[Page 382]

I also need not give a wearisome enumeration of figures and make specialized technical statements to the effect that this part of rearmament which Schacht first financed with nine billions and then reluctantly with a further three billions

[Page 383]

Therefore, I also consider it superfluous to go into long discussions as to whether Blomberg's statement that Schacht was aware of the progress of rearmament is correct or not, or the statement of Schacht and Vocke that this was not the case. I admit without further discussion the sincerity of Blomberg's statement. But as he had more to do with the technical side of rearmament than the Reichsbank had, personal experience favours the opinion that the memory of Schacht and Vocke is more reliable on this point than Blomberg's, to whom this report to the Reichsbank was a matter of secondary importance for his department. For the Reichsbank, the desire to be informed about the technical progress of the armament as well as about the financial expenditures was a very important matter. One remembers such facts more reliably than unimportant secondary matters. In any case, it is established that until the budget year 1937/38 only twenty-one billions were spent for armament, of which twelve billions were financed by credits of the Reichsbank, and that, according to Colonel-General Jodl's statement of 5th June, on 1st April, 1938, only 27 to 28 divisions were ready, whereas in 1939 there were as many as 73 to 75 divisions.

It needs no expert to show. that this volume of expenditure and armament in April, 1938, was entirely insufficient for a war of aggression. Indeed, Hitler was also of the same opinion when, in his memorandum of August, 1936, which has been submitted to the Tribunal, and which was handed over to Speer in 1944, he pointed out, along with many disapproving remarks about Schacht's economic leadership, that four precious years had gone by, that there had been time enough in those four years to determine what we could not do and that he was hereby ordering that the German Army would have to be ready for action in four years, that is, in the course of the year 1940.

I should like to remind the Tribunal that even after Schacht's withdrawal as president of the Reichsbank, 31 1/2 billions were spent on armament during the two budget years 1938/39 and 1939/40. The issuing and expenditure of money on armament, therefore, continued without Schacht, and, indeed, to an even more considerable extent. Schacht had once written to Blomberg that he was not a money-making machine. He exercised a constant restraining pressure on Blomberg. I refer only to his letter to Blomberg of 21st December, 1935, which has been submitted to the Tribunal. He exercised a restraining influence by means of explanatory lectures to officers of the War Ministry and of the Armed Forces Academy. He refused the railway loan of 1936, requested by the Minister of Communications, which was indirectly in the interests of armament, and he stopped the credits of the Reichsbank as early as the beginning of 1937, taking a last step by compromising about the final three billions. He refused the credit which the Reich Finance Minister requested of him in December, 1938.

He created an automatic brake for the armament expenditures through the Mefo bills, which, from the technically financial point of view, was a rather bold measure but still legally tenable. These served at first to finance the armament expenditures, but restricted further armament expenditures after their expiration on 1st April, 1939, because the Reich was obligated to redeem them. Schacht's foresight proved true. The increase in employment brought such a rise in the State revenues that it would not have been difficult to liquidate the Mefo bills at their expiration five years later.

[Page 384]

Nothing shows that any other motives than those which necessarily appear from the facts just mentioned caused him to make this endeavour to relinquish his duties. If the prosecution maintains that the reason was his antagonism to Goering, this is also right in so far as Schacht was an opponent of the Four-Year Plan, of which Goering, was the chief. That the reason was a rivalry of power is a pure supposition, an interpretation of the actual events which justifies the quotation: "Interpret to your heart's content, because if you do not interpret, then you will infer."

The memorandum of the Reichsbank of November, 1938, which led to the dismissal of Schacht and most of his collaborators, including Vocke, is also unequivocally and forcibly opposed to armament. It naturally had to contain reasons for this which were derived from the departmental jurisdiction of the Reichsbank. Its aim was generally known. Hence Hitler's remark: "This is mutiny." The memorandum ends with the demand for control of the capital and loan market, as well as the management of taxation by the Reichsbank. Compliance with this demand would have taken away from Hitler every possibility of raising money for further armament, and therefore, this demand was unacceptable to Hitler. Schacht and his colleagues knew this. Accordingly, they deliberately sought a break by this step. Schacht now bore no further responsibility. From now on Schacht could devote himself exclusively to the plans for a coup d'etat by the group of conspirators to which he belonged. He became a traitor to Hitler. By remaining Minister without portfolio, he hoped to obtain more essential information, which the group had to have to carry out their aims, than if he resigned altogether. I shall return to this point later.

