Chapter III: Front Matter (3)

“I had a biography of Dr. Schacht published twice, first at the
end of 1933 by the Publishing House R. Kittler in Berlin, and at
the end of 1936 by the German Publishing Institute in Stuttgart.
Besides its being a factual presentation of his life and his
work, it also served the purpose of shielding him from his
attackers. Therefore the principles of purely objective
historical research are not applicable to this publication,
because defensive views required by the situation at the time
has to be taken into consideration.”

This must be known and read before one can estimate the evidential value of that biography.

And that concludes my questions.

THE PRESIDENT: The defendant can then retire.

DR. DIX: I now call the witness Vocke with Your Lordship’s permission.

[_The witness Vocke took the stand._]

THE PRESIDENT: Will you state your full name?

WILHELM VOCKE (Witness): Wilhelm Vocke.

THE PRESIDENT: Will you repeat this oath after me: I swear by God—the Almighty and Omniscient—that I will speak the pure truth—and will withhold and add nothing.

[_The witness repeated the oath in German._]

THE PRESIDENT: You may sit down.

DR. DIX: Herr Vocke, you were a member of the Directorate of the Reichsbank. When did you enter the Reichsbank Directorate, and when did you resign from it?

VOCKE: Reich President Ebert appointed me a member of the Reichsbank Directorate in 1919, and Hitler dismissed me from office on 1 February 1939. Therefore, I was for about 20 years a member of the Reichsbank Directorate, and for 10 of these years I was under Schacht.

DR. DIX: Excuse me, but I must ask you, were you a member of the Party?

VOCKE: No.

DR. DIX: Were you a member of the SA?

VOCKE: No.

DR. DIX: Were you a member of the SS?

VOCKE: No.

DR. DIX: Were you a sponsoring member of the SA or SS?

VOCKE: No.

DR. DIX: You had no connection with the Party?

VOCKE: No.

DR. DIX: When did you meet Schacht?

VOCKE: In 1915. I merely made his acquaintance then, but it was not until he became Reichsbank Kommissar and Reichsbank President, that I came to know him better.

DR. DIX: I come now to the period of the first Reichsbank presidency of Schacht, that is, the year 1923. At that time what was the attitude of the Reichsbank Directorate to the candidature of Schacht as Reichsbank President?

VOCKE: A disapproving attitude.

DR. DIX: And for what reason?

VOCKE: We wanted Helferich as candidate for the presidency of the Reichsbank, because Helferich, in close co-operation with the Reichsbank, had created the Rentenmark and stabilization of currency.

But as reason for our disapproval of Schacht, we mentioned an incident contained in Schacht’s dossier which referred to his activity under Herr Von Jung in 1915. According to this, Schacht, who had come from the Dresdner Bank, had rendered assistance to the Dresdner Bank which Von Jung did not consider quite correct, and that was the reason for Schacht’s dismissal at that time.

The Reich Government, however, did not heed the criticism which we made against Schacht, and as Minister Severing told me recently, he followed the proverb, “It is not the worst fruit which is eaten by worms,” and Schacht was appointed President.

DR. DIX: So that Schacht came to you as President, and he must have known that the Directorate did not want him, or at any rate wanted somebody else. Therefore, I assume the question is in order as to what the relations were among that group, that is, the Reichsbank Directorate and the new President.

VOCKE: Schacht took up his office in January 1924. He called us all to a meeting in which he spoke very frankly about the situation, and this was the substance of what he said: Well, you disapproved of me for President because I stole silver spoons; but now I am your President, and I hope that we will work together, and we will get to see eye to eye—that was the expression used by Schacht—however, if one or another of you feels that he cannot work with me, well, then he will have to take the consequences, and I will gladly assist him to find another position.

Our relations with Schacht soon became good and we worked together successfully. It was very good to work with Schacht. We quickly recognized that he was an unrivalled expert in his and our branch, and also in other respects his conduct was beyond reproach. He was clean in his dealings and there was no nepotism. Neither did he bring with him any men whom he wanted to push. Also he was a man who at all times tolerated controversy and differing opinions—he even welcomed them. He had no use for colleagues who were “yes men.”

THE PRESIDENT: There is neither any charge nor any issue about this.

DR. DIX: That is quite correct, Your Lordship, but I thought it would be helpful to touch upon these things. But we are now at the end, and will come to the Reichsbank presidency from 1933 on.

[_Turning to the witness._] After his short period of retirement Schacht again became President of the Reichsbank in 1933. Did you have any conversations with him about his relations to Hitler and to the Party?

VOCKE: Yes.

DR. DIX: Would you like to describe to the Tribunal the kind of statements Schacht made to you?

VOCKE: First, I would like to mention two conversations which I remember almost word for word. During the period when Schacht was not in office, that is about three years, I hardly ever saw him, maybe three or four times at occasions at the Wilhelmstift. He never visited me, nor did I visit him, except once, when Schacht came into the bank—maybe he had some business there—and visited me in my office. We at once...

DR. DIX: When was that?

VOCKE: That must have been in 1932, a comparatively short time before the seizure of power. We immediately began to speak about political questions, about Hitler and Schacht’s relations to Hitler. I used that opportunity to warn Schacht seriously against Hitler and the Nazis. Schacht said to me: “Herr Vocke, one must give this man or these people a chance. If they do no good, they will disappear. They will be cleared out in the same way as their predecessors.”

I told Schacht: “Yes, but it may be that the harm done to the German people in the meantime will be so great that it can never be repaired.”

