DR. DIX: I will make the question a little more precise, your Honor. BY DR. DIX:
Q How, Dr. Schacht, through your exchange of thoughts with foreigners, was your attitude influenced? How was your attitude and your activity influenced through the attitude of these foreigners?
DR. DIX: That is something which Dr. Schacht can testify to alone, because it is something that is inner and personal to Schacht, your Lordship. On the evidence which seems relevant to the Prosecution, I will not wish to conceal anything. group Schacht was -- that this group did not receive any support from abroad, but that foreigners made the opposition more difficult. That is not a criticism that is leveled towards foreign governments. There is no doubt that they were speaking for countries who were taking that attitude, and the representatives took the same stand. But it was of decisive value for this oppositional group to know how the foreign countries were taking their position to this regime, whether it admired or whether it supported it, or through caution and reserve it would show its disinclination, and therefore would strengthen this oppositional group. carrying on of the defense, and I will fight for this piece of evidence as I see it, because it is of the utmost importance to the defense.
THE PRESIDENT; Dr. Dix, the Tribunal has considered the argument which you have presented to it and they think that the investigation of those facts is a waste of time and is irrelevant. They will, therefore, ask you to go on with the further examination of the defendant BY DR. DIX:
Q Dr. Schacht, when we deal with armament, you supported it through your finances in the Reichsbank. Why did you do that? equality an absolute necessity for Germany and I am of the same opinion today; and in order to reach this state, it was necessary that either the disarmament, which had been promised by the Allied Powers, would come into effect or that if the benefit for equal rights were to be obtained, Germany would have to re-arm in a corresponding manner. decreed through the directorate of the Reichsbank?
A In the Reichsbank, the Fuehrer principle applied; the bringing in of Fuehr principle into the Reichsbank was always rejected by me. The Reichsbank was governed by a group of men in which all members had an equal power to vote and if there was a"tie", the vote of the chairman was the decisive vote, and beyond that the chairman had no rights. and I am asking, and with consideration, for the contents of this affidavit which the Tribunal knows. Did Puhl participate to this effect for rearmament?
A Mr. Puhl participated in all decisions which were made by the Reichsbank directorate and not once did he dissent from the decision reached. the discounting of the so-called notes took place and the prosecution has mentioned this fact, and the affidavit signed by Puhl says that this method made it possible to keep the size of rearmament secret. Is that correct?
A We cannot even talk about keeping secret of armament. I call your attention to excerps from documents submitted by the prosecution, which they submitted and used as evidence. I would like to cite and quote first of all from the affidavit by Geroge Messersmith, dated the 30th August 1945, 2395-PS, where it says on page three line nineteen:
"Immediately with the assumption of power, the Nazis launched a tremendous program of rearmament."
And on page eight it says that:
"A tremendous German armament program which was never a secret," and so forth. Mr. George Messersmith, who was in Berlin at the time, knew in any event about those matters and I am sure informed his colleagues about those matters also. I would also like to quote from EC-461. It is the diary of Ambassador Dodd, where it says, on the 19th of September 1934, and I quote in English for I just have the English text before me:
"When Schacht declared that the Germans are not arming so intensively, I said last January and February, Germany bought from American aircraft people one million dollars worth of high-class war flying machinery and paid in Gold," on which occasion he pointed out that already in January and February 1939 -
(A mechanical disturbance in the courtroom at this point.)
THE PRESIDENT. The Tribunal will adjourn.
(A recess was taken.)
THE PRESIDENT: TheTribunal would, like to know how long you expect to be with your examination in chief of the defendant. You have already been nearly a whole day, and the Tribunal think that in view of the directions in the Charter, the examination of the defendant certainly ought to finish in a day.
DR. DIX: Your Lordship, there are two things I don't like doing, to make promises which I can't keep, or to promise something which can't come true. that I can finish today. I am fully aware of the statute of the Charter, but on the other hand I am a king you to consider that the accusations a ainst Schacht have been backed by numerous pieces of evidence by the Prosecution, relevant facts, which have been used to try to prove the accusation, and that it is my duty to refer to these individual pieces of evidence offered by the Prosecution.
