The Nizkor Project: Remembering the Holocaust (Shoah)

The Trial of German Major War Criminals

Sitting at Nuremberg, Germany
7th January to 19th January, 1946

Thirty-Second Day: Friday, January 11th, 1946
(Part 3 of 9)

[Page 190]

PROFESSOR HERBERT KRAUS (Counsel for defendant Schacht): We agree that the question of the disagreement between the defendant's Goering and Schacht need not be discussed further at this time. But we shall come back to and deal in detail with the question how far these disagreements had any bearing on the plan for an aggressive war.

LIEUTENANT BRYSON: If the Tribunal Please, we have eliminated part of our proof. I would simply like to put in a letter from Goering and an interrogation of Schacht, which will finish up the question of the disagreement.

Under date of 5th August, 1937, Schacht wrote a critical letter to Goering, who replied with a twenty-four page letter on 22nd August, 1937. Goering's letter reviews their many differences in detail. I offer it as Document EC-493, Exhibit USA 642, and I wish to read only one statement, found in the middle of Page 13:

"In conclusion, I should like to refer to remarks which you made in a paragraph of your letter entitled 'The Four Year Plan' about your general attitude toward my work in regard to the economic policy. I know and I am pleased that at the beginning of the Four Year Plan you promised me your loyal support and co-operation, and that you repeatedly renewed this promise even after the first differences of opinion had occurred and had been removed in exhaustive discussions. I deplore all the more having recently formed the impression which is confirmed by your letter, that you are increasingly antagonistic toward my work in the Four Year Plan. This explains the fact that our collaboration has gradually become less close."
Schacht and Goering were reconciled by written agreement on 7th July, 1937, but subsequently again fell into disagreement, and Hitler finally accepted Schacht's resignation as Minister of Economics on 26th November, 1937, simultaneously appointing him Minister without Portfolio, and, later, Schacht's resignation was extended to his position as Plenipotentiary for War Economy. Without reading it, I offer in evidence Document EC-494, Exhibit USA 643, as proof of this fact.

Now, finally, I wish to refer the Tribunal to the interrogation of Schacht, under date of 16th October, 1945, Exhibit USA 636, and I wish to read from Page 12 of the document near the bottom:

"A. It may amuse you if I tell you that the last conversation" - this is Schacht speaking - "I had with Goering on these topics was in November, 1937, when Luther for two months had tried to unite Goering and me, and to induce me to co-operate again with Goering and maintain my position as Minister of Economics. Then I had a last talk with Goering, and at the end of this talk Goering said, 'But I must have the right to give orders to you.' Then I said, 'Not to me, but to my successor.' I never have taken orders from Goering, and I would never have done it, because he was a fool in economics and I knew something about it, at least.

Q. Well, I gather that was a culminating, progressive personal business between you and Goering. That seems perfectly obvious.

A. Certainly."

In all this abundant and consistent evidence there is not the slightest suggestion that Schacht's withdrawal from these two posts represented a break with Hitler in the field of contemplated military aggression. Indeed, Hitler was gratified that Schacht would still be active in the Government as President of the Reichsbank and as Minister without Portfolio. I offer in evidence Document L-104, Exhibit USA 644, consisting of a letter to the United States Secretary of State from Ambassador Dodd, under date of 29th November, 1937, enclosing a translation of Hitler's letter of 26th November, 1937, to Schacht. I quote the last two sentences of Hitler's letter, found on Page 2 of the document:

[Page 191]

"If I accede to your wish it is with the expression of deepest gratitude for your so excellent achievements, and in the happy consciousness that, as President of the Reichsbank Directorate, you will make available to the German people and me, for many years more, your outstanding knowledge and ability and your untiring energy. Delighted at the fact that in the future, also, you are willing to be my personal adviser, I appoint you as from to-day a Reich Minister."
Schacht did continue, obviously still in full agreement with Hitler's aggressive purpose. He was still President of the Reichsbank at the time of the taking of Austria in March, 1938. In fact, the Reichsbank took over the Austrian National Bank. On this point I refer the Tribunal to Reichsgesetzblatt 1938, Part 1, Page 254, and ask that judicial notice be taken thereof. Further, Schacht even participated in the planning of the absorption of Austria. In this connection I introduce into evidence Document EC- 421, Exhibit USA 645, consisting of excerpts from minutes of a meeting of the staff of General Thomas on 11th March, 1938, at 15.00 hours. I quote therefrom as follows:
"Lieutenant-Colonel Hunerm reads directive of the Fuehrer of 11th March concerning the 'Action Otto' and informs us that 'The Economy War Service Law' has been put in force. He then reads Directives 1 and 2, and gives special orders to troops for crossing the Austrian borders. According to that, at Schacht's suggestion, no requests should take place, but everything should be put in Reichsmark on an exchange basis of two Schillinge to one Reichsmark."
On the conversion of the Austrian Schilling the Tribunal is asked also to take judicial notice of Reichsgesetzblatt, 1938, Part 1, Page 405.

