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   Nazi Conspiracy and Aggression, Volume Two, Chapter XIV

                                                  [Page 751]

(1) He was a faithful adherent of Hitler. It has already
been demonstrated that even before Hitler's accession to
power, Schacht aligned himself with Hitler and accepted his
program. Schacht's utterances after Hitler had entrenched
himself in power clearly show that he remained a faithful
servant of Hitler despite the series of outrages committed
under Hitler's direction.

At the opening of the Leipzig Fair on 4 March 1935, Schacht

     "My so-called foreign friends don't render any services
     to me or the cause, which they don't want anyway, of
     course, but not even to themselves, if they try to
     construe a contrast between me and the allegedly
     impossible economic theories of National Socialism and
     represent me as a sort of guardian of economic reason.
     I assure you that all that I am doing and saying
     enjoys the absolute approval of the Fuehrer and that I
     would never do or say anything that does not have
                                                  [Page 752]
     his approval. Not I but the Fuehrer is the guardian of
     economic reason." (EC-503)

On the occasion of the unveiling of Hitler's bust in the
vestibule of the Reichsbank on 31 July 1935, Schacht said:

     "Germany stays and falls with the success of the policy
     of Hitler." (EC-415)

At a ceremony in connection with the creation of the
Economic Chamber for Pomerania in Stettin on 19 January
1936, Schacht denied that there was any disagreement between
Hitler and his collaborators, and went on to say:

     "In Germany there is fortunately only one policy and
     one economic policy, namely that of Adolf Hitler; to
     work with him and for his goals is the highest
     satisfaction for every member of the people's
     community." (EC-502)

In May 1936,. Schacht was attacked by some of the more
radical elements of the Nazi Party because he had rejected
their "partially irrational ideas" concerning armament
financing. In repelling these attacks, Schacht emphasized at
a secret meeting of the Ministers on 12 May 1936, that his
program of financing armaments had meant "the commitment of
the last reserve from the very beginning"; and he announced
that despite the attacks, he would continue to work because

     "*** stands with unswerving loyalty to the Fuehrer,
     because he fully recognizes the basic idea of National
     Socialism and because at the end, the disturbances,
     compared to the great task, can be considered
     irrelevant." (1301-PS).

So far as appears, Schacht did not become a member of the
Nazi Party until January 1937. Franz Reuter, whose biography
of Schacht was officially published in Germany in 1937, has
stated that Schacht's becoming a regular Party member was
only a question of secondary importance, and even part of a
carefully planned policy, for,

     "By not doing so -- at least until the final assertion
     and victory of the Party -- he [Schacht] was able to
     assist it [the Party] much better than he would have
     been able to do had he become an official Party
     member." (EC-460)

On 30 January 1937, Hitler bestowed the Golden Party Badge
upon Schacht, in recognition of his "special services to
Party and State." Schacht accepted this hallmark of approval
by the Fuehrer with effusive thanks and a pledge of
continued support In his speech of acceptance, Schacht

     "The presentation of the Golden Badge of the Movement
     is the highest honor the Third Reich has to offer. In
     honoring me as the head of the Reichsbank and the Reich
                                                  [Page 753]
     Prussian Ministry of Economics, it honors at the same
     time the two agencies which I am directing as well as
     the work of all those officials, employees and workers
     functioning in these two agencies."
     "I think all my colleagues among the ranks of
     officials, employees, and workers for their
     faithfulness in the performance of their work, and
     appeal to all of them further to devote, with all their
     hearts, their entire strength to the Fuehrer and the
     Reich. The German future lies in the hands of our
     Fuehrer." (EC-500)
The depths of adulation were reached in a speech which
Schacht delivered on the occasion of Hitler's 48th birthday
in April 1937. Schacht spoke as one of Hitler's "closest
collaborators," who had seen at first hand the difficulties
which beset the Fuehrer in the relentless march toward his
goals. In his speech, Schacht stated:

     "With the limitless passion of a burning heart and the
     infallible instinct of the born statesman, Adolf Hitler
     has won for himself the soul of the German people in a
     battle fought for 14 years with unswerving
     "Only the closest collaborators of the Fuehrer know how
     difficult is the burden of this responsibility; how
     sorrowful are the hours during which decisions must be
     made which bear upon the well being and the fate of all
     of Germany." (EC- 501 )

In November 1938, at a time Schacht now asserts he was
plotting against Hitler, he stated in a speech:

     "Instead of a weak and vacillating Government, a
     single, purposeful, energetic personality is ruling
     today. That is the great miracle which has actually
     happened in Germany and which has had its effects in
     all fields of life and not least in that of economy and
     finance. There is no German financial miracle. There is
     only the miracle of the reawakening of German national
     consciousness and German discipline, and we owe this
     miracle to our Fuehrer Adolf Hitler." (EC-611)

2) Schacht favored the acquisition of additional territory
for Germany-peacefully if possible, but by aggressive war,
if necessary. Schacht had long been a German nationalist and

                                                  [Page 754]
expansionist. As early as 1927, he spoke against the
Versailles Treaty:

     "The Versailles Dictate cannot be an eternal document,
     because not only its economic, but also its spiritual
     and moral premises are wrong." (EC-415)

He strongly favored the acquisition by Germany of both
colonial territory and contiguous territory in Europe. At
the Paris conference on 16 April 1929, he said:

     "Germany can generally only pay if the Corridor and
     Upper Silesia will be handed back to Germany from
     Polish possession, and if besides somewhere on the
     earth colonial territory will be made available to
     Germany." (3726-PS)

In a speech in Danzig in June 1935, Schacht ascribed the
economic difficulties which confronted Danzig to "historical
errors of the greatest extent which were beyond the control
of the German people". He sought to comfort his listeners
with the assurance that

     "We Germans in the Reich today are looking with fullest
     confidence upon our comrades in the Danzig Free State,
     and maintain our people's fellowship with the
     interests, wishes and hopes of this territory which has
     unfortunately been separated from us." (EC-498)

In January 1936, Schacht again publicly spoke against the
Versailles Treaty, and impliedly threatened war unless its
terms were revised in Germany's favor. At that time, he

     "But the memory of war weighs undiminished upon the
     people's minds. 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 renewed labor, but the moral wrong which has
     been inflicted upon the conquered peoples, in the peace
     dictates, leaves a burning scar on the people's
     conscience. The spirit of the 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."

Later in the same year, Schacht again publicly advocated
"Lebensraum" for the German people in terms not unlike those
employed by Hitler. In his speech at Frankfurt on 9 December
1936, Schacht said:

     "Germany has too little living space for her
     population. She has made every effort, and certainly
     greater efforts than any other nation, to extract from
     her own existing small space, whatever is necessary for
     the securing of her liveli-
                                                  [Page 755]
     hood. However, in spite of all these efforts the space
     does not suffice." (EC-415)

Schacht had hoped, it is believed, that his desire for
additional space for Germany would be realized without
resort to war. In Austria, for example, he had authorized
200,000 Marks a month to be set aside for the National
Socialists in Austria, hoping thereby to facilitate the
absorption of Austria into Germany without war. But if
Germany's neighbors would not accede to the conspirators'
demands for additional space, Schacht was willing to go to
war to fulfill those demands.

Thus, on 23 September 1935, Schacht told S. R. Fuller, Jr.
at the American Embassy in Berlin:

     "Colonies are necessary to Germany. We shall get them
     through negotiation if possible; but if not, we shall
     take them."

