[Page 56]

"I think it is quite useful if we recall these things to mind in order to expose all the sanctimonious hypocrisy exuding from the foreign Press. Thank God, these things could after all not hinder the great German people on their way, for Adolf Hitler has created a communion of German will and German thought; he has bolstered it up with the newly strengthened Wehrmacht, and he has thereby given the external aspect to the inner union between Germany and Austria.

"I am known for sometimes expressing thoughts which give offence and here, too, I would not like to depart from this custom."

"I know that there are even here in this country a few people - I believe they are not too numerous - who find fault with the events of the last few days. But nobody, I believe, doubts the goal, and it should be said to all grumblers that you can't satisfy everybody. There are those who say they would have done it maybe in some other way, but the thing is that they did not do it" - and in parentheses the word "hilarity" appears again. Continuing with your speech, " - it was only done by our Adolf Hitler (long

[Page 57]

continued applause); and if there is still something left to be improved, then those grumblers should try to bring about these improvements from within the German Reich and the German community, and not disturb it from without."

A. Yes.

Q. In other words, you publicly ridiculed those who were complaining of the methods, did you not?

A. If that's the way you see it.

Q. Then, you also, in addressing the personnel of the Austrian National Bank which you were taking over, said this:

"I consider it completely impossible that even a single person will find his future with us, who is not wholeheartedly for Adolf Hitler. (Long, continuous applause; shouts of Sieg Heil.")

"Whoever does not do so had better withdraw from our circle of his own accord. (Loud applause)."

A. Yes, they all agreed, surprisingly.

Q. Now, had the Reichsbank, before 1933 and 1934, been a political institution?

A. No.

Q. Had politics been party to the Reichsbank?

A. Never.

Q. Well, on this day, speaking to its employees, you said this, did you not

"The Reichsbank will always be nothing but National Socialist, or I shall cease to be its manager. (Loud, continued applause)."

A. Yes.

Q. Now, sir, you have said that you never took the oath to Hitler.

A. Yes.

Q. I ask you if this is what you, as head of the Reichsbank, required of the employees that you were taking over in Austria, and I quote:

"Now I shall ask you to rise. (The audience rises.) Today we pledge allegiance to the great Reichsbank family, to the great German community; we pledge allegiance to our newly arisen, powerful Greater German Reich, and we sum up all these sentiments in the allegiance to the man who has brought about all this transformation. I ask you to raise your hands and to repeat after me:

"'I swear that I will be faithful and obedient to the Fuehrer of the German Reich and the German people, Adolf Hitler, and will perform my duties conscientiously and selflessly.' (The audience takes the pledge with uplifted hands.)

"You have taken this pledge. A bad fellow is he who breaks it. To our Fuehrer a triple 'Sieg Heil.'"

A. The oath is the prescribed civil service oath, and it is quite in accordance with what I said here yesterday, that the oath is made to the head of the State just as I have stated before, too: "We stand united before the German people" - I do not know exactly what the German expression is used. I hear your English version here. That oath is exactly the same.

Q. I have referred to Document EC-297, Exhibit USA 632, in the course of this examination. That is the exhibit I have been using.

So you say that was to an impersonal head of State and not to Adolf Hitler?

A. Yes. One cannot take a visible oath to an idea. Therefore, one has to use a person. But I said yesterday that I did not take an oath to Ebert or to

[Page 58]

Q. You told your employees that all the sentiments of this oath were summed up in the allegiance to the man, did you not?

A. No.

Q. Is not that what you said?

A. No, that is not correct. If you read it again, it does not say to the man, but to the leader, as the head of the State.

Q. Well, no matter who or what you took the oath to -

A. (Interposing.) Excuse me. There is a very great difference.

Q. Well, we'll come to that. Whatever you took the oath to, you were breaking it at the very time, were you not?

A. No. I never broke the oath to the man as representative of the German people, but I broke my oath when I found out that the man was a criminal.

Q. When you plotted to cause his death?

A. Yes.

Q. Do, you want to explain to the Tribunal how you could cause the death of Adolf Hitler without also causing the death of the head of the German State?

A. There is no difference, because unfortunately that man was the head of the German nation.

Q. You say you never broke the oath?

A. I do not know what you want to express by that. Certainly I did not keep the oath which I took to Hitler, because Hitler unfortunately was a criminal, a perjurer, and there was no true head of the State. I do not know what you mean by "breaking the oath," but I did not keep my oath to him and I am proud of it.

Q. So you were administering to your employees an oath which you at that moment were breaking and intended to break?

A. Again you confuse different periods of time. That was at a time, in March 1938, when, as you have heard me say before, I still was in doubt, and therefore it was not clear in my mind just exactly what kind of a man Hitler was. Only when in the course of 1938 I observed that Hitler was possibly entering into a war, did I break the oath.

Q. When did you find him entering into a war?

A. In the course of 1938, when, judging from the events, I gradually became convinced that Hitler might steer the country into a war, that is to say, intentionally. Then only did I break my oath.

