The Nizkor Project: Remembering the Holocaust (Shoah)
Nuremberg, war crimes, crimes against humanity

The Trial of German Major War Criminals

Sitting at Nuremberg, Germany
2nd May to 13th May, 1946

One Hundred Nineteenth Day: Thursday, 2nd May, 1946
(Part 12 of 12)

[MR. JUSTICE JACKSON continues his cross examination of Hjalmar Schacht]

[Page 44]

Q. And your purpose in maintaining foreign trade was to obtain enough foreign exchange to permit the imports of raw materials, not manufactured, which were required for the rearmament programme. Is that not correct?

A. That is the question that is put to me. Now comes the answer. Please, will you read the answer?

Q. What is your answer now?

A. My answer today is that that was not the only aim.

Q. Not the only aim?

A. Right.

Q. But that was the primary aim, was it not?

A. No, not at all.

Q. All right, what was the other aim?

A. To keep Germany alive, to assure employment for Germany, to obtain sufficient food for Germany.

Q. Which was your dominant aim?

A. The food supply in Germany and work for the export industry.

Q. Well, I should like to go over one or two of these documents with you as to your aim. I refer to Document 1168- PS of 3rd May, 1935.

A. Yes.

Q. Title "Financing of Armament," Exhibit 37.

"The following comments are based on the assumption that the completion of the armament programme in regard to speed and extent is the task of German Policy, and that accordingly everything else must be subordinated to this aim, in so far as this main goal is not endangered by neglecting other questions."
Did you write that?

A. Not only did I write it, but I handed it to Hitler personally. It is one of twin documents, one of which has already been submitted in evidence and discussed in detail by the prosecution. I did not receive the second document.

When my defence counsel examined me, I stated here that I was intent on stopping the Party collections and Party moneys, which were extracted everywhere from the German people, because it was extremely difficult for me to get the money to finance the armament programme and the MEFO bills.

[Page 45]

I could only get that point across to Hitler if I told him that, of course, this was being done in the interests of armament. If I had told him that this was done -

Q. Yes, but -

A. No, please let me finish. If I had told him that this was done in the interest of building theatres, or something similar, it would have made no impression on him. However, if I said to him it must be done because otherwise we could not arm, that was a point which influenced Hitler, and that is why I said it, I admitted that and explained it during the examination by my counsel.

Q. And you didn't call that misleading him?

A. I would not call it "misleading"; I would call it "leading."

Q. But leading, without telling him the true motives which were actuating you, at least.

A. I think you can be much more successful in leading a person if you don't tell him the truth than if you do tell him the truth.

Q. I am very glad to have that frank statement of your philosophy, Dr. Schacht. I am greatly indebted to you. Well, you devised all kinds of plans, one for the control of foreign exchange, blocked foreign accounts, and 'MEFO bills' method was one of the principal ones of your devices for financing, was it not?

A. Yes.

Q. Now, I don't care about the details of MEFO bills, but I would like to ask you this. Isn't it correct, as you testified on the inquiry of 16th October, 1945 - Exhibit USA 636 - as follows?

"Question: Actually, as a matter of fact, let me ask you this. At the time when you started the MEFO bills, for example, there were no ready means available for financing the rearmament?

"Answer: Quite.

"Question: That is to say, through normal budget finance methods?

"Answer: Not enough.

"Question: Also, you were limited at that time by the statute of the Reichsbank which did not permit you to give anything near the sufficient credit which was required by the armament programme?

"Answer: Quite.

"Question: And you found a way?

"Answer: Yes.

"Question: And the way you found was by creating a device which, in effect, enabled the Reichsbank to lend, by a subterfuge, to the Government what it normally or legally could not do?

"Answer: Right."

Q. Is that true?

A. That was my answer.

Q. The following questions were then asked:-

"I understand that, with reference to the building up in Germany of an armament industry, the creating of a domestic economy that was sound, and a Wehrmacht, the efforts that you put in from 1934 to the spring of 1938, when MEFO financing stopped, were responsible in large part for the success of the whole programme."

"Answer: I don't know whether they were responsible for it, but I helped a great deal to achieve that."

A. Yes.

Q. And you were asked as follows, on the 17th of October, 1945:-

"In other words, in effect you are not taking the position that you are not largely responsible for the rearming of the German Army.

"Answer: Oh, no, I never did that.

"Question: You have always been proud of that fact, I take it?

"Answer: I wouldn't say proud, but satisfied."

[Page 46]

Q. Is that still your position?

A. In reply to that I should like to say: The question of MEFO bills was quite certainly a system of finance which normally would never have been attempted. I made a detailed statement on this subject when I was questioned by my counsel. On the other hand, however, I can say that this question was examined by all legal experts in the Reichsbank and use of this subterfuge, as you put it, proved to be a way which was legally possible.

Q. No. I didn't put it that way; you said so.

A. No. I mean the sentence you quoted as being my answer. I beg your pardon. The matter was investigated from a legal viewpoint, and we assured ourselves that it could be done in this way. Moreover, I am still satisfied today that I contributed to the armament, but I wish that Hitler had made different use of it.

Q. Well, on your 60th birthday, Minister of War Blomberg said that, "Without your help, my dear Herr Schacht, there could have been no rearmament." Did he not?