In January 1937, Schacht, in a conversation with Ambassador
Davies, impliedly threatened a breach of the peace unless
Germany's demands for colonies were met. The conversation is
related as follows in a report under date of 20 January
1937, by Ambassador Davies to the Secretary of

     "He [Schacht] stated the following: that the present
     condition of the Germany people was intolerable,
     desperate and unendurable; that he had been authorized
     by his Government to submit proposals to France and
     England which would (1) guarantee European peace; (2)
     secure present European international boundaries; (3)
     reduce armaments; (4) establish a new form of a
     workable League of Nations; (5) abolish sanctions with
     new machinery for joint administration; all based upon
     a colonial cession that would provide for Germany an
     outlet for population, source for food stuffs, fats and
     raw material. ***" (L-111)

The inference was clear: without a colonial cession, peace
could not be guaranteed. Equally clear was the inference
that it would be Germany in its search for "Lebensraum" that
would disturb the peace.

On 21 December 1937, Schacht indicated to Ambassador Dodd
that he desired the annexation of neighboring countries,
without war if possible, but with war, if necessary. The
pertinent portion of Ambassador Dodd's notes on this
conversation are as follows:

     "Schacht meant what the Army chiefs of 1914 meant when
     they invaded Belgium, expecting to conquer France in
     six weeks; i.e., domination and annexation of
     neighboring little countries, especially north and
     east. Much as he dislikes
                                                  [Page 756]
     Hitler's dictatorship, he, as most other eminent
     Germans, wishes annexation -- without war if possible,
     with war, if the United States will keep hands off."

 (3) Schacht knew of Hitler's plans to wage aggressive war
and willfully provided the means whereby such a war might
successfully be waged. Whether or not Schacht personally
favored war it is clear that he at least knew that Hitler
planned military aggression and that he was providing Hitler
with the instrument by which those plans could be executed.
Even before Hitler's accession to power, Schacht knew from a
reading of Mein Kampf that Hitler was bent upon expansion to
the East by force of arms (5727-PS).

In the course of his frequent contacts with Mr. Messersmith,
United States Consul General in Berlin from 1930 to 1934,
Schacht emphasized that the "Nazis were inevitably going to
plunge Europe into war' (EC-451).

In September of 1934, Ambassador Dodd recorded in his diary
a conversation with Sir Eric Phipps at the British Embassy
in Berlin, wherein he stated that "Schacht had acknowledged
to me the war purposes of the Nazi Party" (EC-461).

Schacht has admitted that in the course of his numerous talk
with Hitler from 1933 to 1937, he formed the impression that
"in order to make his hold on the Government secure, the
Fuehrer felt that he must present the German people with a
military victory" (EC-458).

These admissions by Schacht are fortified by other evidence
which shows that Schacht knew that Hitler planned military
aggression. After his appointment as Minister of Economics,
Schacht became a permanent member of the secret Reich
Defense Council. The function of that Council, as shown in
other connections, was secretly to mobilize all of the human
and material resources of Germany for war (EC-177).

Shortly after his appointment as the Plenipotentiary General
for the War Economy in May 193, Schacht was entrusted by the
Reich Defense Council with the "preparation of economic
mobilization" in connection with the proposed re-occupation
of the Rhineland. Schacht and those officials who were
charged with the purely military aspects of the re-
occupation were enjoined to proceed with the utmost secrecy
because of assurances given by Hitler to the French that no
military action was contemplated in the de-militarized zone
of the Rhineland

At the 11th meeting of the Reich Defense Council, on 6
December 1935, which was attended by a number of

                                                  [Page 757]
from Schacht's office of Plenipotentiary of the War Economy,
Keitel pointed out that

     "According to the will of the Fuehrer, the economic
     leadership puts the increase of our armed might
     knowingly ahead of other requirements of the state. It
     is the task of all members of the Reich Defense Council
     to utilize the national property, made available,
     primarily for this purpose and economically in the
     framework of the entire situation, and request only
     such funds and raw materials which serve absolutely and
     exclusively the Reich Defense. ***" (EC-406)

