Chapter XXIII: Part 23

Two parties have a contract with each other. One party does not live up to that contract, and the other party has no way of making him fulfill his obligations. Thus the other party can do nothing except, in turn, not adhere to the contract. That is what Germany did. That is what I supported. Now, of course, I must say that I had expected a type of reaction which in such a case must always be expected from the partner to a contract, namely, that he would say, “Well, if you do not keep up the contract either, then we shall have to discuss this contract again.”

I must say—and I can quite safely use the word—it was a disappointment to me that Germany’s rearmament was not in any way replied to by any actions from the Allies. This so-called breach of contract on Germany’s part against the Versailles Treaty was taken quite calmly. A note of protest was all; nothing in the least was done, apart from that, to bring up again the question of disarmament in which I was interested.

Not only was Germany allowed to go on rearming but the Naval Agreement with Great Britain did, in fact, give Germany the legal right to rearm contrary to the Versailles Treaty. Military missions were sent to Germany to look at this rearmament, and German military displays were visited and everything else was done, but nothing at all was done to stop Germany’s rearmament.

MR. JUSTICE JACKSON: If the Tribunal please, I cannot see the point of all this detail. We have conceded that rearmament here, except as it was involved with aggressive purposes, is immaterial. As I said in the opening, the United States does not care to try here the issues of European politics, nor are they submitted to this Tribunal for decision.

The sole question here is the Indictment, charging arming with the purpose of aggression.

I do not want to interfere with the defendant giving any facts that bear on his aggressive intentions, but the details of negotiations, of European politics and charges and countercharges between governments, it seems to me, lies way back of any inquiry that we could possibly make, and the details of this matter seem to me not helpful to the solution of the issues here, and I think was ruled out by the Tribunal in the case of Göring, if I am not mistaken.

THE PRESIDENT: Well, Dr. Dix, it all seems to be a matter of argument, and argument isn’t really the subject of evidence.

DR. DIX: I do not believe so, Your Lordship. What Mr. Justice Jackson said is quite correct. Schacht is accused of having assisted in bringing about an aggressive war, but this assistance of his is supposed to have consisted in the financing which he carried out.

THE PRESIDENT: Go on, Dr. Dix, and do try to make it as short as possible.

DR. DIX: I think you had come to the end of that question anyway.

May I refer in this connection to one of the motives for Dr. Schacht’s assistance in rearmament. It was his hope to renew the debate on disarmament. May I draw your attention to Exhibit Number Schacht-36, Page 141 of the German text, and Page 149 of the English text? It is an affidavit from Dr. Schacht’s son-in-law, Dr. Von Scherpenberg. On Page 2 of that affidavit you will find the following brief paragraph which I propose to read; in fact, I can confine myself to one sentence:

“He”—that is to say, Schacht—“considered rearmament within
certain limits to be the only means for the re-establishing of
the disturbed equilibrium and the only means of inducing the
other European powers to participate in a limitation of
armaments which, in opposition to the Versailles Treaty, they
had sought to avoid.”

That is a statement of Scherpenberg regarding conversations which Schacht had had at that time. It is, therefore, not an _ex post facto_ opinion; it is the report of a conversation which he, Scherpenberg, had with his father-in-law Schacht at that time. That is just an additional remark I wanted to make.

[_Turning to the defendant._] You have spoken about the rearmament on the part of the other states, particularly Czechoslovakia and Poland, but can you tell us whether at the time you knew of or heard any exact details regarding the state of armament of those two states?

SCHACHT: I know only that it was known about Russia that in 1935 she announced that her peacetime army should be increased to 960,000 men.

Then I knew that in Czechoslovakia, for instance, the installation of airdromes was one of the leading tasks of rearmament. We knew that Great Britain’s Navy was to be stepped up.

DR. DIX: Did you later on completely abandon your idea of general disarmament?

SCHACHT: To the contrary, I used every opportunity, in particular during conversations with men from abroad, to say that the aim should always be disarmament, that, of course, rearmament would always mean an economic burden for us, which we considered a most unpleasant state of affairs.

I remember a conversation which I had with the American Ambassador Davies. His report of this conversation is incorporated in an exhibit that has been submitted to the Tribunal. It is an entry in a diary which is repeated in his book, _Mission to Moscow_, and it is dated as early as 20 June 1937, Berlin. He is writing about the fact that among other things he and I had talked about disarmament problems, and I need only quote one sentence. I do not have the number of the document, Your Lordship, but it has been submitted to the Tribunal.

DR. DIX: It is Exhibit Schacht-18, German Page 43, English Page 49.

SCHACHT: Since I have only the English text, I shall read from it.

Davies writes:

“When I outlined the President’s (Roosevelt) suggestion of
limitation of armament to defensive weapons only, such as a man
could carry on his shoulder, he (means Schacht) almost jumped
out of his seat with enthusiasm.”

It becomes clear, therefore, from Ambassador Davies’ remark that I was most enthusiastic about this renewed attempt and the possibility of an imminent step towards disarmament as proposed by President Roosevelt.

