he was on the climax of his approach to Hitler, and many a time I thought about it, whether it was true, and remained true, that Schacht was a free man. bitter experience that he had lost a great deal of his liberty, of his freedom that the financing of armament, which he had started, he could not stop at the moment when he desired to do so; and that it had become a chain in the hands of Hitler on which he could have filed for years until it broke. cerned the inner attitude of Schacht toward Hitler. Schacht never was a blind follower. It was incompatible with his character, with his nature, to sign himself over to somebody, or sell himself and be devoted blindly to somebody.
If one would like to characterize Schacht's relations, that he said "Fuehrer, your command, I follow; the Fuehrer commands to finance armament," he woul have said "I finance armament and the Fuehrer may decide to what use to put it, whether for peace or war." That was incompatible with Schacht's attitude and character. He was not a man who thought along Subaltern lines or who would thro away his liberty, and that distinguished Schacht fundamentally from a great man rather high political and military positions in Germany.
Schacht's relation, such as I came to know it from his character and from his statements, I would like to describe in the following manner: Schacht admired the tremendous dynamism of that man, which he found in the national field, and he put that man on his account, and he hoped to find a tool in him for his own plans, Schacht's plans, for a peaceful political and economic reconstruction and strengthening of Germany. statements made by Schacht. him, Schacht, to finance armament for an aggressive war. You, Mr. Vocke, were a member of the Reichsbank directorate and through out the years you have worked with him. Therefore, I ask you to tell the Tribunal whether, from conversations or observations of the activity and the work of Dr. Schacht, you could state anything which would justify such a reproach.
A No. Schacht has often emphasized that only a peaceful development could bring Germany back, and never have I heard an intimation made by him that he knew anything about war-like intentions of Hitler. I have tried to remember and have found in my memory three or four incidents which would answer that question quite clearly. I should like to bring them up in this connection. 1933. Luther, when the coverage by the Reichsbank was brought down--
DR. DIX: I may interrupt for the information of the Tribunal. Luther was a predecessor Schacht in office. had sent me to England in his despair in order to acquire a large credit in gold from the Bank of England which would re-establish confidence in the Reichsbank. Governor Norman was quite prepared to help me, but he said that it would be necessary for that purpose also to approach the Federal Reserve Bank of New York, the Bank of France, and the International Bank in Basle. That happened, and the credit amounted to 420 million gold marks, but the inclusion of the Bank de France created political difficulties which delayed that credit for about ten or twelve days.
part of the credit had already been used up. The gold was torn out of our hands, and I told Luther, "That credit has lost its usefulness, and we have to repay it immediately. Our honor is our last asset. The banks which have helped us shall not lose a single pfennig." in substance, "What one has, one has. We do not know for what purpose we may still need that gold very urgently." And so that credit was carried through the years. going to understand this, and he understood me immediately, and he agreed with me immediately, without further hesitation, he repaid that credit. He had no other thought as to what purpose one could use that tremendous amount of gold, and I told myself that if Schacht had known of plans for a war, he would have been a fool to pay back the 420,000,000 of gold marks.
but I believe in 1936. At that time, the Reichsbank received a letter from the Commander of the Army or the General Staff, Top Secret, with the request to list the gold reserves of the Reichsbank and to remove them from the areas at the edge of Germany to a zone in the interior. The reasons given were the following: In case of a threatening two front attack on Germany, the command of the Army was still determined to evacuate the outward areas and to limit itself to a central zone which had to be defended under all circumstances. I still remember from the map which was attacked to the letter that the line of defense in the east-
THE PRESIDENT: It seems to the Tribunal that this is
DR. DIZ: Your Lordship, on that map which the witness
THE PRESIDENT: At what time?
DR. DIX: 1936. I only understood him to say-- Maybe have been about 1936, in my estimation.
DR. DIX: I believe that it is quite relevant. May the witness continue?
THE PRESIDENT: Yes. up to Stettin; The western line I can not remember quite clearly, but Baden and the Rhineland were outside of it. the threat of a two front attack on Germany, about the tremendous sacrifice of German territory, and about the idea that the Reichs bank, in the event of an occupation by the enemy, would have to leave these territories without any financial support.
Therefore, we refused that request, but, so far as the gold was concerned, we placed it in Berlin, Munich, Nurnberg, and so on. top secret document, about the defensive character of our armaments and preparations.
