(3 of 9)
From Schacht’s IMT testimony: When, in August of 1934, I took over the Reich Ministry of Economics, of course I first put the question to Hitler: "How are the Jews in our national economy to be treated?" Hitler told me then, literally, "The Jews can be active in domestic economy in the same way as before."
That was the directive that Hitler had promised to me, and during all the time when I was in charge of the Ministry of Economics I acted accordingly.
However, I have to add that, every few weeks, there was a quarrel on some Jewish question, with some Gauleiter or other Party official. Also, I could not protect Jews against physical mistreatment and the like, because that came under the competence of the Public Prosecutor, and not mine; but, in the economic field, I helped all Jews who approached me to obtain their rights and, in every individual case, I prevailed upon Hitler, and succeeded against the Gauleiters and Party officials, sometimes even threatening to resign.
I believe that it is notable that the pogrom of November 1938 could only have taken place after I had resigned from my office. Had I still been in office, then that pogrom doubtlessly would not have occurred . . . .
As far as my personal composure and comfort would have been concerned, it would have been very simple not to assume office, and to resign. Of course, I asked myself what help that would be for the future development of German politics, if I did refuse office. We were already at a stage in which any public and open opposition and criticism against the Hitler regime had been made impossible. Meetings could not be held, societies could not be established, every press statement was subject to censorship, and all political opposition, without which no government can thrive, had been prevented by Hitler, through his policy of terror. There was only one possible way to exercise criticism, and even form an opposition which could prevent bad and faulty measures being taken by the Government. And this opposition could solely be formed in the Government itself. Thus convinced, I entered the Government and I hoped, in the course of the years, to find a certain amount of support and backing among the German people. There was still a large mass of spiritual leaders, professors, scientists, and teachers, whom I did not expect simply to acquiesce to a regime of coercion. There were also many industrialists, leaders of economy, who I did not assume would bow to a policy of coercion incompatible with free economy. I expected a certain support from all these circles, support which would make it possible for me to have a moderating, controlling influence in the Government. Therefore, I entered Hitler’s Cabinet, not with enthusiastic assent, but because it was necessary to keep on working for the German people, and exercise a moderating influence within the Government.
From the IMT testimony of Hans Bernd Gisevius: I have known the Defendant Schacht since the end of 1934 . . . . I met him when I worked in the Reich Ministry of the Interior, and was collecting material against the Gestapo. I was consulted by various parties who, either feared trouble with the Gestapo or, who had had trouble. Thus, one day, Schacht, who was then Minister for Economy, sent a man to me whom he trusted--it was his plenipotentiary Herbert Goering--to ask me whether I would help Schacht. He, Schacht, had for some time felt that he was being watched by Himmler and the Gestapo, and lately had had good reason to suspect that an informer, or at least a microphone, had been installed in his own house. I was asked whether I could help in this case. I agreed to do so and, with a microphone expert from the Reich post administration, on the following morning, I visited Schacht’s ministerial residence. We went with the microphone expert from room to room, and did not have to search very long. It had been done very badly by the Gestapo. They had mounted the microphone all too visibly and, moreover, had engaged a domestic servant to spy on Schacht. She had a listening device attached to the house telephone installed in her own bedroom, which was easy to discover, and so we were able to unmask the whole thing. It was on that occasion that I first spoke to Schacht . . . .
We spoke about the matters, and the somewhat peculiar situation that had brought us together. Schacht knew that I was very active in opposing the Gestapo, and I, for my part, was aware that Schacht was known for his utterances against the SS and the Gestapo on numberless occasions. Many middle-class people in Germany placed their hopes in him, as the only strong minister who could protect them, if need be. Particularly, the industrialists and businessmen, who were very important at the time, hoped for, and often found his support. So that it was quite natural that, immediately during the first conversation, I told him everything that was troubling me.
The main problem at that time was the removal of the Gestapo, and the removal of the Nazi regime. Therefore our conversation was highly political, and Schacht listened to everything with an open mind, which made it possible for me to tell him everything. I told Schacht that we were inevitably drifting towards radicalism, and that it was doubtful whether, the way things were going, the end of the present course would not be inflation and, that being so, whether it would not be better if he himself were to bring about that inflation. That would enable him to know, beforehand, the exact date of such a crisis and, together with the generals and anti-radical ministers, make timely arrangements to meet the situation, when it became really serious. I said to him, "You should bring about that inflation; you yourself will then be able to determine the course of events, instead of allowing others to take things out of your hands." He replied, "You see, that is the difference which separates us: You want the crash, and I do not want it."
