The Nizkor Project: Remembering the Holocaust (Shoah)

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Q. Do I understand you correctly? Can one draw the
conclusion from your statement that there were other reasons
for your assistance in the rearmament programme, that you
had the tactical consideration that, by putting German
rearmament up for discussion, the debate on disarmament
amongst the other governments might be started again? This
debate, so to speak, had died down?

A. If I may, I will illustrate it briefly by means of an

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 fulfil his obligations. Thus the other party
can do nothing except, in turn, not adhere to the

                                                  [Page 414]

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 which 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 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

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 examine this
rearmament, and German military installations were visited,
and everything else was done, but nothing at all was done to
stop Germany's rearmament.

MR. JUSTICE JACKSON: If the Tribunal please, I cannot see
the point of all this detail. We have conceded that
rearmament here, except so far as it was involved with
aggressive purposes. As I said at the beginning, the United
States does not care to try here the issues of European
politics, nor are they submitted to this Tribunal for

The sole question here is the Indictment, which charges
arming for the purpose of aggression.

I do not want to interfere with the defendant giving any
facts that bear on his aggressive intentions, but the
details of negotiations of European politics and charges and
counter-charges between governments, it seems to me, lies
beyond any inquiry that we could possibly make, and the
details of this matter seem to me not helpful to the
solution of the issues here, and I think was ruled out by
the Tribunal in the case of Goering, if I am not mistaken.

THE PRESIDENT: Well, Dr. Dix, it all seems to be a matter of
argument, and argument is not really the subject of

DR. DIX: I do not believe so, your Lordship. What Mr.
Justice Jackson said is quite correct. Schacht is accused of
having assisted in bringing about an aggressive war, but
this assistance of his is supposed to have been the
financing which he carried out.

THE PRESIDENT: Go on, Dr. Dix, and do try to make it as
short as possible.


Q. I think you had come to the end of that question anyway,
Dr. Schacht.

DR. DIX: May I refer, in this connection, to one of the
motives for Dr. Schacht's assistance in rearmament. It was
his hope to renew the debate on disarmament. May I draw your
attention to Exhibit 36, Page 141 of the German text, and
Page 149 of the English text? It is an affidavit from Dr.
Schacht's son-in-law, Dr. von Scherpenberg. On Page 2 of
that affidavit you will find the following brief paragraph
which I propose to read; in fact, I can confine myself to
one sentence:

  "He" - that is to say, Schacht - "considered rearmament,
  within certain limits, to be the only means for the re-
  establishment 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

That is a statement of Scherpenberg regarding conversations
which Schacht had had at that time. It is, therefore, not an
ex-post opinion, it is the report

                                                  [Page 415]

of a conversation which he, Scherpenberg, had with his
father-in-law Schacht at that time. That is just an
additional remark I wanted to make.


Q. You have spoken about the rearmament on the part of the
other States, particularly Czechoslovakia and Poland, but
can you tell us whether, at the time, you knew of or heard
any exact details regarding the state of armament of those
two States?

A. I only know that it was known that Russia in 1935
announced that its peacetime army should be increased to
960,000 men.

Then I knew that in Czechoslovakia, for instance, the
installation of aerodromes was one of the leading tasks of
rearmament. We knew that Great Britain's navy was to be
stepped up.

Q. Did you later on completely abandon your idea of general

A. On the contrary, I used every opportunity, in particular
during conversations with men from abroad, to say that the
aim should always be disarmament. That, of course,
rearmament would always mean an economic burden for us,
which we considered a most unpleasant state of affairs.

I remember a conversation which I had with the American
Ambassador Davies. His report of this conversation is
incorporated in an exhibit that has been submitted to the
Tribunal. It is an entry in a diary which is repeated in his
book, "Mission to Moscow," and it is dated as early as 20
June, 1937, Berlin. He is writing about the fact that
amongst other things he and I had talked about disarmament
problems, and I need only quote one sentence. I have not the
number of the document, your Lordship, but it has been
submitted to the Tribunal.

Q. It is Schacht Exhibit 18, German text, Page 43, English,
Page 49.

A. Since I have only the English text, I shall read from it.

Davies writes:-

  "When I outlined the President's (Roosevelt) suggestion
  of limitation of armament to defensive weapons only, such
  as a man could carry on his shoulder, he (Schacht) almost
  jumped out of his seat with enthusiasm."
  End of quotation.

