Archive/File: imt/tgmwc/tgmwc-11/tgmwc-11-108.06
Last-Modified: 2000/01/13

                                                  [Page 367]

DR. KAUFFMANN: If a defendant tried to exterminate churches,
then he would not take an action exactly opposite to that
policy. The witness will be able to attest to this fact.

THE PRESIDENT: With reference to churches or with references
to individual people?

DR. KAUFFMANN: Individual people as representatives of the
church of course. I do not believe you can separate the two.

THE PRESIDENT: The Tribunal thinks that the question is
incompetent.

DR. KAUFFMANN: Thank you.

Then I have concluded my examination of the witness.

THE PRESIDENT: The Tribunal will adjourn.

(A recess was taken until 14.00 hours.)

THE PRESIDENT: Have you finished, Dr. Kauffmann?

DR. KAUFFMANN: My examination of this witness is finished.

THE PRESIDENT: Does any other member of the defence want to
ask questions?

DR. SAUTER (counsel for defendant Funk): Mr. President, I
have some questions to put which are, of course, not in any
way connected with Kaltenbrunner, but with reference to
subjects which will have to be dealt with later during the
case of the defendant Funk. However, since the witness can
be called only once, I have no other choice than to put to
the witness now these questions, which really ought to be
put later.

DIRECT EXAMINATION OF THE WITNESS HERMANN NEUBACHER.

BY DR. SAUTER:

Q. Witness, you said today that the German Foreign Service
had sent you to Roumania, I believe, on economic questions.
Is it correct that during the time you were working in
Roumania, you were also representing and handling economic
interests in Greece?

A. In the autumn of 1942, notwithstanding my assignment n
Roumania, I received a special assignment, together with an
Italian financial expert, Minister d'Agostine, to prevent by
proper methods the total devaluation of currency and the
total disruption of the economic structure in Greece.

Q. Witness, were you suited for such a very difficult task
by training and previous experience? Please tell us briefly,
what posts you held before, so that we can judge whether you
were capable of carrying out this task in Greece; but
please, witness, be very brief.

A. I was one of the foremost economic leaders in Austria; at
the age of twenty-eight I was a director; at thirty I was
the general manager of the Viennese Settlement Corporation,
and at the age of thirty-three I was directing a large
combine in the building trade and building material
industry. I was an executive of the Austrian National Bank
and a member of the Austrian Customs Auxiliary Council
(Zellbeirat). I was a member of the Russian Credit Committee
of the City of Vienna and a member of the Commission of
Experts for the investigation of the collapse of the
Austrian Credit bank Corporation. Therefore I brought vast
economic experience to this task.

Moreover, I was entirely familiar with the economic problems
of the Balkans since I had last worked on economic questions
relating to the Balkans in the central finance
administration of I.G. Farben in Berlin.

Q. Witness, several days ago, when I visited you in prison,
I gave you a report of a commission of the Royal Greek
Government, addressed to the International Military
Tribunal, and I asked you to read it and state your opinion.
Is this report correct?

DR. SAUTER: Mr. President, it is Document USSR 358, and it
has the additional number UK 28.

                                                  [Page 368]

Q. (continued): Witness, in this report of the commission
the matter is presented as if it were through German
authorities that the economic structure of Greece was
totally destroyed and Greece was plundered, etc. In the end
this reflects on the defendant Funk. Please don't go into
detail, but tell us briefly, what is your impression in this
connection?

THE PRESIDENT: Yes, General Rudenko.

GENERAL RUDENKO: Mr. President, I would like to make the
following statement before the Tribunal: In regard to the
Report of the Greek Government, which was presented before
the Tribunal by the Soviet Prosecution as provided by
Article 21 of the Charter, it seems to me that the question
of the defence counsel, asking the witness to give his
opinion on this particular matter, should be rejected
because the Witness is not competent to give an opinion on
the Report of the Greek Government. The defence counsel can
ask him a concrete question in regard to any particular
fact, but that is all.

DR. SAUTER: Mr. President, if it is desired, I can, of
course, put the questions individually. It will probably
take a little longer but, if the Soviet Prosecution so
desires, I agree. May I now question the witness? Witness,
is it correct ...?

THE PRESIDENT: Wait a minute. Dr. Sauter, what exactly is it
that you want to ask the witness about this report?