I think that, at the time, the word "crash" was too strong for him. Schacht was thinking along the traditional lines of former governments, but he saw that, here and there, a change had come about--especially since Bruening’s time--by emergency laws and certain dictatorial measures. But as far as I could see at the time, and during all our subsequent conversations, uppermost in his mind was still the idea of a Reich government [that] met and passed resolutions, where the majority of ministers were bourgeois, and where at a given moment--which might be sooner or later--one might steer a radically changed course . . . .
It was quite clear to me that, at that time, he still thought very highly of Hitler. I might almost say that, at that time, Hitler was to him a man of irreproachable integrity. I am now speaking of the time of my first meetings with Schacht, at the end of 1934 and the beginning of 1935 . . . .
I did not understand how an intelligent man, and one who was as capable in economics as he was, could enter into such a close relationship with Hitler. I was all the more bewildered because, on the other hand, this man Schacht, from the very first day and in a thousand small ways resisted the Nazis, and the German public took pleasure in many sharp and humorous remarks which he made about the Nazis. Great was my bewilderment, until I actually met the man Schacht. He had great influence, to the extent that many Germans hoped to find a proponent of decency and justice in him, since they heard that he undertook many steps in that direction . . . . He was, of course, as Minister of Economics, the leading man in German economy, not only for rearmament, but for all questions of German economy; rearmament was just one of them.
From Schacht’s IMT testimony: As far as self-sufficiency [autarchy] was concerned, I believe that, if at a reasonable cost, without undue expenditure, which would have meant a waste of German public funds and German manpower, certain synthetic materials could be produced in Germany, then one should do so, but that apart from this, the maintenance of foreign trade was an absolute necessity for economic reasons, and that it was even more necessary for reasons of international cultural relations, so that nations might live together. I always regarded the isolation of nations as a great misfortune, just as I have always regarded commerce as the best means of bringing about international understanding.
As far as I know, the whole idea of self-sufficiency, which was then formulated in the Four Year Plan, originated with Hitler alone; after Goering was commissioned with the direction of the Four Year Plan, then Goering too, of course, represented that line of thought . . . .
The New Plan was a logical consequence of the economic development that followed the Treaty of Versailles. I mention again, only briefly that, by the removal of German property abroad, the entire organization for German foreign trade was taken away, and therefore great difficulties arose for German exports.
Without those exports, however, payment of reparations, or such, was out of the question. Nevertheless, all the great powers, particularly those who were competing with Germany on the world market, resorted to raising their tariffs, in order to exclude German merchandise from their markets, or to make it more difficult for Germany to sell her goods, so that it became more and more of a problem to develop German exports.
When Germany, in spite of this, tried--by lower prices at the cost of lower wages--to maintain or to increase her export trade, the other powers resorted to other means, to meet German competition. I recall the various devaluations of foreign currencies that were made, again impeding the competition of German products. When even that did not suffice, the system of quotas was invented; that is, the amount of German goods which were imported into a country could not go beyond a certain quota; that was prohibited. Such quotas for German imports were established by Holland, France, and other nations; so here also German export was made increasingly difficult.
All these measures to hinder German export led to the situation that German nationals, also, could no longer pay even private debts abroad. As you have heard here, for many years I had warned against incurring these debts. I was not listened to. It will be of interest to you to state here briefly that Germany, against my advice, had within five years contracted as large a foreign debt as the United States had throughout the 40 years before the First World War
Germany was a highly developed industrial nation, and did not need foreign money, and the United States at that time was going in more for colonial development and could make good use of foreign capital.
We now hit the bottom. When we were no longer able to pay our interest abroad, some countries resorted to the method of no longer paying German exporters the proceeds from the German exports, but confiscated these funds, and out of this paid themselves, the interest on our debts abroad; that is, effecting a settlement, so to speak. That was the so-called "clearing system." The private claims were confiscated, in order to meet the demands of foreign creditors.
To meet this development, I looked for a way out to continue German exports. I set out a very simple principle: "I will buy only from those who buy from me." Therefore, I looked around for countries that were prepared to cover their needs in Germany, and I prepared to buy my merchandise there. That was the New Plan.
With the establishment of the Reich Defense Council and its permanent committee, the Reich Ministry of Economics has been given the task of making economic preparation for war. There should really be no need to explain the tremendous importance of this task. Everyone remembers vividly how terribly the lack of any economic preparation for war hit us during the World War.
From Schacht’s IMT testimony: 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.
