Archive/File: imt/tgmwc/tgmwc-12/tgmwc-12-118.10
Last-Modified: 2000/01/29

THE PRESIDENT: Has any application been made in respect of it?

DR. DIX: No application has been made as yet. I wanted ...

THE PRESIDENT: Which memorandum? Who drew it up?

DR. DIX: It is a Hitler memorandum of the year 1936, of
which there exist three copies, and one of them was in the
camp dustbin. This copy arrived here a fortnight or three
weeks ago, after we had discussed our document book with the
prosecution. I intended to submit the translation of that
memorandum today and at the same time to ask that this be
admitted in evidence, but unfortunately I am not in a
position to do so, because the translation is not yet ready.
My colleague, Professor Krauss, was, in fact, told that it
had been mislaid.

THE PRESIDENT: Dr. Dix, let the defendant go on, and you can
submit the document in evidence and a translation
afterwards.

DR. DIX: Very well. The defendant has a copy and he will
quote the most important, very brief passages.

THE WITNESS: I shall quote very brief passages. Hitler says
in this memorandum, among other things:-

  "It is, above all, not the task of State economic
  institutions to wrack their brains about methods of
  production. This does not concern the Ministry of
  Economics at all."

The Ministry of Economics was under me, and this is
therefore a reproach for me. A further quotation:-

  "It is furthermore essential that German iron production
  be increased
  
                                                  [Page 441]
  
  to the utmost. The objection that we are not in a
  position to produce the same cheap raw iron from German
  ore, which has only 26 per cent. of iron content, as from
  the 45 per cent. Swedish ores, is unimportant ... The
  objection that in this case all the German smelting works
  would have to be reconstructed is also irrelevant; and,
  in any case, this is none of the business of the Ministry
  of Economics."

As is apparent from the statement, I had explained that from
26 per cent. ore one could produce steel only at costs twice
or three times those at which one could produce steel from
45 per cent. ore. And I explained further that, in order to
use 26 per cent. ore, one would have to have completely
different plants from those using 45 per cent. ore. Herr
Hitler states that this is none of the business of the
Ministry of Economics, and that, of course, means Herr
Schacht.

There is one last, very brief quotation:-

  "I want to emphasise in this connection that in these
  tasks I see the only possible economic mobilisation - and
  not the crippling of the armament industry."

That statement, too, is directed, of course, against my
policy.

BY DR. DIX:

Q. We have now reached the stage of tension of technical
differences between you and Goering, the tension between you
and Hitler regarding your functions as Minister of
Economics. What were your thoughts at the time about
resigning from your office as Minister of Economics? Was it
possible for you to resign? Please do not repeat anything
that Lammers and other witnesses have already told us about
the impossibility of resigning. Please talk only about your
own special case and what you yourself did.

A. First of all, I tried to continue my own economic policy,
in spite of the fact that Goering as head of the Four-Year
Plan tried, of course, as time went on to take over as many
as possible of the tasks concerned with economic policy. But
the very moment Goering encroached on my rights as Minister
of Economics I used it as an opportunity to force my release
from the Ministry of Economics. That was at the beginning of
August, 1937.

At the time I told Hitler very briefly the reason, namely,
that, if I was to assume responsibility for economic policy,
then I would also have to be in command. But if I was not in
command, then I did not wish to assume responsibility. The
fight for my resignation, fought by me at times with very
drastic measures, lasted approximately two and a half
months, until eventually Hitler had to decide to grant me
the desired release, in order to prevent the conflict from
becoming more known to the public than it already was.

Q. When you say "drastic measures," do you mean your so-
called sit-down strike? In this connection I want to submit
to the Tribunal Exhibit 40 of my document book, an affidavit
from another former colleague of Dr. Schacht in the Reich
Ministry of Economics, Kammerdirektor Dr. Asmis. On Page 180
of the English version of this long affidavit there is a
brief passage. I quote:-

  "When this was found to be unsuccessful" - it means his
  fight - "and when developments continued along the course
  which he considered wrong, he" - Schacht - "in the autumn
  of 1937, long before the beginning of the war, acted as
  an upright man and applied for release from his office as
  Reich Minister of Economics and thereby from his co-
  responsibility.
  
  He was obviously not able to resign his office in the
  normal way, because for reasons of prestige the Party
  required the use of his name. Therefore, in the autumn of
  1937, he simply remained away from the Ministry of
  Economics for several weeks. He started this sit-down
  strike, as it was humorously called in the Ministry, and
  went in his official capacity only to the Reichsbank."