In this same book, Davies reports a few days later on 26 June 1937 about the conversation he had with me, in a letter addressed to the President of the United States. I quote only one very brief paragraph—in English again:

“I then stated to him (that is, Schacht) that the President in
conversation with me had analyzed the European situation and had
considered that a solution might be found in an agreement among
the European nations to a reduction of armaments to a purely
defensive military basis and this through the elimination of
aircraft, tanks, and heavy equipment, and the limitation of
armaments to such weapons only as a man could carry on his back,
with an agreement among the nations for adequate policing of the
plan by a neutral state. Schacht literally jumped at the idea.
He said: ‘That’s absolutely the solution.’ He said that in its
simplicity it had the earmarks of great genius. His enthusiasm
was extraordinary.”

DR. DIX: To what extent did you want rearmament?

SCHACHT: Not beyond equality with every single one of our neighbor states.

DR. DIX: And did Hitler talk to you of far-reaching intentions, or did you hear of any?

SCHACHT: At no time did he tell them to me, nor did I hear from anyone else, whether he had made remarks about further intentions.

DR. DIX: Were you informed about the extent, the type and speed of rearmament?

SCHACHT: No, I was never told about that.

DR. DIX: Had you set yourself a limit regarding this financing or were you prepared to advance any amount of money?

SCHACHT: I was certainly, by no means, ready to advance any unlimited amount of money, particularly as these were not contributions; they were credits which had to be repaid. The limits for these credits were twofold. One was that the Reichsbank was independent of the State finance administration, and the supreme authority of the State as far as the granting of the credits was concerned. The Board of Directors of the Reichsbank could pass a resolution that credits were to be given, or were not to be given, or that credits were to be stopped, if they considered it right, and as I was perfectly certain of the policy of the Board of Directors of the Reichsbank—all of these gentlemen agreed with me perfectly on financial and banking policy—this was the first possibility of applying a brake, if I considered it necessary.

The second safeguard—limit was contained in the agreement which the Minister of Finance, the Government, and of course Hitler had made—the mefo bills, of which these credits consisted, were to be paid back when they expired. They were repayable after 5 years, and I have already said that if the repayments had been made, funds for rearmament would naturally have had to decrease. Therein lay the second possibility of limiting the rearmament.

DR. DIX: Will you please give now to the Tribunal the figures which you were dealing with at the time?

SCHACHT: We went up to...

MR. JUSTICE JACKSON: We have no desire to enter into controversy about the figures of financing rearmament. It seems that the detail of dollars and cents or Reichsmarks is unimportant to this, and terribly involved. We aren’t trying whether it cost too much or too little; the purpose of this rearmament is the only question we have in mind. I don’t see that the statistics of cost have anything to do with it.

THE PRESIDENT: Dr. Dix, we would like to know what figures the accused and you are talking about.

DR. DIX: The amounts that Schacht as President of the Reichsbank was ready to grant for the rearmament program; that, no doubt, is relevant, because if those amounts remained within such limits as might possibly be considered adequate for defensive rearmaments in case of emergency, then, of course, the extent of that financial assistance is a very important piece of evidence regarding the intentions which Schacht was pursuing at the time. That is the very thing that, in the case of Schacht, Mr. Justice Jackson considers relevant, namely, whether he helped prepare for an aggressive war. If he were considering only the possibility of a defensive war in his financing and placed only sums at the disposal of the rearmament program which would never have allowed an aggressive war, then that would refute the accusation raised by the Prosecution against the defendant, and I think that the relevance of that question cannot be doubted.

THE PRESIDENT: Are you saying that if the Defendant Schacht placed at the disposal of the Reich, say, 100 millions, or whatever the figure is, it would be defensive, and if he placed 150 millions, it would be not defensive, or what? Is it simply the amount?

DR. DIX: No, I want to say that if, as will be proved, he only wanted to give 9 and later on gave hesitatingly and unwillingly 12 millions for the purpose, then that contribution can never have been aimed at an aggressive war.

THE PRESIDENT: It is simply the amount?

DR. DIX: Yes, only the size of the amount.

THE PRESIDENT: Well, that can be stated very shortly, but as for details of finance...

DR. DIX: I am also of the opinion that we have talked about it too long. I was only going to ask, “What amount did you give?” and then the objection was raised, and thus the discussion was drawn out. May I put the question?

THE PRESIDENT: Yes.

DR. DIX: [_Turning to the defendant._] Well, then, what amount did you intend to grant?

SCHACHT: Naturally as little as possible; however, what I contributed is what is decisive. I placed at their disposal—to give one figure and to be very brief—until 31 March 1938, credits amounting to a total of 12,000,000,000 Reichsmark. I have discussed that with one of the interrogators of the British Prosecution, who asked me about the subject, and I replied that that was about one-third of the amount which was spent on rearmament. After that, without the Reichsbank, beginning with 1 April 1938, the figure stated in that budget year for rearmament was 11,000,000,000, and in the subsequent year, 20,500,000,000, and of that not a pfennig came from the Reichsbank.

DR. DIX: That was after your resignation, was it not?

SCHACHT: That was after I had stopped credits.

For the record I should like to say that I think I made a mistake before. I said millions instead of milliards, but I think it is obvious what I meant. I wanted only to correct it.

DR. DIX: Now, then, Dr. Schacht, the Prosecution have stated that on 19 February 1935 the Ministry of Finance received authority to borrow unlimited amounts of money if Hitler ordered them to do so.