From a statement by George S. Messersmith, United States Consul General in Berlin from 1930 to 1934: Dr. Schacht always attempted to play both sides of the fence. He told me, and I know he told both other American representatives in Berlin, and various British representatives, that he disapproved of practically everything that the Nazis were doing. I recall on several occasions his saying, after the Nazi Party came into power, that if the Nazis were not stopped, they were going to ruin Germany, and the rest of the world with it. I recall distinctly that he emphasized to me that the Nazis were inevitably going to plunge Europe into war . . . .
It was his [Schacht’s] financial ability that enabled the Nazi regime, in the early days, to find the financial basis for the tremendous armament program, and which made it possible to carry it through. If it had not been for his efforts ... by every observer at the time, the Nazi regime would have been unable to maintain itself in power, and to establish its control over Germany, much less to create the enormous war machine [that] was necessary for its objectives in Europe, and later throughout the world.
The increased industrial activity in Germany incident to rearmament made great imports of raw materials necessary while, at the same time, exports were decreasing. Yet, by Schacht’s resourcefulness, his complete financial ruthlessness, and his absolute cynicism, Schacht was able to maintain, and to establish the situation for the Nazis. Unquestionably, without this complete lending of his capacities to the Nazi Government and all of its ambitions, it would have been impossible for Hitler and the Nazis to develop an armed force, sufficient to permit Germany to launch an aggressive war . . . .
In my opinion, Schacht was in no sense a captive of the Nazis. He was not compelled to devote his time and his capacities to their interest. His situation was such that he would most likely have been able either to work on much less restrained scale or, to abstain from activity entirely. He continued to lend his services to the Nazi Government, out of opportunism.
From Schacht’s IMT testimony: 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. 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.
My so-called foreign friends do neither me, nor the situation, nor themselves any good when they try to bring me into opposition to the allegedly impossible National Socialist economic theories and, declare me to some extent the protector of economic reason. I can assure you that everything I say and do has the complete approval of the Fuehrer and, that I would not say or do anything that does not have his approval.
From Schacht’s IMT testimony: I admit it, and would like to make a statement. I have said repeatedly, first, that my foreign friends, as far as I had foreign friends, did not do me a service when they said publicly that I was an adversary of Hitler, because that made my position extremely dangerous. Secondly, I said in that speech I would not do anything that would not be according to my conviction, and that Hitler did everything I suggested to [him], that is, that it was his opinion also. If I had said anything to the contrary, that would have been expressed. I was in complete accord with him, as long as his policies agreed with mine; afterwards I was not, and left.
From Article 43 of the Versailles Treaty: In the area defined above [Article 42 defines the area, the left bank of the Rhine and the right bank to the west of a line drawn 50 kilometers to the east] the maintenance and the assembly of armed forces, either permanently or temporarily, and military maneuvers of any kind; as well as the upkeep of all permanent works for mobilization, are ... forbidden.
From Wilhelm Vocke’s IMT testimony: 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 his 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.
From Schacht’s IMT testimony: I always considered war as one of the most devastating things to which mankind is exposed and, on basic principles throughout my entire life, I was a pacifist. Of course, I saw the necessity of a country’s defense in case of war or threats, and I stood for that theory. In that sense, I was always in favor of a Wehrmacht, but the profession of a soldier, I consider to be full of deprivations and characterized by willingness and readiness to sacrifice, not because perhaps during a war the soldier has to give up his life--that is the duty of every citizen of military age--but because his whole aim and aspiration must be directed to the end that never must the craft [that] he has learned be exercised. A soldier, a career officer, who is not intrinsically a pacifist, has really in my opinion missed his calling. Consequently, I was always an opponent of every military digression and excess. I was always against militarism, but I consider that soldiership, conscious of its responsibility, is the highest calling which a citizen can pursue.
From Wilhelm Vocke’s IMT testimony: 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 [devalued] and partly, even crippled. England had to [devalue] 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. 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. 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 [reasons].
From Schacht’s IMT testimony: I might say, in advance, that Hitler never gave me any order or any instructions [that] would have been in opposition to my inner views and, that I also never did anything [that] was in opposition to my inner convictions. From the very beginning, I did not conceal my convictions concerning all these questions [that] you have mentioned, not only when speaking to my circle of friends and to larger Party circles, but also in addressing the public; and even, when speaking to Hitler personally. I have already stated here that, as early as the Party purge of 30 June 1934, I called Hitler’s attention to the fact that his actions were illegal.