Please apply strict measures to my questions. If the Tribunal should be of the opinion that there is something irrelevant, then I shall certainly adhere to their wishes, but I do think that I not only have the right, but also the duty to put any questions which are necessary to contradict the evidence submitted by the Prosecution.
I shall, therefore, certainly not be able to finish today. I should be extremely grateful if your wouldn't make me prophesy. I shall hurry as much as possible, and I may finish in the course of tomorrow, but it may even take the whole day -- I can't say for certain. I shall make every effort to nut only relevant questions, and if the Tribunal should be of the opinion that they aren't relevant, then please tell me and I shall give the reasons for my conception.
THE PRESIDENT: I think you had better pet on at once then, Dr. Dix, and we'll tell you when we think your questions are too long or too irrelevant. BY DR. DIX:
Q. Now, Dr. Schacht, in the case of the Mefo Bill, did you consider them a suitable means of keeping the rearmament secret? Have you anything else to say to that question?
A. The Mefo Bills as such, and as far as the fact of armament was concerned, did not connect with the question of secrecy. The Mefo Bills went to every supplier who wasbeing paid with them. There were, of course, hundreds and thousands of small suppliers everywhere in the country. Bills were amongst the public for at least three months, and any businessmen who required cash used the Mefo Bills to discount them in their banks or to have advances made on the strength of them, so that all banks knew about this particular system. by the Reichsbank were listed on the bill account of the Reichsbank, and furthermore, I should like to say on the question of keeping state expenditures secret, and armament expense as well, that state expenditure, of course, was not a matter for the President of the Reichsbank but an affair concerning the Minister of Finance. If the Reich Minister of Finance did not publish guarantees which he had issued in connection with Mefo Bills, then that was his affair and not mine, and for that I am not responsible. The responsibility for it is in the Reich Minister of Finance.
DR. DIX: The next question, your Lordship, might allow doubts as to whether the question is relevant. I personally consider the information not relevant for this trial, but it has been mentioned by the Prosecution, and for that reason alone I think it is my duty to give Dr. Schacht to justify his actions and reply. Mefo Bills, from the point of view of a reasonable, solid financial procedure might have allowed objections. One might adopt the view that that may be the case or not, but -
THE PRESIDENT (Interposing): Ask the question, Dr. Dix. Ask the question BY DR. DIX:
Q. You have heard, of course, Witness, what I have been referring to.
A. It is a matter of course that in normal times and in normal economic practices, such means as Mefo Bills would not have been used. But if there is an emergency, then it is always customary, and it has always been a policy all scientists, that the currency banking institute should take care to furnish cheap money and should furnish credits so that the economic system can, in turn, be operating on the strength of it.
procedure they were by no means risky, and to prove this I would say that if Herr Hitler, after 1937, had dealt with finance as it had been proposed in paying the Mefo Bills back, and the money was there, then this system would have worked just as smoothly as I had started it off. But Herr Hitler preferred simply to refuse to pay the bills back, and instead to invest the money in further armament. I cou couldn't forsee that; I couldn't expect that someone would break his word in this matter too, which was a purely business matter. doubt have lacked for further rearmaments and the meeting of the bills would there fore have curtailed armament. Is that a correct conclusion? later. I said if the Mefo Bills weren't met, it would obviously show ill-will; then there were further rearmaments, and that must not be so.
Q Earlier you dealt with the question of keeping armament secret. You mentioned it as an aside. Have you anything to add to that?
A I think that it has to be dealt with generally. It has to be, said that State expenditure did not come under the jurisdiction of the President of the Reichsbank, and that the taking of State money is under the control of the Minist of Finance, and consequently it is his duty to publish it and deal with it. The Reichsbank had in their ledgers every bill which they ever had in their possession and they were shown weekly. so-called keeping secret of the armament program?