THE PRESIDENT: Dr. Dix, is it necessary to trouble the
Tribunal with all

                                                  [Page 442]

this detail? There is no dispute that he did resign, and the
only thing that he has to explain is why he continued to be
a Minister. The prosecution has given evidence about his
resignation and about the conflict between him and the
defendant Goering. What is the good of going into all the
detail of it, as to this sit-down strike and that sort of
thing? That does not interest the Tribunal.

DR. Dix: He did not remain a Minister at that time. He
retired.

THE PRESIDENT: I thought he had remained a Minister until
1943.

DR. DIX: Minister without portfolio, yes.

THE PRESIDENT: I did not say Minister with portfolio, I said
Minister.

DR. DIX: Yes, but there is a difference, but I shall come to
that later. I understood you to mean an active minister, but
I shall not go into that now. It was a misunderstanding.
Anyway, I have finished with that. I was merely trying to
show how difficult it was to resign.

BY DR. DIX:

Q. We now come to the manner in which you were released.
Have you anything to add to the statements made by Dr.
Lammers in this connection or not?

A. I think we should inform the Tribunal of one matter about
which I also learned here in prison from my fellow-defendant
Speer. He overheard the argument between Hitler and myself
on the occasion of that decisive conference in which I
managed to push through my resignation.

If the Tribunal allows, I shall quote very briefly. There
are two or three sentences. Herr Speer informed me of the
following:

  "I was on the terrace of the Berghof on the Obersalzberg,
  and I was waiting to submit my building plans. In the
  summer of 1937 when Schacht came to the Berghof ..."

MR. JUSTICE JACKSON (Interposing): Speer is present in the
room. For one defendant to testify as to a conversation with
another defendant is a very convenient way of getting
testimony without access to cross-examination, but it seems
to me that it is a highly objectionable method. I object to
this on the ground that it has no probative value to testify
to a conversation of this character when the defendant Speer
is in the courtroom and can be sworn and can give his
testimony. He sits here and is available.

THE PRESIDENT: What is the subject of the conversation?

DR. DIX: The subject of this conversation is a matter which
concerns the defendant Schacht. It is a statement of Hitler
regarding Schacht; it is not a matter which concerns the
defendant Speer. Therefore I consider it expedient, since -
it is a matter which concerns Schacht, for him to be able to
make a statement about it. I would, of course, consider it
more appropriate that he should not read something which
Speer has written to him, but that he should give his own
account of what happened between Hitler and Schacht and
merely say, "I heard that from Speer." That appears to be'
better than ...

THE PRESIDENT: Very well, Dr. Dix, you may give that.

BY DR. DIX:

Q. Will you please not read, then, but tell of this incident
and say you got it from Speer?

MR. JUSTICE JACKSON: That is even more objectionable to me
than to have a written statement from Speer. If we are to
have Speer's testimony, it at least should be Speer's and
not a repetition of a conversation between the two
defendants. If Speer has made a written statement, it can be
submitted to us in the ordinary course.

This is the second document that we have not had the
privilege of seeing before it has been used here, and it
seems to me that if this is a document signed by Speer -
which I do not understand it to be - if it is, that is one
thing. We can then see it and perhaps it can be used. If it
is a conversation, I should, prefer Speer's version.

                                                  [Page 443]

DR. DIX: May I add something? The question of procedure is
not of basic importance for me here. In that case it can be
discussed when Speer is examined. However, I do not know
whether Speer is going to be called; probably he will be.
Actually it would be better for us to hear it now, but I
leave it to the Tribunal to decide. It is not a question of
great importance to me.

THE PRESIDENT: The Tribunal will allow the evidence.

BY DR. DIX:

Q. Well then, without reading, please describe the incident.

A. The gentlemen on the terrace, among them Speer, heard
this discussion, which was conducted in very loud tones. At
the end of the discussion Hitler came out on the terrace and
...

THE PRESIDENT: Just a moment.  (Brief pause.) Very well, Dr.
Dix, go on.

A. Hitler came out on the terrace after this conference and
said to those present, among them Speer, that he had had a
very serious argument with Schacht, that he could not work
with Schacht, and that Schacht was upsetting his financial
plans.

Q. Well then, after you had left your position as Minister
of Economics you remained a Department Chief as Reichsbank
President. Were you approached by Hitler or the Minister of
Finance in your capacity as President of the Reichsbank, and
asked for credit?

A. After the Reichsbank had discontinued giving credits, on
31 March, 1938, the Minister of Finance received more urgent
demands for money and towards the end of that year he found
himself in the awkward situation of not being able to pay
even the salaries of the civil servants from the treasury.
He came to me and asked me to grant him a special credit.
According to its charter and laws the Reichsbank was
entitled, and to a certain extent obliged, but actually only
entitled, to advance to the Reich up to four hundred million
marks per annum. The Reich Minister of Finance had received
these four hundred million marks and he was asking, over and
above that, for further credits; the Reichsbank refused to
give him these credits. The Reich Minister of Finance had to
go to the private banks and all the large banks together
gave him a credit of a few hundred million marks. However,
the Reichsbank did not participate in this credit.