DR. SAUTER: The report of the Greek Government, which has
been submitted by the Soviet Prosecution, states, for
instance, that Germany, after occupying Greece plundered the
country and brought about a famine by exporting an excessive
amount of goods. It states that the country was charged
excessive occupation costs, and that the clearing system
severely handicapped the country, etc. Through this witness,
who, as the economic expert of the German Foreign Office,
handled these problems in Greece at that time, I propose to
prove, first, that these statements are untrue; second, that
this state of affairs existed when the German troops marched
in, and was not created by the German authorities; and,
last, that it was the defendant Funk who tried repeatedly to
improve matters for Greece in the clearing system, and had
considerable amounts of gold brought to Greece.

THE PRESIDENT: Well, can't you put a few short questions to
show that the scheme which this witness introduced into
Greece was in accordance with international law and was not
unfair to Greece? If you could do that, that would meet the
case, wouldn't it?

DR. SAUTER: Yes. That is what I wanted to do, and I am sure
that the witness would have done so on his own initiative.

BY DR.SAUTER:

Q. Now, then, witness, are you acquainted with the viewpoint
of the German economic authorities and particularly of the
defendant Funk in regard to the question of the clearing of
debts incurred by Greece and the question of how Greece was
to be treated within the clearing system?

A. Concerning the mutual financial charges and obligations I
had spoken to the Finance Minister, Schwerin von Krosigk at
one time, and it was proposed that at some later date after
the war, the claims and counter-claims were to be settled on
the basis of a common denominator.

Q. And at that time, during the war, how was the question of
this clearing account dealt with?

A. Regarding the economic events in Greece, I can give you
information based on my own observations only starting with
October, 1942. At that time, when I first came to Athens,
the Greek currency had already been considerably devaluated
and the circulation of banknotes had increased by something
like 3,000 per cent.

Greece also suffered an economic set-back due to the fact
that, apart from a progressive inflation, an attempt had
been made to introduce in Greece a planned economy with
ceiling prices according to the German pattern. The result
was, of course, that the merchants selling Greek goods
suffered losses when they were

                                                  [Page 369]

paid later. On the other hand, the importers of German goods
made tremendous profits, because they paid the Reichsmark at
the rate of 60 on the clearing account and were reselling
the goods at a rate of about 30,000 by the time I arrived.
This chaos, due to the inflation and attempt to introduce a
planned economy on the German pattern, could be remedied
only by transforming the black market in Greece into a
completely free market. The two experts of the Axis powers,
at the end of October, 1942, introduced this measure with
considerable success. Within a few weeks all shops and
markets were full of goods and foodstuffs; the prices of
food dropped to one-fifth, and prices of manufactured
products to one-tenth. This success was maintained for four
months in spite of increasing inflation.

Q. Dr. Neubacher, is it true that the defendant Funk, who
was Reich Minister of Economy at that time, proposed during
conversation or in correspondence he had with you that, in
spite of the shortage of goods prevailing in Germany, a
considerable amount of goods should be sent from Germany and
other European countries to Greece?

A. After discussing together the difficulties of my task,
Reich Minister Funk and I agreed that a maximum of goods
should be transported to Greece. I secured not only 60,000
tons of food at that time but also large quantities of
German export goods, since it was hopeless to try to stop an
inflation or the effects of an inflation of prices if no
goods were available. Reich Minister Funk supported exports
to Greece with the view of restoring the market conditions
to normal with every means at his disposal.

Q. Are you aware, witness, that since transport from Germany
to Greece had become impossible, the defendant Funk made
every effort to have goods transported on neutral ships,
furnished with British navicerts, in order to combat as far
as possible the already impending famine?

A. I think that was between 1941 and 1942 when I had not yet
arrived in Greece. In 1943, when Greek waters became closed
to us, because all ships were being torpedoed, and the
railroads had become the objects of incessant acts of
sabotage and dynamiting, I, with the help of the Swedish
Ambassador, Alar, who directed the International Relief for
Greece, applied for British navicerts for food transports to
Greece. The British granted this application and, when our
own means of transport ceased to exist, the Swedish boat
Halaren, loaded with German food supplies for Greece, went
from Trieste or Venice to the Piraeus once a month.

Q. And Funk, the Reich Minister of Economy at that time,
played an important part in these actions, didn't he?

A. Reich Minister of Economy Funk took a very active
interest in the Greek question, a question which is unique
in the history of economy, and he supported me in my efforts
with every means at his disposal.

Q. Witness, do you know anything about the fact that the
defendant Funk advocated in particular that the occupation
costs should be kept as low as possible, and he took the
view that it would be preferable that a considerable part of
the occupation costs should rather be charged to the German
account than to the Greek account so that Greece should not
be overburdened too much financially? What do you know about
that?