The Tribunal, of course, is already familiar with the public approval by Schacht of the Anschluss, in his Vienna speech of 21st March, 1938, and your Honours will also recall Schacht's pride in Hitler's use of the rearmed Wehrmacht at Munich, as expressed in his speech of 29th November, 1938. Both speeches were subsequent to his resignation in November, 1937.

We come now to the removal of Schacht from the Presidency of the Reichsbank in January, 1939. The reason for this development is quite clear. Schacht lost confidence in the credit capacity of the Reich and was paralysed with the fear of a financial collapse. He felt that the maximum level of production had been reached, so that an increase in banknote circulation would only cheapen money and bring on inflation. In this attitude he ceased to be useful to Hitler, who was about to strike, and wished to tap every ounce of available Government credit for military purposes.

I refer the Tribunal to Document EC-369, which I have previously submitted in evidence as Exhibit USA 631. This document is a memorandum from the Reichsbank Directorate to Hitler, under date of 7th January, 1939, in which Schacht reviews in detail his fears of inflation. The seriousness of the situation may be seen generally from the entire text. I wish to quote several of the more crucial statements - one from the last paragraph on Page 3, the second sentence:

"We are, however, faced with the fact that approximately three billion Reichsmark of such drafts cannot now be paid, though they will be due in 1939."
I quote from the upper half of Page 4:
"Exclusive of the Reichsbank there are approximately six billion Reichsmark 'Mefo' drafts which can be discounted against cash payment at any time at the Reichsbank, which fact represents a continuous danger to the currency."
And I quote finally from the concluding paragraph of the memorandum:
"We are convinced that the effects on the currency caused by the policy of the last ten months can be mended, and that the danger of inflation again can be eliminated by strict maintenance of a balanced budget.

[Page 192]

The Fuehrer and Reich Chancellor himself has, again and again, publicly rejected an inflation, as foolish and fruitless.

We therefore ask for the following measures:

(1) The Reich as well as all the other public offices must not incur expenditure or assume guarantees and obligations that cannot be covered by taxes, or by those funds which can be raised through loans without disturbing the long-term investment market.

(2) In order to carry out these measures effectively, full financial control over all public expenditures must be restored to the Reich Minister of Finance.

(3) The price and wage control must be rendered effective. The existing mismanagement must be eliminated.

(4) The use of the money and investment market must be at the sole discretion of the Reichsbank."

It is clear that Schacht's fear was genuine and is a complete explanation of his departure from the scene. He had good reason to be afraid. In fact, the Finance Minister had already recognised the situation in September, 1938. I refer the Tribunal to Document EC-419, Exhibit USA 621, which I have already submitted in evidence, and which consists of a letter under date of 1st September, 1938, from Krosigk to Hitler, in which Krosigk gives a warning of an impending financial crisis. I quote from the bottom of Page 2:

THE PRESIDENT: Is that not really cumulative of what you have already read?

LIEUTENANT BRYSON: We will be glad to omit it, Sir; it is cumulative.

Schacht was not only afraid of a financial crisis, but he was afraid that he personally would be held responsible for it. I offer in evidence an affidavit of Emil Puhl, a director of the Reichsbank and co-worker of Schacht, dated 8th November, 1945, designated as Document EC-438, Exhibit USA 646, and I read therefrom, beginning at the bottom of the second page:

"When Schacht saw that the risky situation which he had sponsored was becoming insoluble, he was more and more anxious to get out. This desire to get out of a bad situation was for a long time the 'Leitmotiv' of Schacht's conversation with the Directors of the bank."
In the end, Schacht escaped by deliberately stimulating his dismissal from the Presidency of the Reichsbank. I offer in evidence Exhibit USA 647, consisting of excerpts from an interrogation of von Krosigk under date of 24th September, 1945, and I wish to read several statements, beginning at the very bottom of the second page:
"I asked Schacht to finance for the Reich before the last day of the month the sum of one hundred or two hundred millions. It was this quite usual procedure which we had used for years, and we used to give back this money after a couple of days. Schacht this time refused, and said that he was not willing to finance a penny because he wanted, as he said, that, it should be made clear to Hitler that the Reich was bankrupt. I tried to explain that these were not the proper grounds for discussing the whole question of finance, because the question of financing very small sums for a few days beyond the last days of the month never would bring Hitler to the conviction that the whole financing was impossible. As far as I remember now, it was Funk who told Hitler something about this conversation; then Hitler asked Schacht to call upon him. I do not know what they said, but the result certainly was the dismissal of Schacht."
THE PRESIDENT, Just give me again the reference to that document that you were reading from.

LIEUTENANT BRYSON: This is the interrogation of von Krosigk under date of 24th September, 1945. I wish to read further, continuing on Page 3:

[Page 193]

"Q. Now did Schacht ever say anything to you to the effect that he wanted to resign because he was in opposition to the continuance of the rearmament programme?

A. No, he never said it in this specific form, but in some conversations he certainly said it several times, in his own way, that he had conflicts with Goering so that, in answer to that, I did not take these things very seriously.