The singleness of purpose with which Schacht and the other
conspirators were gearing the German economy for war is
strikingly shown by the Top Secret minutes of the meeting of
ministers dated 30 May 1936. This, it will be recalled, was
little more than 10 weeks after German troops had occupied
the Rhineland. At this meeting, Schacht pointed out that "it
must be attempted to produce those raw materials within
Germany which are economically favorable; for other raw
materials ready reserves for the case of mobilization"; and
also that "certain raw materials for war must be stocked."
Continuing the discussion, Goering emphasized that "all
measures are to be considered from the standpoint of an
assured waging of war." Thereafter, Schacht advocated the
introduction of price supervision and agreed that first
priority should be given to the "specially urgent petroleum
question" (1301-PS) .

By Top Secret letter dated 31 August 1936, Schacht was
advised by General von Blomberg that Hitler had ordered that
"the setting up of all air force units has to be completed
on 1 April 1937". This accelerated program entailed the
expenditure of large additional funds which Schacht and the
Minister of Finance were called upon to supply. The sense of
urgency with which Hitler pressed the completion of the
German air force patently signified that the waging of war
was a certainty (1301-PS).

Shortly after the receipt of this letter, and on 4 September
1936, Schacht attended a secret cabinet meeting where
Goering stated:

     "The Fuehrer and Reichskanzler has given a memorandum
     to the Col. General and the Reich War Minister which
     represents a general instruction for the execution
     "It starts from the basic thought that the showdown
     with Russia is inevitable."
                                                  [Page 758]
     "The Colonel General reads the memorandum of the
     "If war should break out tomorrow we would be forced to
     take measures from which we might possibly still shy
     away at the present moment. They are, therefore, to be
     "All measures have to be taken just as if we were
     actually in the stage of imminent danger of war." (EC-

There was no room for surmise in these utterances; Hitler
was definitely and irrevocably committed to waging
aggressive war If Schacht ever had any doubts concerning
Hitler's firm resolve to carry out the program of-aggressive
war outlined in Mein Kampf; if, contrary to his statements
to Mr. Messersmith and Ambassador Dodd, Schacht actually
doubted in 1934 that the Nazis, whom he was faithfully
serving, would inevitably plunge Europe into war; and if,
despite the pressing sense of immediacy that had pervaded
the Nazi war economy from the very outset, he had
entertained lingering doubts concerning Hitler's plans for
armed aggression, all such doubts must have been removed by
the clear and unequivocal pronouncements in the above-
mentioned eventful meetings of 1936 in which he

Yet, despite his knowledge of Hitler's plans to wage
aggressive war, despite the fact that he had grave technical
doubts about the ability of the Reichsbank to finance
further armaments through additional short term credits, and
despite the fact that some directors of the Reichsbank had
opposed further "mefo" financing, Schacht pledged another 3
billion Reichsmarks by the "mefo" bill method for further
financing of armaments in March 1937 (EC-438).

The Hossbach notes, dated 10 November 1937, on the important
conference of 5 November 1937 in the Reichskanzlei, reveal a
further crystallization of Hitler's program of absorption
and conquest in Europe (86-PS). Definite plans were laid for
the early acquisition of Austria and Czechoslovakia, and for
their exploitation in preparation for further military
operations. So far as appears, Schacht was not present at
this particular meeting. But his awareness of what occurred
at the meeting is shown by the fact that he told Ambassador
Bullitt on 23 November 1937,

     "Hitler was determined to have Austria eventually
     attached to Germany and to obtain at least autonomy for
     the Germans of Bohemia. At the Present moment he was
     not vitally con-
                                                  [Page 759]
     cerned about the Polish Corridor, and in his
     [Schacht's] opinion it might be possible to maintain
     the Corridor provided Danzig were permitted to join
     East Prussia, and provided some sort of a bridge could
     be built across the Corridor uniting Danzig and East
     Prussia with Germany." (L-151) .