I refer, furthermore, to a document of which, unfortunately, only half has been presented by the Prosecution. It is a written report, which I personally submitted to Hitler on 3 May 1935. I remember the date very well because it happened during a trial run of the Lloyd Steamer Scharnhorst, at which both Hitler and I were present.
On that day, I handed him two inter-related memoranda, which together formed a unit. In the one half, I made it clear that I wanted to stop the unrestrained and constant collections of money, by various Party organizations, because it seemed to me that the money ought not to be used for Party purposes, particularly Party installations, Party buildings, and the like, but that we urgently needed this money for State expenses, which had to be paid and which, of course, included the rearmament question as well.
The second half of this report dealt with cultural questions. The Defense and I have tried, for months, to get this, second half of the document from the Prosecution, since they had submitted the first half of the document here as evidence. It has not been possible to obtain that second half. I must therefore confine myself to communicating the contents.
I want to say in advance that, of course, I could only bring forward such charges in regard to the mistaken cultural and legal policy of the Party, and of Hitler, when reasons originating in my own department gave me the excuse to submit these things to Hitler. I stated that very serious harm was being done to my foreign trade policy, by the arbitrary and inhuman cultural and legal policy, which was being carried out by Hitler. I pointed in particular to the hostile attitude towards the churches, and the illegal treatment of the Jews and, furthermore, to the absolute illegality and despotism of the whole Gestapo regime. I remember in that connection, that I referred to the British Habeas Corpus Act, which for centuries protected the rights of the individual; and I stated, word for word, that I considered this Gestapo despotism to be something [that] would make us despised by the whole world.
Hitler read both parts of this memorandum while still on board the Scharnhorst. As soon as he had read it, he called me, and tried to calm me down, by making statements similar to those which he had already made to me in July 1934, when he told me these were still the transitional symptoms of a revolutionary development and that, as time went on, this would be set right again, and disappear.
The events of July 1934 had taught me a lesson, however, and consequently I was not satisfied with this explanation. A few weeks afterwards, on 18 August 1935, I used the occasion of my visit to the Eastern Fair, Koenigsberg, to mention these very things, in the speech which I had to make there; and here I gave clear expression to the same objections [that] I had made to Hitler, aboard the Scharnhorst, at the beginning of May.
The following comments are based on the assumption that the completion of the armament program, in regard to speed and extent, is the task of German policy and that, accordingly, everything else must be subordinated to this aim, insofar as this main goal is not endangered, by neglecting other questions.
From Schacht’s IMT testimony: Not only did I write it, but I handed it to Hitler personally. It is one of twin documents, one of which has already been submitted in evidence, and discussed in detail by the Prosecution. I did not receive the second document.
When my defense counsel examined me, I stated here that I was intent on stopping the Party collections and Party moneys, which were extracted everywhere from the German people, because [it] was extremely difficult for me to get the money to finance the armament program and the mefo bills.
I could only get that point across to Hitler if I told him [that], of course, this was being done in the interests of armament. If I had told him that [this] was done for the building of theaters, or something similar, I would have made no impression on him. However, if I said it must be done, because otherwise we could not arm, that was [a] point which influenced Hitler, and that is why I said it. I admitted that, and explained it during the examination by my attorney.
Point 1: For the purpose of directing the entire war economy the Fuehrer and Reich Chancellor will appoint a Plenipotentiary for War Economy.
Point 2: It will be the duty of the Plenipotentiary for War Economy to utilize all economic possibilities in the interest of the war and, to safeguard the economic well-being of the German people.
Point 3: Subordinate to him will be: the Reich Minister of Economics, the Reich Minister for Food and Agriculture, the Reich Labor Minister, the Chief Reich Forester, and all other Reich officials directly subordinate to the Fuehrer and Reich Chancellor. Further, he shall be responsible for the financing of the war within the sphere of the Reich Finance Ministry and the Reichsbank.
Point 4: The Plenipotentiary for War Economy shall have the right to enact public laws within his official jurisdiction, which may differ from existing laws . . . .
It is the will of the Fuehrer and Reich Chancellor that the Plenipotentiary General for War Economy shall take over this responsible directorate (Leitung), and is, as with the Reich War Minister, holder of the executive power, independent and responsible for his own sphere of activity to the Fuehrer and Reich Chancellor.
From Schacht’s IMT testimony: This document is before the Court, and I assume that you have read it correctly. I had exactly the full powers [that] are described in the law. It was simply an ordinary law. [These are] very common regulations, which are customary with every general staff.
From Schacht’s IMT testimony: 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 [that], 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.
From an affidavit by Dr. Von Scherpenberg (Schacht’s son-in-law): He [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.