Q Another aside you mentioned was why you were in favor of rearmament. Have you anything to add to that?
A Yes. A few very important remarks might, of course, be made on that, since this question is the chief accusation against me, and therefore I may perhaps have permission to deal with it in a little more detail.
armed nations, and I considered it a danger to peace. I want to say that these states weren't only armed, but that they were, to a very large part, continuing to arm and were making renewed rearmaments. The additional rearament refers in particular to the two states Czechoslovakia and Poland which hadn't, of course, existed before, and the further rearmament refers, of course, also to the naval rearmament in Britain subsequent to 1935. which wasn't armed could not defend itself, and that consequently in the international circle it would have no significance. The British Prime Minister Baldwin once said, in 1935, "A country which isn't willing to take necessary precautionary measures for its own defence will never have power in this world, neither moral power nor material power." Germanywas regarded by me as being a permanent moral and material danger to German merely a statement of fact -- that Germany, after the Treaty of Versailles, was in a condition of extreme disorganization. Conditions in Europe were such that in Russia, the latent conflict and controversy existed with regard to Finland and Poland, which had, of course, considerable parts of Russian territory. There was conflict with Rumania which had Bessarabia, and then for Rumania, there was the conflict with the Bulgarians; there was the difference of opinion about the territory belonging to Hungary, conflicts with Serbia, between Serbia and Hungary and Hungary and all its neighbors. There was the conflict between Bulgaria and Greece. In other words, the entire East of Europe was in one continuous state of neutral suspicion and conflict of interests. serious internal conflicts. I remind you of the conflict between the Czechs and the Slovaks. I remind you of the Civil war conditions in Sapin. All that will make it possible to understand that I considered it absolutely essential that in the event of the outbreak of any conflagration in this devil's punch bowl, there should be the absolute necessity for Germany, at least, to protect its neutral attitude. That couldn't possibly be done with that small army of 100,000 men.
hands in this prison, where the conditions in Europe were described, and I beg you to allow me to quote one single sentence. I shall have to quote it in English It doesn't represent the views of the Daily Mail; it describes conditions in Europe.
I quote:
"All observers are agreed that there is continual terror of an explosion and that the crazy frontiers of the peace treaties cannot be indefinitely maintained.
Here too vigorous non-interference should be the pin of the British chariot. What further interests have we in Austria or in Czechoslovakia or in Roumania or in Lithuania or Poland?" this over-heated boiling pot there was the unarmed Germany. I considered that the most serious danger to my country. in anyway. No, gentlemen of the Tribunal, I did not consider Germany threatened directly with an attack, nor was I of the opinion that Russia was likely to attack Germany. However, there we had experienced the break-through of the Ruhr in 1923. That passed, and the situation at that time made it an absolutely essential demand for me that Germany should be equal to other nations and should be supported if there should be an attack. to be dealt with by me and so will the question of how the foreign countries behaved towards us.
Q What did you know at the time about Germany's efforts to bring about disarmament as far as other nations Were Concerned? Was that point of view important for your decisions?
A May I, generally and principally speaking, say the following?
In principle I was not in favor of rearmament; in principle I was in favor of an equal position for Germany. That is, that German equality could be brought about either by means of disarmament on the part of the other nations or by means of our own rearmament. I would have preferred, and I wished at the time disarmament on the part of the others, something which had been promised to us. Consequently, I made the most anxious efforts at the beginning, and during the subsequent years, that disarmament should be avoided if one could succeed in bringing about disarmament. the disarmament conference of the League of Nations it had been repeatedly stated and declared that Germany had met her obligations regarding disarmament. time, and to all Germans who participated in political life, it was a considerable relief that during the first years Hitler, again and again, urged that there should be disarmament and had offered disarmament.