Q. Well, let me put it in this way, and please think carefully about this. Did Schacht ever say that he wanted to resign because he realised that the extent of the rearmament programme was such as to lead him to the conclusion that it was in preparation for war rather than for defence?

A. No, he never did.

Q. Was Schacht ever quoted to you to this effect by any of your colleagues or by anybody else?

A. No.

Q. Now, after Keitel took over the position of Chief of the Wehrmacht, there were still meetings between Schacht and you with Keitel in place of Blomberg?

A. Yes.

Q. Did Schacht ever say anything at these meetings to indicate that, except for the technical question of the financing through the Reichsbank directly, he was opposed to a further programme of rearmament, or to the budget of the Wehrmacht?

A. No, I do not think he ever did."

The defendant Goering has also confirmed this testimony. I refer the Tribunal to the interrogation of Goering under date of 17th October, 1945, this being Exhibit USA 648. I read from this interrogation on 17th October, 1945, from the lower half of the third page:
"Q. I want to ask you this specifically. Was Schacht dismissed from the Reichsbank by Hitler for refusing to participate any further in the rearmament programme?

A. No, it was because of his utterly impossible attitude in this matter regarding this advance, which had no connection with the rearmament programme."

Hitler dismissed Schacht from the Reichsbank on 20th January, 1939. Without reading, I offer in evidence Document EC-398, Exhibit USA 649, consisting merely of a brief note from Hitler to Schacht announcing his dismissal.

From all of the foregoing it is clear that Schacht's dismissal in no sense reflected a parting of the ways with Hitler on account of proposed aggression. This fact may also be seen from Document EC- 397, Exhibit USA 650, consisting of Hitler's letter to Schacht under date of 19th January, 1939, the text of which I wish to read:

"On these occasions of your recall from office as President of the Reichsbank Directorate, I take the opportunity of expressing to you my most sincere and warmest gratitude for the services which you have rendered repeatedly to Germany and to me personally in this capacity, during long and difficult years. Your name, above all, will always be connected with the first epoch of the national rearmament. I am happy to be able to avail myself of your services for the solution of new tasks in your position as Reich Minister."
In fact, Schacht continued as Minister without Portfolio until January, 1943.

I wish to conclude by saying that the evidence shows: first, that Schacht's work was indispensable to Hitler's rise to power and to the rearmament of Germany; second, that Schacht personally was favourably disposed towards Aggression and knew Hitler intended to and would break the peace; and, third,

[Page 194]

that Schacht retired from the scene for reasons wholly unrelated to the imminence of illegal aggression.

As long as he remained in power, Schacht was working as eagerly for the preparation of aggressive war as any of his colleagues. He was beyond any doubt most effective and valuable in this connection. His assistance in the earlier phase of the conspiracy made their later crimes possible. His withdrawal from the scene reflected no moral feeling against the use of aggressive warfare as an instrument of national policy. He personally struggled to retain his position. By the time he lost it he had already completed his task in the conspiracy, namely, to provide Hitler and his colleagues with the physical means and economic planning necessary to launch and maintain the aggression. We do not consider that, having prepared the Wehrmacht for assault upon the world, he should now be permitted to find refuge in his loss of power before the blow was struck.

This concludes our case against the defendant Schacht, and Lt. Meltzer follows me with the presentation of the American case against the defendant Funk.

LIEUTENANT BERNARD D. MELTZER: May it please the Tribunal, the documents bearing upon defendant Funk's responsibility have been assembled in a document book marked "HH," which has been filed with the Tribunal and has also been made available to defence counsel. The same is true of the brief. The documents have been arranged in the book in the order of their presentation. Moreover, to facilitate reference, the pages of the document book have been numbered consecutively in red. I wish to acknowledge the invaluable collaboration of Mr. Sidney Jacoby, who sits to my right, in the selection and analysis of these documents.

We propose to submit evidence concerning five phases of defendant Funk's participation in the conspiracy:

First, his contribution to the Nazi seizure of power;

Second, his role in the Propaganda Ministry and in the related agencies, and his responsibility for the activities of that Ministry;

Third, his responsibility for the unrelenting elimination of Jews, first from the so-called cultural professions and then from the entire German economy;

Fourth, his collaboration in the paramount Nazi task to which all other tasks were subordinated preparation for aggressive war;

And finally, we propose to mention briefly the evidence concerning his active participation in the waging of aggressive war.

We turn now to the evidence showing that defendant Funk actively promoted the conspirators' accession to power and their consolidation of control over Germany. Soon after he joined the Nazi Party in 1931 defendant Funk began to hold important positions, first within the Party itself and then within the Nazi Government. Funk's positions have, in the main, been listed in Document 3533-PS, which is a statement signed by both defendant Funk and his counsel. This document has been made available in the four working languages of these proceedings, and a copy in the appropriate language should be available in each of your Honours' document books. It is accordingly requested that this document, which is Exhibit USA 651, be received into evidence without the necessity of its being read in its entirety.

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