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     Nazi Conspiracy and Aggression, Volume Two, Chapter XIV

                                                  [Page 727]

Funk was vested with, and carried out, major
responsibilities in connection with the planning and
execution of the Nazi program of economic mobilization for
aggression. Thus, in 1938 he succeeded Schacht as Minister
of Economics (3533-PS).

Immediately before Funk actually took over the Reich
Ministry of Economics there was a major reorganization of
its functions, which integrated the Ministry with the Four
Year Plan as the Supreme Command of the German military
economy. The reorganization was accomplished by Goering, in
his capacity as Commissar for the Four Year Plan, by a
decree dated 4 February 1938 ("The Four Year Plan" (Der
Verjahresplan) official monthly bulletin, issued by Goering,
Vol. II, 1938, p. 105). Under this decree, the jurisdiction
of the Economics Ministry was defined as covering the
following fields of Germany's economy: German raw and
working materials, mining, iron industry, power industry,
handicrafts, finance and credit, foreign trade, devisen, and
exports. As a result of this decree, sectors of the German
economy which were strategic in the organization of war and
armaments economy were placed under the immediate control of

Furthermore the Reich Office for Economic Development,
charged by the decree, with "research, planning and
execution of the Four Year Plan", was incorporated into the
Reich Ministry

                                                  [Page 728]
of Economics. Similarly, the Reich Office for Soil Research
and the Office of the Reich Commissar for the exploitation
of Scrap Materials were made subject to that Ministry. Thus,
it is clear that the reorganization decree concentrated
significant responsibilities in the hands of Funk and
thereby made him one of the chief agents of economic
mobilization during a decisive period.

Subsequently, Funk was, by a secret law, expressly charged
with the task of mobilizing the German economy for war. On 4
September 1938, while the conspirators were engaged in
intensive planning for aggression against Czechoslovakia,
Hitler signed a revision of the so-called Reich Defense Law
(2194-PS). This law conferred upon Funk substantially the
same authority which had been vested in Schacht by the Reich
Defense Law of 21 May 1935 (2261-PS). The law of 4 September
1938 provided in part:

     "It is the task of the GBW [Chief Plenipotentiary for
     Economics] to put all economic forces into the service
     of the Reich defense, and to safeguard economically the
     life of the German nation. To him are subordinate: the
     Reich Minister of Economics, the Reich Minister of
     Nutrition and Agriculture, the Reich Minister of Work,
     the Reich Chief of Forestry, the Reich Commissar for
     Price Control. He is furthermore responsible for
     directing the financing of the Reich defense within the
     realm of the Reich Finance Ministry and the Reich Bank.
     "The GBW must carry out the demands of the OKW which
     are of considerable importance for the armed forces;
     and he must insure the economic conditions for the
     production of the armament industry directed
     immediately by the OKW according to its demands. If the
     demands of the armed forces cannot be brought into
     accord with the affairs of economy, then the Fuehrer
     and Reich Chancellor decides.
     "The GBW has the right within his sphere to issue laws
     with the consent of the OKW and GBV which differ from
     the existing laws."

The law of 4 September 1938, which at the specific direction
of Hitler was not made public, was signed by Hitler and by
Funk, among others, as "Chief Plenipotentiary for Economics"

Funk, in a speech which he delivered on 14 October 1939,
explained how he, as Chief Plenipotentiary for Economics,
had, for a year and a half prior to the launching of the
aggression against Poland, advanced Germany's economic
preparation for war. He stated:

                                                  [Page 729]

     "Although all the economic and financial departments
     were harnessed in the tasks and work of the Four Year
     Plan under the leadership of Generalfeldmarschall
     Goering, the war economic preparation of Germany has
     also been advanced in secret in another sector for well
     over a year, namely, by means of the formation of a
     national guiding apparatus for the special war economic
     tasks, which had to be mastered at that moment, when
     the condition of war became a fact. For this work as
     well all economic departments were combined into one
     administrative authority, namely under the General
     Plenipotentiary for Economy, to which position the
     Fuehrer appointed me one and a half years ago." (3324-

In his dual capacity of Chief Plenipotentiary for Economics
and Minister of Economics, Funk naturally was advised of the
requirements which the conspirators' program of aggression
imposed on the economy. Thus, during a conference in the
Reich Aviation Ministry on 14 October 1938 under the
chairmanship of Goering, Goering referred to Hitler's orders
for an abnormal increase of armament, particularly weapons
for attack, and directed the Ministry of Economics to submit
suggestions on how to finance this rearmament by increasing

The report of Goering's remarks states in part:

     "General Field Marshal Goering opened the session by
     declaring that he intended to give directives about the
     work for the next months. Everybody knows from the
     press what the world situation looks like and therefore
     the Fuehrer has issued an order to him to carry out a
     gigantic program compared to which previous
     achievements are insignificant. There are difficulties
     in the way which he will overcome with utmost energy
     and ruthlessness.
     "The amount of foreign exchange has completely dwindled
     on account of the preparation for the Czech Enterprise
     and this makes it necessary that it should be strongly
     increased immediately. Furthermore, the foreign credits
     have been greatly overdrawn and thus the strongest
     export activity stronger than up to nowis in the
     foreground. For the -next weeks an increased export was
     first priority in order to improve the foreign exchange
     situation. The Reich Ministry for Economy should make a
     plan about raising the export activity by pushing aside
     the current difficulties which prevent export.
     "These gains made through the export are to be used for
                                                  [Page 730]
     increased armament. The armament should not be
     curtailed by the export activity. He received the order
     from the Fuehrer to increase the armament to an
     abnormal extent, the air force having first priority.
     Within the shortest time the air force is to be
     increased five fold, also the navy should get armed
     more rapidly and the army should procure large amounts
     of offensive weapons at a faster rate, particularly
     heavy artillery pieces and heavy tanks. Along with this
     manufactured armaments must go; especially fuel, powder
     and explosives are moved into the foreground. It should
     be coupled with the accelerated construction of
     highways, canals, and particularly of the railroads."

Goering's words were the words of one already at war. And
the emphasis on quintupling the Air Force and accelerating
weapon manufacture for attack, were the words of a man
waging aggressive war.

Funk actively participated in the planning of wartime
financial measures (1301-PS). This was natural since Funk,
after 1938, occupied three positions crucial to finance:
Minister of Economics, President of the Reichsbank (to which
he was appointed in January 1939), and Chief Plenipotentiary
for Economics. Funk's role in war financing is illustrated
by a letter, dated 1 June 1939, from the Chief
Plenipotentiary for Economics (Funk), signed on his behalf
by Dr. Posse (3562-PS). This letter found in the captured
files of the Reich Ministry of Economics, transmitted the
minutes of a meeting concerning the financing of the war.
This meeting had been held under the chairmanship of Dr.
Landfried, Funk's Undersecretary in the Reich Ministry of
Economics. The document bears a marginal note in the bottom
left hand corner, dated 5 June, stating that the document
was "to be shown to the Minister" [i.e., Funk]. Only eight
copies were made of the Minutes, which were marked "Top
Secret". Four of these copies were sent to officials
directly subordinate to Funk (two in the Reich Ministry of
Economics, one in the Reichsbank, and one in the Office of
the Chief Plenipotentiary for Economics). During the course
of the meeting, which was attended by twelve officials, five
of whom were directly responsible to Funk in his various
capacities, the conferees discussed a memorandum regarding
war finance which had been prepared by the Chief
Plenipotentiary for Economics on 9 May 1939. The minutes of
this meeting state:

     " *** Then a report was made of the contents of the
     'Notes on the Question of Internal Financing of War',
     of 9 May of this year (appendix to GBW 8/179/39 Top
                                                  [Page 731]
     Secret), in which the figures given to me by the Reichs
     Minister of Finance are also discussed. It was pointed
     out that the General Plenipotentiary for the Economy is
     primarily interested to introduce into the legislation
     for war finance, the idea of financing war expenditures
     by anticipating future revenues, to be expected after
     the war. ***
     "Undersecretary Newman, first, submitted for discussion
     the question whether the production would be able to
     meet to the assumed extent, the demands of the Army,
     especially if the demands of the Army, as stated in the
     above report, would increase to approximately 14
     billions in the first three months of war. He stated
     that, if the production potential of the present Reich
     territory is taken as a basis, he doubts the
     possibility of such a production increase." (3562-PS).
During the course of the meeting one of the representatives
of the High Command stated:

     "The demands of the Army would probably be higher in
     the first three months of war than during the further
     course of the war." (3562-PS).

In the files of the Reich Ministry of Economics there was
also found, attached to the above letter and minutes, a Top
Secret memorandum entitled "Notes Concerning Financing of
War." That memorandum reveals the plans to use the resources
of countries to be occupied in the interest of the Nazi war

     "*** First, as concerns the scope of the total
     production, it is clear that the economic power of the
     Protectorate and of other territories, possibly to be
     acquired, must of course be completely exhausted for
     the purposes of the conduct of the war. It is, however,
     just as clear that these territories cannot obtain any
     compensation from the economy of Greater Germany for
     the products which they will have to give us during the
     war, because their power must be used fully for the war
     and for supplying the civilian home population."

