Thirty-Second Day:
Friday, January 11th, 1946
[Page 190]
LIEUTENANT BRYSON: If the Tribunal Please, we have eliminated part
of our proof. I would simply like to put in a letter from Goering
and an interrogation of Schacht, which will finish up the question
of the disagreement.
Under date of 5th August, 1937, Schacht wrote a critical letter to
Goering, who replied with a twenty-four page letter on 22nd
August, 1937. Goering's letter reviews their many differences in
detail. I offer it as Document EC-493, Exhibit USA 642, and I wish
to read only one statement, found in the middle of Page 13:
Now, finally, I wish to refer the Tribunal to the interrogation of
Schacht, under date of 16th October, 1945, Exhibit USA 636, and I
wish to read from Page 12 of the document near the bottom:
Q. Well, I gather that was a culminating, progressive personal
business between you and Goering. That seems perfectly obvious.
A. Certainly." [Page 191]
The Tribunal, of course, is already familiar with the public
approval by Schacht of the Anschluss, in his Vienna speech of 21st
March, 1938, and your Honours will also recall Schacht's pride in
Hitler's use of the rearmed Wehrmacht at Munich, as expressed in
his speech of 29th November, 1938. Both speeches were subsequent
to his resignation in November, 1937.
We come now to the removal of Schacht from the Presidency of the
Reichsbank in January, 1939. The reason for this development is
quite clear. Schacht lost confidence in the credit capacity of the
Reich and was paralysed with the fear of a financial collapse. He
felt that the maximum level of production had been reached, so
that an increase in banknote circulation would only cheapen money
and bring on inflation. In this attitude he ceased to be useful to
Hitler, who was about to strike, and wished to tap every ounce of
available Government credit for military purposes.
I refer the Tribunal to Document EC-369, which I have previously
submitted in evidence as Exhibit USA 631. This document is a
memorandum from the Reichsbank Directorate to Hitler, under date
of 7th January, 1939, in which Schacht reviews in detail his fears
of inflation. The seriousness of the situation may be seen
generally from the entire text. I wish to quote several of the
more crucial statements - one from the last paragraph on Page 3,
the second sentence:
[Page 192]
We therefore ask for the following measures:
(1) The Reich as well as all the other public offices must not
incur expenditure or assume guarantees and obligations that
cannot be covered by taxes, or by those funds which can be
raised through loans without disturbing the long-term
investment market.
(2) In order to carry out these measures effectively, full
financial control over all public expenditures must be restored
to the Reich Minister of Finance.
(3) The price and wage control must be rendered effective. The
existing mismanagement must be eliminated.
(4) The use of the money and investment market must be at the
sole discretion of the Reichsbank."
THE PRESIDENT: Is that not really cumulative of what you have
already read?
LIEUTENANT BRYSON: We will be glad to omit it, Sir; it is
cumulative.
Schacht was not only afraid of a financial crisis, but he was
afraid that he personally would be held responsible for it. I
offer in evidence an affidavit of Emil Puhl, a director of the
Reichsbank and co-worker of Schacht, dated 8th November, 1945,
designated as Document EC-438, Exhibit USA 646, and I read
therefrom, beginning at the bottom of the second page:
LIEUTENANT BRYSON: This is the interrogation of von Krosigk under
date of 24th September, 1945. I wish to read further, continuing
on Page 3:
[Page 193]
A. No, he never said it in this specific form, but in some
conversations he certainly said it several times, in his own
way, that he had conflicts with Goering so that, in answer to
that, I did not take these things very seriously.
Q. Well, let me put it in this way, and please think carefully
about this. Did Schacht ever say that he wanted to resign
because he realised that the extent of the rearmament programme
was such as to lead him to the conclusion that it was in
preparation for war rather than for defence?
A. No, he never did.
Q. Was Schacht ever quoted to you to this effect by any of your
colleagues or by anybody else?
A. No.
Q. Now, after Keitel took over the position of Chief of the
Wehrmacht, there were still meetings between Schacht and you
with Keitel in place of Blomberg?
A. Yes.
Q. Did Schacht ever say anything at these meetings to indicate
that, except for the technical question of the financing
through the Reichsbank directly, he was opposed to a further
programme of rearmament, or to the budget of the Wehrmacht?
A. No, I do not think he ever did."
A. No, it was because of his utterly impossible attitude in
this matter regarding this advance, which had no connection
with the rearmament programme."