It becomes clear, therefore, from Ambassador Davies' remark,
that I was most enthusiastic about this renewed attempt and
the possibility of an imminent step towards disarmament as
proposed by President Roosevelt.

In this same book Davies reports a few days later, on 26
June, 1937, about the conversation he had with me, in a
letter addressed to the President of the United States. I
quote only one very brief paragraph - in English again:-

  "I then stated to him (i.e., Schacht) that the President
  in conversation with me had analysed the European
  situation and had considered that a solution might be
  found in an agreement among the European nations to a
  reduction of armaments to a merely defensive military
  basis, and this through the elimination of aircraft,
  tanks, and heavy equipment, and the limitation of
  armaments to such weapons only as a man could carry on
  his back, with an agreement among the nations for
  adequate policing of the plan by a neutral State. Schacht
  literally jumped at the idea. He said: 'That's absolutely
  the solution.' He said that in its simplicity it had the
  earmarks of great genius. His enthusiasm was

Q. To what extent did you want rearmament?

A. Not beyond equality with every single one of our
neighbour States.

Q. And did Hitler talk to you of far-reaching intentions, or
did you hear of any?

A. At no time did he inform me of them, nor did I hear from
anyone else whether he had made remarks about further

                                                  [Page 416]

Q. Were you informed about the extent, the type and speed of

A. No, I was never told about that.

Q. Had you set yourself a limit regarding this financing or
were you prepared to advance any amount of money?

A. I was certainly by no means ready to advance any
unlimited amount of money, particularly as these were not
contributions; they were credits which had to be repaid. The
limits for these credits were two-fold: One was that the
Reichsbank was independent of the Reich finance
administration, and the supreme authority of the State as
far as the granting of the credits was concerned. The board
of directors of the Reichsbank could pass a resolution that
credits were to be given, or were not to be given, or that
credits were to be stopped; if they considered it right. As
I was perfectly certain of the policy of the board of
directors of the Reichsbank - all of these men agreed with
me completely on financial and banking policy - therein lay
the first possibility of applying a brake, if I considered
it necessary. The second safeguard, the limit, was contained
in the agreement which the Minister of Finance, the
Government, and so of course Hitler, had made - the Mefo
bills, of which these credits subsisted, which were to be
paid back when they expired. They were repayable after five
years, and I have already said that if the repayments had
been made, funds for rearmament would naturally have had to
decrease. Therein lay the second possibility of limiting the

Q. Will you now please give the Tribunal the figures which
you were dealing with at the time?

A. We went up to ...

MR. JUSTICE JACKSON: We have no desire to enter into
controversy about the figures of financing rearmament. It
seems that the detail of dollars and cents - or Reichsmarks
- is unimportant to this, and terribly involved. We are not
trying whether it cost too much or too little; the purpose
of this rearmament is the only question we have in mind. I
do not see that the statistics of cost have anything to do
with it.

THE PRESIDENT: Dr. Dix, we would like to know what figures
the accused and you are talking about.

DR. DIX: The sums that Schacht as President of the
Reichsbank was ready to grant for the rearmament programme;
that, no doubt, is relevant, because if those sums remained
within such limits as might possibly be considered adequate
for defensive rearmaments in case of emergency, then, of
course, the extent of that financial assistance is an
important piece of evidence regarding the intentions which
Schacht was pursuing at the time. That is the very thing
that in the case of Schacht, Mr. Justice Jackson considers
relevant, namely, whether he helped prepare for an
aggressive war. If he was only considering the possibility
of a defensive war in his financing, and only placed sums at
the disposal of the rearmament programme which would never
have allowed an aggressive war, then that would refute the
accusation raised by the prosecution against the accused,
and I think that the relevance of that question cannot be

THE PRESIDENT: Are you saying that if the defendant Schacht
placed at the disposal of the Reich, say, 100,000,000, or
whatever the figure is, it would be defensive, and if he
placed 150,000,000, it would be not defensive, or what? Is
it simply the amount?