A. Yes, those are the sort of pleasantries which one exchanges on such occasions. But there is quite a bit of truth in it. I have never denied it.

Q. That is the way it looks to me.

Now, when you finally made some suggestion that the armament should stop, or slow up, as I understand, you made that suggestion without knowing what the armament was.

A. Yes.

Q. The only thing you were judging it by was financial conditions, was it not?

A. Oh no.

Q. Well, what was it?

A. I did, of course, have a general impression of these matters because General Thomas always discussed them with me. However, I do not remember that General von Blomberg gave me detailed information about what he thought. Of course, in general, I was informed regarding the progress made in the armament programme, and that is why I said "more slowly." My opinion was strengthened because of the general conditions.

Q. Well now, let's see what reasons you gave in Document 286- EC. That is Exhibit USA 833.

"I am therefore of the opinion that we should promote our export with all resources by a temporary" - and I emphasize the word "temporary decrease of armament."
A. Decrease?

Q. Decrease, yes, temporary.

A. Yes.

Q. I emphasize "temporary" and you emphasize "decreased."

A. Oh no, no; I agree with you.

Q. "And that further, with reference to the Four-Year Plan, we should solve only those problems which appear most pressing. Among these I include the gasoline programme, the buna programme, and the programme of developing ore resources, in so far as this development does not, of itself, require large amounts of raw materials which must be withheld from export. On the other hand, all other measures of the Four-Year Plan should be postponed for the time being. I am convinced that by such a policy our exports could be increased so greatly that there would be a certain improvement in our exhausted stock position; and that the resumption of armament building would again be possible, in the not too distant future, from the point of view of raw materials. I am unable to judge to what extent a temporary postponement of armament development would have military advantages. However, I presume that such a pause in armament building would not only have advantages for the training of officers and men, which has yet

[Page 47]

to be done, but that this pause would afford an opportunity to survey the technical results of previous armament efforts and to effect improvements in the technical field of armament."
Now that you addressed to Goering, did you not?

A. That is perfectly possible. I can't remember the letter, but it looks quite like one of mine.

Q. Yes, and you were correctly giving to Goering your true views, were you not?

A. No; I believe that this was merely a tactical letter. I think that I was mainly trying to limit armament. If I had told him that we wanted to stop arming, Goering would probably have denounced me to the Fuehrer. Therefore I told him, "Let's stop for the time being," "temporary." I also emphasized "temporary." It was a tactical measure to convince Goering that for the time being it should be temporary.

Q. Then, with your fellow officers in the Government you were also using tactical statements which did not represent your true views?

A. That was absolutely necessary.

Q. When did it cease to be necessary, Dr. Schacht?

A. Cease?

Q. Yes; when did it cease to be necessary?

A. I think it more important that you should ask when it "commenced"; when it started.

Q. Well?

A. During the first years I did not do it, but later on, to a considerable extent. I could say truly, it never stopped.

Q. Has it stopped now?

A. I have no more colleagues, and here before this Tribunal I have nothing to tell but the truth.

Q. Well, on the 24th of September, 1935 - December - you wrote, Document 293-EC, which is Exhibit USA 834, and used this language, did you not?

"If there is now a demand for greater armament, it is, of course, not my intention to deny or change my attitude in favour of the greatest possible armament, which I have expressed for years, both before and since the seizure of power; but it is my duty to point out the economic limitations of this policy."
A. That is very good.

Q. And that is true?

A. Surely.

Q. Now, there came in the Four-Year Plan in 1936?

A. Yes.

Q. You did not like the appointment of Goering to that position?

A. I thought he was unsuited and, of course, it made an opening for a policy which was opposed to mine. I knew perfectly well that this was the start of exaggerated armament, whereas I was in favour of restricted rearmament.

Q. Why do you say that Goering's appointment meant exaggeration of armament? Can you point to anything that Goering has said in favour of rearmament that is any more extreme than the things you have said?

A. Oh yes.

Q. Well, will you do it?

A. Yes, I think if you read the documents on the so-called "Small Ministerial Council," of the year 1936, and in particular, of 1938, which you yourself introduced, you will see at once that the necessity of increased armament was emphasized. For instance, those of November or October, 1936.

Q. Well, it was also emphasized in your documents, was it not, throughout?

A. No.

Q. You say that your statements of that sort were merely tactical.

[Page 48]

A. No, I beg your pardon. I said arm within the limits of what is economically possible and reasonable. Goering, if I may say it again, wanted to go beyond those limits.

Q. That is exactly the point I want to make. Your difference with Goering over rearmament was entirely a question of what the economy of Germany would stand, was it not?

A. No. I said that the most important thing was that Germany should live and have foreign trade, and within those limits we could arm, that it is out of the question that Germany should arm for the sake of arming, and thus ruin her economy.

Q. Well that's the difference between you and Goering, it was over what the economy would stand, was it not?

A. No, it was a question of the extent of rearmament. The point is, Mr. Justice Jackson, that German economy paid the price for Goering's policy. The only question is, was it reasonable or unreasonable? If I may state it pointedly, I would say that I considered Goering's economic policy to be unreasonable and a burden to the German nation, and that it was most important that rearmament should not be extended, and that the German nation should have a normal, peace-time standard.

THE PRESIDENT: The Tribunal will adjourn.

(A recess was taken until Friday, 3rd May, 1946, at 1000 hours.)

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