Schacht did not take that very seriously, and with some light remark, such as: You are an old pessimist, or something like that, he left.

The second conversation about which I want to report took place shortly after Schacht’s re-entry into the bank. It was probably in March 1933, or the beginning of April. Schacht at that time showed a kind of ostentatious enthusiasm, and I talked to him about his relation to the Party. I assumed that Schacht was a member of the Party. I told him that I had no intention of becoming a member of the Party, and Schacht said to me: “You do not have to. You are not supposed to. What do you think? I would not even dream of becoming a member of the Party. Can you imagine me bending under the Party yoke, accepting the Party discipline? And then, think of it, when I speak to Hitler I should click my heels and say, ‘Mein Führer,’ or when I write to him address him as ‘Mein Führer.’ That is quite out of the question for me. I am and remain a free man.”

That conversation took place and those words were spoken by Schacht at a time when he was at the apex of a rapprochement with Hitler, and many a time I have thought about it, whether it was true, and remained true, that Schacht was a free man.

As things turned out, after a few years Schacht was forced to realize to his sorrow that he had lost a great deal of his freedom, that he could not change the course of the armaments financing scheme, upon which he had embarked, when he wished to do so; that it had become a chain in the hands of Hitler and that it would take years of filing and tugging for it to break.

But, in spite of that, his words were true inasmuch as they reflected the inner attitude of Schacht towards Hitler. Schacht never was a blind follower. It was incompatible with his character, to sign himself away to somebody, to sell himself and follow with blind devotion.

If one should seek to characterize Schacht’s attitude to Hitler thus: My Führer, you command, I follow; and if the Führer ordered him to prepare an armament program: I will finance an armament program, and it is for the Führer to decide to what use it shall be put, whether for war or peace—that would be incompatible with Schacht’s attitude and character. He was not a man who thought along subaltern lines or who would throw away his liberty; in that Schacht differed fundamentally from a great many men in leading political and military positions in Germany.

Schacht’s attitude, as I came to know it from his character and from his statements, could be explained somewhat as follows: Schacht admired this man’s tremendous dynamic force directed towards national aims, and he took account of this man, hoping to use him as a tool for his own plans, for Schacht’s plans towards a peaceful political and economic reconstruction and strengthening of Germany. That is what Schacht thought and believed, and I take that from many statements made by Schacht...

DR. DIX: That, I think, answers the question fully. Now the Prosecution accuses Schacht and alleges that Hitler picked out Schacht to finance armament for an aggressive war. You, Herr Vocke, were a member of the Reichsbank Directorate and you worked with him during all those years. Therefore, I ask you to tell the Tribunal whether anything transpired in the course of conversations, or whether you noticed anything about Schacht’s activities and work which would justify such a reproach.

VOCKE: No. Schacht often expressed the view that only a peaceful development could restore Germany and not once did I hear him say anything which might suggest that he knew anything about the warlike intentions of Hitler. I have searched my memory and I recall three or four incidents which answer that question quite clearly. I should like to mention them in this connection.

The first was the 420 million gold mark credit which was repaid in 1933. Luther, when the Reichsbank cover disintegrated in the crisis...

DR. DIX: May I interrupt for the information of the Tribunal: Luther was Schacht’s predecessor.

VOCKE: ...in 1931 when the cover for the issue of notes had to be cut down, Luther in his despair sent me to England in order to acquire a large credit in gold from the Bank of England which would restore confidence in the Reichsbank. Governor Norman was quite prepared to help me, but he said that it would be necessary for that purpose to approach also the Federal Reserve Bank of New York, the Bank of France, and the International Bank in Basel. That was done and the credit amounted to 420 million gold marks, but the inclusion of the Bank of France created political difficulties which delayed the credit for about 10 or 12 days.

When I returned to Berlin I was shocked to hear that the greater part of the credit had already been used up. The gold was torn from our hands, and I told Luther: The credit has lost its usefulness and we must repay it immediately. Our honor is our last asset. The banks which have helped us shall not lose a single pfennig.

Luther did not have sufficient understanding for that, and he said in so many words: What one has, one holds. We do not know for what purpose we may still have urgent need of the gold. And so the credit was extended and dragged out over years.

When Schacht came to the bank in 1933, I told myself that Schacht would understand me, and he did understand me immediately. He agreed with me and repaid that credit without hesitation. It never entered his head for what other purpose one might use that enormous sum of gold, and I say here that if Schacht had known of any plans for a war, he would have been a fool to pay back 420 million gold marks.

As to the second incident, I cannot give the exact date, but I believe it was in 1936. The Reichsbank received a letter from the Army Command or the General Staff marked “Top Secret,” with the request to remove the gold reserves of the Reichsbank, the securities and bank note reserves from the frontier regions of Germany to a zone in the interior. The reasons given were the following: In the event of a threat to attack Germany on two fronts, the Army Command had decided to evacuate the frontier areas and to confine itself to a central zone which could be defended under all circumstances. I still remember from the map which was attached to the letter that the line of defense in the East...

THE PRESIDENT: It seems to the Tribunal that this is very remote from any question we have to decide.

DR. DIX: Your Lordship, that map which the witness wants to describe shows clearly and beyond doubt that the attitude of the German High Command in 1936 was a defensive attitude and one which accepted the greatest strategic disadvantages, and this was communicated to the Reichsbank under the presidency of Schacht. We can see from that communication that nobody at that time even thought of aggressive intentions of the Army Command.