From Schacht’s IMT testimony: 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.
Lieutenant Colonel Jodl: The demilitarized zone requires special treatment. In his speech of the 21st of May, and other utterances, the Fuehrer has stated that the stipulations of the Versailles Treaty and the Locarno Pact, regarding the demilitarized zone, are being observed. To the aide-memoire of the French charge d’ affaires on recruiting offices in the demilitarized zone, the Reich Government has replied that, neither civilian recruiting authorities, nor other offices in the demilitarized zone, have been entrusted with mobilization tasks, such as the raising, equipping, and arming of any kind of formations, for the event of war, or in preparation therefor. Since political complications abroad must be avoided, at present, under all circumstances, only those preparatory measures that are urgently necessary may be carried out. The existence of such preparations or, the intention of making such preparations must be kept in strictest secrecy in the zone itself, as well as in the rest of the Reich.
From Schacht’s IMT testimony: 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 . . . .
This famous triumvirate [myself, the Minister of War, and the Plenipotentiary for Administration], 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.
The Jews must realize that their influence in Germany has disappeared for all time. We wish to keep our people and our culture pure and distinctive, just as the Jews have always demanded this of themselves. But the solution of these problems must be brought about under state leadership, and cannot be left to unregulated individual actions, which have a disturbing influence on the national economy, and which have, therefore, been repeatedly forbidden by governmental, as well as Party agencies. The economy is a very sensitive organism. Every disturbance, from whatever direction it may come, acts as sand in the machine. Since our economy is closely allied with that of foreign countries, not one of us can be indifferent to what consequences these disturbances can have, at home and abroad.
From Schacht’s IMT testimony: Never in my life have I demanded even a foot of space that did not belong to Germany, nor would I ever entertain such an idea. I am of the opinion that neither is it national to try to dominate and govern foreign peoples, nor is appropriation of foreign territory a politically just action. These are two questions with which we are much concerned at present.
I might perhaps add, in order to clarify my position, just what I understand by nationalism, and just why I was against each and every form of expansionism. Just one sentence will suffice, a sentence from a speech which I made in August of 1935. On that occasion I said, and I quote:
"We want to express the belief that self-respect requires respect for others, and the upholding of our national individuality must not mean disparagement of the individuality of others; by respecting the acts of others we respect our own action; and a battle of economic competition can be won in the end, only through example and achievement, and not through methods of violence or craft."
From Hitler, 1889-1936, Hubris by Ian Kershaw: On 18 August, in a speech in Koenigsberg, which, despite censorship in the official published version of those sections attacking the anti-Semitic violence, obtained wide circulation inside and outside Germany, Schacht had indicated that anti-Jewish legislation in accordance with the Party Program was "in preparation" and had to be regarded as a central aim of the government.
Schacht summoned state and party leaders on 20 August to the Ministry of Economics to discuss the "Jewish Question." At a packed meeting, lasting almost two hours, Frick gave an account of work being done in his ministry to prepare legislation in line with the Party Program. Adolf Wagner, representing Hess, spoke of popular pressure for legislation, and said that he too disapproved of the "excesses" (which in Munich, he had been instrumental in stimulating). Nevertheless, the state had to take account of anti-Semitic feeling by pursuing the exclusion of Jews in the placing of public contracts, and the prohibition of establishment of new Jewish businesses. Schacht said he agreed in principle with such measures . . . .
Schacht himself fiercely attacked the party’s violent methods, as causing great harm to the economy and rearmament drive, concluding that it was vital to carry out the party’s program, but only through legislation. He agreed with Wagner’s suggestion that such legislation should apply only to "full Jews" (Volljuden) to avoid delay once more through the question of including Mischlinge. The meeting ended by agreeing that party and state should combine to bring suggestions to the Reich government "about desirable measures."
From Wilhelm Vocke’s IMT testimony: 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 that 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.
From Justice Jackson’s IMT opening statement: Does anyone believe that Hjalmar Schacht, seated in the first row at the Nazi Party Rally of 1935, and wearing the Party emblem, was only included in the film for the purpose of making an artistic effect? This great thinker, in lending his name to this threadbare undertaking, gave it respectability in the eyes of every hesitating German.
From Schacht’s IMT testimony: First of all, I would like to make a few minor corrections. In 1935 I did not have a Party emblem. Secondly, Germans who were hesitating were no longer of any importance in 1935, for Hitler’s domination had been firmly established by 1935. There were only those people who were turning away from Hitler, but none who were still coming to him. And then, I must really consider it as a compliment that I am called a figure of importance, a great thinker, and so forth; but I believe that the reasons for my being and working in the Hitler Cabinet have been set forth by me in sufficient detail, so that I need not go into that any more.