From all of the foregoing it is clear that Schacht's dismissal in
no sense reflected a parting of the ways with Hitler on account of
proposed aggression. This fact may also be seen from Document EC-
397, Exhibit USA 650, consisting of Hitler's letter to Schacht
under date of 19th January, 1939, the text of which I wish to
read:
I wish to conclude by saying that the evidence shows: first, that
Schacht's work was indispensable to Hitler's rise to power and to
the rearmament of Germany; second, that Schacht personally was
favourably disposed towards Aggression and knew Hitler intended to
and would break the peace; and, third,
[Page 194]
As long as he remained in power, Schacht was working as eagerly
for the preparation of aggressive war as any of his colleagues. He
was beyond any doubt most effective and valuable in this
connection. His assistance in the earlier phase of the conspiracy
made their later crimes possible. His withdrawal from the scene
reflected no moral feeling against the use of aggressive warfare
as an instrument of national policy. He personally struggled to
retain his position. By the time he lost it he had already
completed his task in the conspiracy, namely, to provide Hitler
and his colleagues with the physical means and economic planning
necessary to launch and maintain the aggression. We do not
consider that, having prepared the Wehrmacht for assault upon the
world, he should now be permitted to find refuge in his loss of
power before the blow was struck.
This concludes our case against the defendant Schacht, and Lt.
Meltzer follows me with the presentation of the American case
against the defendant Funk.
LIEUTENANT BERNARD D. MELTZER: May it please the Tribunal, the
documents bearing upon defendant Funk's responsibility have been
assembled in a document book marked "HH," which has been filed
with the Tribunal and has also been made available to defence
counsel. The same is true of the brief. The documents have been
arranged in the book in the order of their presentation. Moreover,
to facilitate reference, the pages of the document book have been
numbered consecutively in red. I wish to acknowledge the
invaluable collaboration of Mr. Sidney Jacoby, who sits to my
right, in the selection and analysis of these documents.
We propose to submit evidence concerning five phases of defendant
Funk's participation in the conspiracy:
Second, his role in the Propaganda Ministry and in the related
agencies, and his responsibility for the activities of that
Ministry;
Third, his responsibility for the unrelenting elimination of
Jews, first from the so-called cultural professions and then
from the entire German economy;
Fourth, his collaboration in the paramount Nazi task to which
all other tasks were subordinated preparation for aggressive
war;
And finally, we propose to mention briefly the evidence
concerning his active participation in the waging of aggressive
war. [
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(Part 3 of 9)
"In conclusion, I should like to refer to remarks which you
made in a paragraph of your letter entitled 'The Four Year
Plan' about your general attitude toward my work in regard to
the economic policy. I know and I am pleased that at the
beginning of the Four Year Plan you promised me your loyal
support and co-operation, and that you repeatedly renewed this
promise even after the first differences of opinion had
occurred and had been removed in exhaustive discussions. I
deplore all the more having recently formed the impression
which is confirmed by your letter, that you are increasingly
antagonistic toward my work in the Four Year Plan. This
explains the fact that our collaboration has gradually become
less close."
Schacht and Goering were reconciled by written agreement on 7th
July, 1937, but subsequently again fell into disagreement, and
Hitler finally accepted Schacht's resignation as Minister of
Economics on 26th November, 1937, simultaneously appointing him
Minister without Portfolio, and, later, Schacht's resignation was
extended to his position as Plenipotentiary for War Economy.
Without reading it, I offer in evidence Document EC-494, Exhibit
USA 643, as proof of this fact.
"A. It may amuse you if I tell you that the last conversation"
- this is Schacht speaking - "I had with Goering on these
topics was in November, 1937, when Luther for two months had
tried to unite Goering and me, and to induce me to co-operate
again with Goering and maintain my position as Minister of
Economics. Then I had a last talk with Goering, and at the end
of this talk Goering said, 'But I must have the right to give
orders to you.' Then I said, 'Not to me, but to my successor.'
I never have taken orders from Goering, and I would never have
done it, because he was a fool in economics and I knew
something about it, at least.
In all this abundant and consistent evidence there is not the
slightest suggestion that Schacht's withdrawal from these two
posts represented a break with Hitler in the field of contemplated
military aggression. Indeed, Hitler was gratified that Schacht
would still be active in the Government as President of the
Reichsbank and as Minister without Portfolio. I offer in evidence
Document L-104, Exhibit USA 644, consisting of a letter to the
United States Secretary of State from Ambassador Dodd, under date
of 29th November, 1937, enclosing a translation of Hitler's letter
of 26th November, 1937, to Schacht. I quote the last two sentences
of Hitler's letter, found on Page 2 of the document:
"If I accede to your wish it is with the expression of deepest
gratitude for your so excellent achievements, and in the happy
consciousness that, as President of the Reichsbank Directorate,
you will make available to the German people and me, for many
years more, your outstanding knowledge and ability and your
untiring energy. Delighted at the fact that in the future,
also, you are willing to be my personal adviser, I appoint you
as from to-day a Reich Minister."
Schacht did continue, obviously still in full agreement with
Hitler's aggressive purpose. He was still President of the
Reichsbank at the time of the taking of Austria in March, 1938. In
fact, the Reichsbank took over the Austrian National Bank. On this
point I refer the Tribunal to Reichsgesetzblatt 1938, Part 1, Page
254, and ask that judicial notice be taken thereof. Further,
Schacht even participated in the planning of the absorption of
Austria. In this connection I introduce into evidence Document EC-
421, Exhibit USA 645, consisting of excerpts from minutes of a
meeting of the staff of General Thomas on 11th March, 1938, at
15.00 hours. I quote therefrom as follows:
"Lieutenant-Colonel Hunerm reads directive of the Fuehrer of
11th March concerning the 'Action Otto' and informs us that
'The Economy War Service Law' has been put in force. He then
reads Directives 1 and 2, and gives special orders to troops
for crossing the Austrian borders. According to that, at
Schacht's suggestion, no requests should take place, but
everything should be put in Reichsmark on an exchange basis of
two Schillinge to one Reichsmark."