It is plain that Funk exercised comprehensive authority over
large areas of the German economy whose proper organization
and direction were critical to effective war preparation.
The once powerful German military machine, which rested on
the foundation of thorough economic preparation, reflected
the contribution which Funk had made to Nazi aggression.

Immediately before this machine was directed against Poland,
the final preparatory steps were taken, and the previous

                                                  [Page 732]
ment of Funk as Chief Plenipotentiary for Economics was made
public. Thus on 27 August 1939, Funk, in this capacity,
issued two decrees, one introducing general rationing of
consumers goods, the other setting up regional economic
authorities (1939 Reichsgesetzblatt, I, pp. 1495 and 1498).

Finally, on 30 August 1939, Hitler, Goering, and Lammers
signed a decree establishing the Ministerial Council for
Reich Defense, composed of Goering; Funk, and Hess, among
others, to act as a War Cabinet (1939 Reichsgesetzblatt, I,
p. 1532).

Funk mobilized the German economy for war with full
knowledge of the plans for military aggression. An
irresistible inference of such knowledge arises from the
combination of several factors: from Funk's long and
intimate association with the Nazi inner circle; from the
very nature of his official functions; from the war-
dominated setting of Nazi Germany; from the fact that force
and the threat of force had become the open and primary
instruments of Nazi policy; and finally from the fact that
at the same time that Funk was making economic preparations,
specific plans for aggressionlater to be carried outwere
being formulated, plans which could only be effective if
they were synchronized with the complementary economic

The inference of Funk's knowledge and intent is reinforced
beyond question by considering, in the light of the factors
described above, the more specific evidence of Funk's
knowledge of aggressive plans. Thus, Funk, at the very
beginnings of the Nazi Government, had stated that the
absorption of Austria by Germany was a political and
economic necessity, and that it would be achieved by
whatever means were necessary (1760-PS).

Goering had issued instructions to the Ministry of Economics
in the language of a man waging aggressive war (1301-PS).
Moreover, Funk and his subordinates in May 1939 were making
detailed plans for financing the war, that is, a particular
war, the war against Poland. (3562-PS)

In connection with Funk's economic planning for aggression
reference should be made to other evidence of the
preparatory work which Funk carried on prior to the
aggression against Poland. Shortly before the attack on
Poland, in a letter to Hitler dated 25 August 1939, Funk
expressed his gratification for his role in the "tremendous
events" of these days, and his thanks for Hitler's approval
of his economic war measures. He concluded by giving Hitler
his pledge in that hour (699-PS). The text of the letter is
as follows:

                                                  [Page 733]
     "Reich Minister Walther Funk.
                                Berlin W. 8, 25 August 1939.
                                        Unter Den Linden 13.
     "For the congratulations which you transmitted to me on
     my birthday, in such extremely friendly and kind
     fashion, I want to thank you from the depths of my
     heart. How happy and how grateful we must be to you to
     be favored to experience these colossal and world-
     moving times, and that we can contribute to the
     tremendous events of these days.
     "General-Field-Marshal Goering informed me, that last
     night you -- my Fuehrer -- have approved in principle
     the measures prepared by me for financing the war, for
     setting up the wage and price systems and for carrying
     out the plan for an emergency contribution [Notopfer].
     This news has made me deeply happy. I hereby most
     obediently report to you that I have succeeded, through
     the provisions made already during the last month, to
     make the German Reichsbank internally so strong and so
     safe against attack from without that even the most
     serious disturbances of the international currency and
     credit systems would be absolutely unable to affect us.
     "In the meantime I have in a wholly inconspicuous
     manner converted into gold all assets of the Reichsbank
     and of the German economy abroad on which we could
     possibly lay hands. With the proposals worked out by me
     regarding a ruthless choking of any unessential
     consumption and any public expenditure and project not
     necessary for war we will be able to meet all financial
     and economic demands without any serious
     "In my capacity as General Plenipotentiary for
     Economics, appointed by you, my Fuehrer, I have
     regarded it as my duty to give you this report and this
     pledge in this hour.
                                           "Heil, my Fuehrer
                         "(signed) Walther Funk". (699-PS) .

Funk both personally and through duly designated
representatives also participated in the planning which
preceded the aggression against the USSR. Thus, in April
1941, Rosenberg, after he had been appointed deputy for
centralized treatment of problems concerning the Eastern
Territories, discussed with Funk the economic problems which
would be raised when the plans for aggression in the East
were carried out (1039-PS). that time Funk appointed Dr.
Schlotterer as his deputy to

                                                  [Page 734]
work with Rosenberg in connection with the exploitation of
the Eastern Territories. Funk's deputy met with Rosenberg
almost daily.

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