I come to a third incident. That was in 1937. At that time Schacht, when the economy was running smoothly already but more and more money had to be put in, asked for the support of the German professors, national economists, and asked them to a meeting in order to make them cooperate in a creative way. On that occasion, a participant asked the question of Schacht, "What will happen if a ar breaks out?" Schacht got up and said, "Gentlemen, then we are through. Then all is over, and I should like you not to talk about this anymore because we could not speak about that now." will show Schacht's attitude. That was a conversation immediately after the outbreak of the war during the first few days. Schacht, Huelse, Dreise, Schniewind and I met for a confidential conversation. The first thing that Schacht said was, "Gentlemen, that is a fraud such as the world has never seen before. The Poles have never received the German ultimatum. The newspapers are lying in order to deceive the German people. The Poles have been invaded, attacked. Henderson did not even receive the ultimatum, but only a short excerpt from the note and that orally. If at any time at the beginning of a war, the question of guilt was clear, then it is so in this case. That is a crime such as one can not think of a worse one."
Then Schacht continued, "What an act of insanity to start a war with a military power like Poland, which is led by the best French general staff officers. Our armament is no good. It is made without sense and plan. Money has just been wasted."
Then Schacht received the answer, "But we have an air force, which is something." Schacht said, "The air force does not decide a war, but only the ground forces. we have no heavy cannon, no tanks; in three weeks the German armies in Poland will bog down, and then think of the coalition against us."
Those were Schacht's words, which made a deep impression on me, and which for me are a definite and clear answer to the question which Dr. Dix has put to me.
Q Now, in the course of these years from '33 to '39, did Schacht ever speak to you about alleged or assumed war plans of Hitler?
Q What was Schacht's attitude to the thought of a war; did he ever mention that to you?
A Yes, of course, quite often. Schacht always emphasized that war destroys both the victor and the victim and, in his and our field, he emphasized the example of the victorious powers whose economy and currency had been devaluated. England had to devaluate its currency; in France there was a complete corruption of finances, not to speak of other powers, such as Belgium, Poland, Roumania, and Czechoslovakia.
Q These were statements by Schacht?
A Yes, Schacht, which he made quite frequently. All the more, Schacht emphasized the situation in neutral countries. Schacht pointed out, again and again, "There will be conflicts and war again, but for Germany there is only one policy, absolute neutrality," And he brought up the example of Switzerland, Sweden, and so on, who by their neutral attitude had become rich and powerful, and Schacht also emphasized that strongly. explain then or, rather, how did Schacht explain to you that he at all financed armament? which existed in every country, in every nation of the world, was also necessary for Germany for political.
Q May I interrupt you. I want you to state only those facts which Schacht told you, not your opinions about what Schacht may have thought, but only what Schacht actually said to you.
A Yes, Schacht said, "A foreign policy without armament is impossible in a long run." Schacht also said, neutrality, which he demanded for Germany in case of conflict between largo powers, had to be an armed neutrality. Schacht considered armament necessary because, otherwise, Germany would be continuously powerless among armed nations. He did not think of a certain definite attack from any side, but he said, "In every country there is a war party which may come to power today or tomorrow and a completely helpless Germany, surrounded by other nations, is impossible.
It is, in fact, a danger for peace because it is an opportunity." revitalize German economy as a whole. The building industry, which is the backbone of economy, should be revitalized, and only in that way unemployment could be tackled. Rhineland, and did you have conversations with Schacht concerning the fact that this kind of policy of Hitler, such as it continued, could possibly lead to a war, at least an armed intervention by other nations which did not approve of such policies? Did you ever have such conversations; were there any such conversations between you and Schacht?
A Not in the sense of your question. Schacht did speak to me about the incidents at the occasion of the reoccupation of the Rhineland; and that is to say, he explained to me that at that time Hitler, as soon as France assumed a menacing attitude, was determined to withdraw his occupation forces; that Hitler was only stopped by von Neurath, who told me: "I was against that stop but, after you've done it, you've got to stand for it." What Schacht told me at that time about Hitler's attitude was anything rather than that Hitler appeared to be eager for war. Schacht also felt, as he told me, that the friendship with Poland and Hitler's policy during the first years, also with respect to Alsace-Lorraine, were peaceful policies. Later, only, he had objections in foreign political respects.
Q What were Schacht's principles in the way of foreign policy and in connection with his attitude to Hitler's foreign policy? gained influence on foreign politics, in whom Schacht saw the most incapable and irresponsible advisor of Hitler, but before that already there were serious differences of opinion between Schacht and Hitler's foreign policies.
For instance, towards Russia, Schacht already during '28 and '29, had reconstructed his connections with Russia by long termed credits and he has often been attacked on account of it; but he said, "I know what I'm doing.