The fact that, in the first years especially, I could not very well absent myself from the Party rallies is understandable, I believe, for they were Hitler’s principal display of show and ostentation for the outside world, and not only did his ministers participate in the Party rallies, but also a great many other representative guests.
May I add just a few more words?
I stayed away from the later Party rallies. For example, the Party Rally of 1935 mentioned by the Chief Prosecutor. That was the Party Rally--and this is why I happen to remember it--at which the Nuremberg Laws against the Jews were proclaimed, and at the time I was not even in Nuremberg. I believe that, with the exception of the Soviet Ambassador, in the course of years all other leading diplomats attended the Party Rally, and I must say, in large numbers, with great ostentation, and seated in the first rows.
I attended the Party Rally in 1933 and in 1934. I am not certain whether I attended it in 1936 or 1937. I rather believe that I attended in 1936. I was decidedly missing at the later rallies, and the last visit that I made at the Party Rally, which I have just mentioned, I attended only on "Wehrmacht Day."
From Schacht’s pre-trial interrogation:
Q: Now, with respect to civil service. There was this Aryan clause that was put in. Did you agree with that legislation?
A: With the same limitation.
Q: Now, did you ever express yourself in the Cabinet or elsewhere to the point that you wanted these restrictions put in, restrictions you have been talking about?
A: I don’t think so; useless to do it.
Q: You say "useless to do it?"
Q: I thought you said at one time or another that the reason you stayed in is because you thought you might have some influence on policy.
Q: You didn’t consider this as important enough a matter to take a position on it?
A: Not an important enough matter to risk a break.
From Schacht’s IMT testimony: You see, in these matters, it was a question of degrees. I have just explained the principles of my policy. The extent to which these individual laws went, is a question of politics. Today, you can say what you like about it . . . . [It was] not the armament question [that caused me not to risk any break about the Jews], but the equality of Germany ... by means of armament. That is one of the means.
Schacht: Colonies are necessary to Germany. We shall get them through negotiation, if possible; but if not, we shall take them.
From Schacht’s IMT testimony: In a German drama, an intriguer is being instructed by a tyrant to bring a man of honor to ruin, and he says in reply, "just give me one word said by this man, and I will hang him thereby." I believe, My Lord Justices that, in this courtroom, there is not a single person who, at one time or another in his life, has not said a rather unfortunate word. And how much easier is it when he is speaking in a foreign language, of which he is not completely master.
Mr. Fuller is known to me as a respectable business man, and this discussion, which he has here reproduced, is indubitably done according to the best of his knowledge. He himself rightly says that even had he tried to put down the exact words, he could not guarantee that each and every word has been said. But if I did say these words, then it seems only that I said we Germans must have colonies, and we shall have them. Whether I said, "We shall take them," or "We shall get them," that, of course, it is impossible for me to say with certainty today, after a period of 10 years.
The representative of the Prosecution also thought the expression, "We will take them," a little colorless in effect, and therefore, I believe, he just added a trifle, for he said twice in his presentation of the charges that I had said, "We will take these colonies by force," and on a second occasion he even said, "We will take these colonies by force of arms." But "force" or "force of arms" are not mentioned in the whole of Fuller’s affidavit. And, if I had used that word, or even used it only by implication, Mr. Fuller would have had to say with reason: "So you want to take colonies by force; how do you expect to do that?" It would have been utter nonsense to assert that Germany would ever have been able to take overseas colonies by force. She lacked--and always will lack--domination of the seas, which is necessary for this.
Fuller did not take exception to my manner of expression and, in his conversation, he immediately continued; and I quote:
"You mentioned a little while ago that necessary raw materials could not be obtained, owing to German lack of foreign exchange. Would stabilization help you?"
Therefore, rather than to become excited about the fact that I wanted to take colonies by force--something which I never said and which is contrary to my views, as I have already stated--he immediately goes on to foreign exchange and to stabilization.
The economic and illegal treatment of the Jews, the anti-Church movement of certain Party organizations, and the lawlessness which centers in the Gestapo are a detriment to our rearmament task, which could be considerably lessened through the application of more respectable methods, without abandoning the goals in the least . . . . If there is now a demand for greater armament, it is, of course, not my intention to deny or change my attitude, which is in favor of the greatest possible armament, and which I have expressed for years, both before and since the seizure of power; but it is my duty to point out the economic limitations of this policy.