The fact of armament, as such, therefore, has no probative value for the assertion of the prosecution that Schacht deliberately contributed to the preparation of a war of aggression. Simultaneous economic armament, however, belongs of necessity to armament in the modern sense. On the German side, this had been already recognized for the first time at the beginning of the First World War by two very important German Jews, the founder of the Hamburg-America Line, Albert Ballin, and the great German industrialist Rathenau. This is the same Rathenau who made the wonderful speech on peace during the Conference at Genoa, which was received with wild applause by the delegates of those very Powers which had opposed his country but four years previously as enemies, and who, when German Foreign Minister, was the victim of an anti-Semitic outrage in the early twenties. I probably can assume that the personality of Albert Ballin is known to the Tribunal. Both men recognized, even at the start of the First World War, the error of omitting economic mobilization. Rathenau then organized the so-called War Raw Materials Department of the War Ministry. The first Plenipotentiary for War Economy, for this is what he really was, was ideologically a pacifist; and at least since that time, there is probably no mobilization plan by any nation which does not arrange for the purely military armament to be accompanied by a corresponding economic preparation for war. Therefore, the designation of a General Plenipotentiary for War Economy, even if he had taken up his

[Page 385]

In conclusion, the prosecution finally sees something incriminating in the so-called maintenance of secrecy regarding certain mobilization measures and mobilization arrangements, as, for example, the second Reich Defence Law. In this case, too, a natural, worldly way of thinking relieves these findings of any incriminating character. All nations are accustomed to carrying out mobilization and armament measures in "secret." Upon further consideration and after closer observation this practice can, of course, be recognized as a very superfluous, routine matter. Only drafts and technical details can be really kept secret. The fact of rearmament as such can never be kept secret. The same applies to the existence of a large body which is to serve the purpose of this rearmament. Either it becomes known because it starts functioning, or, like the ominous Defence Council, it remains hidden and secret only because it does not function.

In the memoirs of a Tsarist officer regarding his experiences in the Russo-Japanese war, I found the following humorous observation:

"If I, as a member of the General Staff, wished an incident to become known, I had it classified as 'secret' and my wish was fulfilled. If I wished to keep something secret, which was almost an impossibility, I unobtrusively gave it free circulation and occasionally my wish was fulfilled."

Thus, the fact of the military activities of Germany after the seizure of power by Hitler and the subsequent rearmament were never a secret to the world. These proceedings have produced a great deal of evidence to this effect. We know the report of Consul-General Messersmith; we know his sworn testimony of 30th August, 1945, submitted by the prosecution under No. PS-2385, according to which the armament programme - he speaks of a giant armament programme immediately after the seizure of power - and the rapid development of the air programme had been apparent to everybody. It had been impossible to move in the streets of Berlin or in any other city of importance in Germany without seeing pilots or aviators in training. He expressly states, on Page 8 of his testimony, that this giant German rearmament programme was never a secret and was quite publicly announced in the spring of 1935.

I would like to remind you of the remark of Ambassador Dodd, to the effect that he pointed out to Schacht that the German Government had bought high-grade aeroplanes from American aeroplane manufacturers for one million dollars, and had paid for them in gold. Even if Ambassador Dodd perhaps made a mistake in this detail, yet all this still proves that German rearmament - the extent of which was surely even overestimated abroad at that time - must have been an open secret.

Therefore, it is not even necessary to refer to the mutual visits of the general chiefs of staff, to which Milch and Bodenschatz testified - the visits of the Chief of the British Intelligence Service, Courtney, the permanent presence in Berlin of military attaches of nearly all countries - to recognize that the so-called secret rearmament was a public one, and that only technical secrets were safeguarded as is done in every State.

The outside world knew of the existence of this rearmament, and in any case considered it for a longer time than Schacht himself did to be compatible with world peace.

[Page 386]

Furthermore, the prosecution argues that Schacht was a member of the Reich Cabinet, at least as Minister without portfolio, from the time of his dismissal in January, 1938, as Minister of Economics until January, 1943. The prosecution makes the Reich Cabinet responsible, criminally responsible for the belligerent invasions of Hitler. This argumentation has an attractively convincing power for somebody who starts with the normal concept of a Reich Cabinet. The effect disappears once it has been ascertained that the so-called Reich Cabinet was not such in the usual sense of a constitutional State.