SCHACHT: Here, again, the prosecutor did not see things in the proper light. The President of the Reichsbank is not responsible for the actions of the Reich Minister of Finance. I think the President of the Federal Reserve Bank in New York can hardly be held responsible for the things done by the Secretary of the Treasury in Washington.

DR. DIX: You have also been accused that the debt of the Reich increased three times during the time while you were President of the Reichsbank.

SCHACHT: I might just as well be accused of being responsible for the fact that the birth rate in Germany rose sharply during the time I was President of the Reichsbank. I want to emphasize the fact that I had nothing to do with either.

DR. DIX: You were not responsible for the same reason.

SCHACHT: No, of course I am not responsible for that.

DR. DIX: And presumably the same applies to the point made by the Prosecution that you allegedly drafted a new finance program in 1938?

SCHACHT: On the contrary, I refused to do anything else for the financing of rearmament; the finance program was drafted by a state secretary in the Reich Finance Ministry, and it looked like it.

DR. DIX: One of your economic policies, during the time you were Minister of Economy, and which you have been accused of as being a preparation for war, was the so-called “New Plan” (Neue Plan). What was that?

SCHACHT: May I first of all say that the New Plan had nothing at all to do with rearmament. Germany, after the Treaty of Versailles, had fallen into a state of distress, economically speaking and especially export...

DR. DIX: Your Lordship, if the Tribunal is of the opinion that the New Plan has nothing to do with the rearmament and preparations for war—I think the Prosecution are of the opposite opinion—then, of course, the question is irrelevant, and I will drop it. I am only putting it because the New Plan has been used in the argumentation of the Prosecution.

THE PRESIDENT: If you say, and the defendant has just said that the New Plan had nothing to do with rearmament, I think you might leave it for cross-examination and you can raise it again in re-examination if it is cross-examined.

DR. DIX [_Turning to the defendant_]: In that case I shall not ask you about the barter agreements, either. I shall leave it to the Prosecution to bring it out during the cross-examination. I cannot see what it has to do with the preparation for war.

Now, you have already stated that you strove to remove the Versailles Treaty by means of peaceful negotiations, or at least, to modify it. In the opinion which you held at that time did any such means for a peaceful modification of the Versailles Treaty still exist?

SCHACHT: In my opinion, there were no means other than peaceful ones. The desire to modify the Versailles Treaty by means of a new war was a crime.

DR. DIX: Well. But now you are being accused that the alleged preparations for war, which really were a countermeasure to the general rearmament although not a preparation for an aggressive war, were nevertheless a rearmament, and as such, were an infringement of the Treaty of Versailles. I assume that you, at the time, decided to help finance that rearmament only after giving the problem due legal and moral considerations. What, exactly, were these considerations?

SCHACHT: I think I have already answered that question in detail. I need add nothing else.

DR. DIX: Very well. Insofar as you know, was this attitude of yours, the attitude of a pacifist and of someone who was definitely opposed to the extension of living space in Europe, known abroad?

SCHACHT: As long as I have been President of the Reichsbank, that is to say from March 1933—and I am, of course, only talking about the Hitler regime—my friends and acquaintances abroad were fully informed about my attitude and views. I had a great many friends and acquaintances abroad, not only because of my profession but also outside of that and particularly in Basel, Switzerland, where we had our monthly meeting at the International Bank, with all the presidents of the issuing banks of all the great and certain neutral countries, and I always took occasion at all these meetings to describe quite clearly the situation in Germany to these gentlemen.

Perhaps I may at this point refer to the so-called conducting of foreign conferences or conversations. If one is not allowed to talk to foreigners any more, then one cannot, of course, reach an understanding with them. Those silly admonitions, that one had to avoid contact with foreigners, seem entirely uncalled for to me, and if the witness Gisevius deemed it necessary the other day to protect his dead comrades, who were my comrades too, from being accused of committing high treason, then I should like to say that I consider it quite unnecessary. Never at any time did any member of our group betray any German interests. To the contrary, he fought for the interests of Germany, and to prove that, I should like to give you a good example:

After we had occupied Paris, the files of the Quai d’Orsay were confiscated and were carefully screened by officials from the German Foreign Office. I need not assure you that they were primarily looking for proof whether there were not any so-called defeatists circles in Germany which had unmasked themselves somewhere abroad. All the files of the Quai d’Orsay referring to my person and, of course, there were records of many discussions which I had had with Frenchmen, were examined by the Foreign Office officials at that time, without my knowing it.

One day—I think it probably happened in the course of 1941—I received a letter from a German professor who had participated in this search carried out by the Foreign Office. I shall mention the name so that, if necessary, he can testify. He is a Professor of Finance and National Economy, Professor Stückenbeck of Erlangen, and he wrote me that at this investigation...

THE PRESIDENT: The Tribunal cannot see any point in this, so far as this Trial is concerned. In any event, if the defendant says that he did not, in any way, give away the interests of Germany, surely that is sufficient. We do not need all the details about it. What it has got to do with this Trial, I do not know.

DR. DIX: I think, Your Lordship, that that was not the point of the statement. What he wants to say is that reliable men abroad knew him and were acquainted with the fact that he was certainly a man of peace and not a man who prepared aggressive wars, and that applies even to the period of rearmament.

THE PRESIDENT: But he said that 5 minutes ago.