From Schacht’s IMT testimony: The same attitude can also be seen from the minutes of the so-called "small Ministerial Council" for 12 May 1936, which have been submitted in evidence by the Prosecution. It says in these minutes, and I quote: "Dr. Schacht emphasized openly, again and again, that a cultural and legal policy must be pursued, which does not interfere with economy."
From The Devil’s Disciples by Anthony Read: Schacht and his Ministry of Economics had been told, six months earlier, to start making secret economic preparations for war, and he had used considerable sleight of hand to find the necessary funds so far. Along with a number of decidedly dodgy financial maneuvers, he had been forced to create a siege economy, banning virtually all consumer imports, and severely restricting foreign currency transactions. But he believed there were limits, beyond which he dared not push the long-suffering German public.
"They are being starved of oil to cook with, butter for their bread, meat for a Sunday dinner," he told Goering. "Soon there will be a black market, and then we will have to start shooting people. I simply cannot spare you any more money."
Schacht might have been one of the world’s most brilliant economists, but he was no politician, and knew little about ordinary people. Goering, on the other hand, knew nothing about economics, but everything about what the German people really wanted. For three weeks, he worked with Pilli Koerner on a major speech, which he then delivered with great panache, to a mass rally in Hamburg, the city where the loudest complaints about austerity rations had been made. Wearing his Luftwaffe uniform and looking quite drawn after his latest bout of slimming, he began by outlining the tremendous progress that had already been made, in restoring German pride through rearmament. He then moved on to remind his audience of the shaming restrictions still imposed on their country by Versailles. Only through strength, he told them, could Germany regain her rightful place in the sun.
Having softened the meeting up, he delivered the killer punch. "I must speak clearly," he cried. "Some people in international life are very hard of hearing. They can only be made to listen if they hear guns go off. We are getting those guns. We have no butter, comrades, but I ask you: would you rather have butter or guns? Shall we bring in lard, or iron ores? I tell you, being prepared makes us powerful. Butter only makes us fat!" He slapped his hollow belly to emphasize his point, and the meeting erupted into roars of approval. Radio listeners all over Germany joined in. Hitler sent him a telegram of congratulations. Schacht came up with the money for the Luftwaffe. The speech was reported around the world. The defining phrase, "guns or butter" entered the international vocabulary. Goering, of course, never had to make the choice for himself--he could always have both. But no one ever mentioned that.
From the IMT testimony of Hans Bernd Gisevius: By a steady process, Schacht withdrew himself further and further from the Nazis. If I were asked to describe the phases, I would say that, in the beginning, that is to say in 1935, he was of the opinion that the Gestapo only was the main evil, and that Hitler was the man who was the statesman, or could at least become the statesman, and that Goering was the conservative strong man, whose services one ought to use, and could use, to oppose the terror of the Gestapo and the State, by establishing orderly conditions. I contradicted Schacht vehemently, regarding his views about the Defendant Goering. I warned him. I told him that, in my opinion, Goering was the worst of all, precisely because he was hiding under the middle class, conservative cloak. I implored him not to effect his economic policy with Goering, since this could only come to a bad end.
Schacht, for whom much may be said, but not that he is a good psychologist, denied this emphatically. Only then, in the course of 1936, he began to realize, more and more, that Goering was not supporting him against the Party but, that Goering supported the radical elements against him; only then did Schacht’s attitude begin to change gradually, and he came to regard not only Himmler, but also Goering, as a great danger. For him, Hitler was still the one man with whom one could create policy, provided the majority of the cabinet could succeed in bringing him over to the side of law and order . . . . That was the moment when I warned him and, as I said, he became apprehensive about Goering, and realized that Goering was not supporting him against the radical elements.
But the memory of war weighs undiminished upon the peoples’ mind. That is because, deeper than material wounds, moral wounds are smarting, inflicted by the so-called peace treaties. Material loss can be made up through labor, but the moral wrong [that] has been inflicted upon the conquered peoples in the peace dictates, leaves a burning scar on the peoples’ conscience. The spirit of Versailles has perpetuated the fury of war; and there will not be a true peace, progress, or reconstruction, until the world desists from this spirit. The German people will not tire of pronouncing this warning.
From Schacht’s IMT testimony: I never understood, in the course of this proceeding, how there could be a threat of war in this quotation. The quotation concludes with the words, and I must quote in English, because I just have the English words before me:
"The spirit of Versailles is perpetuated in the fury of war, and there will not be a true peace, progress, or reconstruction, until the world desists from this spirit. The German people will not tire of pronouncing this warning."