THE PRESIDENT: At what time?

DR. DIX: 1936, I understood him to say that. Perhaps it is better that he should give you the date.

VOCKE: I cannot say exactly what the date was, but it must have been about 1936, in my estimation.

DR. DIX: I believe that it is rather relevant. May the witness continue?

THE PRESIDENT: Yes.

VOCKE: The line of defense in the East went from Hof straight up to Stettin; I cannot remember so well where the western line was drawn, but Baden and the Rhineland were outside of it.

The Reichsbank was shocked to hear that and about the threat of a two-front attack on Germany and the tremendous sacrifice of German territory. It was also shocked at the idea that the Reichsbank, in the event of an occupation of these regions by the enemy, would have to leave these occupied territories without any financial support. Therefore we refused the last-mentioned request, but, as far as the gold was concerned, we placed it in Berlin, Munich, Nuremberg, and so on.

We could no longer have any doubt, however, after this top secret document, about the defensive character of our armaments and preparations.

I come to a third incident. That was in 1937. At that time, when the economy was already racing ahead and more and more money was being put up, Schacht asked for the support of the German professors of economy and called them together to persuade them to work along his lines, that is, to try to check this trend. At that meeting one of those present asked Schacht the question: “What will happen if war breaks out?” Schacht got up and said: “Gentlemen, then we are lost. Then everything is over with us. I ask you to drop this subject. We cannot worry about it now.”

Now I come to the fourth incident, which also leaves no doubt about Schacht’s attitude or the completeness of his information. That was a conversation immediately after the outbreak of the war. In the first few days Schacht, Huelse, Dreyse, Schniewind and I met for a confidential talk. The first thing Schacht said was: “Gentlemen, this is a fraud such as the world has never seen. The Poles have never received the German offer. The newspapers are lying in order to lull the German people to sleep. The Poles have been attacked. Henderson did not even receive the offer, but only a short excerpt from the note was given to him verbally. If at any time at the outbreak of a war, the question of guilt was clear, then it is so in this case. That is a crime the like of which cannot be imagined.”

Then Schacht continued: “What madness to start a war with a military power like Poland, which is led by the best French general staff officers. Our armament is no good. It has been made by quacks. The money has been wasted without point or plan.”

To the retort: “But we have an air force which can make itself felt,” Schacht said: “The air force does not decide the outcome of a war, the ground forces do. We have no heavy guns, no tanks; in three weeks the German armies in Poland will break down, and then think of the coalition which still faces us.”

Those were Schacht’s words and they made a deep impression on me; for me they are a definite and clear answer to the question which Dr. Dix put to me.

DR. DIX: Now, in the course of those years from 1933 to 1939 did Schacht ever speak to you about alleged or surmised war plans of Hitler?

VOCKE: No, never.

DR. DIX: What was Schacht’s basic attitude to the idea of a war; did he ever mention that to you?

VOCKE: Yes, of course, fairly often. Schacht always emphasized that war destroys and ruins both the victor and the vanquished, and, in his and our field, he pointed to the example of the victorious powers whose economy and currency had been devaluated and partly even crippled. England had to devaluate her currency; in France there was a complete breakdown of the financial system, not to speak of other powers such as Belgium, Poland, Romania, and Czechoslovakia.

DR. DIX: Schacht made these statements?

VOCKE: Yes, he did, and quite frequently. Schacht went into detail and was very definite about the situation in neutral countries. Schacht said again and again: There will be conflicts and war again, but for Germany there is only one policy, absolute neutrality. And he quoted the examples of Switzerland, Sweden, and so on, who by their neutral attitude had grown rich and more powerful and become creditor nations. Schacht again and again emphasized that very strongly.

DR. DIX: In that connection you will understand my question. How can you explain then, or rather, how did Schacht explain to you the fact that he was financing armament at all?

VOCKE: Schacht believed at that time that a certain quantity of armaments, such as every country in the world possessed, was also necessary for Germany for political...

DR. DIX: May I interrupt you. I want you to state only the things which Schacht told you; not your opinions about what Schacht may have thought, but only what Schacht actually said to you.

VOCKE: Yes. Schacht said a foreign policy without armament was impossible in the long run. Schacht also said that neutrality, which he demanded for Germany in case of conflict between the big powers, must be an armed neutrality. Schacht considered armaments necessary, because otherwise Germany would always be defenseless in the midst of armed nations. He was not thinking of definite attack from any side, but he said that in every country there was a militarist party which might come to power today or tomorrow, and a completely helpless Germany, surrounded by other nations, was unthinkable. It was even a danger to peace because it was an incentive to attack her one day. Finally, however, and principally Schacht saw in armaments the only means of revitalizing and starting up German economy as a whole. Barracks would have to be built; the building industry, which is the backbone of economy, must be revitalized. Only in that way, he hoped, could unemployment be tackled.

DR. DIX: Now, events led to the militarization of the Rhineland, the reintroduction of compulsory military service. Did you have conversations with Schacht in which he said that if this policy of Hitler was pursued it might lead to a war, at least to an armed intervention by other nations which did not approve of such policies? Were there any such conversations between you and Schacht?