DR. DIX: I do not think the question of Professor Stückenbeck is so important, but it certainly seems pertinent to me what Ambassador Davies said about his conversation with the then Foreign Commissar of the Soviet Republic, Litvinov. This is contained in Exhibit Schacht-18 of my document book. It is Page 43 of the German text, and Page 49 of the English text. May I read one paragraph, and then ask Dr. Schacht briefly whether that statement of Ambassador Davies corresponds to his recollection? It is Davies’ report, an extract from his book _Mission to Moscow_. A report is there to the Secretary of State in the United States. The passage is on Pages 108 and 109.

“Pursuant to an appointment made, I called upon Commissar for
Foreign Affairs Litvinov to present my respects before departure
for the United States.

“I then stated that the European situation in its elementals
looked simple and that it was difficult to understand why the
statesmanship of Europe could not provide that England, France,
Germany, Italy, and Russia should agree to preserve the
territorial integrity of Europe and through trade agreements
provide Germany with raw materials, thereby giving the assurance
that she could live, which would relieve the peoples of Europe
and the world of these terrific burdens of armament and of the
fear of catastrophic war. The prompt rejoinder was: ‘Do you
think Hitler would ever agree to anything like that?’ I said
that I did not know, but that it was my opinion that there was a
very substantial body of influential and responsible men in
Germany that such an idea would appeal to. Litvinov replied that
he thought that might be so; that Schacht was of that type; he
did not think they could prevail against Hitler and the
political and military forces dominant in Germany.”

And now I ask you, do you remember that conversation with Davies?

SCHACHT: I think there must be a mistake. I did not speak to Davies about this, I spoke to Litvinov. This is a report of Davies to the Secretary of State, about which I did not know.

DR. DIX: Yes, you are perfectly right.

It has been repeatedly emphasized by the Prosecution that your knowledge of Hitler’s intentions of war resulted also from your being Plenipotentiary for War Economy and a member of the Reich Defense Counsel. Göring has made a detailed statement on it. Have you anything new to add to Göring’s statement?

SCHACHT: I think the witness Lammers has also talked about it. I should like merely to confirm that the first Reich Defense Counsel of 1935 was nothing other than the legalization of a committee which existed before 1933, made up of ministerial officials who were supposed to deal with economic measures as well as administrative measures, which might have to be taken in the event of a threat of war against Germany.

DR. DIX: How often did you have a meeting especially with the Minister of War and the Plenipotentiary for Administration?

SCHACHT: This famous triumvirate, this Three Man College described by one of the prosecutors as the cornerstone of war policy, never met at all, and it is no wonder that we lost the war, if that was the cornerstone.

DR. DIX: The Prosecution have also referred to the report of the Ministry of War regarding the task of the Reich Defense Counsel of 1934. It is Document Number EC-128, Exhibit Number USA-623. Have you anything in particular to add to that?

SCHACHT: Yes, I should like to have permission to quote one very brief paragraph. I see there are only two sentences. This report contains the following statement:

Referring to the experiences of World War I, that is 1914 to 1918, and I quote—I shall have to do it in English since I have only the English, I quote:

“At that time we were able to extend our bases for raw materials
and production toward the West: Longwy, Briey, Tourcoing,
Roubaix, Antwerp (textiles), and toward the East, Lodz, and
Southeast (ore mines in Serbia and Turkey, mineral oils in
Romania). Today we have to reckon with the possibility of being
thrown back in our own country and even of being deprived
thereby of most valuable industrial and raw material in the West
and in the East.”

I think that if anyone wanting to prepare an aggressive war had calculated in September 1934 that one would have to protect oneself against the possibility of such a situation arising, that this is the best proof that there can be no question of an aggressive war at all.

DR. DIX: In that connection, under the heading of “peaceful efforts,” can you perhaps also tell the Tribunal what your peaceful efforts were, to have the reparations clauses of the Versailles Treaty modified or even abolished?

SCHACHT: From the very first moment, after the reparations were determined in 1921 or so, I fought against this nonsense with the argument that the carrying out of those reparations would throw the entire world into economic chaos. One cannot, during one generation, pay 120,000,000,000 Reichsmark or about 2,000,000,000 Reichsmark yearly, as at that time...

DR. DIX: We would like to make it brief. Will you please talk only about your peaceful efforts and not about national economy?

SCHACHT: All right, I will not talk about national economy.

I fought against it and, as time went by, I did succeed in convincing the people of almost all the countries that this was sheer nonsense. Therefore in July of 1932, if I am not mistaken, the then Reich Chancellor Papen was in a position to affix his signature to an agreement at Lausanne, which reduced reparations, _de jure_, to a pending sum of 3,000,000,000, and which, _de facto_, canceled reparations altogether.

DR. DIX: Did you then continue your definitely peaceful efforts in other fields? You have already touched upon the negotiations in Paris regarding the colonial question. I wonder if you have anything to add to that in this connection?

SCHACHT: I do not remember at the moment how far I had gone at the time, but I think I reported on the negotiations in detail, so I need not repeat.

DR. DIX: George Messersmith, the often-mentioned former Consul General of the United States in Berlin, states in his affidavit Document Number EC-451, Exhibit Number USA-626, to which the Prosecution have referred, that he is of the opinion that the National Socialist regime could not have been in a position to stay in power and build up its war machine if it had not been for your activity. At the end of the case for the Prosecution, the Prosecution present that thesis of Messersmith. Therefore I should like you to make a statement on this subject.