Judgements should not, however, be based on outward appearances and forms, on fiction, but only on actually established conditions. This makes it necessary to penetrate sociologically the nature of the Hitler regime, and to examine whether a member of the Reich Cabinet, hence of the Reich Government as such, must, in this capacity, bear the same criminal responsibility as if he were in any other normal State set-up, be it a democratic republic, or a democratic monarchy, or a constitutional monarchy, or an absolute monarchy, but nevertheless a monarchy based on a constitution, or of a constitutional nature, which bears the character of a lawful State based on a constitution. We must therefore investigate the actual, sociological structure of the Hitler regime. We have heard an account of the Fuehrer order (Fuehrerbefehl) in this connection by Professor Jahrreiss. Here, too, I want to avoid repetition and only state the following in abbreviated form:

I want to say first of all, in order to avoid again the danger of a misunderstanding, that, when I speak of the Hitler regime here, I do so without referring in any ways to the persons sitting in the defendants' dock; naturally with the exception of Schacht. For the latter, I do so in the negative sense, for he did not belong to the regime as such, in spite of the fact that he was a member of the Reich Government and President of the Reichsbank. I leave the question completely open as to whether any of the other defendants should be considered a member or supporter of the regime. That question is subject only to the judgement of the Tribunal and the evaluation of the respective competent defence counsel.

At the very beginning of my argument I indicated that, even for those who lived in Germany during the Hitler regime, it was difficult to differentiate between the seeming, apparent distribution of power and the actual wielding of this power, as it requires a great deal of political intuition; and that for people living outside of Germany this is bound to be too difficult to judge, and will only be made possible through the findings resulting from the presentation of evidence before this Tribunal. We have established here that the Reich Cabinet, which Hitler termed a club of defeatists, was convened for the last time in 1938 - and that it met then only to receive a communication from Hitler. For actual deliberation and the passing of a resolution it had last been convened in 1937. We have also established that Hitler deliberately kept all news of political importance from the Reich Cabinet, as is proved quite unequivocally by the so- called Hoszbach Minutes of 10th November. During this meeting the Fuehrer called the attention of the chiefs of the branches of the Wehrmacht and the Reich Foreign Minister, who; were present - Schacht, of course, was not present and did not learn about the Hoszbach Minutes until he came here - to the fact that the subject for deliberation was of such great importance that it would result in full Cabinet meetings in other countries, and that just because of its great significance he had decided not to discuss the matter with the Reich Cabinet.

[Page 387]

Despotism and tyranny hid attained their most absolute character in 1938. It was a characteristic quality of the Fascist, as well as of the National Socialist regime, to concentrate the political will in the head of the Party, who, with the help of this Party, subjugated and became master of the State and its people. Justice Jackson also recognized this when he stated, on 28th February, 1946, that the apex of power existed in a power group outside of the State and outside the Constitution.

To speak, in the case of such a regime, of a responsible Reich Government and of free citizens who, through some organization or other, could exert influence on the formation of the political will, would mean proceeding from entirely wrong hypotheses. Only inconceivable eminence usually gains irresponsible influence on the head of State and Party in such regimes. The formation of the political will can be recognized in its crystallised form only in the head of the State himself; otherwise it becomes opaque. It is another characteristic of such a regime that behind the faade of seemingly absolute harmony and union, several power groups fight each other. Hitler not only tolerated such opposing groups, he even encouraged them and in part used them as a basis for his power.

If any of the defendants spoke here of the unity of the German people during this war in contrast with the First World War, I must stress in reply that hardly at any time during its history was the German nation so torn internally as it was during the Third Reich. The apparent unity was merely the quiet peacefulness of a churchyard, enforced through terror. The conflicts between the individual high functionaries of the German people, which we have ascertained here, reflect the inner strife-torn condition of the German nation, hidden artificially only through the terror wielded by the Gestapo.

To give only a few examples, we were confronted here with the conflicts between Himmler and Frank, between Himmler and Keitel, between Sauckel and Seldte, between Schellenberg and Canaris, between Bormann and Lammers, between SA and SS, between Wehrmacht and SS, between SD and justice, between Ribbentrop and Neurath, and so on and so forth. The list could be continued ad libitum.

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