Afterwards, of course, it is easy to say that that was also a false pretense and a lie on Hitler's part, but that false pretense and that lie would have blown up quite quickly if the countries abroad had shown the slightest inclination to take up the proposals and the offers. when Foreign Minister Eden of Great Britain was in Germany, at the beginning of 1934. At that time, during conversations with him, quite concrete proposals concerning Germany's duties regarding disarmament were being putto him in case disarmament on the part of the others might be begun and carried out. It was promised to Eden that all so-called military units like the SS, the SA and the Hitler Youth would be deprived of their military character if only one could succeed in accelerating general disarmament by those means. but since it is the wish of the president not to delay the proceedings, I shall certainly forego them. There are well-known statements made by statesmen and ministers, ambassadors, and such, all of which have the same tenor, namely, that it was absolutely essential that the promise made by the Allies should be kept; in other words, that disarmament should be carried out
DR. DIX: Excuse me if I interrupt you, but we can do it more quickly and more simply by asking the Tribunal--without reading that--to take judicial notice of Exhibit No. 12, which I have been granted. It is at page 31 of the English translation of my document book. others, and also the Belgian Foreign Minister. There is no need to road them; they can be presented. I just hear that they have been presented, and I can refer to them. BY DR. DIX:
Q Please forgive me for interrupting you. Will you continue?
A Well, in that case my statement is complete. Hitler did make these offers continuously, but the other countries did not take up a single one of these offers, and thus only the alternative remained, and that was rearmament. That rearmament carried out by Hitler was financed with my assistance, and I assure responsibility for everything I have done in that connection.
Q Do I understand you correctly? Can one draw the conclusion from your statement that there were other reasons for your assistance in the rearmament program, that you had the tactical thought that by putting German rearmament up for discussion the debate about disarmament amongst the other governments might be started again, which, at that time, had died down?
A If I may, I will illustrate it briefly by means of an example:
Two parties have a contract with each other. One party doesn't live up to that contract, and the other party has no way of malting the breaker of the contract stick to it. Then, the other party has no responsibility whatsoever, so that he, in turn, should not adhere to the contract. That is what Germany did. That is what I supported. in any such case must always be expected from a partner to a contract, namely that he would say, "Well, if you don't keep up the contract either, then we shall have to talk about the contract again."
to me that Germany's rearmament was not in any way replied to by any actions abroad. This so-called breach of contract on Germany's part against the Versailles Treaty was taken quite calmly. A note of protest was all; nothing in the least was done, apart from that, to solve the question of disarmament. That is what I was interested in, to start it up again. Great Britain did, in fact, give the legal right, contrary to the Versailles Treaty, to rearm. Military missions were sent to Germany to look at this rearmament, and German military installations and shows were visited and everything was done, but nothing was done to stop Germany's rearmament.
MR. JUSTICE JACKSON: If the Tribunal please, I cannot see the point of all this detail. We have conceded that rearmament here, except as it was involved with aggressive purposes, is immaterial. As I said in the opening, the United States does not care to try here the issues of European politics, nor are they submitted to this Tribunal for decision. purpose of aggression. upon his aggressive intentions, but the details of negotiations and European politics and charges and counter-charges between governments, it seems to me, lies way back of any inquiry that we could possibly make, and the details of this matter seem to me not helpful to the solution of the issues hare, and I think was ruled out by the Tribunal in the case of Goering, if I am not mistaken.
THE CHAIRMAN: Well, Dr. Dix, it all seems to be a matter of argument, and argument isn't really the subject of evidence.
DR. DIX: I don't believe that is quite right, Your Lordship. Dr. Schacht is accused of having assisted in bringing about an aggressive war, but this assistance of his is supposed to have been the financing which was carried out.
THE PRESIDENT: Go on, Dr. Dix, and do try to make it as short as possible.