SCHACHT: I do not know whether that completely unsubstantiated private opinion of Mr. Messersmith has any value as evidence. Nevertheless, I should like to contradict it by means of a few figures. I had stated earlier that until 31 March 1938, the Reichsbank had given 12,000,000,000; that is to say, during the first fiscal year, about 2,250,000,000, and during the subsequent 3 years, 3,250,000,000 per annum. During those years—the Codefendant Keitel was asked about that when he was examined here—the armament expenditures, as Keitel said, amounted to the following:

In the fiscal year 1935-1936—5,000,000,000.

In the fiscal year 1936-1937—7,000,000,000.

In the following fiscal year—9,000,000,000.

And at that stage the assistance from the Reichsbank ceased. In spite of that, during the following year and without any assistance from the Reichsbank, the expenditure for armament increased to 11,000,000,000, and in the following year it climbed to 20,500,000,000.

It appears, therefore, that even without the financial genius of Herr Schacht, they managed to raise the funds. Just how they did so is another question.

DR. DIX: I duly put these figures to the Defendant Keitel. I do not think that the Tribunal had the document at the time. It is now available and has the Exhibit Number Schacht-7. It is Page 15 of the German text and Page 21 of the English text. Herr Keitel could, of course, only refer to the first column, that is to say, total expenditure; but there is a second and a third column, in this account, and these two are calculations made by Schacht, calculations regarding what was raised with the help and without the help of the Reichsbank.

I do not intend to go through it in detail now. I should merely like to have your permission to ask Dr. Schacht whether the figures calculated by him, in Columns 2 and 3 of the document, were calculated correctly.

SCHACHT: I have these figures in the document before me. The figures are absolutely correct and again I want to declare that they show that, during the first year after the Reichsbank had discontinued its assistance, no less than 5,125,000,000 more were spent without the assistance of the Reichsbank, that is to say, a total of 11,000,000,000.

DR. DIX: Up to now you have stated to the Tribunal that you were active against a dangerous and extensive rearmament and you showed that by tying up the money bag. Did you oppose excessive rearmament in any other way, for instance, by giving lectures and such?

SCHACHT: Many times I spoke not only before economists and professors who were my main auditors, but I often spoke upon invitation of the Minister of War and the head of the Army Academy before high-ranking officers. In all these lectures I continually referred to the financial and economic limitations to which German rearmament was subject and I warned against excessive rearmament.

DR. DIX: When did you first gather the impression that the extent of German rearmament was excessive and exaggerated?

SCHACHT: It is very difficult to give you a date. Beginning in 1935, I made continuous attempts to slow down the speed of rearmament. On one occasion Hitler had said—just a moment, I have it here—that until the spring of 1936 the same speed would have to be maintained. I adhered to that as much as possible, although, beginning with the second half of 1935, I continuously applied the brake. But after 1935 I told myself that, since the Führer himself had said it, after the spring of 1936 the same speed would no longer be necessary. This can be seen from Document 1301-PS in which these statements of mine are quoted, statements which I communicated to the so-called “small Ministerial Council” (kleiner Ministerrat). Göring contradicted me during that meeting, but I of course maintain the things which I said at the time.

After that I constantly tried to make the Minister of War do something to slow down the speed of rearmament, if only in the interest of general economy, since I wanted to see the economic system working for the export trade. Proof for the fact of just how much I urged the Minister of War is contained in my letter dated 24 December 1935, which I wrote him when I saw the period desired by Hitler coming to an end, and when I was already applying the brake. It has also been presented by the Prosecution as Document Number EC-293. In the English version of the document it is on Page 25.

I beg to be allowed to quote very briefly—all my quotations are very brief—from that document. I wrote a letter to the Reich Minister of War, and I quote:

“I gather from your letter dated 29 November”—and then come the
reference numbers—“that increased demands by the Armed Forces
for copper and lead are to be expected, which will amount to
practically double the present consumption. These are only
current demands, whereas the equally urgent provisions for the
future are not contained in the figures. You are expecting me to
obtain the necessary foreign currency for these demands, and to
that I respectfully reply that under the existing circumstances
I see no possibility of doing so.”

In other words, Blomberg is asking that I should buy raw materials with foreign currency, and I am stating quite clearly that I do not see any possibility of doing so.

The document goes on to say—and this is the sentence regarding the limit up to 1 April. I quote:

“In all the conferences held with the Führer and Reich
Chancellor up to now, as well as with the leading military
departments, I have expressed my conviction that it would be
possible to supply the necessary foreign currencies and raw
materials for the existing degree of rearmament until 1 April
1936. Despite the fact that, due to our cultural and agrarian
policies which are being repudiated all over the world, this has
been made extremely difficult for me and continues to be
difficult, I still hope that my original plan may be carried
out.”

That is to say, that I thought this proposed program could be carried out up to 1 April, but not over and beyond that.

DR. DIX: It is a fact that Minister of Transportation, Dorpmüller, was trying to raise credits for railway purposes. What was your attitude as President of the Reichsbank towards this?

SCHACHT: During a conference between the Führer, Dorpmüller, and myself, at which the Führer strongly supported Dorpmüller’s demands, I turned that credit down straightway, and he did not get it.