VOCKE: Not in the sense of your question. Schacht did speak to me about the incidents when the Rhineland was reoccupied, that is to say, he explained to me how at that time Hitler, as soon as France adopted a somewhat menacing attitude, was resolved to withdraw his occupation forces—Hitler had climbed down—and how he was only prevented in this by Herr Von Neurath, who said to him: “I was against that step, but now that you have done it, it will have to stand.” What Schacht told me at that time about Hitler’s attitude was that Hitler would do anything rather than have a war. Schacht also felt this, as he told me, when he mentioned the friendship with Poland, the renunciation of his claim to Alsace-Lorraine, and, in particular, Hitler’s policy during the first years, all of which was a peaceful policy. Only later did he begin to have misgivings as regards foreign policy.

DR. DIX: What were Schacht’s principles and ideas in foreign policy and how did these line up with his attitude to Hitler’s foreign policy?

VOCKE: He definitely disapproved, especially, of course, since Ribbentrop had gained influence in foreign politics; Schacht saw in him the most incapable and irresponsible of Hitler’s advisers. But already before that there were serious differences of opinion between Schacht and Hitler on foreign policy.

For instance, as regards Russia: Already from 1928-29 onwards Schacht had built up a large trade with Russia by long term credits which helped the economy of both countries. He has often been attacked on account of that, but he said: “I know what I am doing. I also know that the Russians will pay punctually and without bargaining. They have always done it.” Schacht was very angry and unhappy when Hitler’s tirades of abuse spoiled the relations with Russia and brought this extensive trade to an end.

Also, with regard to China, Schacht was convinced of the importance of trade with China and was just about to develop it on a large scale, when Hitler, by showing preference to Japan and recalling the German advisers to Chiang Kai-Shek, again destroyed all Schacht’s plans. Schacht saw that this was a fatal mistake and said that Japan would never be able nor willing to compensate us for the loss of trade with China.

Also Schacht always advocated close co-operation with the United States, with England, and with France. Schacht admired Roosevelt and was proud of the fact that Roosevelt, through the diplomat Cockerill, kept in constant touch with him. Schacht was convinced of the necessity of remaining on the best terms with England and France and for that very reason he disapproved of Ribbentrop being sent to London and actively opposed this plan.

Schacht was against Hitler’s policy towards Italy. He knew that Mussolini did not want to have anything to do with us, and he considered him the most unreliable and the weakest partner.

With regard to Austria, I know only that Schacht thought highly of Dollfuss and was horrified and shocked when he heard of his murder. Also after the occupation of Austria, he disapproved of much that happened there.

May I, in this connection, say a word about Schacht’s colonial policy, which was a sort of hobby of Schacht’s, and about which he once gave a lecture? I can best illustrate Schacht’s views by telling you about the orders which he gave me. Schacht’s idea was to make an arrangement with England, France, _et cetera_, whereby these powers should purchase part of the Portuguese colony of Angola and transfer it to Germany, who would not exercise any sovereign rights, but would exploit it economically; and he had experts’ opinions...

THE PRESIDENT: Dr. Dix, the Tribunal thinks that this is being given in far too great length.

DR. DIX: Well, we can leave out the individual examples. The late Field Marshal Von Blomberg made a statement to the effect that the Reichsbank received every year from the Reichswehr Ministry a written communication about the state of the armaments. Do you, who were a member of the Directorate, know anything about this communication?

VOCKE: No, I have never heard anything about it.

DR. DIX: From the whole of your experience in the Reichsbank and your experience with Schacht’s attitude to his colleagues, do you consider it possible that Schacht personally received that information, but did not pass it on to any of his colleagues in the Reichsbank Directorate?

VOCKE: It may be, but I consider it highly improbable.

DR. DIX: Now, when did Schacht start to try to stop the financing of armaments and thereby check rearmament; and, if he did try, and if you can affirm it, what were his reasons?

VOCKE: Schacht made the first attempts to limit armaments, I believe, about 1936, when economy was running at top speed and further armament seemed an endless spiral. The Reichsbank was blocked and, I believe, in 1936, Schacht himself started making serious attempts to put an end to armaments.

DR. DIX: And do you know from your own experience what these attempts were?

VOCKE: These attempts continued throughout the following years: First, Schacht tried to influence Hitler and that proved to be in vain. His influence decreased as soon as he made any such attempt. He tried to find allies in the civic ministries, and also among the generals. He also tried to win over Göring, and he thought he had won him over, but it did not work. Schacht then put up a fight and at last he succeeded in stopping the Reichsbank credits for armaments. That was achieved at the beginning of March 1938. But that did not mean that he discontinued his efforts to stop rearmament itself, and he continued to use every means, even sabotage.

In 1938 he issued a loan at a time when he knew that the previous loan had not yet been absorbed—when the banks were still full of it; and he made the amount of the new loan so big that it was doomed to failure. We waited eagerly to see whether our calculations were correct. We were happy when the failure became obvious and Schacht informed Hitler.

Another way in which he tried to sabotage armaments was when the industries which applied for loans to expand their factories were prohibited from doing so by Schacht, and thus were prevented from expanding. The termination of the Reichsbank credit did not only mean that the Reichsbank could no longer finance armaments, but it dealt a serious blow to armament itself. This was shown in 1938, when financing became extremely difficult in all fields and, upon Schacht’s resignation, immediately reverted to the direct credits of the issuing bank, which was the only means of maintaining elastic credit, perpetual credit, so to speak, which Hitler needed and could never have received from Schacht.

I know that from my personal recollection, because I protested against that law which was put to me and which Hitler issued after Schacht’s dismissal. I said to the Vice President: I am not going to have anything to do with it.

Thereupon, I was immediately dismissed ten days after the dismissal of Schacht.