Q. Well, you stated yesterday that you started to sabotage the government in 1936 and 1937.

A. Yes, because I did not want excessive armament.

Q. And we find you administering an oath to the employees to be faithful and obedient.

Now, I ask you if you did not make this statement in interrogation:

"Question: But you make this statement at the end of the oath, after everybody has raised his band and made his oath. Did you say the following, 'You have taken this pledge. A bad fellow is he who breaks it.'?

"Answer: Yes, I agree to that and I must say that I myself broke it.

"Question: Do you also say that at the time that you urged this upon the audience, that you already were breaking it?

"Answer: I am sorry to say that within my soul I felt very shaken in my loyalty already at that time, but I hoped that things would turn out well in the end."

Q. Well, I am sure we want to be helpful to each other, Dr. Schacht.

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Q. Now, you remained in the Reichsbank after this Anschluss, of course?

A. Yes.

Q. And you remained there until January 1939, if that is the date?

A. Yes.

Q. Now, after this Anschluss, the MEFO bills which had been issued began to become due, did they not, in 1938 and 1939?

A. No, the maturity date of the first MEFO bills must have been at the earliest in the Spring of 1939. They had all been issued for five years and I assume that the first MEFO bills were issued in the spring of 1934, so that the first MEFO bills became due in the spring of 1939.

Q. Now, this is the question and the answer. Correct me if I am wrong.

"Question: Well, did you in the Reichsbank utilize funds which were available? Let me put it this way: As these MEFO bills became due, what did you do about them?

"Answer: I asked the Minister of Finance whether he could repay them, because after five years he had to repay them, some in 1938 or 1939, I think. The first MEFO bills would have become due for repayment and of course he said 'I can't.'"

A. I said that throughout our financial dealings we became somewhat worried as to whether we would get our bills paid or not; and I have already explained to the Tribunal that, in the second half of 1938, the Finance Minister got into difficulties, and he came to me in order again to borrow money. Thereupon I said to him, "Listen, in what kind of a situation are you anyway, for you will soon have to repay the first MEFO bills to us. Are you not prepared for that?" And now it turned out - that was in the autumn of 1938 - that the Reich Finance Minister had done nothing whatever to fulfil his obligation, to meet payment of the MEFO bills; and that of course, in that period of 1938, exceedingly strained relations with the Reich Finance Minister, that is, between the Reichsbank and the Reich Finance Minister.

Q. Now, taxes did not yield sufficient revenue to discharge those bills, did they?

A. Yes; I explained yesterday that the risk which was taken in regard to the MEFO bills, which I have admitted from the very beginning, was not really a risk if a reasonable financial policy were followed; that is, if from 1938 on, further armament had not been sought and further foolish expenditures made, but instead, money received from taxes and bonds had been used for meeting payment of the MEFO bills.

Q. All I am asking you at the present moment, Dr. Schacht, is whether those bills could not have been paid out of the revenue from taxes.

A. Surely. Yes.

Q. They could have?

A. Of course, but that was the surprising thing, they were not repaid; the money was used to continue rearming. May I add, in order to give you a clear picture -

Q. No, I am really not concerned with the financing, I am merely concerned with what kind of a mess you were in at the time you resigned.

A. Yes.

Q. The MEFO bills were due and could not be paid?

A. Shortly.

Q. They were shortly to mature?

A. Yes, but they could be paid. That is a mistake if you say that they could not be paid.

Q. Well, they could not be paid out of the current year's taxes, could they?

A. Yes, indeed. You are not interested and do not want me to tell you, but I am quite ready to explain it.

[Page 60]

A. You have just told me you were not interested.

Q. Your subscriptions to the Fourth Reich Loan of 1938 had produced unsatisfactory results, had they not?

A. Quite. The capital market was not good.

Q. And you had reported on the loan that there had been a shortage in the public subscription? And the result had been unsatisfactory?

A. Yes.

Q. Now, did you not make this answer to the interrogator's question:

"Question: But I am asking you whether during that period from 1st April, 1938 to January, 1939, you did not continue to finance armaments?

"Answer: Sir, otherwise these MEFO bills had to be refunded by the Reich, which they could not be, because the Reich had no money with which to do it, and I could not procure any money for refunding because that would have had to come from taxes or loans. So I had to continue to carry these MEFO bills and that, of course, I did."

A. Yes , that was quite in order - kindly let me speak won't you - because the Finance Minister did not put his funds available for the repayment of the MEFO bills, but instead used them for armaments. If he had used these funds to pay the MEFO bills, everything would have been all right.

Q. And you carried the MEFO bills which allowed him to use current revenues to continue the plans of rearmament after 1938, did you not?

A. This was the situation. A large part of the MEFO bills was already in the open market. Now, if that market was too heavily taxed by the government, then the people brought in the MEFO bills to the Reichsbank and the Reichsbank promised to accept them. That, precisely, was the great obstruction to my policy. The Reich Finance Minister financed the armament programme, instead of discharging the MEFO bills as he had promised.

Q. It was under these circumstances that you took a position which would result in your retirement from the Reichsbank?

A. Yes.

Q. Now we come to Czechoslovakia. Did you favour the policy of acquiring the Sudetenland by threat of resort to arms?

A. Not at all.

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