DR. DIX: The meeting of 27 May 1936 of the so-called “small Ministerial Council,” presided over by Göring, has been discussed here. The Prosecution contend that intentions of aggressive war became apparent from that meeting. Did you have any knowledge of that meeting?

SCHACHT: What was the date, please?

DR. DIX: 27 May 1936.

SCHACHT: No. I was present during that conference and I see nothing in the entire document pointing to an aggressive war. I have studied the document very carefully.

DR. DIX: It has furthermore been stated against you what is contained in the report of Ambassador Bullitt, Document Number L-151, Exhibit USA-70, dated 23 November 1937. You have heard, of course, that the Prosecution are also drawing the conclusion from that report that there were aggressive intentions on Hitler’s part. Will you please make a statement about that?

SCHACHT: I see nothing in the entire report to the effect that Hitler was about to start an aggressive war. I was simply talking about Hitler’s intentions to bring about an Anschluss of Austria, if possible, and to give the Sudeten Germans autonomy if possible. Neither of those two actions would be aggressive war, and apart from that, Mr. Bullitt says the following with reference to me in his report about this conversation. I quote: “Schacht then went on to speak of the absolute necessity for doing something to produce peace in Europe....”

DR. DIX: The memorandum of this conversation is also contained in my document book as Exhibit Number Schacht-22. It is on Page 64 of the English text and Page 57 of the German text.

We shall now have to deal in greater detail with your alleged knowledge of Hitler’s intentions to start war. First of all, speaking generally, did Hitler ever, as far as you know...

SIR DAVID MAXWELL-FYFE: My Lord, I asked Dr. Dix if he would object if the Tribunal would allow me, since he is passing to a new point, to mention the question of the Raeder documents. I had a discussion with Dr. Siemers. There are still some outstanding points, and we should be grateful if the Tribunal would hear us this afternoon, if possible, because the translating division is waiting for the Raeder documents to get on with their translations.

THE PRESIDENT: How long do you think it will take, Sir David?

SIR DAVID MAXWELL-FYFE: Not more than a half hour, My Lord.

THE PRESIDENT: If the translation department are waiting, perhaps we had better do it at 2 o’clock.

SIR DAVID MAXWELL-FYFE: If Your Lordship pleases.

THE PRESIDENT: If it is only going to take a half hour. It isn’t likely, I suppose, to take more than that?

SIR DAVID MAXWELL-FYFE: I don’t think it will take more than that.

THE PRESIDENT: We will do that at 2 o’clock, and now we will adjourn.

[_The Tribunal recessed until 1400 hours._]

_Afternoon Session_

SIR DAVID MAXWELL-FYFE: May it please Your Lordship, the Tribunal should have in front of them a statement of our objections to certain of the documents, arranged in six groups. Attached to that sheet they will find an English summary of the documents, presenting shortly the contents of each one of them. My Lord, with regard to the first group, might I make two erasures from our objection to Number 19, which has been allowed in the case of Schacht, and if I understand Dr. Siemers correctly he doesn’t press for Number 76.

Now, My Lord, the others in that group:

Number 9 is a series of quotations from Lersner’s book on _Versailles_.

Number 10, the quotation from a book by the German left-wing publicist, Thomas Mann.

Number 17 is the _Failure of a Mission_, by Nevile Henderson.

Number 45 is a quotation from a book of Mr. Churchill’s.

Number 47 is the report on a complaint to Lord Halifax about an article in _News Chronicle_ criticizing Hitler.

My Lord, Number 66 is rather different. If the Tribunal would be good enough to look at it, it is a report by a German lawyer, Dr. Mosier I think his name should be, who is an authority on international law, dealing with the Norway action. Dr. Siemers has been, of course, absolutely frank with me and he said that it would be convenient to him to have this, which is really a legal argument, embodied in his document book. Of course, that is not really the purpose of these document books; but, of course, it is a matter for the Tribunal, and we felt we had to draw attention to it.

Then, My Lord, Number 76 comes out.

Numbers 93 to 96 are quotations from Soviet newspapers.

Number 101 is a quotation from Havas, the French News Agency.

Numbers 102 to 107 are minor orders relating to the Low Countries which, the Prosecution submit, have no evidential value.

Then in the second group, there are a number of documents which, the Prosecution submit, are not relevant to any of the issues in the case.

THE PRESIDENT: Sir David, you didn’t deal with Number 109, did you?

SIR DAVID MAXWELL-FYFE: I am sorry, My Lord, it is on the second line. That is another legal argument, the effect of the war on the legal position of Iceland, which is a quotation from the _British Journal of Information in Public Law and International La_w.

THE PRESIDENT: All right.

SIR DAVID MAXWELL-FYFE: My Lord, the second group, the Prosecution submit, is irrelevant.

Number 22 is a Belgian decree of 1937 dealing with the possible evacuation of the civil population in time of war.

Number 39 is a French document of the Middle East.

Numbers 63 and 64 are two speeches, one by Mr. Emery and another by Mr. Churchill, dealing with the position in Greece at the end of 1940, some two months after the beginning of the Italian campaign against Greece.

Number 71 is an undated directive with regard to the study of routes in Belgium, which doesn’t seem to us to have any evidential importance.

Number 76 comes out as the _Altmark_.

THE PRESIDENT: Did you say 76 came out?