DR. DIX: Well, Herr Vocke, for an outsider the motive for stopping the financing of armaments might have been purely economic. Have you any grounds, have you any experience which shows that Schacht was now also afraid of war, and wanted to prevent a war by this stoppage of credit?

VOCKE: Yes. At any rate, in 1938 the feeling that this tremendous armaments program which had no limits would lead to war became stronger and stronger, especially after the Munich Agreement. In the meantime Schacht had realized, and I think the Fritsch affair had made it very clear to him, that Hitler was the enemy, and that there was only one thing to do; that was to fight against Hitler’s armament program and warmongering by every possible means. These means, of course, were only financial, such as the sabotage, _et cetera_, as I have already described. The final resort was the memorandum by which Schacht forced his resignation.

DR. DIX: We will speak later about that. May I ask you another question? The Tribunal knows about the method of financing this credit, namely, by mefo bills, so you need not say anything about that. What I want to ask you is now, in your opinion as a lawyer, could the financing of armaments by these mefo bills be reconciled with banking law?

VOCKE: The mefo bills and the construction of that transaction had, of course, been legally examined beforehand; and the point of their legality had been raised with us, and the question as to whether these bills could be brought under banking law had been answered in the affirmative. The more serious question, however, was whether these bills fulfilled the normal requirements which an issuing bank should demand of its reserves. To that question, of course, the answer is definitely “no.”

If one asks, why did not the bank buy good commercial bills instead of mefo bills, the answer is that at that time there had been no good commercial bills on the market for years—that is, since the collapse due to the economic crisis. Already under Brüning schemes for assisting and restoring economy and credit had been drawn up, all of which followed similar lines, that is, they were sanctioned according to their nature as normal credits along the lines of a semipublic loan; for the Bank was faced with the alternative of standing by helplessly and seeing what would happen to the economy or of helping the Government as best it could to restore and support the economy. All issuing banks in other countries were faced with the same alternative and reacted in the same manner. Thus the armaments bills, which, economically speaking, were nothing more than the former unemployment bills, had to serve the same purpose. From the point of view of currency policy the Reichsbank’s reserves of old bills, which had been frozen by the depression, were again made good.

All the regulations under banking law, the traditional regulations concerning banking and bills policy, had only one aim, namely, to avoid losses.

DR. DIX: I believe, Herr Vocke, it will be sufficient for the Tribunal if you could confirm that in the end the legal experts of the Reichsbank pronounced the mefo bills to be legal. The reasons for this, if Your Lordship agrees, we can omit.

Now we come to the memorandum which you have already mentioned. I want you to describe to the Tribunal the reasons which caused the Reichsbank Directorate, with Schacht at the head, to submit that memorandum to Hitler, and what the tactical purposes were which the Directorate, and therefore Schacht, hoped to achieve by that memorandum.

VOCKE: If we had been able to speak frankly, of course, we would have said: You must stop armaments. But the Reichsbank itself could not do this. Instead, we had to limit ourselves to the question of our responsibility for the currency. Therefore, the Reichsbank memorandum dealt with the question of currency. It said: If the financing of armaments is continued, German currency will be ruined and there will be inflation in Germany.

The memorandum also spoke of limitless credits, of unrestrained expansion of credits, and unrestrained expenditure. By expenditure we meant armaments. That was quite clear.

THE PRESIDENT: We have all seen the memorandum, have we not?

DR. DIX: He is not speaking about the contents of the memorandum, but of the reasons, the tactical reasons.

[_Turning to the witness._] You understand, Herr Vocke, the Tribunal knows the text of the memorandum, so please confine yourself to what I have asked you.

VOCKE: The memorandum had to deal with the question of currency, but at the same time, we made quite clear what we wanted: Limitation of foreign policy. That shows clearly what we wanted: Limitation of expenditure, limitation of foreign policy, of foreign policy aims. We pointed out that expenditure had reached a point beyond which we could not go, and that a stop must be put to it. In other words, the expenditure policy, that is the armaments program must be checked.

DR. DIX: Now tell us, did you anticipate the effect that that memorandum would have on Hitler? What did you expect, tactically?

VOCKE: Either the memorandum would result in a halt of this intolerable expenditure which had brought us to ruin—for at the end of 1938 there was no more money available, instead there was a cash deficit of nearly 1,000 million. That had to be faced, and the Minister of Finance was on our side. If this was not recognized, then the smash would come and we would have to be released. There was no other alternative. We took the unusual step of getting the whole Directorate to sign this document.

DR. DIX: That, in my experience, is quite unusual, because generally an official document of the Reichsbank is signed by the President or his deputy, is it not?

VOCKE: That is true. We wanted to stress that the entire Directorate unanimously approved this important document which was to put an end to armaments.

DR. DIX: That, Witness, is clear. Have you any reason for believing that Hitler recognized that fact?

VOCKE: Yes, Hitler said something to the effect that that would be “mutiny.” I think that is the word they use in the Army. I have never been a soldier, but I think that when a complaint is signed by several soldiers, it is looked upon as mutiny. Hitler had the same ideas.

DR. DIX: Yes, something like that does exist. But you were not present there. Who told you about that expression “mutiny”?

VOCKE: I cannot remember that any more. I believe it was Herr Berger of the Finance Ministry. But I cannot say exactly.

DR. DIX: So there was talk about this expression in ministerial circles?

VOCKE: Yes.

DR. DIX: Now, that memorandum also contained a compliment to Hitler, a reference to his success in foreign policy.