On the conversion of the Austrian Schilling the Tribunal is asked
also to take judicial notice of Reichsgesetzblatt, 1938, Part 1,
Page 405.
"We are, however, faced with the fact that approximately three
billion Reichsmark of such drafts cannot now be paid, though
they will be due in 1939."
I quote from the upper half of Page 4:
"Exclusive of the Reichsbank there are approximately six
billion Reichsmark 'Mefo' drafts which can be discounted
against cash payment at any time at the Reichsbank, which fact
represents a continuous danger to the currency."
And I quote finally from the concluding paragraph of the
memorandum:
"We are convinced that the effects on the currency caused by
the policy of the last ten months can be mended, and that the
danger of inflation again can be eliminated by strict
maintenance of a balanced budget.
It is clear that Schacht's fear was genuine and is a complete
explanation of his departure from the scene. He had good reason to
be afraid. In fact, the Finance Minister had already recognised
the situation in September, 1938. I refer the Tribunal to Document
EC-419, Exhibit USA 621, which I have already submitted in
evidence, and which consists of a letter under date of 1st
September, 1938, from Krosigk to Hitler, in which Krosigk gives a
warning of an impending financial crisis. I quote from the bottom
of Page 2:
"When Schacht saw that the risky situation which he had
sponsored was becoming insoluble, he was more and more anxious
to get out. This desire to get out of a bad situation was for a
long time the 'Leitmotiv' of Schacht's conversation with the
Directors of the bank."
In the end, Schacht escaped by deliberately stimulating his
dismissal from the Presidency of the Reichsbank. I offer in
evidence Exhibit USA 647, consisting of excerpts from an
interrogation of von Krosigk under date of 24th September, 1945,
and I wish to read several statements, beginning at the very
bottom of the second page:
"I asked Schacht to finance for the Reich before the last day
of the month the sum of one hundred or two hundred millions. It
was this quite usual procedure which we had used for years, and
we used to give back this money after a couple of days. Schacht
this time refused, and said that he was not willing to finance
a penny because he wanted, as he said, that, it should be made
clear to Hitler that the Reich was bankrupt. I tried to explain
that these were not the proper grounds for discussing the whole
question of finance, because the question of financing very
small sums for a few days beyond the last days of the month
never would bring Hitler to the conviction that the whole
financing was impossible. As far as I remember now, it was Funk
who told Hitler something about this conversation; then Hitler
asked Schacht to call upon him. I do not know what they said,
but the result certainly was the dismissal of Schacht."
THE PRESIDENT, Just give me again the reference to that document
that you were reading from.
"Q. Now did Schacht ever say anything to you to the effect that
he wanted to resign because he was in opposition to the
continuance of the rearmament programme?
The defendant Goering has also confirmed this testimony. I refer
the Tribunal to the interrogation of Goering under date of 17th
October, 1945, this being Exhibit USA 648. I read from this
interrogation on 17th October, 1945, from the lower half of the
third page:
"Q. I want to ask you this specifically. Was Schacht dismissed
from the Reichsbank by Hitler for refusing to participate any
further in the rearmament programme?
Hitler dismissed Schacht from the Reichsbank on 20th January,
1939. Without reading, I offer in evidence Document EC-398,
Exhibit USA 649, consisting merely of a brief note from Hitler to
Schacht announcing his dismissal.
"On these occasions of your recall from office as President of
the Reichsbank Directorate, I take the opportunity of
expressing to you my most sincere and warmest gratitude for the
services which you have rendered repeatedly to Germany and to
me personally in this capacity, during long and difficult
years. Your name, above all, will always be connected with the
first epoch of the national rearmament. I am happy to be able
to avail myself of your services for the solution of new tasks
in your position as Reich Minister."
In fact, Schacht continued as Minister without Portfolio until
January, 1943.
First, his contribution to the Nazi seizure of power;
We turn now to the evidence showing that defendant Funk actively
promoted the conspirators' accession to power and their
consolidation of control over Germany. Soon after he joined the
Nazi Party in 1931 defendant Funk began to hold important
positions, first within the Party itself and then within the Nazi
Government. Funk's positions have, in the main, been listed in
Document 3533-PS, which is a statement signed by both defendant
Funk and his counsel. This document has been made available in the
four working languages of these proceedings, and a copy in the
appropriate language should be available in each of your Honours'
document books. It is accordingly requested that this document,
which is Exhibit USA 651, be received into evidence without the
necessity of its being read in its entirety.