BY DR. DIX:
Q I think you had come to the end of that question anyway, Dr. Schacht
DR. DIX: May I refer to the motive for Dr. Schacht's assistance in rearmament? It was his hope to again start the debate about disarmament. In that connection may I draw your attention to Exhibit No. 36, page 141 of the German text, and page 149 of the English text? It is an affidavit from Dr. Schacht's son-in-law, Dr. von Scherpenberg. On page 2 of that affidavit you will find the following brief paragraph which I propose to read; in fact, I can confine myself to one sentence:
"He--that is to say, Schacht--considered rearmament within certain limits to be the only means for the re-establishing of the disturbed balance and the only means of bringing the other European powers into participation within the limitations of disarmament." Schacht had had at that time. It is, therefore, not an ex post opinion, afterwards, it is the report of a conversation which Schacht's son-in-law had with Schacht at that time.
BY DR. DIX:
Q. And, now, regarding rearmament on the part of the other States, particularly Czechoslovakia and Poland, you have discussed that, but can you say anything regarding the question whether you know any exact detail regarding the state of disarmament of those two States, or heard about it?
A. I only know that it was known about Russia that in 1935 they announce that its peacetime army should be increased to 960,000 men; and then I knew that in Czechoslovakia, for instance, the installation of aerodromes was one of the leading tasks of rearmament. We knew about Great Britain, that her wartime navy was to be stepped up.
Q. Did you later on drop the thought of general rearmament?
A. To the contrary, I used every opportunity, in particular during conversations with men from abroad, to say that the aims should always be disarmament, that, of course, rearmament would always mean an economic burden which we considered a most unpleasant state of affairs. Davies. He did this -- and it is incorporated in an exhibit that has been sub mitted to the Tribunal -- in a report. To begin with, it is an entry in a diary or journal which is repeated in his book, "Mission to Moscow", and it it dated the 20th of June, 1937, as early as that. It was made in Berlin. He is writing about the fact that amongst other things he and I had talked about dis armament problems, and I need only quote one sentence. Unfortunately, I haven got the number of the document, your Lordship, but it has been submitted to the Tribunal.
Q. It is Schacht Exhibit 18, German page 43, English page 49.
A. Since I have only got the English text, I shall read from it. Davies writes:
" (Reading in English) When I outlined the President's suggestion of limitation of armament to defensive weapons only, such as a man could carry on his shoulder, he almost jumped out of his seat with enthusiasm." with this renewed attempt and the impending initiative towards disarmament which I had hoped for, which was coming from President Roosevelt, I was most enthusiasitcally entering into the spirit of that proposal.
1937, in a letter addressed to the President of the United States about a conversation he had with me. And from that I quote only one very brief paragraph. Again I shall have to do it in English:
" (Reading in English) I then stated to him that the President in conversation with me had analyzed the European situation and had considered that a solution might be found in an agreement among the European nations to a reduction of armaments to a sheerly defensive military basis; and this through the elimination of aircraft, tanks, and heavy equipment, and the limitation of armament to such weapons only as a man could carry on his back, with an agree ment among the nations for adequate policing of the plan by a neutral state. Schacht literally jumped at the idea. He said: 'That is absolutely the solution!' He said that in its simplicity it had the earmarks of great genius. His enthusiasm was extraordinary."
Q. To what extent did you want rearmament?
A. Not beyond equality with neighboring States, with every single one our neighbor-States.
Q. And did Hitler, as far as you know, state any further intentions?
A. At no time did he say so to me, nor did I hear from anyone else whether he had made remarks about rearmament going beyond that.
Q. Were you informed about the extent, the type and speed of rearmament
A. No, I was never told about that.
Q. Had you set yourself a limit regarding that finance or were you prepared to advance any amount of money?
A. I was certainly by no means to advance any unlimited amounts of money particularly since these weren't contributions; they were credits which had to be repaid. But the limits of these credits were two-fold: one, that the Reichsbank was independent of the administration of the Reich finance and the supreme authority of the State. The director of the Reichsbank could pass a resolution that credits were to be given or were not to be given, or that credits were to be stopped if they considered that a suitable procedure.