I also know that the Russians are going to pay punctually and correctly. They have always done it." And Schacht was very angry and unhappy when the attacks of Hitler to that policy spoiled business with Russia and stopped it. of business with China and was just about to develop it to a large extent when Hitler, by his choice of Japan and the withdrawal of German advisors to Chiang-Kai-Chek, here also destroyed all of Schacht's plans. Schacht saw a very serious and very fateful mistake in that and said that Japan would never be able or willing to substitute for the business with China. States, with England, and with France. Schacht admired Roosevelt and he was proud that Roosevelt, through the diplomatic doctrine, was maintained in connection with him. Schacht was convinced of the necessity to maintain good relations, sound relations, with England and France, and just for that reason he seriously disapproved of the fact that Ribbentrop was sent to London.
Schacht was against Hitler's policy towards Italy. He knew that Mussolini didn't want to have anything to do with that, and he considered him the most unreliable and the weakest partner. heard about his murder with indignation. And then, after the occupation of Austria, he disapproved of much which happened there.
May I, in that connection, speak briefly about Schacht's colonial policy, which was a sort of hobby-horse of Schacht's and about which he once made a speech? I may illustrate Schacht's opinions by stating orders which I received from him. Schacht's ideas were to make an arrangement with the powers, England, France, and so on. To achieve that they should purchase part of the Portuguese colonies in Angola and give them to Germany for its economicuse, and he presents experts' opinions-
THE PRESIDENT: The Tribunal thinks that this is being given in far too great length. BY DR. DIX:
Q Well, we can leave out the individual examples. The late Fieldmarshal Blomberg has made a statement to the effect that the Reichsbank received every year written information about the state of rearmament. Do you, who were a member of the directorate, know anything about this information? your experience about the attitude of Schacht to his assistants, do you consider it possible that Schacht personally received that information, but did not tell any of his assistants of the Reichsbank Directorate about it? thereby rearmament; and, if he has tried it and if you can affirm it, what were his reasons? believe, around '36, when economy was running fully and further armament looked like a spiral without end. The Reichsbank was locked and, I believe, in '36, Schacht started with serious attempts to put an end to armament on his part. consisted?
A These attempts went on through the following years: First, Schacht tried to influence Hitler and had to find out that this was useless. His influence was decreasing as soon as he made any such attempt. He tried to find assistance among the ministries and, also, among the generals. He also tried to convince Goering, and he thought he had won him, but it did not work. Schacht has then fought for it and, finally, with success, that at first the Reichsbank credits for armament should stop, and that success occurred in the beginning of March, '38. But that did not mean that he discontinued his efforts to step rearmament as such, but he continued with all means, also by means of sabotage.
In the year '38, he issued a loan for a date of maturity when he knew that the loan before that was not yet digested; that the banks were still full of it; and the amount of the new loan he anticipated so highly that a failure had to occur. And we waited to see whether his calculations were correct. We were happy when that failure was apparent, and Schacht told it to Hitler. who wanted to take loans to increase their factories were prohibited to do so by Schacht and, therefore, stopped. But, also, the termination of the Reichsbank credit was not only a removal of the Reichsbank from armament affairs, but a serious blow to armament itself, as it could be seen in 1938, when financing proved to be extremely difficult in all fields and when Schacht was dismissed and resigned and had immediately returned to the direct credits of the issuing bank, which was the only means to maintain elastic credit, so-called indefinite credit, which Hitler needed and could never have received from Schacht. that law which was put to me, which Hitler issued after Schacht's dismissal, and I said "I am not going to have anything to do with it." Thereupon, I was immediately dismissed, ten days after the dismissal of Schacht.
Q Now, Mr. Vocke, is there any reason that the stoppage of financing of armament may have been purely economical? Do you have any cause, or any reason, or experience to show that Schacht was also afraid of the war and wanted to fight the possibility of a war by this stoppage of credit? tinuation in armament would lead to war became stronger and stronger.
Especially after the conference of Munich. In the meantime, Schacht know only one more thing and that was to find out means against Hitler's armament in preparing for war. These means, of course, were not only financial, but of sabotage and so on, as I described beofre. In the end, there was only the memorandum in which Schacht declared his resignation.
Q About that we will speak later. May I ask you first -- the Tribunal knows about the memorandum so you don't have to say anything about that. What I want to ask you is how, in your opinion, the opinion of you as a lawyer, that the financing of armament by the MEFO draughts was kept down? of course been examined before, and the question of legality hasbeen submitted to us, and the question as to whether that could be brought under the banking law, that question was examined. The more serious question, however, would have been whether these draughts were according to normal demands which a bank of issue should put to the portfolio and that question, of course, to that I answer No.