Q. If you, as President of the Reichsbank, turned down those
credits, then it seems there was nothing for it but to print
more notes. Did Hitler or anyone else suggest that the note
printing presses should be set in motion?

A. After the events of 1938 I paid one more visit to London,
in December, to attend a conference regarding the financing
of the Jewish emigration from Germany in an orderly manner -
a thing which I myself had suggested. On that occasion I
also talked with Prime Minister Chamberlain. On 2 January,
1939, I arrived at the Berghof in Berchtesgaden to report to
Hitler about these matters. On that occasion we, of course,
also talked about the financial needs of the Reich. I still
refused to give credit to the Reich, and pointed out the
very difficult financial situation which called for, or
should have called for, a reduction of State expenditure,
and, with that, of armament expenditure.

In particular, I pointed out that at the beginning of
December the first instalment of the so-called Jewish fine -
which had been imposed on the Jews after the murder of Herr
von Rath in Paris and which had been collected to the extent
of 250 million marks at the beginning of December - that
this first instalment of 250 million marks had not been
received entirely in the form of cash, but that the Reich
Minister of Finance had had to agree to accept a
considerable part of it "in kind," as the English say,
because it was not possible to make liquid the cash
necessary for this payment. Hitler replied:-

  "But we can circulate notes on the basis of these goods.
  I have looked into the question of our future financial
  policy very carefully and when I
  
                                                  [Page 444]
  
  get back to Berlin in a few days I shall discuss my plans
  with you and the Minister of Finance."

I saw at once that it was Hitler's intention to resort to
the printing of notes to meet his expenditure with or
without the necessary cover, but at any rate against certain
securities. The danger of inflation was now imminent. And
since I realised at once that this was the point where I and
the Reichsbank had to say "stop," I replied to him:-

  "Very well, in that case I will get the Reichsbank to
  submit a memorandum to you, setting out the attitude of
  the Reichsbank to this problem and which can be used at
  the joint meeting with the Finance Minister."

After that I went back to Berlin and informed my colleagues
in the Directorate of the Reichsbank. We saw, to our own
personal satisfaction, that here was an opportunity for us
to divorce ourselves definitely from that type of policy.

The memorandum dated January 7, which the Directorate of the
Reichsbank then submitted to Hitler has, I think, also been
submitted as evidence by the prosecution.

In order to explain the statements which the Directorate of
the Reichsbank made to Hitler in this decisive moment
regarding further State expenditure, and especially armament
expenditure, I ask permission to read only two very brief
sentences from this memorandum. It says:-

  "Unrestrained public expenditure constitutes a definite
  threat to our currency. The unlimited growth of
  government expenditure defies any attempts to draw up a
  regulated budget. It brings State finances to the verge
  of ruin, despite a tremendous increase in taxes, and it
  undermines the currency and the issuing bank."

Then there is another sentence:-
  
  "... if during the two great foreign political actions in
  Austria and the Sudetenland an increase in public
  expenditure was necessary, the fact that after the
  termination of these two foreign political actions a
  reduction of expenditure is not noticeable, and that
  everything seems rather to indicate that a further
  increase of expenditure is planned, it is now our
  absolute duty to point out what the consequences will be
  for our currency.
  
  The undersigned Directors of the Reichsbank are
  sufficiently conscious of the fact that in their co-
  operation they gladly devote all their energy to the
  great aims that have been set, but that a stop must now
  be put."

DR. DIX: This memorandum has already been submitted by the
prosecution under the No. EC-369, but it is being submitted
again as Exhibit 24 in our Document Book, Page 70 of the
English text, and Page 63 of the German text.

I shall have to put various questions to Dr. Schacht on that
memorandum, but I think that perhaps there is not time now
and that I should do so tomorrow.

THE PRESIDENT: If you must, Dr. Dix, but do you think that
is very important? At any rate, you had better do it
tomorrow, if you are going to do it at all.

DR. DIX: Yes.

THE PRESIDENT: Dr. Siemers?

DR. SIEMERS: Yes, Sir.

THE PRESIDENT: Dr. Siemers, can you inform us whether those
extracts are the same as the extracts which were refused in
the case of the defendant Ribbentrop?

DR. SIEMERS: I have made a comparison, and I can hand it to
the Tribunal in writing. Some documents are the same, some
do not tally, and some are missing. I have done that in
writing.

THE PRESIDENT: Thank you.

The Tribunal will adjourn.

(A recess was taken until Thursday, 2 May, 1946, at 10.00 hours.)

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