SIR DAVID MAXWELL-FYFE: Yes, My Lord, that is the _Altmark_. It is the same one that is in Number 71. I am sorry, My Lord, it should have been marked out.

Number 99 is the minutes of the ninth meeting of the combined Cabinet Council on the 27th of April 1940, and it deals with a suggestion of M. Reynaud with regard to the Swedish ore mines. As it was long after the Norway campaign and it was never, of course, acted upon in Norway, it seems to us to have no relevance for this Trial.

Numbers 102 to 107 I have dealt with under one. They have certain very small unimportant memoranda relating to the Low Countries.

Number 112 is a French document in which Paul Reynaud quotes a statement from Mr. Churchill that he will fight on to the end, which again doesn’t seem of much importance in 1946.

Now, My Lord, the next group are documents which were rejected by the Tribunal when applied for by the Defendant Ribbentrop. The first two deal with British rearmament and the others with the Balkans and Greece. The Tribunal will probably remember the group which they did reject in the Ribbentrop application; and the fourth group are other documents of the same series as those rejected by the Tribunal in the case of the Defendant Von Ribbentrop. The fifth group are really objectionable on the _tu quoque_ basis. I think they are entirely French documents which deal with proposals in a very tentative stage and which were arranged, but never followed out, with regard to the destruction of oil fields or the blocking of the Danube in the Middle East. My Lord, they are documents dated in the spring of 1940 and, as I say, they deal with the most tentative stages and were never put into operation. The plans were never in operation.

The sixth group are documents dealing with Norway, which were captured after the occupation of France. As I understand Dr. Siemers’ argument, it is not suggested that these documents were within the knowledge of the defendants at the time that they carried out the aggression against Norway; but it is stated that they had other information. Of course, as to their own information, we have not made any objection at all; and that these documents might be argued to be corroborative of their agents’ reports. Actually, as is shown by Document Number 83, to which we make no objection, they also deal with tentative proposals which were not put into effect and were not proceeded with; but in the submission of the Prosecution, the important matter must be what was within the knowledge of the defendants before the 9th of April 1940; and it is irrelevant to go into a large number of other documents which are only arguably consistent with the information which the defendants stated they had.

My Lord, I tried to deal with them very shortly because I made a promise to the Tribunal on the time, but I hope that I have indicated very clearly what our objections were.

DR. WALTER SIEMERS (Counsel for Defendant Raeder): Your Honors, it is extremely difficult to define my position with reference to so many documents, especially since I know that these documents have not yet been translated and that the contents, in the main, are therefore not known to those concerned. Therefore, I might point out that there is a certain danger in treating documents in this way. In part they are basic elements of my defense.

Therefore, I should like to state now that in dealing with these documents I shall be compelled, in order to give the reasons for the relevancy of this evidence, to point out those passages which I shall not need to read separately into the record, for as soon as the document book is ready they will be known to the Tribunal and can be read there.

I shall follow the order as outlined by Sir David. First of all, the first group, Document Numbers 9 and 10. The note submitted by Sir David to the Tribunal points out that the submission of these documents conflicts with the ruling given by the Tribunal on 29 March. In reply I should like to point out that this opinion of the Prosecution is an error. The ruling of the Tribunal said that no documents might be submitted concerning the injustice of the Versailles Treaty and the pressure arising from it. These documents do not concern the injustice and the pressure; rather they serve to give a few examples of the subjective attitude of a man like Noske, who was a Social Democrat and certainly did not want to conduct any wars of aggression. A few other statements in Numbers 9 and 10 show the thought of the Government and the ruling class at that time in regard to defensive measures and the fear that in case of an attack on the part of Poland, for instance, the German Armed Forces might be too weak. These are facts pure and simple; and I give you my express assurance that I shall not quote any sentences which might introduce a polemic. Moreover, I need this mainly as a basis for my final pleading.

Number 17 is a very brief excerpt from the book by Henderson, _Failure of a Mission_, written in 1940. I believe there are no objections to my quoting about 15 lines, if I wish to use them in my final pleading in order to show that Henderson, who knew Germany well, still believed in 1940 that he had to recognize certain positive good points in the regime at that time; and I believe that the conclusion is justified that one cannot expect that a German military commander should be more sceptical than the British Ambassador at that time.

Then we turn to Document Number 45. It is true this document is taken from a book by Churchill; but it deals with a fact which I should like to prove, the fact that already many years before World War I there existed a British Committee for Defense. In the table of contents which Sir David has submitted, the word “Reichsverteidigungsausschuss” is used, and I therefore conclude that this is a mistake on the part of the Prosecution who took it to mean a German Reich Defense Committee; that is not correct. This document shows how it came about that the Prosecution wrongly overestimated the importance of the German Reich Defense Committee, as the Prosecution naturally compared it with the British Committee for Defense, which went very much further in its activities.

Number 47 is evidence to show that when the German Embassy pointed out that an extremely scathing article on Hitler had appeared in the paper _News Chronicle_, Lord Halifax pointed out in reply that it was not possible for him to exert any influence on the newspaper. I should merely like to compare this with the fact that the Prosecution made it appear as though Raeder had had something to do with the regrettable article in the _Völkischer Beobachter_: “Churchill sank the _Athenia_.” Raeder was no more connected with that article than Lord Halifax with the article in the _News Chronicle_ and was unfortunately even more powerless, as far as this article was concerned, than the British Government.