DR. DIX: No, I want to say that if, as will be proved, he
only wanted to give nine and later on gave hesitatingly and
unwillingly twelve million for the purpose, then that
contribution can never have been aimed at an aggressive war.

THE PRESIDENT: It is simply the amount?

DR. DIX: Yes, only the size of the amount.

THE PRESIDENT: Well, that can be stated very briefly, but as
for details of finance

                                                  [Page 417]

DR. DIX: I am of the opinion also that we have talked about
it too long. I was only going to ask, "What sum did you
give"? and then the objection was raised, and thus the
discussion was drawn out. May I put the question?


Q. Well, then, what sum did you intend to grant?

A. Naturally as little as possible. However, what I
contributed is what is important. I placed at their disposal
- to give one figure and to be very brief - until 31 March,
1938, credits amounting to a total of 12 milliards of
Reichsmarks. I have discussed that with one of the
interrogators of the English prosecution, who asked me about
the subject, and I replied that that was about one third of
the amount which was spent on rearmament. After that,
without the Reichsbank, beginning with 1 April, 1938, the
figure stated in that budget year for rearmament was eleven
milliards, and in the subsequent year, twenty and one half,
and of that not a penny came from the Reichsbank.

Q. That was after your departure, was it not?

A. That was after I had stopped credits.

For record purposes I should like to say that I think I made
a mistake before, I said milliards instead of millions, but
I think it is obvious what I meant. I only wanted to correct

Q. Now, then, Dr. Schacht, the prosecution have stated that,
on 19 February, 1935, the Ministry of Finance received
authority to borrow unlimited amounts of money if Hitler
ordered them to do so.

A. Here, again, the prosecutor did not see things in the
proper light. The President of the Reichsbank is not
responsible for the actions of the Ministry of Finance of
the Reich. 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 State in Washington, for instance.

Q. You have also been accused that the debt of the Reich
increased three times during the time while you were
president of the Reichsbank.

A. 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
emphasise the fact that I had nothing to do with either.

Q. You were not responsible for the same reason.

A. No, of course I am not responsible for that.

Q. And presumably the same applies to the point made by the
prosecution that you allegedly drafted a new finance
programme in 1938?

A. On the contrary, I refused to do anything else for the
financing of rearmament; the finance programme was drafted
by a State Secretary in the Reich Finance Ministry, and, it
looked like it.

Q. One of your economic policies, during the time you were
Minister of Economy, and which you have been accused of as
being a preparation for war, was the so-called "New Plan"
(Neue Plan). What was that?

A. May I first of all say that the "New Plan" had nothing at
all to do with rearmament. Germany, after the Treaty of
Versailles, had fallen into a state of distress,
economically speaking and especially export ...

DR. DIX: May I interrupt you. Your Lordship, if the Tribunal
is of the opinion that the "New Plan" has nothing to do with
the rearmament and preparation for war - I think the
prosecution is of the opposite opinion - then, of course,
the question is irrelevant, and I will drop it. I am only
putting it because the "New Plan" has been used in the
arguments of the prosecution.

THE PRESIDENT: If you say, and the defendant has just said,
that the "New Plan" had nothing to do with rearmament, I
think you might leave it for cross-examination and you can
raise it again in re-examination if it is necessary.

Q. In that case I shall not ask you about the barter
agreements, either. I shall leave it to the prosecution to
bring it out during the cross-examination. I cannot see what
it has to do with the preparation for war.

                                                  [Page 418]

Now, defendant, you have already stated that you strove to
remove the Versailles Treaty by means of peaceful
negotiations, or at least, to modify it. In your opinion,
did any such means for a peaceful modification of the
Versailles Treaty still exist?

A. In my opinion, there were no means other than peaceful
ones. The desire to modify the Versailles Treaty by means of
a war was a crime.

Q. Right. But now you are being accused that the alleged
preparations for war, which really were a counter measure to
the general rearmament, but, although not a preparation for
an aggressive war, were nevertheless a rearmament, as such
were an infringement of the Treaty of Versailles. I assume
that you at the time decided to help finance that rearmament
only after giving the problem due legal and moral
considerations. What, exactly, were these considerations?

A. I think I have already answered that question in detail.
I need add nothing else.

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