If one asks, why didn't the bank buy other papers by the MEFO draughts, the answer is that at that time there were no other papers on the market. -- That is, since the collapse on account of the pressure of the national economy. Already, in the spring, a means for the vitalization of the economy and credit had been restored, which followed a similar scheme -that is, long term credits, because it wasput before the bank either to observe what would happen or to assist the Government in the vitalization with the speed of the armament as long as the bank could. And all banks of issue were also put to the same ultimatum and reacted in the same sense. that, on the point of view of currency policy, the protfolio of the Reichsbank which had been frozen by the depression was made good. All the draughts, the traditional ones, and the legal ones, of the bank, and the policies -
Q I believe, Mr. Vocke, it will be sufficient to the Tribunal that in the end the lawyers of the Reichsbank approved the administration of draughts and the details of that, if your logic agrees, we can leave out. describe to the Tribunal the reasons which had caused the Reichsbank director to submit that memorandum to Hitler and what the tactical purposes were of that memorandum? have to stop armament, but that was not the Reichsbank's business. We had to limit ourselves to the question of our responsibility for the currency, therefore, the memorandum of the Reichsbank came with the question of how much currency -- the continuation of our financing of armament would endanger German currency and bring about inflation.
unlimited expenses of credits, and expenditures. The expenditures which we mean were for armament, that was quite clear.
THE PRESIDENT: We have all seen the memorandum, have we not?
DR. DIX: He is not speaking about the contents of the memorandum, but of the reason, the tactical reasons. BY DR. DIX: your testimony to the reasons of the memorandum. it demanded a limitation of foreign policy that shows clearly what we wanted to do in the limitation of our expenditures and limits of foreign political armament. We have pointed out that expenditures had reached a measure which could not be continued and that they had to be stopped. In other words, a red light had to be shown to the armament policies of the Reich. to Hitler? What did you expect, tactically? expenditures which had brought us to ruin had to be effected, because at the end of the year 1938 there was no more money available, but only a deficit of nearly one billion dollars. That had to be understood and the finance minister was on our side, and if they did not recognize that it had to come to a break and we were dismissed. There was no other alternative. It would have come to the unusual stage. It came to the unusual stage that the entire memorandum. memorandum of the Reichsbank is signed by the President or his deputy, is it not?
A That is true. We wanted to emphasize the opinion of the entire directorate and express it with that document to end rearmament.
Q Do you have any reason to show that Hitler recognized that fact?
A Yes, Hitler used the word such as that would be mutiny. I believe in the Army, I never said in the Army, but I believe that a thing like that in the Army would be considered mutiny if it is signed by severalpeople. Such things happen.
Q But you were not there. Who told you about that expression?
A I don't remember that any more. I believe it was Mr. Berger of the Finance Ministry. Hitler, a reference to his foreign political successes. flattery. In the same measure Schacht became a definite opponent of the Government. He used flattery, therefore, in that manner. In the beginning, where he spoke of the successes of Hitler he also used those tactics.
Q And what was the consequence of that memorandum? Please tell us briefly. dismissed. The results, however, were at the same time that one knew abroad what it had come to in Germany. My colleague Huelse had made statements in Basle saying that if we would be dismissed our friends would know how far it would have come.
Q Did Huelse tell you that?
DR. DIX: Your Lordship, shall we make a short pause here?
THE PRESIDENT: How much longer do you think you will take before you finish?
DR. DIX: It is very short. The documents will be very short. Shall I continue?
THE PRESIDENT: The Tribunal will recess.
BY DR. DIX:
Q Now, Mr. Vocke, you have described to the Tribunal how that dismissal of Schacht came about. Why did Schacht not do that before? Did he talk to you about it?
A No. Throughout the years 1936 and 1937 we could not make up our minds. At first there was still hope that Hitler could develop himself in a reasonable direction as a statesman, and finally, in 1938, the serious, objectionable moments came, particularly in connection with the Munich conference and then after the Munich conference. Then, indeed, there was serious fear that it would come to a war, and at that time we saw that we had to force the issue.
However, one has to consider the following: As a bank we could not come with political or military arguments or demands, which were not within our competence. The element of inflation, which we mentioned as menacing in that memorandum, had only appeared in the course of the year 1938, and the currency circulation had increased seriously during the last months, more seriously than throughout the five years before.
Q So that during that year you found a cause to jump? conclusion--and the high intelligence of Dr. Schacht is not disputed--that he was deceived and disappointed, as he himself says. And you yourself probably, on the basis of your knowledge of the personality of Schacht, had thoughts of your own as to how that deception or disappointment of Schacht could be explained. Therefore, if the Tribunal permits, I will be grateful if you could give us your personal impressions about that.
MR. JUSTICE JACKSON: Your Honor, may I make an objection? I don't understand how the operations of Mr.