VOCKE: Yes, Schacht had adopted the habit of using flattery in his dealings with Hitler. The greater an opponent of the Hitler regime Schacht became, the more he made use of this flattery. Therefore, in that memorandum, at any rate at the beginning where he spoke of Hitler’s successes, he also used those tactics.

DR. DIX: And what was the consequence of that memorandum? Please tell us briefly.

VOCKE: The result was that first Schacht was dismissed, then Kreide and Huelse, then I, Erhard, and Lessing. The result, however, was that they knew abroad what things had come to in Germany. My colleague Huelse had made unequivocal statements in Basel, and said that if we should be dismissed, then our friends would know to what pass things had come.

DR. DIX: Did Herr Huelse tell you that?

VOCKE: Yes, Huelse told me that.

DR. DIX: Your Lordship, shall we make a short pause here? I have not much more, but I still have the documentary evidence.

THE PRESIDENT: How much longer do you think you will take before you finish?

DR. DIX: It is very short and then the documentary evidence is also very short. Shall I continue?

THE PRESIDENT: The Tribunal will adjourn.

[_A recess was taken._]

DR. DIX: Now, Witness, you have described to the Tribunal how that dismissal of Schacht and yourself came about. Why did Schacht not take that step before? Did he talk to you about it?

VOCKE: No. Throughout the years 1936 and 1937 we could not make up our minds. At first there was still hope that Hitler would steer a reasonable course as a statesman. Finally, in 1938, we reached a crisis, particularly in connection with the Munich Agreement and then after the Munich Agreement. Then, indeed, there was real anxiety that things would lead to war, and we then saw that we had to force the decision.

However, one has to consider the following: As a bank we could not bring up political or military arguments or demands which were not within our competence. The danger of inflation, which we had stressed in that memorandum, did not show until 1938, when the note circulation during the last ten months had increased enormously—more than throughout the five preceding years.

DR. DIX: So that it was not until that year that, let us say, a pretext, a means, was found to take that leap?

VOCKE: Yes.

DR. DIX: Now I will end with a general question. The high intelligence of Dr. Schacht is not disputed—that he was disappointed in Hitler and deceived by him, he says himself. You yourself, with your knowledge of Schacht’s personality must probably have had your own ideas as to how this mistake on the part of Schacht could be explained, how he could have been so deceived. Therefore, if the Tribunal permits, I should be grateful if you could give us your personal impressions about it, but...

MR. JUSTICE JACKSON: Your Honor, may I make an objection? I do not understand how the operations of Dr. Schacht’s mind can be explained by someone else. I have had no objection to any facts which this witness has known. We have even let him detail here at great length private conversations. However, speculation on Schacht’s mental operations, it seems to me, is beyond the pale of probative evidence.

THE PRESIDENT: Dr. Dix, as I think I have said before, you cannot give by one witness the thoughts of another man; you can only give his acts and his statements.

DR. DIX: Yes, Your Lordship. When I put the question, I said “if the Tribunal permits.” I, too, was aware of the question of admissibility...

THE PRESIDENT: You have the answer now: The Tribunal does not allow it.

DR. DIX: Then we will leave that question. May I ask Your Lordship this? Of course, I can still put questions about the treatment of the Jews by Schacht. I personally think that this chapter has been dealt with so exhaustively that it is not necessary for this witness to give us more examples of the attitude of Schacht. I would only ask to be permitted to put the same question concerning the Freemasons, because nothing has been stated about that.

[_Turning to the witness._] Do you know anything about the treatment of Freemasons or the attitude of Schacht to Freemasons?

VOCKE: Yes. The Party demanded that the Freemasons should be eliminated from the Civil Service. Schacht said: “I refuse to let anybody tell me what to do. Everybody knows that I myself am a Freemason; how can I take action against officials simply because they belong to the Order of Freemasons?” And as long as Schacht was in office he kept Freemasons in office and promoted them.

DR. DIX: Now, one last question. Do you know whether Schacht ever received any gifts or had any economic advantages during Hitler’s time beyond his regular income as an official?

VOCKE: No; that was quite out of the question for Schacht. Besides, he was never offered gifts. In all his dealings, as far as money was concerned, he was absolutely clean and incorruptible. I can give examples. For instance, when he left in 1930 he reduced his pension to less than half the pension of the vice president or of any board member. He said: “These people have devoted their whole life to the bank, whereas I have given only a few years incidental service.” I could give more examples of Schacht’s absolute correctness in that respect.

DR. DIX: I believe, if the Tribunal does not wish so, it will not be necessary to give further examples. That brings me to the end of my interrogation of this witness.

THE PRESIDENT: Does any other counsel for the defense wish to ask any questions?

DR. GUSTAV STEINBAUER (Counsel for Defendant Seyss-Inquart): Witness, do you remember the financial-political measures on the occasion of the annexation of Austria in March 1938; that is to say, in general terms?

At that time two laws were issued, both of 17 March 1938, one concerning the conversion of schillings into marks, and the other for the taking over of the Austrian National Bank by the Reichsbank.

Dr. Schacht, as a witness, stated yesterday that on 11 March he was asked what exchange rate he would consider correct in the event of an entry into Austria, and he answered that question by saying that according to the latest market rate two schillings for one Reichsmark would be correct.

After the Anschluss, my client, Dr. Seyss-Inquart, objected to the under-valuation of the schilling, and he succeeded in getting the schilling converted at 1.50 to the Reichsmark. Is that correct?