Although Schacht apparently sought to convey the impression
to Ambassador Bullitt that he desired to stay Hitler's hand
but was powerless to do so, it is clear that he was actually
in complete sympathy with Hitler's objectives. Despite the
mounting tension which followed his conversation with
Ambassador Bullitt, Schacht remained as President of the
Reichsbank, and in that capacity established, in advance of
the invasion of Austria, the rate of exchange between Marks
and Austrian Schillings which was to prevail after the
absorption of Austria (EC-421).

Moreover, under his direction, the Austrian National Bank
was merged into the Reichsbank (Reichsgesetzblatt, 1938, I,
254). His speech of 21 March 1938, to the employees of the
former Austrian National Bank on the occasion of its
obliteration as an independent institution, betrayed his
true feelings. After inveighing against "the dictates of
Versailles and St. Germain", -Schacht stated:
     "Thank God, these things could after all not hinder the
     great German people on their way, for Adolf Hitler has
     created a communion of German will and German thought,
     he bolstered it up with the newly strengthened
     Wehrmacht and he then finally gave the external form to
     the inner union between Germany and Austria."
     "One person says he would have done it maybe in one
     way, but the remarkable thing is that they did not do
     it (hilarity), that IT WAS ONLY DONE BY OUR ADOLF
     HITLER (Long continued applause) and if there is still
     something left to be improved, then those grumblers
     should try to bring about those improvements from the
     German Reich and within the German community, but not
     to disturb it from without. (Lively agreement) ".
     "I ask you to raise your hands and to repeat after me:
     I swear that: I will be faithful, and obedient to the
     Fuehrer of the
     German Reich and the German people, Adolf Hitler, and
     will perform my
     duties conscientiously and selflessly. (The audience
     takes the pledge
     with uplifted hands).

                                                  [Page 760]
     You have taken this pledge. A scoundrel he who breaks
     it. To our Fuehrer a triple 'Sieg heil'." (EC-297-A)

Schacht was likewise enthusiastic about the acquisition of
the Sudetenland, and filled with pride over the contribution
his credit policy as head of the Reichsbank had made thereto

In January 1939, when Hitler was ruthlessly exploiting his
successes in Austria and the Sudetenland in preparation for
his next aggressive move, Schacht again referred, with
pride, to the fact that the Wehrmacht which he had helped
create by his ingenious and risky methods had made possible
Hitler's successes. Thus, he said:

     "From the beginning the Reichsbank has been aware of
     the fact that a successful foreign policy can be
     attained only by the reconstruction of the German armed
     forces. It [the Reichsbank] therefore assumed to a very
     great extent the responsibility to finance the
     rearmament in spite of the inherent dangers to the
     currency. The justification thereof was the necessity -
     - which pushed all other considerations in the
     background -- to carry through the armament at once,
     out of nothing and furthermore under camouflage, which
     made a respect-commanding foreign policy possible." (EC-

The foregoing proof establishes, it seems clear, that
Schacht knew of Hitler's plans for aggressive war, and
willfully created the means whereby those plans could be
executed. But apart from this direct proof, it is submitted
hat to a man in Schacht's position, the events of the period
clearly bespoke Hitler's intentions. Schacht was a key
figure in the Nazi Government during the period of the Nazi
agitation in Austria, the introduction of conscription, the
march into the Rhineland, the conquest of Austria, and the
acquisition of the Sudetenland by a show of force.

During this period, the Reich debt trebled under the stress
of mounting armaments (EC-419), and all the resources of
Germany were being strained to the very limit for armament.
It was a period in which the burning European foreign policy
issue was the satisfaction of Germany's repeated demands for
additional territory. Hitler, committed to a policy of
expansion, was laying the greatest stress upon utmost speed
in preparation for war.

Certainly in this setting, Schacht did not proceed in
ignorance of the fact that he was assisting Hitler and Nazi
Germany along the road towards armed aggression.

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