A. I know too little of the details of what happened in
Berlin; but at long intervals I reported to Reich Minister
Funk about the situation in Greece and I know that he made
my reports the basis for his own interventions.

He was perfectly aware of the fact that the Greek economic
problem during the war and within the blockade was so
infinitely complicated that all efforts had to be made to
prevent a complete dissolution of the economic structure;
and he intervened frequently to assist in averting the
catastrophe.

Q. Witness, did defendant Funk act in such a way that the
Greek currency, the drachma currency, was devaluated or that
it deteriorated, or did he, on the contrary, endeavour to
back the value of the drachma, particularly for the purpose
of preventing a catastrophic famine? Please state briefly
what you know about that.

                                                  [Page 370]

A. Reich Minister Funk always made every effort in the
latter direction. He proved that by enforcing exports to
Greece, and finally by the grant of a considerable amount of
gold for the purpose of slowing down the Greek inflation,
which grant, in accordance with the Four-Year Plan, involved
the gravest sacrifice for Germany.

Q. You say "a considerable amount of gold." There was very
little gold in Germany during the war. Can you tell us how
large the amount of gold was which the defendant Funk sent
to Greece at that time for the purpose of backing the
drachma to some extent and preventing the impending
catastrophe? How large was the amount?

A. All told, one and one third-million gold pounds were
invested in Greece and Albania, to my recollection, to back
the currency, and more than one million gold pounds of that
went to Athens.

Q. One and one-third of a million gold pounds?

A. Greece and Albania got that amount.

Q. And now, witness, I have a last question. Is it correct
that all these efforts on the part of the German economic
management and the German Minister of Economy were often
frustrated and foiled, particularly by Greek merchants. To
quote just one example, there were cases where German
factories sold German engines for 60 drachma to Greek
merchants - that is to say, 60 drachma which had actually no
value - and the Greek merchants sold these same engines
which they had bought for 60 drachma from Germans to the
German Armed Forces at 60,000 drachma a piece. These are
supposed to be cases which you discovered and on which you
reported to the defendant Funk, and that is why I am asking
you whether that is true.

A. I have the following comment to make about that: It did,
in fact, happen, but I want to state that the Greek business
men had to do that in consequence of inflation and the black
market. The Greek people are much too intelligent to be
caught up in an inflation. Every child there is a business
man. Therefore, the only possible method to counteract this
obvious speculation, which in itself is not amoral, was that
of transforming the black market into a totally free market
by means of purely economic measures, and that was the aim
of these measures.

Q. This transformation of the black market into a free
market, which was after all a problem which also played an
important part in France, was brought about by your activity
in agreement with the defendant Funk?

A. Yes, I introduced this measure together with my Italian
colleague d'Agostino at the end of October, 1942.

DR. SAUTER: Thank you very much, witness.

Mr. President, I have no further questions.

DR. STEINBAUER (counsel for Seyss-Inquart): Mr. President,
members of the Military Tribunal, for your information I am
going to examine the witness on the question of the
Anschluss.

BY DR. STEINBAUER:

Q. Witness, you have described to the Tribunal your economic
activities. Were you not active politically as well?

A. I was politically active as the chairman of the Austro-
German People's Union (Oesterreichisch-Deutscher Volksbund).

Q. What were the aims of that Austro-German People's Union?

A. The Austro-German People's Union was an institution which
stood above parties and religious denominations and which
aimed at revising the Anschluss Clause prohibition in the
peace treaties and solving the question of the Austro-German
Anschluss peacefully by a plebiscite. In the executive
committee of this Austro-German People's Union, all parties
were officially represented with the exception of the
National Socialist and Communist Parties. The German
organisation of the same name was under the leadership of
the Social Democratic President of the German Reichstag,
Paul Loebe.

                                                  [Page 371]

Q. Thank you. I have here a list of the executive committee
which is dated 1926. You appear as chairman and Paul Speiser
as deputy of the State Councillor (Staatsrat). Dr. Arthur
Seyss-Inquart is named as treasurer, and then there, is Dr.
Benedikt Kautsky, one Georg Stern, Public Councillor and
President of the Banks' Association, and a certain Dr.
Stolper. Is that correct?

A. Yes.

Q. Why did all these members who represented different
political parties and religious denominations strive towards
the Anschluss at that time?

A. After the Treaties of Versailles and St. Germain, a
movement on the broadest basis started in Austria for the
union of this country, which was suffering from severe
economic depression, with Germany. Men from all parties and
all religions joined this movement, as you can see from the
names which you, Herr Doctor, have just mentioned.

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