Schacht's mind can be explained by someone else. I have had no objection to any facts which this witness has known. We have even let them detail here at great length private conversations. However, speculation on Schacht's mental operations, it seems to me, is beyond the pale of probative evidence.
THE PRESIDENT: Dr. Dix, as I think I have said before, you can't give, by one witness, the thoughts of another man; you can only give his acts and his statements.
DR. DIX: Yes, Your Lordship. When I thought of the question I said "if the Tribunal permits". I recognized the question of admissibility.
THE PRESIDENT: Yes; the Tribunal does not allow the question.
DR. DIX: Then we will leave that question. May I ask your Lordship this, then? Of course, I can still put questions about the treatment of the Jews by Schacht. exhaustively dealt with, so that it is not necessary for this witness to give us more examples of the attitude of Schacht. I would only ask to be permitted to put the same question concerning the Free Masons, because nothing has been stated about that. BY DR. DIX: Masons, or the attitude of Schacht to Free Masons?
A Yes. The Government and the Party demanded that the Free Masons should be removed from office. Schacht said: "I don't let anybody tell me what to do. Everybody knows that I myself am a Free Mason; how can I proceed against employees for the reason that they belong to the order of Free Masons?" And as long as Schacht was in office he kept Free Masons and promoted them.
Q Now, one last question. Do you have any knowledge of the fact that Schacht had economic advantages during the Hitler era beyond his regular income as an official?
A No; that was quite out of the question for Schacht. Besides, donations have never been offered to him. In every respect, so far as money was concerned, he was absolutely clean and correct. I can give examples, such as, for instance, when he left, he reduced his pension to less than half, below the pension of vice-presidents. He said, "These people have worked all their lives in the bank, and I only gave a few years of service." I could give more examples of Schacht's absolute correctness in that respect.
DR. DIX: I believe, if the Tribunal does not desire to hear it, that will not be necessary. witness.
THE PRESIDENT: Does any member of defendants' counsel wish to ask any questions? BY DR. STEINBAUER (Counsel for the defendant Seyss-Inquart): at the occasion of the annexation of Austria in March of 1938; that is to say, in general terms? 1938, one concerning the conversion of shillings into marks, and the other one to take over the Austrian National Bank by the Reichsbank.
Dr. Schacht, as a witness, stated yesterday that on the 11th of March he had been asked what exchange rate, in the event one would march into Austria, he would consider correct; and he answered that question by saying that according to the last rate at the stock exchange, two shillings for one mark would be correct.
After the Anschluss, my client, Dr. Seyss-Inquart objected to the under-valuation of the shilling, and he achieved the result that a rate of one-fifth was established. Is that correct relation or exchange rate. The Reichsbank Directorate dealt with that question only after the march into Austria, and it proposed the relation which was according to conditions, and there was only a slight difference. It was the job of the Government, which, in order to buy the favor of the Austrian population, wanted to make them a present.
Q. The second law deals with the Austrian National Bank. The witness, Dr. Schacht, has said today that the Austrian National Bank was not liquidated, but --- as he expressed himself -- amalgamated. I looked up that law and it states expressly in paragraph 2 that the Austrian National Bank is to be liquidated. That is 2312-PS, Now, I ask you, Witness, do you know anything about it? Was the Austrian National Bank, as bank of issue, left functioning or was it liquidated?
A. The right of issue, of course, fell to the Reichsbank which, as far as I know, took over the Austrian National Bank in Vienna, and I don't know any details. May colleague, Kesnik took care of it.
Q. But maybe you will remember if approximately if I quote you from the official reports of the Austrian National Bank that the gold reserve of the Austrian National Bank in March, 1938, amounted to 243 million schillings -in the hands of the banks. That is about 400 million schillings gold value taken over by the Reichsbank from the Austrian National Bank.
A. I don't recall these facts any more, but if it was done, it was done by law, by the government.
Q. Yes. I have that law of the 17th of March. I just wanted to correct it and to point out that Schacht must have made a mistake unintentionally. In fact, it says in the law, which was signed, "shall be liquidated." I have no other questions.
BY DR. LATERNSER (Counsel for General Staff and OKW).
Q. Witness, you have said before that Dr. Schacht was to be distinguished from high military leaders because he remained a free man toward the regime. I wanted to ask you now concerning that, since that statement includes a judgement of high military leaders. Which high military leaders do you know personally?
A. Not a single one.
Q. Then would you maintain that judgment?
A. In all circles of the Reichsbank General Keitel and other gentlemen were considered too servile and too soft toward Hitler.
Q. But if you had no personal knowledge of these personal acquaintances, don't you think this is a rather serious judgement to make, such as you have made?