VOCKE: Before the entry into Austria I had not heard of any ratio being fixed by the Reichsbank Directorate. They were entrusted with that question only after the entry into Austria, and as experts and bankers they proposed a ratio which was in accordance with the conditions; and only a slight modification was made for the exchange. It was for the Government to make concessions, if it wanted to win over the Austrian population or make it favorably inclined.

DR. STEINBAUER: The second law deals with the Austrian National Bank. The witness Dr. Schacht has said today that the Austrian National Bank was not liquidated, but—as he expressed himself—amalgamated. I have looked up that law and it states expressly in Paragraph 2 that the Austrian National Bank was to be liquidated. That is Document Number 2313-PS. Now I ask you, Witness, do you know anything about it? Was the Austrian National Bank left in function as an issuing bank, or was it liquidated?

VOCKE: The right to issue notes in Austria, of course, went to the Reichsbank, which, as far as I know, took over the Austrian National Bank in Vienna and carried it on. I do not remember any details. My colleague Kesnick took care of that.

DR. STEINBAUER: But maybe you will remember if I quote from the official reports of the Austrian National Bank that the gold reserve of the Austrian National Bank in March 1933 amounted to 243 million schillings in gold and the foreign currency reserve to 174 million schillings, which means that roughly over 400 million schillings in gold were taken over by the Reichsbank from the Austrian National Bank.

VOCKE: I do not recall these facts any more; but if it was done, it was done by law, by the Government.

DR. STEINBAUER: Yes. I have that law of 17 March. I just wanted to correct a mistake which Herr Schacht must have made today unintentionally. The law he himself signed says “shall be liquidated.” I have no other questions.

DR. LATERNSER: Witness, you said earlier that the fundamental difference between Dr. Schacht and the high military leaders was that he remained a free man in his attitude to the regime. I want to ask you now, since that statement seems to imply an opinion of the high military leaders: Which of the high military leaders do you know personally?

VOCKE: Not a single one.

DR. LATERNSER: Then would you maintain that opinion?

VOCKE: In our circle of the Reichsbank Herr Keitel and other gentlemen were considered too servile and too acquiescent toward Hitler.

DR. LATERNSER: But since you had no personal acquaintance with these people do you think that you can express a somewhat critical opinion on them, as you have done?

VOCKE: Yes, I think so.

DR. LATERNSER: I have no further questions.

THE PRESIDENT: Do any of the other counsel wish to cross-examine?

MR. JUSTICE JACKSON: Witness, when you met Dr. Schacht first, as I understood it, it was on the occasion of an official visit which you paid to Von Lumm in Brussels?

VOCKE: Yes.

MR. JUSTICE JACKSON: During the first years of the first World War?

VOCKE: Yes.

MR. JUSTICE JACKSON: Schacht then held some position on Von Lumm’s staff?

VOCKE: Yes.

MR. JUSTICE JACKSON: What was his position, Schacht’s?

VOCKE: I cannot say that. He was just one of the staff. How I came to meet him was that on one occasion when I was sent to Brussels to discuss something with Von Lumm, the latter took the opportunity to introduce his collaborators and among them was Schacht. We were merely introduced.

MR. JUSTICE JACKSON: And what was Von Lumm’s position? What was he doing in Brussels?

VOCKE: He was Commissioner for Banking with the General Command.

MR. JUSTICE JACKSON: General Command of the German Army?

VOCKE: Commissioner for the Banks with the Occupation Army.

MR. JUSTICE JACKSON: Named by Germany.

VOCKE: Without doubt.

MR. JUSTICE JACKSON: Well, he was a German, not a Belgian?

VOCKE: Yes, he was a German.

MR. JUSTICE JACKSON: Now, some time after that Schacht was dismissed by Von Lumm, was he not?

VOCKE: Yes.

MR. JUSTICE JACKSON: And you had a discussion with Von Lumm about that and also you had one with Schacht about it, did you not? Tell me whether you had the visit...

VOCKE: I read the official reports in Berlin about the dismissal of Schacht. I was working in the Reich Office of the Interior. I only spoke about these things with Schacht when he became Reichsbank President and he spoke to me about it one day.

MR. JUSTICE JACKSON: Now, before Schacht went on the staff of Von Lumm, he was director of the Dresdner Bank.

VOCKE: Yes.

MR. JUSTICE JACKSON: And the dismissal was because Schacht had delivered to that bank a considerable amount of Belgian francs.

VOCKE: Yes. I do not know how large that amount was.

MR. JUSTICE JACKSON: But it was considerable.

VOCKE: Maybe.

MR. JUSTICE JACKSON: And that, Von Lumm thought, gave to the Dresdner Bank an advantage which was incompatible with Schacht’s duties as a public official?

VOCKE: That, at any rate, was Von Lumm’s view. He took a very serious view, which Schacht, not being a civil servant, could not quite appreciate.

MR. JUSTICE JACKSON: And Von Lumm called a meeting and reproached Schacht?

VOCKE: Yes.

MR. JUSTICE JACKSON: Schacht then gave an answer to Von Lumm which Von Lumm considered was not sincere, but was merely a lie?

VOCKE: Yes. That was Von Lumm’s point of view.

MR. JUSTICE JACKSON: Now, that is what Von Lumm told you about?

VOCKE: That was in the written report which I have read.

MR. JUSTICE JACKSON: Now, when you came to talk to Schacht about it and about his answer to Von Lumm, Schacht told you that it was perhaps not quite an open answer, but not a lie?

VOCKE: Yes.