The conclusion says that the German people will not tire of pronouncing this warning. It seems to be a matter of course that, hereby, expression is given to the fact that I am warning others from persisting in war mania. I am not warning ourselves, but the entire world, to avoid perpetuating the spirit of Versailles.
From Wilhelm Vocke’s IMT testimony: 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. 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 Goering, 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.
It is, above all, not the task of State economic institutions to rack their brains about methods of production. This does not concern the Ministry of Economics at all . . . . It is furthermore essential that German iron production be increased to the utmost. The objection that we are not in a position to produce the same cheap raw iron from German ore, which has only 26 percent of iron content, as from the 45 percent Swedish ores, is unimportant . . . The objection that, in this case, all the German smelting works would have to be reconstructed is also irrelevant and, in any case, this is none of the business of the Ministry of Economics . . . . I want to emphasize in this connection that, in these tasks, I see the only possible economic mobilization, and not in the curbing of the armament industry.
From Schacht’s IMT testimony: In August 1936, Hitler himself dictated this memorandum, which has been shown to me in prison by my fellow Defendant Speer . . . . The Ministry of Economics was under me, and this is therefore a reproach for me . . . .
As is apparent from the statement, I had explained that, from 26 percent ore, one could produce steel only at costs twice or three times those, at which one could produce steel from 45 percent ore. And I explained further that, in order to use 26 percent ore, one would have to have completely different plants from those using 45 percent ore. Herr Hitler states that this is none of the business of the Ministry of Economics, and that, of course, means Herr Schacht ... [it] is directed, of course, against my policy.
From Wilhelm Vocke’s IMT testimony: He [Schacht] definitely disapproved [of Hitler’s foreign policy], 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.
President Schacht called me to him at 1300 hours today, and requested me to forward the following to the Minister of War: Schacht returned from the Fuehrer with the greatest anxiety, since he could not agree to the economic program planned by the Fuehrer. The Fuehrer wants to speak at the Party convention about economic policy, and wants to emphasize there that we now want to get free from foreign countries, with all our energy, by production in Germany. Schacht requests urgently that the Reich Minister of War warn the Fuehrer from this step . . . . If we now shout out abroad our decision to make ourselves economically independent, then we cut our own throats, because we can no longer survive the necessary transitory period.
From Schacht’s IMT testimony: I would like to say that, within the Party, of course, the decent elements were by far in majority; the greater part of the population had joined the Party because of a healthy instinct, and with good intentions, driven by the need in which the German nation found itself.
I would like to say about the SS, for instance, that in the beginning numbers of decent people joined the SS because Himmler gave the SS the appearance of fighting for a life of ideals. I would like to call your attention to a book written by an SS man which appeared at that time under the significant title, Schafft anstaendige Kerle (Let’s Make Decent Men).
But, in the course of time, Hitler knew how to gather around him all bad elements, within the Party and its organization, and to chain tightly all those elements to himself, because he understood how to exploit shrewdly any mistake, slip-up, or misdemeanor on their part. Yesterday, I talked about drunkenness as a constituent part of Nazi ideology; I did not do that with the purpose of degrading anyone personally. I did it for another quite definite reason.
In the course of further developments, I observed that even many Party members who had fallen into this net of Hitler, and who occupied more or less leading positions, gradually became afraid, because of the consequences of the injustices and the evil deeds to which they were instigated by the regime. I had the definite feeling that these people resorted to alcohol, and various narcotics, in order to [free] from their own conscience, and that it was only this flight from their own conscience that permitted them to act the way they did. Otherwise, there would be no explanation for the large number of suicides that took place at the end of the Nazi regime . . . .
I may say, that I myself never received any order, or fulfilled any wish [that] might have been contrary to the conception of right. Never did Hitler request anything from me, which he knew I would surely not carry out because it did not agree with my moral point of view. But neither did I ever notice or observe that one of my fellow ministers, or one of the other leading men who did not belong to Hitler’s inner circle--of course, I could not control that circle--or anyone else whom I met in official contacts, showed in any way that there was an intent to commit a war crime; on the contrary, we were always very glad when Hitler came off with one of his big speeches, in which he assured, not only the entire world, but above all, the German people, that he was thinking of nothing except peace and peaceful work. The fact that Hitler deceived the world and the German people, and many of his co-workers is one of the things that I mentioned yesterday.
From Wilhelm Vocke’s IMT testimony: 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 [that] was attached to the letter that the line of defense in the East. 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.
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