Number 66 deals with the opinion given by Dr. Mosier, a specialist on international law, an opinion on the Norway action in very compressed form, as the Tribunal will surely admit. The Tribunal will also concede that in my defense of the Norway action I must speak at length about the underlying principles of international law. The underlying principles of international law are not an altogether simple matter. I have nothing against presenting this myself in all necessary detail. I was merely guided by the thought that the Tribunal have asked again and again that we save time. I believe that we can save considerable time if this statement of opinion is granted me, so that I shall not have to cite numerous excerpts and authors in detail in order to show the exact legal justification. I could then perhaps deal with the legal questions in half an hour, whereas without this statement of opinion it is utterly impossible for me to treat such a problem in half an hour. If the Prosecution do not object to more time being taken up, then I do not object if the document is denied me. I will merely have to take the consequences.

Number 76 has meanwhile been crossed out, that is, it is granted me by the Prosecution.

Numbers 93 to 96 are excerpts on statements of the official Moscow papers, _Isvestia_ and _Pravda_. These statements prove that, at least at that time, Soviet opinion regarding the legality of the German action in Norway coincided with the German opinion of that time. If the Tribunal think that these very brief quotations should not be admitted as documents, I would not be too insistent, since at this point in the proceedings I shall in any case be compelled to discuss it. The Tribunal will remember that at that time Germany and Russia were friends, and Soviet opinion on a purely legal problem should, at any rate, be considered as having a certain significance.

Then, Number 101; I beg your pardon, Sir David, but if I am not mistaken Dr. Braun said an hour and a half ago that Number 101 is to be rejected. Very well, then, Numbers 101 to 107. The action against Norway, as I have already said, involved a problem of international law. It involves the problem of whether one country may violate the neutrality of another country when it can be proved that another belligerent nation likewise intends to violate the neutrality of the afore-mentioned neutral state. When presenting my evidence I shall show that Grossadmiral Raeder, in the autumn of 1939, received all sorts of reports to the effect that the Allies were planning to take under their own protection the territorial waters of Norway, that is, to land in Norway, in order to have Norwegian bases. When I deal with the Norway documents, I shall return to this point. I should like to say at this point that it is necessary to explain and to prove that the legal attitude taken by the Allies to the question of the possible violation of the neutrality of a country was in the years 1939 and 1940 entirely the same as the attitude of the Defendant Raeder in the case of Norway at the same time.

Therefore it is necessary not only to deal with Norway; but also to show that this was a basic conception, which can readily be proved by reference to parallel cases on the strength of these documents. These parallel cases deal in the first place with the plans of the Allies with respect to the Balkans, and secondly with the plans of the Allies with respect to the Caucasian oil fields.

Your Honors, it is by no means my intention, as Sir David has suggested, to use these documents from the _tu quoque_ point of view, from the point of view that the defendant has done something, which the Allies have also done or wanted to do. I am concerned only with a judgment of the Defendant Raeder’s actions from the legal point of view. One can understand such actions only when the entire matter is brought to light.

It is my opinion—and in addition to this I should like to refer to the statement of Dr. Mosier’s opinion, Exhibit Raeder-66—that this cannot be made the subject of an accusation.

We are concerned, Your Honors, with the right of self-preservation as recognized in principle by international law. In this connection I should like...

THE PRESIDENT: Dr. Siemers, we don’t want to go into these matters in great detail, you know, at this stage. If you state what your reasons are in support and state them shortly, we shall be able to consider the matter.

DR. SIEMERS: I am very sorry that I have to go into these details, but if through the objection of the Prosecution the principles...

THE PRESIDENT: The Tribunal do not wish to hear you in detail. I have said that the Tribunal do not wish to hear you in detail.

DR. SIEMERS: I merely ask that the Tribunal take into consideration the fact that this concerns the principle of international law laid down by Kellogg himself in 1928, namely, the right of self-preservation, or “the right of self-defense.” For that reason 1 should like to adduce these documents showing that just as the Allies acted quite correctly according to this principle, so also did the Defendant Raeder.

Document Number 22 is next. I have given various statements of principle which apply to a large number of the remaining documents, so that I can refer to the statements I have already made. These statements also apply to Documents Numbers 22 and 39.

As far as Documents Numbers 63 and 64 are concerned, I should like to point out that these documents deal with Greece; and not only these two, but also a later group of perhaps 10 or 12 documents, with which I should like to deal very briefly.

As far as Greece is concerned, the situation is as follows:

I must admit that I was more than surprised that the Prosecution objected to these documents, about 14 in all. In Document Number C-12, Exhibit Number GB-226, the Prosecution accuse Raeder of having decreed on 30 December 1939; and I quote, “Greek merchantmen in the prohibited area declared by the United States and England are to be treated as enemy ships.” The accusation would be justified, if Greece had not behaved in such a manner that Raeder had to resort to this order.

If the documents concerning Greece which show that Greece did not strictly keep to her neutrality are struck out, then I cannot bring any counterevidence. I do not believe that it is the intention of the Prosecution to restrict my presentation of evidence in this way.

These are all documents which date back to this time and which show that Greece put her merchantmen at the disposal of England who was at war with Germany. Therefore they could be treated as enemy ships.