MR. JUSTICE JACKSON: However, having heard both sides of it, you along with all of the other directors of the Reichsbank were opposed to Schacht’s appointment as President, as you have testified.

VOCKE: Yes.

MR. JUSTICE JACKSON: And you took the view, along with all the other directors, that the behavior of Dr. Schacht in the Belgian bank affair was not quite fair and not quite correct?

VOCKE: Yes.

MR. JUSTICE JACKSON: Now, when Dr. Schacht came back to the Reichsbank under the Nazi regime, as I understand it, there was a good deal of resentment and reserve against him on the part of the Reichsbank Directorate, because he “in our eyes then was a Nazi. He was in close touch with Hitler and kept some things secret from us, his colleagues.” That is correct, is it not?

VOCKE: I could not say that. It is true there was a feeling against Schacht. As I explained before, because we had assumed, and I had assumed—though we were wrong about it—that he was a Nazi. It is possible that Schacht did keep things secret from us, but at any rate I do not know whether he did, or what those things were.

MR. JUSTICE JACKSON: Now, did you not say in a statement that he was in close touch with Hitler and kept some things secret from “us, his colleagues”?

VOCKE: I do not know whether he kept things secret from us. It is possible, but I could not prove it.

MR. JUSTICE JACKSON: Is it not true that years later, when already some fatal moments were reached in the currency system, circulation, price and wages system, “rumors came to our ears through semiofficial channels that Dr. Schacht had given Hitler the promise to finance armaments”? Did you not say that?

VOCKE: That Schacht had given the promise to Hitler? Well, in certain circles there were rumors of that nature. Whether it is true I could not say.

MR. JUSTICE JACKSON: Now, you felt after the Munich Agreement and after Hitler’s speech at Saarbrücken that that destroyed all hopes of peace, did you not?

VOCKE: Yes.

MR. JUSTICE JACKSON: And from that date, together with Pilseck, you did all in your power to persuade Schacht that a decision had to be forced?

VOCKE: Yes.

MR. JUSTICE JACKSON: Dr. Schacht agreed with you, but hesitated to take the decisive step?

VOCKE: Yes. He said—Schacht was not against it in principle, but he wanted to decide himself when our memorandum should be submitted, and as this memorandum was to be signed by all of us, and each one of us wanted to make corrections, the handing in of this memorandum was delayed from October until 7 January.

MR. JUSTICE JACKSON: The agreement was prepared by you and Pilseck?

VOCKE: Yes.

MR. JUSTICE JACKSON: And you approached Dr. Schacht again and again on it?

VOCKE: Yes.

MR. JUSTICE JACKSON: And he kept the draft all this time and told you that he was in doubt about the best moment to bring it before Hitler?

VOCKE: Yes.

MR. JUSTICE JACKSON: And it was not until Hitler refused to see him at Berchtesgaden that he finally sent him the memorandum?

VOCKE: That I do not know. I have heard here for the first time that Hitler refused to receive Schacht at Berchtesgaden. It may be. I only heard that Schacht was at Berchtesgaden, and after his return, according to my recollection, he talked about his meeting with Hitler and that now the moment had come to send him the memorandum.

MR. JUSTICE JACKSON: Well, your memorandum is the only source of my information, and according to my translation it says: “Finally, in December 1938, he resolved to sign it after a last attempt to speak with Hitler in Berchtesgaden.”

VOCKE: Yes.

MR. JUSTICE JACKSON: At that time, there was something of a financial crisis.

VOCKE: Yes.

MR. JUSTICE JACKSON: Considerable difficulty, inflation was just around the corner, as you might say.

VOCKE: The Government was confronted with the 3,000 million mefo bills which were about to fall due and which had to be covered, and the Minister of Finance had a cash deficit of 1,000 million. The Minister of Finance came to see us and asked us to tide it over, because otherwise he could not pay the salaries on 1 January. We refused. We did not give him a single pfennig. We told him that the best thing that could happen would be that bankruptcy should become manifest in order to show how impossible it was to continue this system and this policy. He then received money from private banks.

MR. JUSTICE JACKSON: And you and Huelse, particularly Huelse, had long warned against this course of the Reichsbank, is that not true?

VOCKE: No, that is not true.

MR. JUSTICE JACKSON: Had not you and Huelse, long before this, warned that this mefo business would end up in trouble?

VOCKE: Of course, the Reichsbank had for years fought against the mefo bills, which were to mature in March 1938, and from then on the Reichsbank did not give any more armament credits.

MR. JUSTICE JACKSON: Now, after his dismissal from the Reichsbank, you very frequently discussed matters with Schacht and you found that he had turned very bitter against the Government. Is that not true?

VOCKE: I did not have frequent meetings with Schacht. We met every few months in the beginning and then, when Schacht went to Guehlen, our meetings stopped; I saw him there only once or twice. But it was not only after his dismissal that Schacht became a bitter enemy of Hitler, but he had been that during the whole of 1938.

MR. JUSTICE JACKSON: And you said, “I think in his heart he hoped he would be called after Hitler’s defeat to help build a new and better order of things in Germany”?

VOCKE: Certainly. Schacht spoke to me in Guehlen about the men who would have to come after Hitler had been finally overthrown, and in conversation we mentioned the ministers who then could save Germany from despair, and Schacht was certain that he also would be called in to assist.

MR. JUSTICE JACKSON: No further questions, Your Honor.

THE PRESIDENT: Do any of the other Prosecution Counsel want to cross-examine?